Wealth

Does Ramaphosa deserve a R3.6 million salary?

Staff Writer

 ·25 Mar 2018

South Africa’s new president Cyril Ramaphosa is expected to earn a salary of R3.6 million in 2018 – easily making him one of the best paid leaders in the world.

Of the many criticisms, analysts have said a large salary hike (25% higher than Zuma’s salary) at a time when South Africa is experiencing a massive budget shortfall, and needs to cut spending – especially with an already bloated government wage bill – sends the wrong message.

Others have said that, as one of the richest men in South Africa, with a net worth estimated at $450 million, the president doesn’t really need to earn so much.

But many critics of the proposed salary levels have questioned whether or not the president – and whoever serves in that role – deserves such a high salary at all, given the size of and state of the economy over which he governs.

Two ways to better compare the levels of presidential salaries is to view them in the context of a country’s GDP and average salaries paid to workers.

Note: the salary for Ramaphosa is only proposed in the budget, and will still have to pass through and be approved by Parliament. 

Salary vs GDP

While all the presidential salaries make up a small proportion of overall GDP, it’s clear that Singapore, Hong Kong and South Africa pay the biggest proportional salaries by this metric.

According to data from the World Bank, South Africa and Singapore have similar GDPs, but the Singaporean prime minister gets paid more than seven times as much as the proposed salary for Ramaphosa, and accounts for 0.0007% of the country’s GDP.

South Africa’s presidential salary is at 0.0001% of GDP, third under Hong Kong’s level of 0.0002%.

However, a country could have a high GDP output, but also extremely large populations, which makes per capita analysis a better measure of overall wealth.

In both the GDP analyses (GDP and GDP per capita), it is understandable for a rich country to also have a well paid president – but there are cases where a relatively poorer country (like South Africa) pays a lot more than would be expected, considering the size of its population and productive output.

BusinessTech has looked at how a president’s salary compares to the GDP per capita of their country.

While BRICS leader salaries appear far more modest compared to other nations on these measures, the true extent and sources of their wealth is widely questioned.

Source: World Bank, BusinessTech

Salary vs average salary

Another metric to use when comparing presidential salary levels is how they stack up to the average salary in any given country. If a country’s workers are generally well paid, having a president that is well paid is not unreasonable.

However if the gap between the president’s salary and the average worker’s salary is too large, it points to high levels of inequality between the those in power and those they serve.

Again, South Africa’s president ranks near the top of the pile, with the proposed presidential salary over 30 times bigger than the average salary (Stats SA).

South Africa is one of three extreme outliers here (the others being Singapore and India), and only one of five countries where there is a double-digit multiple.

Source: OECD, Trading Economics, BusinessTech

Read: Ramaphosa’s presidential salary vs other world leaders