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The current population of South Africa is 57,104,932 as of Friday, January 26, 2018, based on the latest United Nations estimates.

South Africa population is equivalent to 0.75% of the total world population.

South Africa ranks number 25 in the list of countries (and dependencies) by population.

The population density in South Africa is 47 per Km² (121 people per mi²).

The total land area is 1,213,090 Km2 (468,376 sq. miles)

62.8 % of the population is urban (35,633,585 people in 2018)

The median age in South Africa is 26.3 years.

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South Africa is the 33rd largest export economy in the world. In 2016, South Africa exported $69.1B and imported $73.7B, resulting in a negative trade balance of $4.57B. In 2016 the GDP of South Africa was $294B and its GDP per capita was $13.2k.

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OEC - South Africa (ZAF) Exports, Imports, and Trade Partners

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An online resource for international trade data and economic complexity indicators available through interactive visualizations of countries and products.

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Abortion Is Legal in South Africa — But Illegal Clinics Are Thriving. Why?

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Abortion Is Legal in South Africa — But Illegal Clinics Are Thriving. Why?

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“Legalizing abortion is one thing, but ensuring safe abortion is accessible can be quite another.”

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Reproductive Health

"Legalizing abortion is one thing, but ensuring safe abortion is accessible can be quite another."

A faded poster with the word 'ABORTION' in purple capital letters is plastered on a lamppost near my house in Grahamstown, South Africa. At the bottom of the poster, a phone number is printed in large font. Similar posters can be spotted in cities like Johannesburg, Port Elizabeth, and Cape Town. It might be on an electricity box in a small town, or on the side of a traffic light in a coastal area. The posters live all over South Africa - in fact, they're so ubiquitous I rarely noticed them until a foreign friend mentioned them.

"Are these clinics legal?" she asked. "Because, I mean, abortion is legal here, right?"

Yes, abortion is legal here. The 1996 Choice on Termination of Pregnancy Act allows trained doctors, midwives, and nurses to perform abortions on demand up to 12 weeks into the pregnancy, and for doctors to perform abortions thereafter under certain circumstances. The act was amended in 2003 to allow any health facility with a 24-hour maternity service to offer first trimester abortion services. South Africans are - at least theoretically - able to obtain abortions for free from public facilities.

Despite this, illegal abortion is surprisingly common. Leading Safe Choices, an initiative by the Royal College of Obstetricians & Gynecologists, estimates that about half of all abortions in South Africa are illegal - although accurate figures are difficult to obtain, because few people admit to having illegal abortions.

The abortion posters themselves don't say whether the clinics attached to them are illegal, but many definitely are. "If people [call] numbers on fliers that they see on the street, this will undoubtedly be an illegal abortion provider," said Professor Lesley Regan, President of the Royal College of Obstetricians & Gynecologists. Of course, it's hard to verify this.

The presence of these posters prompts a question: In a country with liberal abortion laws, why is there still a demand for illegal abortion clinics?

While abortion may technically be legal in South Africa, accessing one can be quite challenging.

According to Leading Safe Choices, over 40% of designated abortion care sites in 2011 weren't actually providing the service. Conscientious objection, or the right for medical professionals to refuse to perform abortion on religious or moral grounds, is used extensively. Marion Stevens, who coordinates Women in Sexual and Reproductive Rights and Health (WISH) Associates. says that healthcare professionals who refuse to perform abortions are legally obliged to refer the patient to someone who will, but not all professionals do. This is often because they believe performing abortion is against their religion.

Anti-abortion groups like Doctors for Life work on upholding and broadening the right to conscientious objection. The lack of providers also leads to long waiting lists, which means that many people are pushed over the 12-week limit. Because of this, many people turn to illegal clinics.

Rebecca*, a 31-year-old woman living in Cape Town, has had two abortions, one legally conducted by a government hospital, and another done at an illegal clinic. (Because of the stigma attached to abortion, she's requested we use a pseudonym for this article.) Her first abortion took place after she was sexually assaulted, while the second one took place after her contraceptive methods failed and was financially unable to care for a child. Perhaps ironically, she preferred her experience at the illegal clinic.

