Study shows black population taking more of SA’s wealth, debt

The African black population group possesses almost 60% of the value of total household wealth and two-thirds of the value of household assets in South Africa, according to research from the University of SA (Unisa) and Momentum group.

The numbers surprised some economists, while others said the numbers indicated life was improving slowly for African people, the biggest population group in the country.

Black population owns 66% of household assets

The Unisa-Momentum report said the value of South African households’ wealth, expressed in current prices, increased to R19.3 trillion at the end of 2023, which is R1.3 trillion or 7.1% higher compared to the end of 2022.

The value of South African household assets amounted to R22.2 trillion at the end of 2023 (measured in current prices), up from R20.8 trillion a year before.

Detailed figures showed that the African black group held 57.3% of total household wealth and 66% of total household assets.

Whites held 32.2% of household wealth and 19.7% of household assets. Next came Coloureds, with 6.6% of household wealth and 9.8% of household assets.

At the bottom of the ladder were Indian/Asians, with 3.9% of household wealth and 4.6% of household assets.

The report noted that the African black sector “owes almost 60% of outstanding debt”. Black Africans make up 82.1% of the country’s population, according to the report, with whites comprising 8.6%.

It added: “South African households’ wealth is unequally distributed among demographic groups.

“The wealth Gini coefficient was estimated at 0.75 in 2023, mostly because the wealthiest 1% of households possessed 37% of the wealth, while 76% of the wealth was in the hands of the top 10% richest households.

“In addition, 51% of households had a negative wealth position, meaning their debt exceeded their assets.”

It said that, in general, the African black household group “hold more assets via ownership of residential property, other tangible assets and deposits or cash, compared to the other population groups”.

It added: “Compared to the African black population group, the other three population groups accumulate more of their assets via saving and investments.”

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The report looks at households, not individuals – economist

Economist Dawie Roodt pointed out that the report refers to households and not individuals.

“Black households on average consist of more people than white households. “You also have to consider that people in the white households are older than those in black households and older people usually have more assets.”

Another economist, prof Jannie Rossouw, said he was surprised at the numbers, which also showed that “the next generation will be better off”.

Dr Mark Burke, DA national spokesperson on appropriations, said he was not surprised by the shift in wealth, adding: “We need to look at real numbers and then come as close as we can to the individual experience of South Africans either getting wealthier, or poorer.”

He also pointed out that “the purchasing value of households’ wealth was 1.8% higher compared to Q4 2022” and that after accounting for inflation, “Momentum’s own numbers suggest it’s only 1.8% growth”.

Factoring in GDP growth, “this is not a very big increase”. Burke said the report suggested the reason the net wealth of South Africans increased marginally above inflation is because of a slowdown in liabilities.

“People would be taking out fewer mortgages during this time given the high interest rates. It also makes sense that wealth grew very marginally in real terms given the stressed economy.

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DA says inequality still prevalent

“What the report shows is that there is persistent wealth inequality in SA, even within the same demographic groups.

“The DA advocates for equal opportunities. We’re working hard to make sure that those at the bottom have access to the resources that will improve their lives.

“If we can achieve this and we believe that we can, it will grow the collective wealth in SA while balancing the distribution.”

The report also said: “The wealthiest households are not necessarily the highest income-earners. Many middle-income households were more successful than high-income households in the wealth accumulation process.

“For instance, where the wealthiest 1% of households have an estimated 36.5% of the wealth, the top 1% income-earning households possess an estimated 15.5% of household wealth. This indicates that high-income earners don’t always convert income into wealth.”

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