Never shall the twain meet

It’s well known that Nigeria’s richest and poorest people are worlds apart

Off the coast of Lagos, Nigeria, land is being reclaimed from the sea to host Eko Atlantic, a futuristic new city for the mega-rich. Touted as the ‘Hong Kong of Africa’, it will boast the continent’s largest shopping mall and financial hub, a marina, private international schools and hospitals, and 250,000 residents.

Ten kilometres away is the slum neighbourhood of Makoko, also built on water and already home to 250,000 people. They live along polluted waterways, in densely packed stilted houses, under constant threat of demolition by government.

For the first time, the US think-tank Center for Global Development (CGD) has published figures on the middle (median) incomes of almost all countries. It turns out that the middle earner in Nigeria takes home just US$1.80 each day — below the international poverty line of US$1.90 a day. The data also shows that in several countries with a similar GDP (gross domestic product) per capita to Nigeria, the middle earner has a more comfortable living: more than US$7 in Tonga and US$9 in Bolivia, for example. Meanwhile, in Nigeria’s northern neighbour Niger — six times poorer as a country per capita — the middle earner lives on US$1.90 per day.

It’s incredible that this data wasn’t published before. We knew Nigeria had an inequality problem, but until now discussions have been steered by per capita (mean) incomes — and these are heavily skewed by the incomes of the mega-rich. But by looking at median income statistics we can see just how poorly Nigeria’s economy is set up to serve most people, and how rampant inequality there is compared to other countries.

Rich and Poor in Angola

Angola, Africa’s second-largest crude exporter, which relies on oil sales for 95% of foreign-exchange revenue, slashed a third off its budget after a glut in global production caused a halving of oil prices last year. President Eduardo dos Santos ended petrol subsidies last month, a move supported by economists but resented by the poor, who felt the effects of a 30% rise in fuel prices. The central bank also restricted dollar sales as foreign-exchange supplies dried up, prompting a sharp fall in the kwanza, ramping up costs in a country that relies on imports for 80% of consumer goods. The kwanza is trading at 170/$ on the street, against 109/$ officially.

Those who have benefited from the country’s $50bn a year in oil sales are unlikely to support any dissent. "We’ve actually had more customers since the kwanza crashed. They can’t get dollars so they buy luxuries," says Louis Mendes, who runs a jewellery shop in Bela’s Shopping, a mall named for its owner, Isabel dos Santos. "There is an incredible disparity between super rich and super poor. No middle ground."

"The government treats us like dogs," says Claude Ambrosio, at a rundown market in Vianna, one of Luanda’s poorest suburbs. "The price of everything went up but we get no help. There are no schools, no hospitals and you can see how we live," she says, pointing to crumbling shacks and piles of rotting rubbish.

A series of protests in the capital, Luanda, were cancelled last month after warnings of a police crackdown, human rights activists told Reuters. Pres. dos Santos’s opponents say he uses the powerful military, which takes the biggest slice of the budget, to maintain power. They also accuse him of using oil funds to enrich friends and family. His billionaire investor daughter, Isabel, is Africa’s wealthiest woman and his son, Jose, was made head of a $5bn sovereign wealth fund in 2013.

Angola provides one of the starkest examples of inequality in Africa: the Gini coefficient, a World Bank measure of inequality, puts Angola at 169th out of 175 countries. Most Angolans in Luanda live on less than $2 a day but foreign oil workers and the Angolan elite pay more for a hotel room, dinner out or a bottle of milk than they would in Paris, Singapore or New York.

SA Politicians Fill Their Pockets

34 Ministers, 33 Deputy Ministers, 52 Parliamentary Chairpersons, 53 Parliamentary Whips, leaders of opposition parties, around 200 MPs, 9 Premiers, 90 MECs and 331 MPLs will pad their already hefty pay packages with another 5% windfall (backdated to April last year).

Deputy President Motlanthe gets an extra R118 000 for a R2, 5 million yearly package while Ministers will receive an additional R100 000 to raise their annual salary to R2,1 million. National MPs and MPLs will have to make do with R45 000 and R43 000 yearly increases respectively, taking their corresponding annual salaries to R934 000 and R904 000.