"Because I had an abortion before, and because I was able to research what to look out for, I knew that the abortion was legitimate," she said. "The clinic was clean and [the abortion] was over in four hours. When I went to the hospital, my experience was worse. [The hospital workers] were rude and judgmental, I had to dig around to get information, and I had to return to the hospital twice after the abortion."

While the hospital abortion was free, Rebecca's second abortion cost her R1400 - roughly $100. According to her, it was "worth every cent" because it was a more pleasant and accessible experience.

It's a paradox: free abortions are sometimes less accessible than costly ones. Even in towns where abortion services are available, the legal ones aren't advertised as publicly as the illegal ones.

While phone numbers for private abortion clinics are plastered all over lampposts, the National Department of Health's website lists no information on abortion at all.

When I contacted the clinics advertised on lampposts in Johannesburg, Cape Town, Grahamstown, Pietermaritzburg and Port Elizabeth, someone answered almost immediately. In some cases, I could speak to the clinic workers via Whatsapp. A few clinics offered to schedule an appointment for me on the same day I called.

When I phoned government clinics, on the other hand, I struggled to get through on the first try. In two cases, when I asked about abortion, the person on the other end hung up. For clinics in Cape Town and Johannesburg, the people I spoke to told me that they don't conduct abortions. One doctor confessed to me that, although her degree was legitimate, her clinic was not registered with the Department of Health and was thus illegal.

While some political parties, like the African Christian Democratic Party, are strongly opposed to abortion, few politicians are outspoken supporters of legalized abortion. The ruling party - the African National Congress, or ANC - supported the Choice on Termination of Pregnancy Act in 1996. But since then, Stevens claimed, "Nobody [in South African politics] has really championed abortion."

She pointed out that ANC-affiliated Health Minister Aaron Motsoaledi has spoken about 'committing' abortions - a word that implies abortions are criminal - and has stated that teenage girls are using abortion as a contraceptive, despite producing no evidence to prove that claim.

Since the implementation of the Choice on Termination of Pregnancy Act, non-governmental organizations have played a key role in making abortion services accessible. But their resources are limited, especially since the Mexico City Policy - known as the 'Global Gag Rule' - was reinstated in 2000 by George W. Bush. The law prevents any NGOs receiving U.S. funding from even mentioning the word abortion, let alone providing abortion-related services. The policy was revoked under the Obama administration and reinstated by Trump during his first week in office.

The policy means the United States cannot provide aid to organizations that engage with abortion in any manner. This includes abortion providers, but also those who offer counseling, referral, and advocacy services. As Janet Walsh, the Acting Director of the Women's Rights Division of Human Rights Watch, wrote, "Under this rule, organizations will be disqualified from receiving U.S. assistance simply because they use their own non-U.S. funds to provide abortion-related services and information that are legal in their home country and in the U.S."

Professor Regan said that no U.S. agency is currently funding abortion abroad, including in South Africa. "The law will not directly stop provision of abortion in South Africa at the few state facilities that offer it," she said. Stevens agreed  - even under the Obama administration, abortion services in South Africa never recovered after the policy was re-implemented in 2000. With the reinstatement of the policy, the chances of those services recovering is even slimmer.

All of this means that South African people who need abortions end up with illegal instead of legal options. And the quality of illegal abortions can vary widely.

Rebecca got lucky. She had access to information that enabled her to find a legitimate - if not legal - clinic. Other illegal clinics, however, exploit their patients. According to Stevens, there have been reports of sexual abuse from some illegal abortion providers.

Low-income South Africans are particularly vulnerable to this exploitation. While wealthy people might be able to access private, legal abortion services - like at Marie Stopes South Africa - this is seldom an option for the poor. Additionally, transportation to cities where abortion is performed can be too expensive for many patients.

Because of the economic legacy of apartheid, the majority of low-income South Africans are also black, making abortion provision inherently a racialized issue.

