This is because our usual tools are well suited to measuring income and consumption, but not very good at measuring wealth. By Leibbrandt's estimates, South Africa's middle class is small and sluggish, and comprises approximately one in five South Africans. JOHANNESBURG (AP) — Perhaps nowhere in today’s South Africa is the country’s inequality on more dramatic display than in the neighboring Johannesburg suburbs of Sandton and Alexandra. The report states that non-whites statistically have fewer skills, simply because they were excluded from the workforce for so long. In South Africa, the divide between rich and poor is visible from the sky. Such dire predictions aren't confined to South Africa; that's the case for most of Africa … Economic inequality remains a large issue in South Africa and contributes to extreme poverty. Economic Inequality Is a Major Obstacle to Growth in South Africa Haroon Bhorat is a professor of economics and the director of the Development Policy Research Unit at … According to the latest figures from the World Inequality Database, the top 1% of South African earners take home almost 20% of all income in … And so if we are going to try and flourish together ... then we do need to try and understand that. With its gleaming high-rises and lush estates, Sandton is known as Africa… According to (Poverty and Inequality in South Africa2004-2014) 40% out of South African people are living in poverty and 15% of the poorest are living in a struggle just to survive on a daily basis. And, at the other end of the spectrum, an elite, mainly white minority continues to thrive. On the right is Kya Sands informal settlement. The focus needs to be on creating a business environment more conducive to private investment and job creation. It's not just income inequality that is cause for concern, he adds, but also unequal access to opportunities and essential public services. The focus needs to be on creating a business environment more conducive to private investment and job creation. Firstly, the African National Congress (ANC) won an … © 2020 International Monetary Fund. For South Africa to benefit from an ageing population, a supportive economic and institutional context must be created to encourage saving for retirement to help fund consumption in old age South Africa is one of the world's most unequal countries, with a Gini coefficient of 0.625. Mthandazo Ndlovu, Oxfam South Africa's democracy and governance manager, say inequality has been exacerbated as a result of "systemic failures at a government level.". https://www.cnn.com/2019/05/07/africa/south-africa-elections-inequality-intl South Africans go to the polls on 8 May with, the gap between the rich and the poor set to be a key issue. In the future, South Africa will need further fundamental reforms for more robust and inclusive growth. Sources: Overall inequality: Gini coefficient of per capita income from Statistics South Africa, 2014, Table 5, linked at 2005/2006 to series from 1993 from Leibbrandt et al (2010a, Table 5.17), linked at 1991/1993 to estimates for 1975, 1991 and 1996 of Whiteford and van Seventer (2000). Efforts to reduce inequality Economic inequality in post-apartheid South Africa has deepened.This is not what was expected. Can polar bears survive the climate crisis? The report says: “Labour market inequalities are one of the key drivers of wealth and income inequality in South Africa. A more developed social security system would help reduce inequality and relieve the pressure on poorer families to provide for older generations. entrepreneurship among the previously marginalized. have focused on higher social spending, targeted government transfers, and All rights reserved. regional disparities. B. Atkinson, J. Hasell, S. Morelli and M. Roser (2017) 'The Chartbook of Economic Inequality' at www.ChartbookOfEconomicInequality.com This visualisation is licensed under a The IMF Press Center is a password-protected site for working journalists. Wealth inequality in South Africa is not only intolerably high, with Gini coefficients of 0.93 in 2010/11 and 0.94 in 2014/15, it is also not reducing. It is often said to be the most unequal, but that is incorrect. "If you look at the number of people who sleep on an empty stomach, these numbers are quite shocking," adds Ndlovu. Wage inequality, deeply rooted in South Africa’s history, plays a central role in overall income distribution, and patterns of human capital development are fundamental to the future growth path and therefore to poverty and income distribution. "It's a society with declining inequality and a growing middle class.". South Africa suffers among the highest levels of inequality in the world A number of countries, for example Namibia and Seychelles, have higher gini coefficients (the measure most often used to measure income distribution) than does South Africa 1. through progressive fiscal redistribution. Economic inequality, sometimes referred to as income inequality, is the unequal distribution of a country’s wealth. While the African National Congress (ANC) is. This means that they are still more likely to be unemployed than white people. "The picture that we pick up in our statistics is that we haven't been successful in breathing transformation through the country. Read: Can a new president halt South Africa's decline. "It's a very embedded phenomenon that doesn't change very quickly, because it's the result of the way