Local politicians have followed suit. In late January the City of Johannesburg announced that Co-operative Governance and Traditional Affairs Minister Lechesa Tsenoli had approved over R122 million in salary hikes for the city’s 230 councillors, 17 committee chairpersons, 10 mayoral committee members as well as the city council’s Chief Whip and Speaker. Accordingly, councillors in this oft-claimed ‘world class’ city will receive a R28 000 annual increase, elevating their yearly salary to R458 000 while committee chairpersons get a R39 000 hike which ups their annual salaries to just under R825 000.

All of these pay hikes are, in formal terms, separate from the incredible array of benefits and perks enjoyed by  politicians but which are, in reality, part of the overall salary ‘package’. Despite repeated warnings by the Treasury to reign-in such ‘nice-to-haves’ alongside promises by the self-same politicians to practice self-restraint, Minister Tsenoli recently approved increased monthly cell phone allowances for South Africa’s 10 000+ local politicians of up to R3 300 for metro mayors and R1 650 for councillors.

Let’s put this all into perspective. The median wage of those South Africans fortunate enough to actually have a job stands at R2800 per month or R33 600 per year. With respect to the lowest paid South African politician, a local councillor, the pay hike for the Johannesburg variety is only slightly less than a worker’s median yearly wage.  Even the monthly cell phone allowance of metro mayor’s is R500 more than what an average South African worker earns in the same period.

A comparison of worker and politician wage increases only further confirms the huge wage gap. Worker demands for wage increases, which politicians and capitalists continually decry as excessive, have, according to the Labour Research Service delivered an average increase since 2007of R957 per month. Meanwhile, a quick calculation of the same average for national politicians rings in at 5 times that of the workers.

When DA leader Helen Zille boasts about the DA-run Western Cape refusing the latest salary increases, we must ask her and her party why they have readily accepted all previous hikes and have nothing to say about the astronomical wage gap between DA politicians and the black majority that they so desperately want to vote for them.

While President Zuma or Minister Nzimande tells us that ANC/SACP politicians have an enduring commitment to redress wage inequality and are simply servants of the people, Zuma earns more than British Prime Minister David Cameron and French President Francois Hollande. South Africa’s national Ministers edge out their British peers by a cool R300 000+ and have raced ahead of the French by almost R1 million per year. Even if by smaller differentials, our national MPs are also better paid than their British and French counterparts.

From Here 

The haves, the have-lots and the have-nots

When Apartheid ended in 1994, South Africa moved from an era of institutionalized racial separation to what many believed was an equal society. But today, the rich-poor divide is starker than ever before. What has been happening is that as businesses have pushed down wages, profit margins have been increasing. The World Bank showed the country to have a Gini coefficient (a measure of inequality) of 63.1 –  which is among the worst globally.

 South Africa is now ‘‘the most unequal country on earth and significantly more unequal than at the end of apartheid,’’ said a Oxfam report released just ahead of the World Economic Forum in Davos.

Oxfam predicts that if nothing is done at both government and the international level to address the situation, in South Africa alone one-million more people could be pushed into poverty by 2020.

South Africa's Inequality

10 percent of earners in South Africa take away 101 times the earnings of the bottom 10 percent of the population. The gap between the rich and poor people in South Africa is fast increasing and poor people are fed up that they live in deep poverty yet the bosses for whom they work live in luxury. Recent reports have shown that Chief Executive Officers (CEOs) of most of these large mining firms like Anglo Platinum and Goldfields earn in the excess of R20million a year yet their workers receive meagre wages and the social conditions that they live in resemble a squatter camp.

 Unemployment rate is currently at 25 percent

The Spoils

The share of national income going to the richest 1% of Americans has doubled since 1980, from 10% to 20%, roughly where it was a century ago. Even more striking, the share going to the top 0.01%—some 16,000 families with an average income of $24m—has quadrupled, from just over 1% to almost 5%. That is a bigger slice of the national pie than the top 0.01% received 100 years ago.

According to Forbes magazine’s rich list, America has some 421 billionaires, Russia 96, China 95 and India 48. The world’s richest man is a Mexican (Carlos Slim, worth some $69 billion). The world’s largest new house belongs to an Indian. Mukesh Ambani’s 27-storey skyscraper in Mumbai occupies 400,000 square feet, making it 1,300 times bigger than the average shack in the slums that surround it.

