Research cited by Independent Online recently revealed that only 0.01% or 3,500 individuals hold around 15% of the total fortunes in South Africa. The report also shows that the wealth disparity in the country did not decline even after 26 years of democracy.
The study titled ‘Measuring the distribution of household in South Africa’ was conducted by Aroop Chatterjee from the Southern Centre for Inequality Studies at Wits University, Leo Czakjka from Belgium’s Universite Catholique de Louvain and Amory Gethin from the World Inequality Lab at the Paris School of Economics.
According to their findings, South Africa is one of the countries with the highest rates of the wealth gap. The researchers presented the country’s riches as a pyramid, with the top 0.01% or exactly 3,540 people hold 15%, the top 0.1% or 35,000 people control 29% and the top 1% or 350,000 people have 55%. Those who belong to the top 10% or 3.5 million people have power over 85%.
Meanwhile, a whopping 90% of the population or 31.8 million individuals hold a measly 14% of all fortunes. A large portion of the largest tier is deep in debt. The bottom 50% or 17.7 million individuals have negative riches, which averages to a net of -R16,000.
The researchers emphasized that they used affluence as a measurement of disparity as opposed to the income gap. A paper by Chatterjee said that considering the populations’ affluence is important as “those with a higher starting level of wealth are able to build wealth quicker than those with lower or no wealth to begin with,” which leads to increasing inequality.
The IOL report noted that affluence is difficult to quantify especially as the rich are able to hide their assets through various means such as the case of the Panama Papers.