Standard Bank Confirms Guidance After Strong Start to Year
Standard Bank SBK -0.04%decrease; red down pointing triangle Group stuck to its annual guidance after reporting a strong performance for the first five months of the year.
The South African bank on Thursday reiterated that it expects banking revenue growth in the mid-to-high single digits for 2025 with the banking-cost-to-income ratio flat to down on-year. Group return on equity should be anchored in the 17% to 20% targeted range, it said.
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• For more financial news, go to the News24 Business front page. In June 2025, Capitec CEO Gerrie Fourie suggested that South Africa's real unemployment rate might be closer to 10% than the official 32.9% - the reaction was swift and unforgiving. Critics accused him of 'madness,' misunderstanding labour metrics, and trivialising the economic struggles of millions. But amid the furore, Fourie touched a nerve, one we can no longer afford to ignore. We need to be forthright. Any figure of the unemployment rate represents an enduring crisis that continues to erode our democratic dividend and undermine our efforts to build a more equitable and prosperous society for all South Africans. At the same time, we must all visit the fundamental assumptions guiding our understanding of the problem itself. What if the way we measure unemployment is not just analytically contested but structurally flawed? What if the very tools we rely on to understand our labour market are obscuring its most vital dynamics? This is not to say that our government, through Statistics South Africa, has been dishonest or missed the point through the years, but rather that the instruments and definitions used, while internationally accepted, may not fully capture the unique complexities and realities of South Africa's diverse economy, particularly its significant informal sector. South Africa's massive informal sector fundamentally challenges standard unemployment metrics. Millions officially classified as 'unemployed' are actively engaged in vital, though precarious, economic activities, such as street vending, waste recycling, home-based production, subsistence farming and numerous micro-services. These generate essential income and sustain communities, forming a vast parallel economy. Therefore, standard definitions, which prioritise formal employment structures like fixed hours, registered businesses, and regular wages, fail to capture this fluid, irregular, and self-directed work, misrepresenting significant economic participation as idleness. The fact that one is not seeking employment, is discouraged, or does not report any 'income' or 'wage' in the conventional sense, should not imply economic inactivity or irrelevance. Limitations Our unique economic landscape, shaped by historical exclusion and inequality, demands context-sensitive metrics. The rigid employed-unemployed binary obscures critical nuances, including underemployment, sporadic work, unpaid family labour and discouraged workers who actively survive informally. Relying on tools designed for smaller informal sectors misdiagnoses exclusion and risks policies that fail to support or integrate this vital economic segment. Admittedly, the official unemployment rate, derived from Statistics South Africa's Quarterly Labour Force Survey (QLFS), uses International Labour Organisation (ILO) standards, as rightly confirmed by our Statistician-General, Risenga Maluleke. It is important to acknowledge that although the ILO provides a standardised framework for measuring unemployment, it has limitations. A key limitation is the exclusion of 'discouraged workers,' those who have stopped actively seeking work, from the official count. This can lead to an underestimation of the true extent of unemployment, particularly among women. Additionally, the ILO definition relies on individuals actively seeking work in the past four weeks, which may not capture those who have been unemployed for extended periods and may have become less active in their job search. These standards are internationally recognised and sound in principle; however, they have limitations. Statistically invisible They were likely designed for economies where formality dominates, yet they tend to undervalue the reality of emerging markets where survivalist and informal economies are not only widespread but essential. It is necessary to emphasise that South Africa has a particularly complex labour market: sophisticated in parts yet exclusionary in others. Many South Africans are not unemployed in the literal sense; they work long hours selling food on the roadside, fixing shoes, braiding hair, or delivering packages via digital platforms. However, because their activities often lack legal status, banking records, or employer verification, they are statistically invisible. This invisibility is not benign. As Michel Foucault noted, how a state 'sees' its citizens, through censuses, surveys and indicators, is not just descriptive but political. It determines where resources flow, which sectors are prioritised, and who is included in the policy imagination. Troubling reality Across the Global South, countries with expansive informal sectors report strikingly low unemployment rates. India, with an informality rate above 90%, records unemployment rates under 5%. Mexico, Nigeria, Zimbabwe and Ethiopia—despite structural challenges—report similarly low rates. South Africa, with an informal economy estimated to comprise 40% of total employment, somehow reports the highest unemployment rate in the world. There is a profoundly troubling reality in our labour market, mirroring trends across the Global South: the relentless informalisation of the African worker. As scholars like Guy Standing illuminate, this creates a growing 'precariat' or workers stripped of stable contracts, benefits and legal protections, existing in perpetual insecurity. This is evident in models like Shoprite's Sixty60 delivery service. Reports suggest deep labour rights transgressions and potential circumvention of migration laws, potentially relying heavily on vulnerable foreign nationals and drivers operating without proper licensing. While such practices may fuel corporate profits and boost tax collections, they fundamentally erode worker dignity and flout our migration laws. Enhanced tax revenue may be problematic when achieved through the systemic exploitation and informalisation of labour. We urgently need businesses committed to ethical conduct, recognising that loyal and honest citizenship demands treating workers with dignity, not as disposable cost centres. Dogmatic fixation on formality This crisis reflects our nation's unresolved struggle: building a vibrant economy that simultaneously