The recent Inequality report by the World Bank paints a bleak picture about South Africa’s economy. According to the report, titled Inequality in Southern Africa: An Assessment of the Southern African Customs Union, the Southern African region is the most unequal region in the world.
The report examined the process of household income generation to identify the sources of inequality in the region. It mainly focused on five countries: Botswana, Eswatini, Lesotho, Namibia, and South Africa, with Namibia and South Africa reporting distinctly higher inequality in the region.
“South Africa, the largest country in SACU, is the most unequal country in the world, ranking first among 164 countries in the World Bank’s global poverty database. Botswana, Eswatini, and Namibia are among the 15 most unequal countries, and despite recent improvements, Lesotho still ranks among the top 20 percent, the report shows,” said the report.
Over the years, researchers have warned us that high levels of inequality threaten the social fabric, can increase the risks of political and economic upheaval, and prevent the majority from living up to their full potential.
The World Bank report suggests promoting policy measures that foster equality of opportunity and address the highly skewed distribution of productive assets, which are critical to reducing the persistently high inequality in the five (SACU) countries.
The report also suggests enhancing the capacity to respond to increasing climate and economic shocks, which generally severely affect the poor. “Improving the efficiency and effectiveness of social spending, and improving the targeting of key social protection programs to redirect resources towards the most vulnerable for more sustainable and efficient fiscal redistribution, is key for accelerating reduction in inequality,” said the report.