For miles, boxy shacks of cheap metal stretch to the horizon. On your way from the airport into Cape Town’s bustling city center, take a sharp left after these shantytowns, and the road takes you to several enclaves of affluence. The mansions overlooking the water are frequented by the elite and Hollywood celebrities alike. This was South Africa during Apartheid, and this is South Africa now.
Since the sun set on the existence of the apartheid-era National Party, the economic makeup of South Africa and her people has changed both marginally and markedly. South Africa’s Gini coefficient, a unit of measuring a country’s inequality, remains one of the highest in the world. Multiple studies report the top 10% owns between 70–90% of the nation’s wealth.
In many areas of the world, inequality often bears the sister of poverty. South Africa is no different. In 2015, approximately six out of ten South Africans live on less than $55 per month.
Though these numbers are concerning, the structure of South African society has improved with more of the non-white population taking their place in the middle and upper classes. Further encouragements include considerable advances in the realm of service provision, education, and higher standards of living.
Undoubtedly, there are aspects of South African society that provide more opportunities to non-whites than there were before the election of Nelson Mandela.
For many years, non-whites were barred from holding certain higher-income occupations, or they were restricted on where and how they worked. By the sheer dissolvement of apartheid legislation; blacks, coloureds, and Indians were awarded more opportunity following the repeal of pro-white labor laws.
This reality can be seen. Servaas van der Berg, a Stellenbosch University Professor of Economics found, “After 1994, the black population experienced broad income gains across the board… The black middle class, in particular, grew from 300,000 in 1993 to 3,000,000 in 2012.
The actual poverty levels, according to some statistics, show that South Africans aren’t as poor either. Stats SA cites this improvement, “…we are still better off compared to the country’s poverty situation from a decade earlier when it was estimated that close to two-thirds of South Africans (66.6% or roughly 31.6 million people) were living below the upper bound poverty level in 2006”. This is compared to the 55% seen in recent years.
Though the overall proportion is still skewed, there have been improvements for blacks in the labor market as well. In 2004, whites made up 86% of the top bracket of living standards. By 2015 that share had fallen to 49%, with blacks making up 30%. Previously, South African universities produced one black engineering graduate for every forty-four white graduates. By 2014, there were two blacks graduates for every white.
A national minimum wage of 20 Rand an hour has been established and was set in May 2018. This bill has benefited working blacks the most.
After apartheid, the canyon of inequality began to close. Basic services that were nonexistent before, incrementally became available as the black majority succeeded the final Apartheid leader, President F. W. De Klerk.
Compared to 1994, healthcare, access to potable water and food, electricity, and sanitation have all markedly improved. For example, 66% of South Africans in 2015 felt they had enough food compared to 54% in 2002.
For five decades, the National Party’s government neglected the non-white populations and faced no electoral backlash due to their disenfranchisement. This is the obvious reason many urban and rural communities like those in the Eastern Cape, a considerably rural region of South Africa, began to receive service when they were ignored previously.
One of the most notable improvements has been the construction of shelters. Since 1996, the number of people living in proper houses has more than doubled. Access to sanitation and electricity has grown by even more. Nearly 2.3 million houses have been provided by the government since 1994.
While acknowledging these improvements, inequality and poverty remain painfully high.
There are a couple of major reasons why South Africa remains and is in ways more unequal. Solving these deep-rooted and historical issues is no easy feat and cannot likely be changed in only two decades. However, if South Africa wishes to address their dragging inequality, these issues must be better redressed.
On the drive from the Cape Town airport towards the city center, the view of this remaining inequality is as staggering as the problem is evident.
A vast majority of the impoverished are black, the most oppressed racial group for the entirety of apartheid. In 2015, 9 out of every 10 poor people in South Africa (93%) were black, even though they make up 80% of the country’s population.
These unfortunate statistics seem logical considering a vast majority of members within non-white generations were subjected to poor educations and heavily restricted economic opportunities. The ANC government has tried to improve this negative educational legacy, spending more money on education than any other African country. However, this spending has largely been in vain. South African primary school students perform worse than their much poorer neighbor, Swaziland, on international tests.