Sandy* was one of the many patients who were exploited. (She also requested a pseudonym.) She was 17 years old when she had an abortion, and she wasn't aware of what an abortion entailed or where she could have one. "I couldn't find a website, and I didn't want to call a local clinic where they could tell me no," she said. She recalls being very afraid when she decided to call the number of an alleged clinic, which she saw on a wall near her school.

Sandy's abortion cost R500 (roughly $35) - a sum that, according to Stevens, can signify that the abortion is illegitimate. The medical abortion caused her to have a miscarriage, accompanied by incredibly painful cramps and incessant bleeding. Because of pre-existing health conditions, her physical state worsened. She eventually was taken to a hospital. "This was all traumatic," she said, "and what's worse, I had to explain my situation to my family."

South Africa's situation demonstrates a truth that is important for the global reproductive health community to remember: legalizing abortion is one thing, but ensuring safe abortion is accessible can be quite another. In effect, Stevens said, "We have legalized illegal abortion."

There's something eerily symbolic about the abortion posters. They've been ripped off, time and time again. You can tell from the faded, tattered edges that they've been removed by angry hands and stuck again, carefully, over the tears.

The matter, so stigmatized, consistently reappears on the infrastructure of the government that fails to provide it, an uncomfortable reminder protruding into the public space.

The Development Set is made possible by funding from the Bill & Melinda Gates Foundation. We retain editorial independence. Follow The Development Set on Facebook and Twitter. The Creative Commons license applies only to the text of this article. All rights are reserved in the images. If you'd like to reproduce the text for noncommercial purposes, please contact us.

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Abortion Is Legal in South Africa - But Illegal Clinics Are Thriving. Why?

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Reproductive Health A faded poster with the word 'ABORTION' in purple capital letters is plastered on a lamppost near my house in Grahamstown, South Africa. At the bottom of the poster, a phone number is printed in large font. Similar posters can be spotted in cities like Johannesburg, Port Elizabeth, and Cape Town.

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Does SA’s private healthcare sector only serve 16% of the population?

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Does SA’s private healthcare sector only serve 16% of the population?

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At a press conference about South Africa’s National Health Insurance, the country’s health minister again said that private healthcare serves only 16% of the population. But his claim is misleading.

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At a press conference about South Africa's National Health Insurance, the country's health minister again said that private healthcare serves only 16% of the population. But his claim is misleading. Researched by Liesl Pretorius

South Africa is regarded as an outlier in healthcare spend because it invests "huge amounts of money on few people", the country's health minister said at a media conference in June.

Minister Aaron Motsoaledi was announcing the gazetting of South Africa's National Health Insurance white paper. A slide in his presentation repeated a frequent claim that "the private sector... only provides care to 16% of the population", with the country's public sector taking care of the rest.

8.8 million medical aid members in 2015

Motsoaledi's spokesman, Joe Maila, told Africa Check that "the 16% is the people on medical aid" and that the figure comes from the Council for Medical Schemes.

The 2015/2016 annual report of the Council for Medical Schemes notes that "only 16% of the South African population belong to medical schemes while the rest of the population depends on an overburdened government sector".

The percentage calculation was based on a medical scheme membership number of 8.8 million in 2015, Dr Elsabé Conradie, the council's general manager for stakeholder relations, told Africa Check. She said that "for the past few years, the percentage varied between 16% and 17%" of South Africa's population.

( Note: Statistics South Africa's 2016 General Household Survey estimated that 17.4% of the population had medical aid.)

'Many people use combination of both sectors'

But the number of people with medical aid does not equal the number of people using the private healthcare sector.

"It's not as simple as either public or private as many people use a combination of both sectors depending on their health needs," Dr Jacqui Miot from the Health Economics and Epidemiology Research Office (HE²RO) at the University of the Witwatersrand told Africa Check.

In 2016, Statistics South Africa estimated that 1,515,000 households with no medical aid normally used the private healthcare sector and 706,000 households where at least one member had medical aid used the public health sector.