 America’s Gini for disposable income is up by almost 30% since 1980, to 0.39. Sweden’s is up by a quarter, to 0.24. China’s has risen by around 50% to 0.42 (and by some measures to 0.48).

Britain 36 billionaires worth 4% of GDP
Germany 55 billionaires worth 7.2% of GDP
Russia 96 billionares worth 18.6% of GDP
China 95 billionaires worth 2.6% of GDP
India 48 billionaires worth 10.9% of GDP
Brazil 37 billionaires worth 6.2% of GDP
USA 421 billionaires worth 10.5% of GDP

Source

South Africa - the inequality didn't go away

South Africa’s first census in a decade shows wealth disparities between race groups that persist 18 years after the end of apartheid. While incomes for black households increased an average 169 percent over 10 years, their annual earnings are 60,613 rand ($6,987), or a sixth of that for whites.

Population growth and life expectancy have been curbed by one of the world’s worst AIDS epidemics. About one in nine people in South Africa are infected with HIV, the virus that causes the disease, according to the government. The census found 3.37 million children under the age of 17, or 19 percent of the total, had lost one or both parents, with AIDS cited as a major contributor.

“These figures tell us that at the bottom of the rung is the black majority who continue to be confronted by deep poverty, unemployment and inequality,” President Jacob Zuma said.

Botswana inequality

Various studies have shown that Botswana is one of the most unequal countries in the world. Botswana's income inequality, with a Gini Index in excess of 0.5, is one of the highest in the world.

At present, the highest paid senior public servant is the Permanent Secretary to the President (PSP), Eric Molale, who earns P47,380 per month. With the three percent increase, Molale will earn about P48,801.40. Permanent Secretaries currently earn P41,200 per month. With the three percent salary increase, they will smile all the way to the bank to rake in P42,436. This is in contrast to what the lowest paid public workers are remunerated. If these workers are lucky to get the three percent, they will have only P41 more than what they have been earning. At present, these workers earn about P1,351.67. With the increment, their earnings will total P1,392.67.

The CEO of the National Development Bank earns about P1,172.608 per annum or about P97,717.333 per month.

It was reported earlier this year that two executive directors at Choppies earned P11 million while former president Festus Mogae - who is the company's chairman and non-executive director - pocketed half a million Pula in salaries and bonuses for the year ended June 30, 2011. The deputy chairperson of the Choppies Group, Farouk Ismail, raked in P5,057,000 in salaries and bonuses and a further P628,000 in benefits and bonuses, all of which total P5,685,000. Choppies director Ramachandran Ottaphathu pocketed P5,354,000 while former president Mogae was paid P529,000 in what is characterised as fees.

DRC blues

In Kinasha, DRC, things have got better for the few. The progress has mostly benefited the narrow elite - the number of new highrises, restaurants, internet cafés and bars is astounding (as are the prices on the menus). For the average citydweller, life has gotten harder, mostly because the cost of living has gone up. There is a big infrastructure improvement in Kinshasa and Lubumbashi ,but the rest of the country has completely been forgotten. For example, in BuKavu and Goma there is a housing boom and villas are spreading up like mushrooms but there is no more paved roads and public hospitals are in decay, even the hotel de ville (city hall) is a rundown building, once you live Kinshasa and Lubumbashi you start to feel that there is no government in the rest of the country.

Widening the gap in standard of living/lifestyle, between have's and have not's, in a country like Congo, can hardly be considered progress.

The Rich Elite

While millions live in crushing poverty a tiny elite that make up the super-rich across Africa.

About 200 Nigerians own the luxury cars, each costing up to $180,000, Porsche brand manager Michael Wagner said. Porsche is already planning a showroom in the Angolan capital, Luanda, similarly awash with petrodollars and ranked the world's most expensive city 10 years Over in the Ivory Coast city of Abidjan, once nicknamed the "Paris of Africa", billboards advertise French perfumes and Rolex watches. The city is home to a glass-front luxury brand-only boutique, Zino's. "Ninety per cent of our customers can walk in and spend $35,000 in one visit without thinking about it," store director Jean Miguel Darde said.

Shortly after officials revved the latest Carrera model for reporters and thrilled onlookers, posing for photographs in front of the gleaming black car. In the sticky heat outside, an employee said owning one of the personalised Porsches he was washing would be "a dream. But I only earn $120 a month," he shrugged.

