Over the past 30 years or so Statistics South Africa has undertaken a series of Income and Expenditure Surveys in the post-apartheid period. The vintages were undertaken in 1995, 2000, 2005, 2011 and 2022. In 2015/16, yet another Income and Expenditure Survey was to be undertaken, but the Treasury would not allocate funding for it. The survey provides, besides a profile of expenditure and incomes of South Africans for the purpose of constructing a consumer price index (CPI), invaluable information on demand for goods and services based on the incomes of citizens and what they spend their money on.
I recall arguing that it is not a grainy CPI but a granular one that South Africa deserves. These five data points are very important as they reflect how South Africans chose to create incomes for themselves from different sources and how they spent these. More importantly, this comes as we reflect on the Reconstruction & Development Programme (RDP), which focused on five areas, namely meeting basic needs, developing our human resources, building the economy, democratising the state and society and implementing the RDP.
The statistician-general’s report, probably more than any other, provides the clearest image of where South Africa has been in a rather foolproof manner. What remains is to determine what to do given intolerable outcomes to date for the majority of black Africans especially and the coloured population who stand to never see intergenerational value. This is the sad evidence emerging out of all the income and expenditure survey time-series, save for the invited black African minority of 13%. A surprising figure that ironically corresponds with the 1913 Land Act.
The first post-apartheid income and expenditure survey that was undertaken in 1995, laid the picture of inequality as bare as can be and subsequent ones have followed suit, including the most recent one.
The report breaks down race, sex and region according to income received. The sources of income are tabulated as deriving from employment, pensions, retirement or gifts, and are also broken down by race. The expenditure covers a huge horizon of items that are classified into, for instance, food, education, transport, housing and health. The expenditure items per household are split by whether the head of the household is male or female. No doubt this trove of data is any policymaker’s wish. Given that this is a time-series data in space, in time, this places South Africa in a unique position on which a true assessment of nation-building can be made. In particular the constitutional articulation that says: “We, the people of South Africa, recognise the injustices of our past; honour those who suffered for justice and freedom in our land; respect those who have worked to build and develop our country.”
The reports on income and expenditure over the past 28 years have focused on the historical injustices but from an income and expenditure perspective. It is a mirror that tells a gruesome story, one of persistent inequality.
The first post-apartheid income and expenditure survey that was undertaken in 1995, laid the picture of inequality as bare as can be and subsequent ones have followed suit, including the most recent one.
For instance, it showed that the expenditure of black Africans on food accounted for 35% of their total expenditure compared with that of whites, which was 19.5%. The gap persisted in 2000 but dropped dramatically for black Africans to 23.2% in 2005 and rose to 26.7% before dropping back to 19.5% in 2022. The corresponding numbers for whites were 9.4%, 7.2% and 9.1% respectively. The cost of transport has remained high for both blacks and whites, but Covid-19 seems to have worked in favour of whites as their transport costs dropped to 5.4% relative to that of black Africans, whose transport costs by 2022 were16.9%. Working from home and connectivity might be the major drivers.
Income disparities by race persist and remain very high. Total black African expenditure per household stands at R108,000 against R409,000 for whites. Yet the total black African expenditure stands at 62% against a 25% expenditure by whites. The black Africans accommodated in the top quintile income, of which whites constitute 73%, is a mere 13%.
Here is where the injustice rests, driven by levels of concentrations of purchase points. These are in the hands of whites substantively and the two-thirds expenditure driven by blacks is spent in these white enclaves. It is certainly a losing battle for black Africans.
The income and expenditure report represents a final testament to the intractable policy failures that have left the 80% black majority as consumers of white-produced products. It is unbecoming and unacceptable that 62% of expenditure flows into a pool of less than 10% of the population whose per capita incomes are four times that of the majority, and they within their race group constitute 73% of the moneyed aristocracy who are on the top quintile against the accommodated black Africans, who are a minuscule 13% of this top quintile. Rivers flow to the ocean and until the black Africans change the destination of the sea their rivers serve as conduits of wealth transfer away from their own future generations.
If the constitution understands the injustices of the past, it is this persistent and stubborn outcome of inequality and pathways that sustain it. Such as the 62% of the total expenditure by black Africans which flows into the concentrations of wealth that are in white hands, whose expenditure is a mere 25% and the remainder of 13% expenditure is by coloureds. The income-expenditure survey by Stats SA has just shown how unsustainable inequality is, and it must serve as workbook for the much talked about National Dialogue. It is the central, if not the only, pillar.
Dr Pali Lehohla is a Professor of Practice at the University of Johannesburg, a Research Associate at Oxford University, a board member of Institute for Economic Justice at Wits and a distinguished Alumni of the University of Ghana. He is the former Statistician-General of South Africa
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