The minister of trade, industry and competition, Parks Tau, has told parliament that the CEO of Capitec was on to something when he said Stats SA and South African society at large should include the work of those in the informal sector when compiling statistics on unemployment.
He briefed parliament’s portfolio committee on trade, industry and competition on Tuesday after the release of the quarterly labour force survey data by Stats SA, which found that unemployment rose to 32.9% in the first quarter, with GDP data showing that the economy grew by only 0.1% in quarter one.
Tau's remarks come after a Business Day article in which Capitec CEO Gerrie Fourie said South Africa should rethink its unemployment metric. When informal sector activity is taken into account, the figure of 32.9% could be closer to 10%, Fourie told Business Day.
Tau said the role the informal sector played in driving economic activity and supporting livelihoods had arguably been understated for a long time and the government should find innovative ways of optimising the informal sector’s economic impact.
“This point has been raised by various other quarters with regard to what we should calculate and what we shouldn’t calculate. I have not read the article ... but I also hold the view that there is a significant undercount, particularly if you take into account the informal sector.
“In fact, it’s something that we should all collectively be engaging in resolving so we are able to, one, acknowledge the informal sector, but also reinforce the support mechanisms for what is a major contributor to employment in the country.”
He said the multiplier effect for jobs and livelihoods supported by the informal sector, which he said carries an average of one job supported by each informal sector establishment, needed to be clarified and further supported.
Tau backs Capitec CEO's call for new approach to unemployment data
Role of informal sector has 'arguably been understated for a long time'
The minister of trade, industry and competition, Parks Tau, has told parliament that the CEO of Capitec was on to something when he said Stats SA and South African society at large should include the work of those in the informal sector when compiling statistics on unemployment.
He briefed parliament’s portfolio committee on trade, industry and competition on Tuesday after the release of the quarterly labour force survey data by Stats SA, which found that unemployment rose to 32.9% in the first quarter, with GDP data showing that the economy grew by only 0.1% in quarter one.
Tau's remarks come after a Business Day article in which Capitec CEO Gerrie Fourie said South Africa should rethink its unemployment metric. When informal sector activity is taken into account, the figure of 32.9% could be closer to 10%, Fourie told Business Day.
Tau said the role the informal sector played in driving economic activity and supporting livelihoods had arguably been understated for a long time and the government should find innovative ways of optimising the informal sector’s economic impact.
“This point has been raised by various other quarters with regard to what we should calculate and what we shouldn’t calculate. I have not read the article ... but I also hold the view that there is a significant undercount, particularly if you take into account the informal sector.
“In fact, it’s something that we should all collectively be engaging in resolving so we are able to, one, acknowledge the informal sector, but also reinforce the support mechanisms for what is a major contributor to employment in the country.”
He said the multiplier effect for jobs and livelihoods supported by the informal sector, which he said carries an average of one job supported by each informal sector establishment, needed to be clarified and further supported.
He said the department was working on a draft industrial policy, whose formulation was at an advanced stage. He said this policy had to prioritise the government’s transformative policies while affecting industrialisation and job creation.
“We should be able to share fairly soon what the proposals of the industrial policy are. It is going through various processes and reviews. Yesterday I was told that it was at FOSADG, the Forum for South African DGs.
“I have confidence that, in fact, a lot of the proposals that have been put forward in relation to both the industrial policy and the inclusive growth path have the capacity to shift the needle on the dial. There is no doubt that we need to [do this], that growth has been lacklustre.”
He said the factors behind South Africa’s underwhelming economic growth were both internal and external, but the external factors were creating uncertainty across the board and until July 9, there will be significant uncertainty in South Africa’s global trade outlook.
“While we accept that there are indigenous factors that have impacted growth, we cannot ignore the reality of the increasing impact of external factors or exogenous factors. In particular, this year the change in the trade environment has significantly led to slowing growth across the board internationally because of the reciprocal tariff interventions by the US and other interventions.”
He said the “trade skirmishes, if not wars”, caused by the US have led to certain industries not getting access to the market in the US and Europe, and some of those products being redirected to markets such as South Africa, creating potential supply imbalances.
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