SA is the most unequal country on Earth because of its poor quality education, huge spending on social upliftment projects yielding poor results and a corrupt leadership that has mismanaged the country without being held to account.
And for this dismal picture to change, South Africans need to change society’s trajectory, narrow the wealth gap, offer children better access to quality education and health services and put an end to our failing leadership structure.
These were the takeaway points of a global webinar on Wednesday aimed at unpacking SA’s startling inequality as laid out earlier this year in a World Bank report, the role of social investment and ways to effectively address inequality.
Opening, Dr Pali Lehohla — former statistician-general and consultant to Oxford University’s Poverty and Human Development Initiative — said there are six white graduates to every black graduate in SA.
“This means investments in education are not yielding fair results, we have fewer taxpayers than needed and more people reliant on social grants than necessary,” he said.
“And poverty is driven by a lack of education. You are 10 times more likely to be poor when you are uneducated. Apartheid created conditions that led to the underperformance of blacks who were blocked from the best schools. And there were environment challenges ... parents who themselves never saw the inside of a classroom having to send children to school.”
There was also gendered inequality, with women earning on average 38% less than men. This, he said, required a new social compact and a change in trajectory.
Precious Zikhali, a poverty economist at the World Bank, which was involved in drawing up the inequality report, said a large gap between rich and poor could drive further inequality if left unresolved.
“If you are born poor, you have minimal chance of getting out without help because access to jobs is uneven. You’ve lost the battle before you start because of the things you inherited,” she said, adding government’s efforts to tackle this unfairness “are not commensurate with the results we are seeing” in a wealth gap that has remained unchanged since apartheid.
Oxfam SA project officer Vuyokazi Futshane said black women were the hardest hit, with the Covid-19 pandemic intensifying the situation as seen with the rich growing their wealth and the poor falling deeper.
Prof Imraan Valodia, director of Wits University’s Southern Centre for Inequality Studies, said while the Broad Based Black Economic Empowerment was well-intentioned, it had not improved inequality, just altered the complexion.
Call it what it is. Plain old stealing.
— Thami Ngubeni, convener
“The top 1% of the wealthy in this country have average net holdings of R17.8m, while in the bottom 50% of SA families wealth position isat minus R16,000 on average.”
Zikhali said other countries — Brazil being the most comparable to SA — had managed to address the challenges successfully by focusing on quality education, incentivising upliftment partnerships and projects, using the digital economy to reach those in need and “lessening the leaks”.
Convener Thami Ngubeni scoffed at the much-used term “leakage”.
“Call it what it is. Plain old stealing,” she said.
Zikhali said addressing inequality was necessary for all classes of society, as it eased social tensions and the associated protest action and improved the business environment and investment climate.
Valodia said mechanisms to move households from poverty to a relatively higher income bracket were critical.
“We have huge concentrations of power given to small groups of companies, and that needs to change for ownership and profits to be more spread out like with companies that are owned by workers.
“And then the biggest challenge in the next 50 years will be climate change, so we need to design fair ways to address the fact that consumption patterns are showing that the top earning 10% are driving the most emissions.”
Futshane said it is government, not the private sector, that is mandated to provide basic services.
“So my question is to people in general. If government is failing to meet socioeconomic needs, why do we keep them in power? The youth are unemployed and count for the highest population group, yet we see low voter turnout from them. Why don’t you do something?” she said.
Tracey Henry, CEO of the webinar host Tshikululu Social Investments, said the World Bank report was “rich in data”.
“We have taken insights from this in the belief that it’s time to address this inequality,”
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