Africa labor market faces high informal employment and unemployment

The United Nations Economic Commission for Africa (ECA) has reported that while Africa’s unemployment rate stood at 6.3 per cent in 2025, a staggering 84.4 per cent of employment on the continent is informal. ECA Executive Secretary Claver Gatete noted that relying solely on unemployment figures fails to capture the realities of underemployment, job quality, and working poverty.

Gatete emphasized that African nations require more comprehensive statistics to guide effective public policy and investment. He warned that outdated or incomplete data risks misallocating resources and overlooking underserved communities. He also called for improved multidimensional poverty data that covers health, education, and living standards.

In South Africa, the unemployment crisis remains acute. According to Stats SA’s Quarterly Labour Force Survey for the second quarter of 2026, the official unemployment rate rose to 33.6 per cent, leaving approximately 8.5 million people without work. Critics argue that existing legislation, such as the Labour Relations Act, the National Minimum Wage Act, and the Broad-Based Black Economic Empowerment Act, increases the risks and costs for businesses attempting to hire new employees.