{"id":869804,"date":"2026-08-12T09:30:00","date_gmt":"2026-08-12T07:30:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=869804"},"modified":"2026-08-12T09:04:30","modified_gmt":"2026-08-12T07:04:30","slug":"one-silver-lining-for-unemployment-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business-opinion\/869804\/one-silver-lining-for-unemployment-in-south-africa\/","title":{"rendered":"One silver lining for unemployment in South Africa"},"content":{"rendered":"\n

In the latest Quarterly Labour Force Survey (QLFS), the informal sector was the only area which reported job growth, but the sector could be far larger than reported.<\/p>\n\n\n\n

The data showed that South Africa’s unemployment rate rose from 32.7% in the first quarter of 2026 to 33.6% in the second quarter.<\/p>\n\n\n\n

This represents a 0.9% increase despite efforts to boost the country’s economic growth and create work opportunities.<\/p>\n\n\n\n

The largest drop was seen in South Africa’s formal economy, which recorded roughly 41,000 fewer jobs than in the first quarter of 2026.<\/p>\n\n\n\n

The formal economy comprises traditional economic sectors such as mining, manufacturing, and finance, and is the best-known employment area.<\/p>\n\n\n\n

Another economic sector involved in the QLFS is the informal sector, which saw its employment increase by approximately 34,000 people.<\/p>\n\n\n\n

The informal sector is primarily made up of small businesses, such as spaza shops and at-home manufacturing.<\/p>\n\n\n\n

These businesses are particularly prevalent in rural or township areas, where formal job opportunities are not as widely available.<\/p>\n\n\n\n

The QLFS estimated that 3.57 million South Africans are currently working in the informal sector, but experts believe the number could be higher.<\/p>\n\n\n\n

Speaking to BusinessTech, Efficient Group chief economist Dawie Roodt said he believes that South Africa’s informal sector is larger than currently estimated.<\/p>\n\n\n\n

“I think there are more people working in the informal sector than what the official data says,” he said.<\/p>\n\n\n\n

He added that Stats SA is accurately capturing the data it collects, but its methodology may not be the right approach to truly understanding the size of the informal sector.<\/p>\n\n\n\n

“I believe that Stats SA is following the right processes and methodologies, but those processes and methodologies are not necessarily applicable to South Africa,” he said.<\/p>\n\n\n\n

Understanding the size of the informal sector has been an ongoing challenge for South Africa, with some experts estimating its value to be approximately R1 trillion<\/a>.<\/p>\n\n\n\n

A common issue is that many informal businesses are not registered with the government, placing them outside of what can be accurately tracked and measured.<\/p>\n\n\n\n

Good news for South Africa’s economy<\/h2>\n\n\n\n
\"\"<\/a>
Economist Dawie Roodt<\/figcaption><\/figure>\n\n\n\n

Growth in the informal sector is good news for South Africa. Even if it is not comprehensively tracked, it still represents economic growth for the country.<\/p>\n\n\n\n

South Africa has struggled in recent years to stimulate economic growth, with GDP growth reaching only 1.1% in 2025.<\/p>\n\n\n\n

This is far below that of many other emerging economies globally, which often hover around 4% annual GDP growth.<\/p>\n\n\n\n

Roodt noted that increasing GDP growth is the only way to realistically address South Africa’s current unemployment crisis.<\/p>\n\n\n\n

To that end, any growth in employment should be welcomed.<\/p>\n\n\n\n

“A growing informal sector is not a bad thing, as long as the economy grows, it doesn’t matter if it is formal or informal,” he said.<\/p>\n\n\n\n

“I think what we can do is create an environment where we can grow both formal and informal parts of the economy.”<\/p>\n\n\n\n

In recent years, South Africa’s government has made efforts to formalise township economies by simplifying small-business registration.<\/p>\n\n\n\n

Currently, the QLFS estimates that the informal economy is less than a third of the size of South Africa’s formal sector.<\/p>\n\n\n\n

Roodt reiterated that current measurements do not capture all parts of the current economy.<\/p>\n\n\n\n

“Although the official numbers are right in terms of the methodologies they follow, the actual unemployment in South Africa is probably much lower,” he said.<\/p>\n","protected":false},"excerpt":{"rendered":"

While unemployment grew in South Africa, one sector saw job growth and could be larger than the data suggest.<\/p>\n","protected":false},"author":131,"featured_media":790488,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"failed","_sma_x_autopost_error":"Instagram publishing failed: Instagram returned HTTP 400: Media ID is not available","_sma_x_post_id":"2087441721235812496","_sma_facebook_post_id":"191437357620492_2173815503438849","_sma_instagram_post_id":"","_sma_x_attempts":1,"footnotes":""},"categories":[4],"tags":[1459,19911,16476,3651],"class_list":["post-869804","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-opinion","tag-dawie-roodt","tag-informal-economy","tag-qlfs","tag-unemployment"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/869804","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/131"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=869804"}],"version-history":[{"count":25,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/869804\/revisions"}],"predecessor-version":[{"id":869846,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/869804\/revisions\/869846"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/790488"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=869804"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=869804"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=869804"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}