the whole society coheres," Leibbrandt said. According to a new study by the UN Development Programme (UNDP), South Africa has the highest recorded level of income inequality in the world. Health inequality in South Africa Even though it has been 20 years that south Africa has underwent the change from apartheid to a constitutional democratic south Africa, when looking at the healthcare in South Africa one will see the fact that the is an unequal access to resources by South Africans. South Africa has struggled to bridge the socio-economic gap that stands between the small fraction of its population that has what can be considered a first-world standard of living and the majority of the population. "The best signifier of a country that's really on its way isn't a society with no inequality," he said. Currently, a slightly progressive tax … Because apartheid took place relatively recently, many non-white people in South Africa who lived through it are still recovering from being discriminated against during that time. But the story of inequality in Africa is more complex than that of a widening gulf between the very rich and the very poor. The authorities have used different tools to tackle stubborn levels of inequality (photo: Gero Breloer/picture-alliance/dpa/Newscom). In fact, black South Africans saw a 31.4 percentunemplo… when measured by the commonly used Gini index. urban-rural), gaps in access to education, and barriers to employment and career progression for women." Critics still point to its repressive nature. Indeed, according to the HDI, every country in Africa is today less equal than it was in 2010; for the African masses, in other words, the trickle-down benefits of economic growth have been relatively small. The most widely used data on living standards come from household surveys. There are a number of other countries that are clearly very unequal - some major oil … South Africa's richest households are almost 10 times wealthier than poor households, according to World Bank estimates. Unemployment, poor education programs and a collapsing public health system all play a … ", Why South Africa's 'Born Free' generation isn't voting, After arrest, Jimmy Lai denies colluding with foreign forces (August, 2020), Former Covid-19 success story is now one of hardest-hit countries in region, Inside a Tehran hospital facing Iran's biggest Covid-19 surge, Hear Merkel's plea to Germans amid record Covid-19 death toll, 'It didn't hurt at all': 91-year-old Briton on receiving Covid-19 vaccine, Here's why tens of thousands of Indian farmers are protesting, Saudi Arabia is changing. IMF Members' Quotas and Voting Power, and Board of Governors, IMF Regional Office for Asia and the Pacific, IMF Capacity Development Office in Thailand (CDOT), IMF Regional Office in Central America, Panama, and the Dominican Republic, Financial Sector Assessment Program (FSAP), Currency Composition of Official Foreign Exchange Reserves. D. Wealth inequality is very high, even higher than income inequality 51 E. Low intergenerational mobility is an obstacle to inequality reduction 53 F. South Africa lags its peers on inclusiveness of consumption growth 56 i. This requires improved governance, reducing the cost of doing business, making goods and services markets more open to competition, allowing firms to compensate workers in line with their skills and productivity, and making state-owned service providers more efficient. The gap between rich and poor is wider in South Africa than in any other country where comparable data exist, the World Bank found. In South Africa, the white population makes up the majority of the elite — or top 5% — explained Murray Leibbrandt, economics professor at the University of Cape Town. In order to achieve the United Nations’ Global Goal 10 that calls for reduced inequalities, as well as Goal 8 that calls for decent work and economic growth, South Africa needs to come to terms with its serious inequalities and work towards sustainable solutions. through a skewed income distribution, unequal access to opportunities, and affirmative action to diversify wealth ownership and promote Part of Leibbrandt's work has involved tracking the social progress of 30,000 South Africans from 2008 to 2017. Data made available by CNN presented that white South Africans earn nearly three times the average wage made by black South Africans, who take up the overwhelming majority of the workforce population. Sign up to receive free e-mail notices when new series and/or country items are posted on the IMF website. Striking miners are the latest manifestation of the country's fundamental social and economic … These measures need to A 2011 OECD study investigated economic inequality in Argentina, Brazil, China, India, Indonesia, Russia and South Africa. to the persistence of inequality. This requires improved governance, reducing the cost of doing business, making goods and services markets more open to competition, allowing firms to compensate workers in line with their skills and productivity, and making state-owned service providers more efficient. be complemented with reforms that promote private investment, jobs, and The World Bank estimate… In fact, despite 25 years of democracy, South Africa remains the most economically unequal country in the world. William Shakespeare among first Britons to receive coronavirus vaccine, CNN gets access to site of Iranian scientist's assassination, From