South Africans are now poorer than 15 years ago

South Africa’s real GDP per capita declined from R78,437 in 2008 to R74,411 in 2023, which means South Africans became poorer over the last fifteen years.

GDP per capita measures a country’s total annual output divided by the number of people within the country.

It is the best measure of whether a country’s citizens became richer or poorer and whether their lives improved.

The per capita GDP growth rates globally are diverse and show how much people’s lives have improved from one generation to the next.

For example, India’s income doubled every 50 years, while South Korea’s doubled every 10 years.

Simply put, on average, an Indian citizen’s life will be twice as good as their grandfather’s. In South Korea, it will be 32 times better.

It raises the question of South Africa’s per capita GDP growth rate. However, real GDP per capita is a better measure of living standards.

GDP is the total number of goods and services produced within a country and represents the size of a country’s economy.

Real GDP is the amount of goods and services produced within a country after it has been adjusted for inflation. It measures an economy’s real output and growth. 

Dividing this figure by a country’s population, which increases all the time, delivers the country’s real GDP per capita.

This measure returns an inflation-adjusted figure of individual income within the economy, which is a good way to measure a country’s standard of living.

The real GDP per capita in South Africa grew strongly from 1994 to 2008. From 1994 to 1999, it increased from R58,906 to R61,182.

The biggest growth occurred from 1999 to 2008, when the real GDP per capita grew 28%, from R61,182 to R78,437.

However, there has been little growth since then. The last five years have been disastrous, with the value falling from R78,508 to R74,411.

This means that the average South African’s life is now worse than fifteen years ago, which is uncommon in today’s world.

The chart below shows South Africa’s real GDP per capita from 1994 to 2023.