South Africa unchanged since apartheid- richest 10% owns more than 85% of household wealth

The social architecture formed during more than three centuries of white-minority rule has maintained South Africa’s position as the world’s most unequal society, according to World Inequality Lab, a research group focusing on the study of income and wealth distribution worldwide.

Attempts by the now-democratic government to wipe away the legacy of apartheid and colonialism have failed to narrow the imbalance between the rich and the poor, with 3 500 adults owning more than the poorest 32 million people in the country of 60 million, it said in a report released last week.

Asset allocations before 1993 still continue to shape wealth inequality.

“There is no evidence that wealth inequality has decreased since the end of apartheid,” the Thomas Piketty-backed group said. “Asset allocations before 1993 still continue to shape wealth inequality.”

During colonialism and structured apartheid from the late 1940s, black South Africans were largely denied economic opportunities. More than a quarter of a century of democratic rule has led to the growth of a black middle class and a black business and political elite.

Yet most South Africans still suffer from a woeful education system that leaves them ill prepared for jobs, while townships, built for blacks during apartheid, leave them far away from workplaces.

Discontent with economic prospects and an unemployment rate of more than 30 per cent has stoked unrest in Africa’s most industrialised economy. That in turn limited expansion and curtailed investment.

Laws ranging from affirmative action to mandating minimum black-owned stakes in businesses have done little to narrow inequality, according to the group.

“South Africa’s successive governments endorsed several ambitious socioeconomic policy frameworks whose primary objectives consistently included reducing economic inequality inherited from colonial and apartheid regimes,” it said. “Yet wealth inequality has remained remarkably stable.”

In South Africa, the richest 10 per cent of the population owns more than 85 per cent of household wealth, while more than half the population have more liabilities than assets, the report showed.

That gap is higher than in any other country for which sufficient data is available, the group said.

While blacks have outnumbered whites in the richest 10 per cent of the population for about seven years, the gap between South Africa’s richest and poorest has not narrowed because the decline in racial inequality is being driven almost entirely by a surge in the top black incomes rather than increased wealth for the poorest, according to World Inequality Lab data.- Bloomberg

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