Bethlehem to Rome, see Christmas decorations around the world, Hear Ashton Kutcher's plea to lawmakers on proposed child abuse legislation, 'The stench is unbearable': Inside horrific Venezuelan Covid-19 ward, These 2 countries are embracing Covid-19 'immunity passports', 'It's a lot worse than being in Iraq': Veteran on Covid-19 pandemic, 2018 World Bank report on poverty and inequality in South Africa, Read: Land was stolen under apartheid. It is, however, very hard to measure precisely how unequal it is. By Katy Scott, CNNGraphics by Henrik Pettersson, CNN. The IMF now forecasts South Africa's economy to contract by 5.8% in 2020. Income inequality in South Africa has deepened. inclusive growth. South Africa remains a dual economy with one of the highest inequality rates in the world, with a consumption expenditure Gini coefficient of 0.63 in 2015. And it fractures the country.". Previously disadvantaged South Africans hold fewer assets, have fewer skills, earn lower wages, and are still more likely to be unemployed, a. But a fraction of the population still enjoys the lion's share of the spoils while the rest struggle to make ends meet. The Brookings Institution Africa Growth Initiative 33 SOUTH AFRICA: ECONOMIC GROWTH, POVERTY AND INEQUALITY Carlene Van Der Westhuizen, Development Policy Research Unit at While the middle class has hardly grown since 2008, the black percentage of the middle class has increased from 47% to 64%, he says. Data shows that the widening and intergenerational gap is disproportionately affecting the black South Africans. Bhorat (2003a) estimates that in 1999, 32% of households in South Africa were below a poverty line of US$251 per month per household (1995 prices), equivalent to US$81 per month per individual. In 2005, the Gini coefficient was even higher, at 0.650. In many ways, the legacy of apartheid endures. The way forward, he suggested, starts with South Africans recognizing the situation as it is right now. Using the same poverty line, the poverty gap3 was 13%. In South Africa, the richest 10% hold 71% of the wealth, while the poorest 60% hold just 7% of the wealth. The South African labour market is heavily racialised and gender-biased The largest contributor to overall income inequality … "The point is that this inequality and these livelihoods of people, that is their daily life. According to the Gini coefficient, as well as other inequality measurements, South Africa ranks as one of the most unequal countries in the world. FOUR FACTS ABOUT INEQUALITY IN SOUTH AFRICA 1. On the left is Bloubusrand in Johannesburg, a middle class area with larger houses and pools. Their main limitation when it comes to measuring wealth is that participation is voluntary and that richer hous… Policies will also be needed to create opportunities to support the marginalized population through improved quality of education, health, and transportation. This is not to say the government hasn't made significant strides in leveling the playing field, he added. Economic Inequality in South Africa Earnings Dispersion Overall Income Inequality Poverty Top Income Shares Earnings at top decile as % median 320 400 450 520 A. (CNN)More than two decades have passed since South Africa overhauled a racist regime designed to keep the country's black population under the thumb of an elite white minority. South Africa is one of the most unequal countries in the world. We know that South Africa’s wealth distribution is highly unequal. Inequality has been persistent, having increased from 0.61 in 1996. It still hasn't been given back, Read: South Africa's Suidlanders are prepping for a race war. DfID – Inequality in Middle Income Countries: South Africa Case 3 in Woolard, 2002). Fiscal policy has been used effectively to reduce inequality. Low growth and rising unemployment have contributed stubborn levels of inequality that have plagued the country, including Access to basic services such as electricity, water, education and health care has improved considerably since the ANC came into power, according to the World Bank report. It concluded that key sources of inequality in these countries include "a large, persistent informal sector , widespread regional divides (e.g. Inequality manifests itself The South African government has used different tools to tackle the But while democracy has delivered freedom for all South Africans, not enough has changed for those living in the country's vast townships. "One would have assumed that 25 years into democracy we would have had better access to land, better access to health care, we would not have children falling into pit latrines due to failures in the provision of ablution facilities," he said. Levels of inequality in South Africa appear to be passed down from generation to generation. Gardeners tending the lawn at the seat of government in the capital Pretoria. There are various ways to look at economic inequality and South Africa scores terribly on all of them. The source of the inequality that plagues South Africa is multifaceted. The white population makes up 12% of the population, Asian/Indians take up 3%, the mixed race category takes up 11%, and the black population stands at nearly 75%. Here are six charts that tell the story of South Africa's inequality: In the future, South Africa will need further fundamental reforms for more robust and inclusive growth. 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