The International Monetary Fund (IMF) has published a series of graphs highlighting some of the major wealth issues facing South Africa right now.
The group drew specific attention to the significant disparities across South Africa’s nine provinces.
Its data shows that income per capita in Gauteng – the main economic province that comprises large cities like Johannesburg and Pretoria – is almost twice the levels as that found in the mostly rural provinces like Limpopo and Eastern Cape.
This is because being close to the economic centres increases job and income prospects, the IMF said.
Subdued growth has also jeopardised efforts to promote inclusion, it said.
“With growth stagnating over the past decade, the economy has not created enough jobs to absorb the unemployed and new entrants to the labour market.
“Broad-based growth that generates more low-skilled jobs for the unemployed will support inequality reduction.”
The high unemployment is also a major factor behind the inequality levels, the group said.
“South Africa’s unemployment rate is significantly higher than in other emerging markets, with youth unemployment exceeding 50%.
“Creating more low-skilled jobs to improve labor force participation, especially in the poorest provinces, will spur inclusion.
“Employment prospects can be enhanced by improving the quality of education and facilitating affordable transportation to job centres.”
The IMF further warned that in the future, South Africa will need further fundamental reforms for more robust and inclusive growth.
The focus needs to be on creating a business environment more conducive to private investment and job creation, it said.
“This requires improved governance, reducing the cost of doing business, making goods and services markets more open to competition, allowing firms to compensate workers in line with their skills and productivity, and making state-owned service providers more efficient.
“Policies will also be needed to create opportunities to support the marginalized population through improved quality of education, health, and transportation.”