South Africa: Bridging the Income Divide

Proshare

Saturday, February 08, 2020  09:07 AM / by IMFBlog / Header Image Credit: GERO BRELOER/PICTURE ALLIANCE/DPA/NEWSCOM


South Africa suffers among the highest levels of inequality in the world. As our Chart of the Week shows, the country's wealth is concentrated in the upper levels of society. The top 20 percent of the population holds over 68 percent of income, while the poorest 40 percent possess only 7 percent of income.

That inequality isn't only seen in income distribution; it also manifests itself in unequal access to opportunities-education, health, and jobs-and regional disparities. Meanwhile, low growth and rising unemployment have perpetuated inequality. High unemployment is a major factor. South Africa's unemployment rate is significantly higher than other emerging markets, and nearly 60 percent of the country's youth (aged 15-24) are unemployed.

Proshare Nigeria Pvt. Ltd.

 

South Africa started the 1990s with already elevated inequality as the policy of apartheid excluded a large swath of the population from economic opportunities. South Africa's Gini-an index that measures inequality-has increased further in the early 2000s and has remained high ever since. Meanwhile, its peers have made inroads in reducing inequality.

The South African government has used different tools to tackle the stubborn levels of inequality, including through progressive fiscal redistribution. Efforts to reduce inequality have focused on higher social spending, targeted government transfers, and affirmative action to diversify wealth ownership, and promote entrepreneurship among the previously marginalized. Rising debt is reducing the scope to further use fiscal policy for redistribution.

In the future, existing measures will need to be complemented by reforms that promote private investment, create jobs, and foster inclusive growth if South Africa is to bridge its great income divide.


Proshare Nigeria Pvt. Ltd.


Related News - South Africa

  1. South Africa's Investment Summit Secures $25bn of Fresh Funding
  2. Can Team Ramaphosa Stabilize South Africa's Economy?
  3. Nigeria and South Africa: A Reason to Worry?
  4. South Africa's Rate Decision: Giving Priority To Foreign Investors
  5. Lower Sugar Production In South Africa To Increase Prices
  6. Moody's Rating: Life-Saver to South Africa's Economy?
  7. Mid-Term Budget Policy Statement: Should South Africa Be Worried?
  8. Nigeria-South Africa: Strengthening Relations Between Two Regional Powerhouses
  9. Nigeria - South Africa New Trade Deal: Anything to Cheer?
  10. South Africa's Economy in Q2-19: Fragile Still?
  11. As For South Africa, So For Jigawa: Understanding The Missing Point - Fasua
  12. Why Nigerians Will Never Leave South Africa - Fasua
  13. Nigeria-South Africa; Trade Not Xenophobia, A Handshake Across the Sub-Sahara
  14. South Africa and Nigeria: A Similar Narrative
  15. In the Footsteps of Nigeria, South Africa Reappoints Apex Bank Governor
  16. South Africa's Q1-19 GDP Result: On the Way to Another Recession?
  17. South Africa's Rand Continues To Tumble On Central Bank Worries
  18. South Africa's Economic Slump-A Huge Signal for Structural Reforms
  19. Cabinet reshuffling in South Africa: Any lesson for Nigeria?

 

 Proshare Nigeria Pvt. Ltd.


Related News - World Bank, IMF And Devt Agencies

  1. Interest Rate Controls, Capital Flow Restrictions, and Other Costly Fin. MKT Regulatory Tools
  2. Assessing Climate-Change Risk by Stress Testing for Financial Resilience
  3. Waste Woes in the World
  4. Countries in the IMF Financial Spotlight in 2020
  5. A Call for Vigilance After a Strong Year for Risky Assets
  6. The Global Social Mobility Report 2020 - Equality, Opportunity and a New Economic Imperative
  7. IMF and World Bank Differ on Nigeria's Growth Outlook
  8. A Little Better Message in the New WEO; 2020 Global Forecast Trimmed from 3.4% to 3.3%
  9. Tentative Stabilization, Sluggish Recovery?
  10. US Embassy's Description of Nigeria: What Partners Share Openly
  11. Afreximbank Signs Term Sheet for $190m Facility to Made in Africa Inc
  12. WAMZ Recommends Extraordinary Meeting Of Ecowas On Eco

 

 Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.

 

 

 

 

READ MORE:
Related News
SCROLL TO TOP