Most of Nigeria's Porsche sales will come from Abuja, the makers believe. In the moneyed capital city, where wedding-cake mansions overlook smooth cloverleaf highways, wealth is a more conspicuous status symbol.
"There's a big market here. For example, I have a Bentley, a Porsche and a Ferrari, so I can easily buy another brand-new one," said one businessman from Abuja who sponsors golf tournaments as a hobby. But he added: "People don't travel by road anymore, they go by air. So the Ferrari in the garage hasn't done 500 miles in three years."

http://www.guardian.co.uk/world/2012/mar/23/africa-super-rich-luxury-cars

Class

The African Development Bank defines the African middle class as people who spend the equivalent of $2-$20 (£1.30-£13) a day. It acknowledged that many living on $2-$4 a day are "floating" and could easily slip back into poverty. Taking these people out of the equation, it put the "stable" middle class at 123 million, 13% of the population.

Yet economic growth does not necessarily mean shared growth: in some cases it means widening inequality, most vividly in South Africa.

There are now more than 100,000 Africans with at least $1m to invest. With an estimated fortune of $10.1bn (£6.5bn), the Nigerian cement tycoon Aliko Dangote is Africa's richest man and one of the continent's 16 billionaires. The South African diamond magnate Nicky Oppenheimer – who also owns the country's largest private game park, the Tswalu Kalahari reserve – comes second, with a $6.5bn fortune. Patrice Motsepe, a 40-year-old mining magnate, is South Africa's first and only black billionaire, with $2.5bn. Together, the combined wealth of Africa's 40 richest is $64.9bn – roughly twice the GDP of Kenya ($32bn) or Ghana ($31bn) in 2010.

http://www.guardian.co.uk/world/2011/dec/25/africas-middle-class-hope-continent

Nigerian poverty

Governor of Central Bank of Nigeria, Sanusi Lamido Sanusi has said 90 per cent of Nigeria live on less than $2 per day. 70 per cent are living on less than one dollar a day. Despite being a major oil producing nation, poverty, lack and deprivation reign supreme.

"...how come we have so many women dying in child birth, how come we have so many children that are out of school, how come life expectancy is down to 55 or 54. What has happened to us? We need to ask what have we done ?” Sanusi said.

Nigeria - so wealthy, so poor

The world’s 20th poorest country apparently because most Nigerians (92 per cent) live below the poverty line as they subsist on less than two dollars (N320) a day. According to the Nigerian Bureau of Statistics (NBS), no fewer than 33 million Nigerians are unemployed, many of them university graduates, while the 2010 Global Monitoring Report of the United Nations Education, Scientific and Cultural Organisation (UNESCO) puts the number of out of school children at over eight million. Infant mortality rate is 85.8 of 1000 live births, under-five mortality rate is 137.9 of live births, malnutrition prevalence is 41 per cent, insecurity rate is alarming, while life expectancy at birth is 48.1 years.

In 1960, according to the Nigerian Bureau of Statistics, about 15 per cent of the population was poor. This rose to 28 per cent in 1980. By 1985, it had risen to 46 per cent, dropping to 43 per cent in 1992. However, by 1996 the poverty incidence had gone up to 66 per cent before climbing further to the current rate of 92 per cent. This rise in poverty rate in the country has been inversely proportional to the petro-dollar wealth of the country; it seems Nigeria makes more money to get Nigerians poorer; the richer the country, the poorer the citizens.

The colonialists paid better!

Uganda was governed by British colonialists for almost a century. Casual wisdom would suppose that the colonialists had more income inequality than Museveni. Sorry; look again: Just before independence in 1962, the office cleaner, the porter – the lowest government employee – was earning Shs150. Excluding the governor, the highest-paid employee got around Shs6,000. Professors, medical consultants, ministers, permanent secretaries, district commissioners, boarding secondary school headmasters; all those senior people (Ugandans or white expatriates) were in the relatively narrow bracket between Shs2,500 and Shs6,000. Full primary (P6) school teachers got about Shs400. University graduates in teaching and most other government jobs started at around Sh1,300. A doctor got Sh1,700. All annual increments were predictable.
Let us compute: The highest official (Shs6,000) got only 40 times as much as the porter (Sh150), and less than five times as much as a fresh university graduate (Sh1,300).

