The real inequality in South Africa

A new report by New World Wealth, an information consulting services firm, says there are close to 47,000 “high net-worth individuals” (HNWI) in South Africa. These are folks who are worth at least $1 million a year. They possess a combined wealth of $184 billion and constitute 31% of the country’s overall wealth. Since 2007 the number of HNWIs has grown by about 9%, with the actual volume of their wealth also going up 9%. White South Africans are the highest proportion (69%). Johannesburg, South Africa’s second largest city, has the highest number of millionaires. But Durban made the biggest jump growing by 200% since the year 2000.

South African banking CEOs – some of the highest earners in the country – are taking home between 40 and 80 times more than their average employees.

Looking at South Africa’s five biggest retail banking groups – Barclay’s Africa, Standard Bank, FirstRand, Capitec and Nedbank – the average retail banking employee earns an average of R360,000 per year. Meanwhile, across the groups, CEOs take an average of R2.1 million – almost 60 times as much as the average employee. Nedbank CEO, Mike Brown, was the top earner among banking execs in 2014, taking home a salary of R35 million for the year. This is 77 times greater than the average employee earns at the bank, which sits at R453,720 for its 30,500 employees.

South Africa sits with the 5th highest average pay gap in the world, after the USA (1st), Hong Kong (2nd), Germany (3rd), and the UK (4th).

All this wealth is limited to the few. For example, unemployment stands at 24%, well above emerging-market averages, and it’s the highest amongst the world’s top 40 economies.