South Africa @ 20: Economy Leaves Many Behind After Apartheid

South Africa @ 20: Economy Leaves Many Behind After Apartheid

On Sunday April 27 South Africa celebrated a monumental anniversary in the country’s checkered history. On that date in 1994, the country held its first inclusive, democratic elections. These elections marked the end of apartheid and the systematic disenfranchisement of Black South Africans, for the first time allowing them to vote and stand for national office.

The elections would sweep Nelson Mandela and his African National Congress party into power, a position the ANC is yet to leave. After two decades of democracy, it is worth examining where the country is, both politically and economically. In this continuing AFKInsider exclusive mini-series, we look at where African states are 20 years after major events in their history. (For our reports on Rwanda, 20 years after genocide, click here and here),

In both the South African body politic and the country’s economy there is good news and much more troubling progress to report. This piece will examine the economy of the sub-Saharan state since the apartheid system was replaced by inclusive democracy and the orange, white and blue apartheid flag was replaced with the current rainbow model.

After 20 years of democratic rule, the South African economy is, in many ways, a world of contrasts. Until recently overtaken by Nigeria, South Africa — a country with a third of the population — was the continent’s largest economy, but inequality runs rampant.

This has led to a sharp disparity between the country’s international economic power and prevalent on-the-ground poverty. Even as the country’s economic power is acknowledged by its inclusion in the BRICS economic group, more than 30 percent  of the population lives at or below the poverty line and nearly a quarter of the population is unemployed.

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South Africa is the world’s second most unequal country, according to the Gini Coefficient for income distribution — a widely cited economic tool for measuring income inequality. It is eclipsed only by Lesotho, which has not reported new data for nearly two decades.

A number of factors further illustrate South Africa’s inequality problems. Despite having the world’s 26th-largest economy, South Africa has a nearly 25-percent unemployment rate. While the per capita gross domestic product is more than $11,000 USD, more than 30 percent of the country’s population of 48 million-plus lives on less than $2 a day.

While the most impoverished 10 percent is responsible for just 1.2 percent of the country’s income, the top 10 percent, which is majority whites, accounts for nearly 52 percent. This compares to 2 percent and 30 percent in the United States, itself a relative model of inequality.

In addition to the normative or moral problems of a country with comparative wealth leaving so many behind, this strikes a chord with those who remember the fight for social justice, equality and freedom that preceded a democratic South Africa.

Nobel Laureate and anti-apartheid activist Archbishop Desmond Tutu recently told South Africa’s Sunday Times that he was “glad” Mandela and other freedom fighters were not around to see the country’s struggles. These struggles have also led to widespread disillusionment.

In an Associated Press interview surrounding the 20 years of democracy celebration, Gundo Mmbi, a student at Wits University in Johannesburg bemoaned the “really crazy” corruption of its leadership and lack of opportunity for the poor.

Despite the inequality in the young democracy, the economy’s overall direction has completely turned around since the final years of apartheid.

This fact was celebrated by the Department of Trade and Industry at a public discussion April 23. The 1994 economy “…was characterized by an extended period of negative growth rates, falling per capita incomes, ballooning fiscal deficit, double digit inflation rates, negative rates of fixed investment, rising unemployment,” and a number of other maladies, said Rob Davies, South Africa’s minister of trade and industry.

After apartheid the sanctions and isolation were lifted, allowing a significant turnaround over the last two decades.

In the 78 fiscal quarters between 1994 and 2013 South Africa experienced negative growth in just two. In both instances “international crises precipitated the contraction” according to Davies. This is the longest sustained period of growth since the South African Reserve Bank began keeping records.

While the South African economy has grown in leaps and bounds since the flatlining economic indicators of the final years of apartheid, its growth has not benefited all. While industries such as mining and banking have created vast wealth for a number of South Africans, too many have been left behind.

This is particularly troubling in the context of the social justice and economic empowerment themes of the anti-apartheid movement, spearheaded by the recently deceased Nelson Mandela. While it is sometimes said that a rising tide lifts all boats, this has not been the case in South Africa.

Government initiatives to lift the masses out of poverty have only gone so far. If the vision of anti-apartheid revolutionaries of a free, just and truly equal-opportunity South Africa are to be realized, they must go further.

Part two of this series will address the country’s governance in the two decades since apartheid. While government has remained stable and voting has remained free and fair, a lack of meaningful challengers has turned the country into a de factoone-party state with sometimes troubling consequences.

Andrew Friedman is a human rights attorney and consultant who works and writes on legal reform and constitutional law with an emphasis on Africa. He can be reached via email at afriedm2@gmail.com or via twitter @AndrewBFriedman.