Under Museveni, the lowest office attendant gets about Shs150,000. A primary school teacher gets Shs260,000, and a fresh university graduate in teaching or mainstream civil service gets about Shs450,000. A fresh doctor gets about Shs600,000. Up to that point, the ratios are close to the colonial model. But above Shs2 million, salaries have become wildly arbitrary. With Shs30 or 40 million per month, each of the best-paid government officials hauls away 200 times as much as the lowly officer gets in his slave pay packet. This has far-reaching socio-political implications; because, however packaged or disguised, the wealth being dished out comes from the collective effort of our people. Glancing at the colonial salary ratio of fourty-to-one, the departed British governors must be smiling in their graves.

Allan Tacca
From here

The African Spring

Across North Africa protesters have toppled some of the most ruthless and well-resourced political strongmen on the planet. In sub-Saharan Africa, many are asking: will the Arab Spring spread south? Many insist that African societies are so fragmented along ethnic, sectarian and regional lines that it would be impossible today for a Tahrir Square ; instead, they believe, an outcome like Libya’s civil war or the messy departure of Yemen’s president is more likely.

Yet many of the underlying realities are the same. As food and fuel prices rise, inflation is driving millions of Africans below the poverty line just when the world’s economists and politicians have been preaching that growth will benefit all. Across the world, as growth has spread and accelerated, so has inequality. It is clear that growth is often not enough to guarantee stable, cohesive societies. Rather than create a rising tide that lifts all boats, it can actually increase inequality in a society. Steady economic growth and urbanization, combined with high levels of youth unemployment and conspicuous consumption on the part of the corrupt ruling elite, create a situation in which growth exacerbates political volatility instead of quelling it. Growth is taking place in a continent where the capacity to create jobs in the formal sector has been woefully inadequate; and elites have mastered the manipulation of ethnic, linguistic, religious and regional differences to maintain their grip on power. Their rule has turned systemic inequalities and, more important, perceptions of inequality, into potent triggers for violence. Growing economic inequality animated much of what was at stake in the various Arab uprisings, and it will play a major role in shaping African politics.

The "middle class" remains a tiny sliver of the population in most African countries largely dependent on state patronage for its survival. Africa’s middle class has grown in recent years, but its members are politically and economically vulnerable and their lives can be overturned by the whims of elites.

The poor are assaulted daily by the symbols of rising inequality: glitzy malls filled with status enhancing designer goods that cost 10 times the monthly minimum wage. Globalization has changed the aspirations of the poor, and their expectations will follow. The Arab Spring occurred at a moment when economic development had outpaced political development in much of the region; ossified political systems no longer satisfied a population yearning for modern freedoms.

By 2025, sub-Saharan Africa will be home to a quarter of the world’s people under the age of 24, and their anger is growing. For Africa’s youth, many of them educated and unemployed, the future seemingly holds no hope under the current arrangement. The idea of revolution has arrived, among the minority of youth with access to social media but also among the masses.

Adapted from here

CEOs making millions

The Congress of South African Trade Unions has noted with anger the report that in 2010 the median pay of executive directors of the top 40 JSE-listed companies increased by 23.3%, to R4.8 million.

The Naledi Research Paper on the Living Wage, presented to the COSATU Central Committee in June, spells out the reality. The top 10% of earners receive around 94 times more than the bottom 10%. The poorest 10% share R1.1 billion between them while the richest 10% share R381 billion, 51% of the total.

The inequality has a marked racial dimension. Whereas the African population accounts for 79.4% of the population and 76.8% of households, it only accounts for 41.2% of household income from work and social grants. In contrast the white population account for only 9.2% of the population and 12.8% of households yet receives 45.3% of household income, five times their proportion of the population.

Inequality is further aggravated by the fact that the poorest have to spend a much higher percentage of their incomes on basic essentials like food and clothing.

The rewards of academia

It might come as a surprise to academics in South Africa but the purchasing power of their salaries, on average, is now higher than that of their counterparts in Canada, the UK and New Zealand, according to a survey of 46 Commonwealth universities.

At the same time, South Africa has the highest salary scales relative to national gross domestic product per capita and the overall average academic salary is seven times the GDP per capita. This is perhaps not surprising for a developing country where joblessness is high and average per capita income is low, and where there are deep inequalities between rich and poor.

