South Africa

3,500 people have 15% of all wealth in South Africa

A World Bank Inequality in Southern Africa report revealed that South Africa has the highest income inequality in the world, with a Gini coefficient of 0.67.

However, the country’s wealth inequality is even worse, with the top 0.01% of people – just 3,500 individuals – owning about 15% of all of the wealth in South Africa.

The Gini coefficient is a widely used statistical measure of how income is distributed in a country’s population. 

A coefficient of 1 indicates perfect inequality – where one individual in a country would earn all the income in that country.

Conversely, a coefficient of 0 indicates perfect equality, where the country’s income is distributed equally among all citizens.

South Africa’s Gini is exceptionally high at 0.67, with this number gradually increasing post-Apartheid.

In South Africa, the evidence suggests that income inequality has risen in the post-apartheid period, though it has fluctuated significantly. 

The main problem in South Africa is the country’s high unemployment rate. This heavily skews its Gini coefficient as a significant portion of the country’s population has no income at all. 

Moreover, among those who are employed, many earn low wages as they work unskilled jobs. Of those who do have work, about 3 million people subsist in the informal economy, where incomes are very low. 

Another 900,000 people work in agriculture, and about 1 million are domestic workers with very low incomes.

Incomes at the top end of the distribution are also very high. One way to get a sense of this is to look at household expenditure – a good proxy for income. 

The richest 10% of South African households are responsible for 52% of all expenditures, while the poorest 10% contribute only 0.8%.

In general, high-income South African households, irrespective of race, have done well over the last three decades, which is why inequality has remained stubbornly high.

Income inequality is not the same as wealth inequality, as wealth includes other factors such as inheritance, earnings from financial assets, and the value of physical assets. 

Newsletter

Top JSE indices

1D
1M
6M
1Y
5Y
MAX
 
 
 
 
 
 
 
 
 
 
 
 

Comments