How much South Africa’s richest 10% owns

Net financial assets per capita in South Africa have risen to EUR 9,770 (R189,000), but the distribution is heavily imbalanced, with the richest 10% controlling 85% of the country’s total wealth.

South Africa’s financial assets are showing strong growth, but unequal distribution remains the nation’s Achille’s heel.

This is according to Allianz’s latest edition of its Global Wealth Report, which looks at the assets and debt situations of nearly 60 countries under the microscope.

Allianz said that 2023 was marked by sharp monetary tightening, but many economies provided resilience, and some markets even boomed.

Global financial assets of private households also recorded strong growth, increasing 7.6% following a loss of 3.5% the year prior.

Total financial assets grew to EUR 239 trillion at the end of 2023.

Financial assets in South Africa increased by 8.3% in 2023, showing a strong recovery after a dismal year in 2022 (+0.1%).

The main drivers were insurance/pensions (9.5%), the dominant asset call in South African households, with a share of 49%.

The two other asset classes, bank deposits and securities, also grew 7.5% and 7.0% over the year.

Financial assets only increased by 2.2% in 2023 when adjusted for inflation.

That said, compared to the pre-pandemic level of 2019, the purchasing power of financial assets was 12.3% higher at the end of 2023.

“This sharply contrasts many European economies where savers suffered four lost years in real terms,” said Allianz.

In line with the global trend, growth in liabilities slowed to 5.6% in 2023.

However, the debt ratio remained at 41%, which is on par with the pre-pandemic level and 8% below the record in 2008.

Net financial assets finally also advanced by a robust 8.9%. With net financial assets per capita of EUR 9,770 (R189,000), South Africa climbed one place to 38th place in Allianz’s rankings:

Notably, Allianz said that while growth in financial assets is solid, distribution remains South Africa’s Achilles heel.

“In fact, it is one of the countries with the most unequal distribution of wealth, with the richest 10% of the population owning 85% of total net financial assets,” said Allianz.

“Moreover, the situation has hardly improved over the last two decades.”

South Africa’s inequality is widely recognized as being the worst in the world, with the disparity between the top and bottom earners widening since the end of apartheid.

Imraan Valodia, the Director of the Southern Centre for Inequality Studies at Wits, said that the top 0.01% of people – just 3,500 individuals – own about 15% of the wealth in South Africa.

South Africa has the highest Gini coefficient in the world. The Gini coefficient is a statistical measure that gauges how income is distributed across populations. It takes values between 0 and 1, with 0 indicating perfect equality, while a coefficient of 1 indicates perfect inequality.

South Africa’s Gini Coefficient is the highest in the world, standing at 0.67 in 2023

According to the World Bank’s Gini Index, the Slovak Republic is the most equal society globally, with a score of 0.29.

South Africa is on the other end of the scale, with a Gini Coefficient of 0.67.

Valodia said a significant driver of inequality is that many South Africans are unemployed or report meagre incomes.

Stats SA’s latest Quarterly Labour Force Survey showed South Africa’s unemployment rate has jumped to 33.5%.

Valodia also said that incomes at the top end of the income distribution are very high. Data show that the wealthiest 10% of households are responsible for 52% of all expenditures. Conversely, the poorest 10% of households contribute only 0.8% of all expenses.

Data from JustShare also highlights the income inequality in major JSE-listed companies.

The average CEO in the retail and wholesale sector, the country’s second-largest employer, earns 597 more than their lowest-earning employee.

For instance, Woolworths CEO Roy Bagattini earned R122 million for the 2023 financial year— over 1,300 times more than the R93,600 internal minimum pay.

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