In January this year the Department of Trade, Industry and Competition (DTIC) started saying more about its planned Transformation Fund. It is an attempt to make R100 billion available to support black-owned businesses and small, medium, and micro enterprises (SMMEs).
Support for entrepreneurs and gig workers is certainly something everyone should take seriously in a country where official employment is far too low. PWC expects the narrowly defined unemployment rate to increase to 33,2% in 2025.
South Africans are resourceful people, we know, and that is why many more are trying to fend for themselves outside of the civil service and big corporates.
In fact, the term “gig economy” was born from people doing freelance, flexible, on-demand work rather than the more traditional approach of a nine-to-five job. People get compensated per task, tend to have many different clients simultaneously and often use online platforms to connect to clients.
Trading Economics quotes 2025 projected numbers from the World Bank to say that 2,4 million of South Africans are self-employed.
South Africa’s gig economy is currently estimated to be 2 million people, and is projected to grow by 10% per year.
Small business owners, independent contractors and professional freelancers are leading the pack. These “gig workers” are so-called free agents who derive their primary income from independent work.
Many of us admire their guts, creativity and diligence. They, in turn, love more flexible working arrangements and hours. They prefer remote work and the autonomy they enjoy so that they can fit their work life around their lifestyle.
Their thoughts on money may be equally laissez-faire.
For instance, retirement is not something that crosses their minds easily. They are too busy looking for new opportunities and wooing clients. To think about long-term financial challenges is the last thing on their minds. In fact, long-term thinking may be considering the next year, let alone a five- or ten-year plan. Any consideration of formal retirement is an equally foreign concept. They love what they do so much that they can’t imagine ever wanting to slow down or stop doing what they’re doing. Besides, doesn’t investing in themselves or their business make more sense than putting money in a retirement annuity?
All these arguments make sense.
On top of that, a gig worker’s income is often unpredictable and inconsistent. Cash flow is probably not a smooth-running river – work may come in dribs and drabs and late payments will often be a headache.
Their other pain points are that they have no benefits and limited access to financial products because their income may be sporadic. They are often socially isolated, and have to fund their own leave and sick leave.
That doesn’t mean gig workers don’t have financial dreams besides making a living from what they most enjoy.
We all know that having money gives us options. If I have something in my pocket, I can consider and Uber ride above public transport. If I have money, I can get away to recharge my batteries if I want to, or upskill myself to take on a next endeavour. And if I have money one day when I grow older, it will be my choice whether I want to continue working or take my hobbies to a next level.
That’s why I’m trying to make the case for gig workers to consider some form of formal saving:
- What happens if you can’t work and earn an income?
- What if you need capital to expand your business?
- Should you have all your eggs in your entrepreneurial nest?
- What if some medical hurdle comes your way?
- If the “r” word, retirement, is too ghastly to contemplate, what about “relaxation savings”?
If you work for yourself, spare cash is often hard to come by. But if a windfall lands in your lap, please don’t squander it. Over time, even a small amount can multiply.