The South African economy is the largest and most innovative on the continent. In the years leading up to the global recession of 2008, South Africa’s economy experienced consistent annual GDP growth. South Africa has very lucrative mining, agriculture, and tourism industries which contribute to economic growth. Over the past two decades the economy has experienced unprecedented growth, by far the largest in the nation’s history.
Many economic indicators show that South Africa’s economy is growing significantly. Although this may be true in many respects, the nation faces severe economic inequality and disparity among racial groups. South Africa is considered an upper-middle income country in terms of GDP and economic indicators. In respect to social aspects such as life expectancy, disease rates, and unemployment, it is on the level of nations with very low income levels (Classification System).
The average household income for South Africa appears to be higher than other nations because of extreme inequality between blacks and whites. As the chart below shows, over the past 30 years, whites, on average, have earned up to 12 times as much as blacks. This accounts for the higher average income that is seen in many economic reports.
|Per capita income: 1980 1985 1990 1995 2000 2005|
|Blacks||R 3 134||R 4 479||R 5 107||R 5 423||R 6 008||R 6 704||R 7 283|
|Coloured||R 8 184||R 8 630||R 8 822||R 9 855||R 11 404||R 12 722||R 14 126|
|Indians||R 9 595||R 11 244||R 13 296||R 15 113||R 17 637||R 20 592||R 23 938|
|Whites||R 39 217||R 44 242||R 46 670||R 48 370||R 51 951||R 53 840||R 62 360|
|Total||R 9 936||R 11 626||R 12 125||R 12 385||R 12 903||R 13 436||R 14 716|
Economic inequality is a problem that can be attributed to South Africa’s long history of apartheid. The nation’s history of racial discrimination still lingers today and, unfortunately, is reflected in poverty levels between racial groups. The figure below shows the poverty levels among different racial groups within the nation. This is a startling illustration of the level of inequality in the economy.
|Census 1996||Census 2001||Community Survey 2007|
A BBC podcast from earlier this month documented economic conditions within black townships around Johannesburg. The report indicated that some townships still face unemployment rates hovering around 60%, severe poverty, and horrible living conditions.
This is a problem that the government must address. Although income inequality may be present in many nations, it is particularly staggering in South Africa. Whites, which represent less than 10 percent of the population, enjoy great success and live, for the most part, very comfortable lives. Blacks which are the overwhelming majority still face poverty levels, comparable to some of the lowest income nations. South Africa must address this dilemma in order for its economy to enjoy continued success in the future.