Measuring SA’s ‘second’ economy

12 October 2005

In the coming months Statistics South Africa (Stats SA) will be sending fieldworkers to households all over the country to assess informal and self-employment, so as to measure the growth of South Africa’s informal economy.

This will help provide a clearer picture of the country’s economic growth and unemployment, and help the government provide services to encourage entrepreneurship.

Stats SA deputy director-general Elizabeth Gavin told Parliament’s portfolio committee on finance on Tuesday that South Africa’s “second”, or informal, economy was difficult to measure because the sector’s large number of small and informal businesses were not listed on the official business register. The survey is an attempt to remedy this situation.

Survey fieldworkers are being trained and will be going out to selected households in the coming weeks, Gavin said.

This ties in with Stats SA’s priority of improving the quality of statistical information, as was achieved by its November 2004 benchmarking and rebasing of GDP, the committee was told.

Gavin said the survey was important to assess the impact of the informal economy on South Africa’s GDP.

Statistician-general Pali Lehohla said informal employers and the self-employed should be taken into account in the assessment of GDP; the only way to do this was with a household survey of a sample frame of dwellings.

Reliable information on the number of informal businesses is also necessary for the government to provide the necessary services to encourage people to start their own businesses, the committee was told.

The survey would also result in more accurate unemployment figures, Stats SA officials said.

The stricter international definition of employment does not reflect “job-seeking behaviour” as a whole, the committe was told. The standard measure may therefore not provide a comprehensive picture of the problem.

A broader definition of unemployment accounts for factors such as “discouraged” job-seekers, so providing a clearer picture of actual numbers of people out of work.

Source: BuaNews