It’s time South Africa faced up to an honest question: what if the formal economy can’t deliver the jobs that are needed?
I am an economist who has been working closely with South Africa’s administrative tax data over the past five years – arguably the best way to track progress in the formal sector.
The sobering reality is that the country has gone backwards. And young people are bearing the brunt of the deterioration. The scale of the jobs crisis is now so large that even decades of strong economic growth won’t be enough to eliminate it.
Looking at the last 10 years (2013/14 to 2023/24 tax years) of formal sector jobs data, as reported in the Spatial Tax Panel – a database constructed from employer-employee tax returns – South Africa managed to create only about 130,000 net new full-time equivalent work opportunities per year. This rate of job creation works out at just under 1% growth per annum – which isn’t enough to keep pace with the country’s growing population.
The official statistics from the Quarterly Labour Force Survey confirm this. The number of unemployed job seekers in South Africa has risen from about 8 million to almost 12 million between 2014 and 2024. The reported number of formal sector jobs is also around 12 million.
