How South Africa
New data shows the comparative earnings analysis of the informal sector in South Africa’s two major cities of Gauteng and the Western Cape.
According to the most recent data, in 2013 there were 1.5 million people running an informal business in South Africa, according to Statistics South Africa (Stats SA).
The sector, Stats SA said, accounts for 5% of the country’s GDP, remaining pretty much stagnant over the past decade.
The report found that in 2013, as many as 52.3% had a turnover of R1,500 or below in the month prior to the survey, and only 14.6% had sales above R6,000.
Net profits for 64.9% of businesses were also low, at R1,500 or lower in the month prior to the survey, and only 9.2 % of businesses made net profits above R6,000.
Using its Salary Analysis ModelTM of 128,087 individuals, Analytico, a data and earnings analytic consultancy, finds the following:
- 59% of the informal sector are males;
- 21% of the sample is self-employed;
- 14% of the individuals have a Grade 8 to Grade 9;
- 48% of the individuals have a Grade 10 to Grade 12.
According to Statistics South Africa the informal sector consists of: “…businesses that are not registered for income tax or VAT. They are generally small in nature and are
seldom run from business premises. These kinds of businesses are generally run from homes, street pavements and other informal arrangements.”
Some examples of such occupations range from street-vendors, hawkers, spaza shops and informal tradesman.
Analytico found that the median earnings for Gauteng is slightly higher however, the percentage chance of not earning anything is 2% higher in Gauteng than the Western Cape.
This could be due to Gauteng having a much more competitive informal sector which is 52% larger than the Western Cape’s.
| Lower | Median | Upper | |
|---|---|---|---|
| National (p/m) | R1 050 | R2 004 | R4 497 |
| Gauteng (p/m) | R1 188 | R2 818 | R6 936 |
| Western Cape (p/m) | R1 386 | R2 606 | R5 597 |
Source: Business Tech
