TSHEPO LANGA | South Africa is not only losing jobs, its economy is being redefined
South Africa’s latestunemployment statisticsare not only about jobs. They are about the collision between inflationary pressures, volatile oil prices, weak consumer demand and an economy increasingly. . .
South Africa’s latestunemployment statisticsare not only about jobs. They are about the collision between inflationary pressures, volatile oil prices, weak consumer demand and an economy increasingly surviving on informal entrepreneurship rather than formal employment. The first layer of the crisis is global. Oil prices remain one of the most important hidden taxes on developing economies such as South Africa. When oil prices rise, transport costs increase across the supply chain, from taxis and logistics to food distribution and electricity generation. This fuels inflation, erodes disposable income and weakens consumer spending power. Businesses then respond cautiously by delaying hiring, freezing expansion or automating operations. Even though inflation moderates statistically, households often continue feeling poorer because wages are not rising at the same pace as living costs. This creates what economists call a “high-cost low-growth trap”. South Africa is increasingly operating inside this trap. The unemployment debate has recently become more complicated because of comments made by formerCapitec CEO Gerrie Fourie, who argued South Africa’s “real” unemployment rate may be significantly lower than official figures suggest because millions of informal entrepreneurs are economically active but statistically invisible. His argument resonates strongly with the ideas advanced in the Kasinomics books by GG Alcock. Kasinomics essentially argues that mainstream South African economics often misunderstands township economies because it measures value creation through formal Western economic lenses while ignoring the adaptive, resilient, cash-based entrepreneurial systems operating daily in townships and informal settlements. There is truth in this perspective. Township economies are highly active through backroom rentals, street food vendors, logistics hustles, hair salons, informal retail, repair services, delivery networks and micro-manufacturing. Many people classified as “unemployed” are, in reality, economically active in fragmented and unstable ways. However, selling products on the street because there are no formal jobs is not necessarily entrepreneurial empowerment. Often it is survival adaptation. The informal economy can absorb economic pain temporarily, but it cannot alone generate the scale of productivity, tax revenue, infrastructure investment, exports and technological advancement needed to sustainably grow a modern economy. This is where South Africa faces a profound paradox. The country increasingly depends on entrepreneurship because formal employment growth is too weak. But entrepreneurship itself struggles. Unemployment pushes people into entrepreneurship, while the economic environment simultaneously weakens entrepreneurial success rates. The comments from Fourie and theKasinomicsperspective should therefore not be dismissed, but neither should they become an excuse for policymakers to underplay the unemployment crisis. The real lesson is that South Africa’s economy is changing faster than its measurement systems, policy frameworks and institutions. Traditional industrial era employment models are weakening globally. Around the world, economies are seeing growth from gig work to micro-enterprise ecosystems. South Africa is experiencing this transition more aggressively because of its structural inequality and low-growth environment. The challenge is not merely “creating jobs” in the old sense. The challenge is building an economic system where entrepreneurship can transition from survivalist activity into scalable wealth creation. This will require cheaper energy, lower logistics costs, stable inflation, better access to capital, reduced red tape, digital infrastructure and entrepreneurial education. Without these foundations, unemployment statistics will continue worsening officially, while informality expands unofficially. Perhaps that is the most important insight from the latest unemployment release: South Africa is no longer simply a labour market crisis. It is becoming a country where economic participation itself is being redefined. Langa is a lecturer in leadership at Stellenbosch Business School Executive Development. Sowetan