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BSTEP (Black, Science, Technology and Engineering Professionals) is a non-profit advocacy organisation with the aim of advancing black excellence in Science, Engineering, Technology and Innovation

Just how much of the economy is black owned?

By Tshetlhe Litheko

Sunday, October 30, 2016

I have stayed away from writing on the state of inequality in South Africa for some time due to five fundamental reasons. Firstly any article highlighting the extent to which challenges exist, should also be followed by an attempt to solve those challenges. Secondly the extent to which the socio-economic classes are defined to racial lines, means those shown to have an advantage would feel targeted and those lagging behind would feel discriminated. Thirdly there is no programme by the current government to correct the challenge of economic inequality through new wealth creation and productivity development at scale that would reverse the unfortunate situation. Fourthly there is an existing racially tense environment in South Africa that would easily make a case for further divisions between races instead of finding solutions. Lastly, despite the many times that these numbers and stats are brought out, history tells me, we are happy finding reasons to disagree than attempting to find solutions.

As mentioned in previously published work, before we can gear ourselves to building a thriving economy we need to have shared sense of patriotism. We need to build a large national sentiment that South Africa is a great country that deserves more. We now need to become a united South Africa and it will take us tabulating our national psychology and philosophy on the following issues:

1. Inequality between citizens
2. Our common future across racial and ethnic lines
3. Our commitment to growing the economy until we are all on equal footing
4. Our work ethics as a people
5. Our commitment to building South Africa as a productive society that is continuously advancing towards its developmental goals

Economic Ownership

If what dividesus is our economic asymmetry and the continued lack of leadership from government to improve the challenge, then we need to understand the challenge. From understanding the challenge we would begin to correct it. South Africa has an indifferent past, and from it we have inequality. The empirical evidence that South African society is unequal is unquestionable. Let's consider the following Asset classes:

Bonds – Listed bonds and government bonds
Houses – residential and rental property
Listed shares – JSE listed property
Money market – retirement savings and related savings
non-residential property – commercial, retail and industrial property

In 2011 economist Mike Schussler published, www.Economists.co.za, the data looking at these asset classes and how their ownership reflects on society as a county. The figure below was the summary of ownership for the asset classes between white South Africans and all other races minus foreign and government ownership. The ownership of houses by black people with the support of RDP housing and the retirement savings have resulted in favourable ownership of those assets towards black South Africans. The other asset classes are favourable towards white South Africans.

A further breakdown of the data shows that, compared to other social groupings, state and foreign owners, asset ownership in South Africa is 41% in the hands of white South Africans, 27% black South Africans, 13% foreign owners, and 10% state owned. This is perhaps the foundation for all unsettled fears between those that own the assets and those that feel those assets were stolen from them from the onset as proceeds of Apartheid.


The next graphs shows the per person value of assets as owned by the different race. So collectively All white people own assets worth R5,5 Trillion compared to R3,6 Trillion by blacks; R1,3 Trillion by government; R1,8 Trillion by foreign interest and R1,2 Trillion by both coloureds and Indians.

An average Black person has an average Asset base worth R 73 712, which is the lowest of all races. An average white person has net Asset worth of R952 511 almost a million in comparison. 

The last factor to account for in the value absorbed by debt from the net wealth ownership in the economy. The graph below show the adjustment. What is key to note, is how debt financing for asset acquisition is affecting overall net worth of the social groups.

In Conclusion

Imagine a moral conversation between three cardinals each with a moral conviction that their political party in South Africa is aligned to an ideal solution for South Africa. One making a point that South Africa belong to all who lives in it, without any discrimination (ANC). The second one says my party (DA) also has a charter and it tenets are more important to SA today that any other, South Africa needs Freedom, Fairness and Opportunity for all. Then the third raises asks, "shall we have economic freedom in our lifetime?"

The truth is that we all agree on the ideas of fairness and freedom. Equality is the one thing that exist in containers that people are comfortable with. In fact most will be happy with being equal before the law, and point the next minute how different people are to have a more balanced society. They would even suggest its nature and nurture that makes us unequal. So freedom, fairness and South Africa belonging to all that live in it is espoused by all but God forbids we start debating equality among citizens. This dialogue is outstanding and we need a type of government willing to engage and not fear the subject.

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Comments 1

Guest - Kagisho Dichabe on Friday, 26 October 2018 15:28

Thanks for sharing. Quiet informative and interesting view on wealth in our country. In all honesty - there is no freedom, than economic freedom. It all begins with educating and investing in our own. We still have a long way to go.

Thanks for sharing. Quiet informative and interesting view on wealth in our country. In all honesty - there is no freedom, than economic freedom. It all begins with educating and investing in our own. We still have a long way to go.
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