When freedom came along and the economy opened, the small percentage of the black population that was already educated disproportionally benefitted, exacerbating inequality further. Simultaneously, as the educated black population rose on the socio-economic ladder, many South Africans lost their jobs due to capital flight and corporate restructuring of white companies. Although the governmental structure of apartheid has a lingering, adverse legacy, the economic one is no better.
“To many South Africans opportunity is a foreign name. In many cases you will find nepotism, connections are normalized as opportunities. The gap between poor and rich in South Africa is massive, especially in Cape Town,” said Asekho Sekho, a Cape Town resident and business owner in the township of Langa.
“Opportunities are still preserved or distributed from the elite groups to the bottom of the chain. The country’s economy is facing hard times. It’s a lot of work for our newly elected president (Cyril Ramaphosa), which won’t be done over night ,” he went on to say.
The domination of low-labor, high capital industries is without a doubt a factor in this inequality. The mining and natural resources sector, an infamous industry for needing few workers, has played a large role in South Africa’s economy due to the nation’s abundant reserves of gold, diamonds, and coal. Another notable sector with these low labor requirements is the financial services industry, which provides 20% of the country’s GDP, a larger portion than any other industry in the South African economy.
Manufacturing, once making South Africa famous as the continent’s most industrialized nation, has decreased in relevancy. As seen in countries all over the world, the opening of the economy shrank manufacturing and labor-intensive industries, these jobs moving to countries with lower labor costs.
“The clothing and textile sector in South Africa employed well over 300,000 people in 1994. A few years after that- because of the flood of cheap imports from various parts of the world- there were maybe 50,000 people employed” said Andrew Feinsten, former ANC member of parliament.
Although a manufacturing industry exists within South Africa, it is marginal compared to what it once was. “Value-added by the industrial sectors of the economy did not exceed 35% of GDP since the mid-1990s. This compares poorly with a random selection of other middle-income countries..” according to Mr. Feinstein.
Although to what extent is unknown, a lasting controversy is the continued control of major economic sectors by the white population. During the prosperous years of the mid-2000s, most South Africans earned more money as a result. However, not proportionately. Between 2000 and 2005, the income of whites increased by 78%, while blacks only saw an increase of 45%.
According to some sources, the white population still owns up to 71% of South Africa’s arable farmland. In recent years, this fact has fueled a populist movement best embodied by a rising Marxist political party known as the Economic Freedom Fighters. They now hold the third most seats in parliament.
These systemic disadvantages do exist, and without radical restructuring of the economy they are unlikely to change soon. Decreasing inequality could only have been done to an extent with any government. Nonetheless, the ANC has generally squandered an opportunity to make more progress on income equity.
Because of faulty economics and rampant corruption, the ANC’s nearly two-thirds government majority for twenty years has only marginally increased the quality of South Africans’ lives. In 2011, Willie Hofmeyer, the head of the Special Investigation Unit within the ANC, found that between R25 billion and R30 billion was lost each year from corruption. Other estimates have far more.
When there are still four hundred South African schools made of mud; inadequate electricity in 3,000 schools and a lack of water in 2,000 more, this theft is detrimental to development. This abuse of funds is not found only in low-level positions, but most notoriously, within the Presidential Office itself. Former President Jacob Zuma allocated $23 million of government funds to pay for improvements of his luxurious personal mansion outside of Johannesburg.
Mcebisi Ndletyana of the Pan African Institute claims that improved economic prospects would disadvantage political patronage, and therefore the present system remains intact. Mr. Ndletyana believes that the South African government is not a meritocracy, but many government positions remain occupied by unqualified individuals because they were put there to agree or push for policies supported by their patron.
Though the policies of the ANC have not led to an overall decline in the economy, their policies have failed to adequately raise the incomes of the poor and non-whites. South Africa has seen admirable improvements, this is undeniable. But a quick drive into Cape Town proves that not nearly enough has been done.