In total, 4,679,000 households' normal place of consultation was the private sector.

"The only way to get an estimate of the normal place of consultation on an individual level would be to make the assumption that all members of the household would act the same way," Stats SA's service delivery statistics manager, Niël Roux, told Africa Check.

Under this assumption - that is influenced by the household member's age, sex and particular illness or injury, of course - an estimated 13,393,357 South Africans (24.3% of the population) normally used private healthcare in 2016.

41.5% saw a private healthcare provider at last visit

Another calculation is from the National Income Dynamics Study, conducted in 2014 by the Southern Africa Labour and Development Research Unit at the University of Cape Town. It surveyed a nationally representative sample of more than 28,000 individuals in 7,300 households.

The study found that 41.5% of the respondents went to see someone in the private healthcare sector at their last visit.

However, two limitations need to be kept in mind, NIDS communications manager Kim Ingle told Africa Check.

First, children younger than 15 weren't included and only people "who didn't know when they last consulted someone about their health or said they consulted someone in the last 12 months" were asked who they had last visited, she said.

GPs & retail pharmacy services paid for out-of-pocket most

In a 2010 discussion paper on private sector funding of health services, health economist Di McIntyre proceeded from a calculation based on a nationally representative survey of 4,800 households. Called the South African Consortium for Benefit Incidence Analysis (SACBIA), it was carried out in 2008 and entailed repeat visits to the households sampled.

This analysis put the share of people without medical scheme coverage who use private providers for outpatient care at 20%. Based on a medical scheme membership of 15% of the population, up to 32% of South Africans were estimated to have used outpatient services in the private sector.

Non-scheme members paying for care in the private sector were "largely restricted to general practitioners and retail pharmacy services but sometimes specialists as well", McIntyre told Africa Check.

According to the discussion paper, those with medical scheme coverage mostly use private healthcare services.

"However, medical scheme members do sometimes use public hospitals, particularly for inpatient care and often at the most highly specialised hospitals," McIntyre wrote.

Conclusion: The claim is misleading

South Africa's health minister, Aaron Motsoaledi, claimed that "the private sector... only provides care to 16% of the population". This was based on the number of people in South Africa who are on medical aid.

But depending on their health needs, many people use a combination of private and public healthcare services. Shares vary, depending on how the surveys are carried out and the question asked.

For instance, in 2016, an estimated 4.7 million households (28% of the total) reported to Stats SA that they normally go to someone in the private healthcare sector. When people older than 15 were asked in 2014 where their last visit had taken place in the year before, 41.5% indicated the private sector.

While it is true that the majority of South Africans do not benefit from private healthcare, it is misleading to equate medical scheme coverage - or the lack thereof - with the exclusive use of a particular healthcare sector.

© Copyright Africa Check 2017. You may reproduce this report or content from it for the purpose of reporting and/or discussing news and current events, subject to providing a credit to "Africa Check a non-partisan organisation which promotes accuracy in public debate and the media. Twitter @AfricaCheck and www.africacheck.org".

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Does SA's private healthcare sector only serve 16% of the population?

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At a press conference about South Africa's National Health Insurance, the country's health minister again said that private healthcare serves only 16% of the population. But his claim is misleading. Researched by Liesl Pretorius South Africa is regarded as an outlier in healthcare spend because it invests "huge amounts of money on few people", the country's health minister said at a media conference in June.

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A glimpse inside Johannesburg's Diepsloot slum

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A glimpse inside Johannesburg's Diepsloot slum

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Just north of Johannesburg’s suburbs lies Diepsloot. The sprawling township is a congregation of wooden and corrugated iron shacks. Many youths are hoping to improve their lives and the place they call home.

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Music sounds from the shacks of Diepsloot, one of Johannesburg's largest slums. The young filmmaker Simon Maringa and his friend Selby Masaba are singing and dancing to a self-composed song - a homage to their home, Diepsloot. "I love this place and the people here love music," says Simon. Selby, who works as a DJ, grins with a hint of irony: "We live in paradise."

