South Africa’s Gini coefficient: causes, consequences and possible responses

Abstract

South Africa is acknowledged as having the highest Gini coefficient in the world. The Gini coefficient is a measure of income inequality in a country. The eradication of all forms of inequality was probably the most important aspiration for people pre-democracy. After two decades of democracy, not only has the eradication of inequality not materialised, but inequality has worsened. The aim of the research is threefold. Firstly, to understand the origins and the ensuing reasons for inequality as it is experienced in South Africa in 2013 and secondly, to investigate what the effects of this inequality are on the lives of South Africans, socially, politically and economically. Lastly, the research aims to find what, if anything, South Africans can do to address the issue, in order to determine if the aspiration is indeed attainable. Qualitative exploratory research was conducted by interviewing 16 prominent South Africans with the requisite knowledge of the topic and experience in their respective fields. Semi-structured, in-depth face-to-face interviews were performed. Content and theme analysis were carried out on the transcripts, followed by the recording of the responses in logically ordered tables. The literature informed the interpretation of the results in the tables. The reasons for and causes of South Africa’s high Gini coefficient were identified, with the apartheid legacy and the present government’s governance style as the two greatest contributors. The effects of the high inequality in the South African context were considered far more detrimental to society, than to the politics and the economy of the country. The research yielded a number of actions that could be considered to reduce inequality, thereby improving the Gini coefficient. The two most important proposals were addressing the current poor education system and finding a solution for unemployment.