SALDRU Contributes to Latest World Bank Report on Poverty & Inequality in South Africa

Image: World Bank Photo Collection flickr/CC

The World Bank released its latest poverty report on South Africa during the month of April to much dismay, as it presented indisputable evidence that South Africa is the most unequal country in the world. SALDRU’s research contributed to the findings.

The report titled, Overcoming Poverty and Inequality in South Africa: An assessment of drivers, constraints and opportunities, specifically contends, “By any measure, South Africa is one of the most unequal countries in the world.”

Highlighting the fact that South Africa has struggled to address inequality despite adopting a redistributive fiscal policy stance that has its roots in the Reconstruction and Development Program, the report argues, “The persistence of these challenges, more than two decades after the end of apartheid, calls for a comprehensive assessment of the extent and causes of poverty and inequality, with attention to trends, drivers, dynamics, policy, impact, and monitoring.”

The report pinpoints South Africa’s extremely high level of income inequality as a major obstacle to economic growth. In addition, it points out, “Wealth inequality is also high and has been growing over time.”

The report draws on an input paper that was produced for the World Bank by Murray Leibbrandt, Rocco Zizzamia and Simone Schotte on “Assessing the Extent and Nature of Chronic Poverty, Poverty Dynamics, and Vulnerability to Poverty in South Africa” in order to analyse poverty dynamics and the size of the middle class in South Africa. As reported, this work finds that only one in four South Africans can be considered stably middle class or elite and that just under 40% of South Africans seem to be trapped in poverty.

This work makes use of data from the National Income Dynamics Study (NIDS), a panel survey on the dynamics of poverty and inequality that SALDRU currently implements on behalf of the Department of Planning Monitoring and Evaluation (DPME).

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