31-year-old Simon Maringa pays tribute to the township through his songs.

An influx of newcomers

There are no exact figures on Diepsloot's population, but the informal settlement houses around 200,000 residents. Newcomers arrive on a daily basis. They are often poor South African or migrants from neighboring Zimbabwe. Only 20 years ago, it consisted of a handful of shacks but in recent years the population of Diepsloot has exploded. In the meantime, a few permanent brick houses have appeared and there are several schools in the area. Most of its residents however continue to live without electricity and running water.

"Life in Diepsloot is very cheap," explains 26-year-old Lerato Monama. She moved to the township in 2003. "If you live in Diepsloot's Area One, you don't pay rent for your hut and you can buy meat for 10 Rand (0,68 euro or $ 0.94) and live off that for two days." Monama volunteers in the residents' association WASSUP (Water, Amenities, Sanitation Services, Upgrading Program), which builds and maintains public toilets in Diepsloot. The government does little to improve sanitation in the area, she says.

Many of Diepsloots residents still live without running water, sanitation and electricity.

Apartheid and a failed housing policy

Like many informal settlements in South Africa, Diepsloot is a result of the politics of racial segregation under the Apartheid regime and the government's failure to implement a proper housing program. Another factor is the gigantic gap between rich and poor, which often still goes hand in hand with the gap between black and white South Africans. After the end of Apartheid in 1994, the democratically elected African National Congress (ANC) government promised every South African their own brick house. They built millions of houses but failed to meet huge demand by the growing urban population.

Is change around the corner?

Many South Africans associate the name Diepsloot with poverty, hopelessness and violent crime. In late 2013, Diepsloot attracted media attention for the kidnapping and killing of several young children over the space of a few weeks. The townships residents agree that crime, drug abuse, rape and violent attacks continue to be a huge problem. "Diepsloot is a very young community," says Mzolosi Mbikwana, who heads Diepsloot's Business Forum. "The majority of its residents are youths. We have a high rate of unemployment and that leads to crimes like the abuse of women and children."

Cases of sexual abuse are still common in Diepsloot.

Diepsloot needs more educational facilities, more jobs and businesses, says Mbikwana. He is both a businessman and a politician from the ruling ANC party. "I believe we need a lot more support from the government in order to promote entrepreneurship and small and medium sized businesses," he says. Mbikwana knows that change needs time to develop and that one cannot rely on the government alone. "Our vision for Diepsloot is that we will unite as a community and make sure that all residents take on some responsibility to improve the situation."

Some of Diepsloot's residents already meet on a regular basis in the hope of providing the youths with new perspectives. Sihle Sakala is 20 years old for instance organizes regular dance and music competitions. "The people here know how important art is because it prevents the youths from turning to crime," she says. "I am very young myself and I decided to choose the right path and do something for my community."

One of the artists who Sihle works with is 19-year-old Tato. He writes and composes songs and acts in a theater group. Tato came to Diepsloot at the age of four and also plans to stay there. "If you want to change something, then it is best to start at the place where you live."

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A glimpse inside Johannesburg's Diepsloot slum | Africa | DW | 19.06.2014

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Music sounds from the shacks of Diepsloot, one of Johannesburg's largest slums. The young filmmaker Simon Maringa and his friend Selby Masaba are singing and dancing to a self-composed song - a homage to their home, Diepsloot. "I love this place and the people here love music," says Simon.

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Urbanisation and the future of South African real estate

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Urbanisation and the future of South African real estate

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“the proportion of people living in urban areas increased from 52% in 1990 to 62% in 2011. The share of those living in rural areas dropped from 48% to 38% over the same period,” says CEO of RE/MAX of Southern Africa.

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The property needs in South Africa are evolving as more and more people move into urban areas. In 1960, around 46.6% of the population lived in urban areas, however, that figure has changed dramatically with around two-thirds of the South African population now living in metropolitan hubs.

"Urban living surpassed rural living in South Africa in 2009. Currently, South Africa has a higher urbanisation rate than the world average, and it is expected to continue increasing at a rapid rate."