protects labour rights. Our history is one where economic progress was built upon the foundation of cheap, exploitable black labour. Disturbingly, many companies remain anchored in this unpalatable logic. Their substantial profits are too often subsidised by poverty wages and resistance to adhering to labour laws, perpetuating a modern form of exploitation. The Shoprite case highlights a critical flaw in our current statistical lens: even those formally recognised as 'employed' can face severe decent work deficits – insecure incomes, unsafe conditions and denied benefits - which our rigid metrics fail to capture. Formal employment status, in such contexts, offers no guarantee of dignity or security. The human cost of this informalisation extends far beyond wages into wellbeing and visibility. Informal wage workers at the foot of the formal economy, such as Sixty60 riders, face significantly heightened health and safety risks due to unregulated work environments. In South Africa, informal workers experience injury rates 2-3 times higher than their formal counterparts, alongside severe psychological stress, with women disproportionately affected. Critically, this precarity is structurally reinforced, since only 10.7% of informal enterprises hold municipal licenses, thereby denying workers access to basic infrastructure and legal recourse. Unlike the often entrepreneurial, family-driven informality seen in parts of West Africa or South Asia, South Africa's informal sector reflects not prosperity, but our dogmatic fixation on formality. Suppressing informality does not create formality; instead, it traps workers in a vulnerable, invisible underclass. Right tools, wrong terrain The Sixty60 paradox, characterised by soaring profits and tax contributions alongside alleged deep-seated worker indignity, exposes the dangerous fallacy of equating state revenue with societal well-being or ethical progress. True dignity requires labour security and voice, neither of which is inherent in precarious gig work. To turn moral clarity into action, we will work with other government entities, including Statistics South Africa and the National Treasury, to address our concerns. We will also ramp up our labour inspection efforts to improve enforcement and compliance. Our view is that this disconnect is not purely economic but methodological. We could be using the right tools for the wrong terrain. Again, we must stress that this is not about pushing the black majority further into an abyss; we acknowledge vast swathes of surplus labour that continue to characterise the South African labour market. However, our immediate concern is solely whether the statistical measures accurately reflect the nature of economic activity, particularly informal survivalist efforts, within this complex reality. As the Department of Employment and Labour, we are addressing this definitional challenge. In our internal policy discussions, we are advancing a more nuanced classification of employment, distinguishing between formal unemployment (individuals actively seeking or available for formal sector work) and economic participation (those actively engaged in the informal economy or self-employed outside regulated sectors). This is not an attempt to mask the crisis or rewrite history. Instead, it is a genuine bid for clarity, so that policymakers, economists and communities alike can operate from a shared and realistic understanding of South Africa's complex labour market dynamics. Resilience is not success Yet, our data underscore a profound crisis: official unemployment stands at 32.9%, rising to 43.1% under the expanded definition (which includes discouraged job seekers). Youth unemployment (15–24 years) is staggering at 62.4%, while graduate unemployment stands at 11.7%, revealing deep-seated structural challenges, even for the educated. Furthermore, there are currently 3.8 million young people classified as NEET (Not in Employment, Education or Training). These figures demand urgent, comprehensive reform and a labour market framework that recognises the diverse forms and complex realities of all economic activity, both formal and informal. Behind each statistic lies a human story of effort, ambition, exclusion and resilience. It is essential to stress that this resilience should not be mistaken for success; the informal sector is not thriving, but merely surviving under conditions of precarity and exclusion. Research from the UCT-Harvard Growth Lab identifies South Africa's informality rate as 'abnormally low' relative to peer economies, not due to prosperity, but rather to state-imposed constraints, including hostile zoning laws, bureaucratic red tape and over-policing. Crucially, unlike entrepreneurial, family-driven informality in West Africa or South Asia, South Africa's informal economy is predominantly employee-based, precarious and excluded from support systems. This vulnerability is strikingly illustrated by the fact that only 10.7% of informal enterprises held a valid municipal licence in 2023. These figures demand urgent, comprehensive reform and a labour market framework that recognises the diverse forms, complex realities and systemic barriers facing all economic activity, both formal and informal. We need to distinguish between informal and illegible. Just because someone is not counted does not mean they are not making a contribution. New tools needed If we want a policy that reflects the realities on the ground, we need new tools. A hybrid data ecosystem, combining the QLFS with alternative indicators such as mobile money flows, anonymised bank transaction data and digital platform work patterns, can provide a more complete and human-centred picture of labour in South Africa. Crucially, unlocking this invisible economy requires collaboration. Private sector players, including Capitec, which processes billions of township-based transactions annually, may hold part of the key to decoding our invisible economy. However, this must be done with ethical safeguards, public oversight and institutional collaboration, not in corporate isolation. Gerrie Fourie may have overstated his case, but he also illuminated a critical truth: our unemployment narrative is not just technical; it is moral. A country that fails to see the economic contributions of its people, no matter how unorthodox, fails to recognise and thus harness its potential. We are at a crossroads. Either we continue to wage policy wars based on partial metrics, or we build a statistical framework that honours the full complexity of labour in South Africa. One pathway leads to ongoing crises, while the other results in inclusive renewal. Let us choose to see. Let us choose to count. Let us choose to act. Nomakhosazana Meth is Minister of Employment and Labour.
