This month the World Bank launched the ‘Poverty and Shared Prosperity 2016’ report. The 2016 edition, titled ‘Taking on Poverty’, highlights the shameful state of economic inequality in South Africa.
The wealthiest 1% of South Africans – 80% of whom are white – have seen their wealth double since the fall of apartheid. The report, which collected the data from analysing tax returns, has found that the gap between the haves and the have nots has increased to levels comparable to the United States (one of the most unequal countries in the world despite being the richest).
The finding will not come as a surprise to any of our regular readers. Only two weeks ago, this blog published the findings from the Institute of Race Relations, which showed that:
“…almost two-thirds of white households fall into the “highest level of monthly expenditure” at over R 10,000. In comparison, only 8% of black households, 20% of coloured and 43% of Asian households are in this bracket. Instead, 60% of black African households spend under R2,500 a month, over ten times as many as white households, at only 6%. The obvious inequality in these statistics show how the wealth in South Africa is still concentrated amongst white people, a minority of the population, trickling down to the individual level, leaving a majority of the black population with a much smaller income with which they can feed their family.”
The World Bank report does give some credit to the ANC government for their efforts to address some of these issues. It finds that some of its programmes have helped to reduce poverty in the country.
For example, South Africa’s rural electrification programme – which includes 50 kWh of basic electricity for free for poor households – has led to a large expansion of electricity use for cooking. This has resulted in a steady reduction in burning wood for fuel. The programme is also credited withas well as a 10% rise in women’s employment.
Another important use of electricity of watching television. The World Bank report argues that this has major benefits for improving health education, reducing fertility, and challenge entrenched perceptions of gender roles.
The government of South Africa should prioritise delivering more targeted programmes such as these designed to reduce economic inequality and drive economic emancipation for the majority black population.