South Africa ranks second overall with an average of PPP US$78,653 while Canada and the UK are in third and fourth place respectively. This is in contrast to the survey in 2006-07 when South Africa was at the bottom of the ranking. South Africa has the highest salary scales relative to national GDP per capita (the overall average academic salary is seven times the GDP per capita) and also saw the highest level of growth in academic salary scales since the last survey (51%). In South Africa, the large diversity in salary levels is due to the relatively high level of institutional autonomy.

billionaires double

"Cosatu has for many years been highlighting the gross levels of inequality in South Africa;...if the report is true, Cosatu, far from exaggerating the gulf between rich and poor, has been seriously under-estimating it!" said Cosatu spokesman Patrick Craven was responding to a Sunday Times article that reported on a survey 'Who Owns Who' on the super-wealthy in South Africa.

The survey revealed that the number of super-wealthy South Africans had doubled in a year. The number of billionaires nearly doubled from 16 in 2009 to 31.

"The wealth that these people own and receive is created by the workers' labour in the mines and factories, on the farms and in the shops.Their bosses' salaries and perks are now higher than those in developed countries, while workers' wages are nowhere remotely near those of their American or European counterparts."

The top earner in the survey was reported as Pine Pienaar, CEO of Mvelaphanda Resources, who earned R63 million in 2009. He was followed by Norbert Platt, CEO of Richement, who got R58 million and then Marius Kloppers, CEO of BHP Billiton who took home R54 million.The highest paid state-owned enterprise executive was Khaya Ngqula, former head of SAA ‘earned' R13.7-million in 2009, including his controversial R9.35-million "termination benefit".

SOUTH AFRICA AND INEQUALITY

COSATU president Sdumo Dlamini yesterday said the country's income inequality has deepened within racial groups.

"We cannot rest when we are confronted with the reality that 16 years into democracy redistribution of income has not occurred. Besides the decline in the real incomes of African households between 1995 and 2005, income inequality has increased across the board," he said.
"The top 10 percent of the rich accounted for 33 times the income earned by the bottom 10 percent in 2000. This gap is likely to have worsened, given the fall in the share of employees in national income and the global economic crisis of 2008.
"About 20 percent of South Africans earned less than R800 a month in 2002, with the situation worse for Africans. By 2007 about 71 percent of African female-headed households earned less than R800 a month and 59 percent of these had no income; 58 percent of African male-headed households earn less than R800 a month and 48 percent had no income."

In 2008 the top 20 directors of JSE-listed companies, the overwhelming majority of whom are still white males, earned an average of R59million a year each, while in 2009 the average earnings of an employee in the South African economy was R34000.
Each of the top 20 paid directors in JSE-listed companies earned 1728 times the average income of a South African worker. On average, between 2007 and 2008, these directors experienced 124 percent increase in their earnings, compared to below 10 percent settlements for ordinary workers. In state-owned enterprises where the top 20 directors experienced a 59 percent increase in their earnings, collectively raking in R132223 million. This amounts to R6,6million a director.

Pervasive Poverty in Swaziland

With a population of about 1.1 million, Swaziland has over 759 000 people living below the poverty line.48 per cent of the population lived on less than US $ 1 per day which translates to about E7.50 in local currency while 78 per cent lived below US $ 2 per day. The United Nations Complementary Country Analysis which was published in April this year blames this problem to the inequalities in the distribution of wealth in the country and the HIV/AIDS scourge where the country remains with the highest HIV prevalence in the world.

Income distribution remains skewed, with 56 per cent of wealth held by the richest 20 per cent of the population, while the poorest 20 per cent of the population owns less than 4.3 per cent.

HIV /AIDS translates to an estimated loss of 20 years of life expectancy in the country.

20-25 per cent of Swazi households are food insecure.

29 per cent of children under the age of five are showing signs of stunting which is an indication of malnutrition over an extended period.

The mortality rate has risen dramatically, with maternal mortality increasing from 229 deaths per 100 000 births in 1996 to 589 per 100 000 in 2006.

In Swaziland there is limited access to and control of productive assets such as land and water for sustainable livelihoods for the poor, and inadequate capacity to participate in policy making and decisions.The UN noted that physiological and social deprivation which includes risk, vulnerability, lack of autonomy, powerlessness and lack of respect was prevalent in the country.