• Government seeks to revise unemployment metrics to reflect informal labor

• Official jobless rate at 32.9% may drop to 10% if informal work is included

• Reform aims to improve policy targeting for training, credit, and support

South Africa’s government is exploring changes to how unemployment is measured in an effort to capture the country’s large informal workforce and improve the accuracy of labor statistics. The move could reshape how public policy responds to joblessness.

Trade, Industry and Competition Minister Parks Tau told Parliament last week that current metrics exclude a large number of unregistered workers—such as street vendors, artisans, and freelancers—resulting in a distorted picture of the labor market. He advocated for a revision of the methodology used by Statistics South Africa (Stats SA).

Economists have long criticized the current approach for ignoring informal economic activity, which includes small business owners and self-employed individuals operating outside formal registration. This exclusion, they argue, undermines the effectiveness of employment policy and hinders proper targeting of public programs.

According to Stats SA, the official unemployment rate was 32.9% in Q1 2025. However, Capitec Bank CEO Gerrie Fourie claimed that the true figure could be closer to 10% if informal earners—such as those making 1,000 rands ($56) a day in townships—were counted.

Expanding the scope of labor statistics to include informal activities could improve the design of support measures, from vocational training and micro-credit schemes to social protection initiatives.

The proposed reform would require collaboration between Stats SA, academic researchers, and local communities. Kenya is already adopting a hybrid approach to labor data, which could serve as a model. In South Africa, the outcome will depend on both the resources allocated and the political will to implement the changes.