"According to a survey released by the South African Institute of Race Relations, the proportion of people living in urban areas increased from 52% in 1990 to 62% in 2011. The share of those living in rural areas dropped from 48% to 38% over the same period," says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.

"Urban living surpassed rural living in South Africa in 2009. Currently, South Africa has a higher urbanisation rate than the world average, and it is expected to continue increasing at a rapid rate."

As a result, he says density, scarcity and re-urbanisation will be the key long-term themes in the property market for some time, as the current stock does not support the growing demand for urban property."

Goslett says there are two major causes that have brought about the trend - one being that people in post-apartheid South Africa have more freedom to move around, and the other that there is higher economic growth within metropolitan areas.

"People are drawn to urban areas because there are greater employment opportunities. Urbanisation has created a concentration of economic activity, which is alluring to people who need jobs," he says.

Goslett says urbanisation is not a trend that is unique to South Africa. Globally around 54% of the world's population currently lives in urban areas, which is around 3.9 billion people.

"The largest percentage of growth in urban areas has been in the smaller cities. This is mostly because these areas have a small initial population, increasing economic activity and lessening competition."

He says urbanisation is not a trend that is unique to South Africa. Globally around 54% of the world's population currently lives in urban areas, which is around 3.9 billion people.

It is estimated that this will grow to around 66% by 2050, which is in the region of 6.4 billion people. It is expected that as a continent, Africa's rate of urbanisation will overtake Asia's by the year 2030.

"Currently the property stock in South Africa is mostly full title homes, with this type of property accounting for 82.7% of the current market stock. Sectional title homes represent around 12% of the property stock, while estates make up the remaining 5%," says Goslett.

"As the population continues to push into urban areas and land becomes more and more scarce, it is likely that there will be far fewer full title homes being built."

According to statistics from Absa, in the last 20 years, flats and townhouses have made up 26.6% of newly completely buildings. In the last three years, around 36% of all residential development units financed by Absa were sectional title units.

"Sectional title homes are in great demand due to a few reasons, such as financial pressure on consumers, inadequacy of land and a changing lifestyle demand," says Goslett.

"It has been said that full title properties may well become an impractical and outdated luxury for most South Africans."

He says the changing property needs within the country are no longer merely a trend - they are a reality.

"People are migrating to suburban inner-city areas where they can live, work and play, eat and shop. This not merely because it is the place to be, but rather because of the convenience and lifestyle urban living provides," says Goslett.

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Urbanisation and the Future Of South African Property - Property24.com

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The property needs in South Africa are evolving as more and more people move into urban areas. In 1960, around 46.6% of the population lived in urban areas, however, that figure has changed dramatically with around two-thirds of the South African population now living in metropolitan hubs.

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2017 estimates reveal ageing South African population

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2017 estimates reveal ageing South African population

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The latest mid-year population estimates produced by Statistics South Africa (Stats SA) show that South Africa's population is estimated at 56,5 million people. The estimates indicate that the proportion of elderly (60 years and older) in South Africa is growing, reaching 8,1 % in 2017. According to the estimates, there are 4,6 million people in South Africa over the age of 60.

Population estimates are necessary to ensure that government and various other sectors, including health, education and business, plan effectively for South Africa. The mid-year estimates provide an indication of the distribution of the population by sex, age, population group, and province.

The mid-year population estimates show that regional variations of ageing exist in South Africa. While almost a quarter of the elderly live in Gauteng, they account for only 7,7% of the total Gauteng population. In contrast, 12% of the elderly reside in Eastern Cape; however, nearly 10% of the Eastern Cape population comprises elderly persons. Mpumalanga's population comprises 7% elderly, the lowest among the provinces. These should be factored into future planning and decision-making at provincial level and lower.

Variations in age are particularly noticeable by population group in South Africa. Between 2002 and 2017, the proportion of elderly among black Africans increased by 0,5%, among coloureds by 2,7%; among Indians/Asians by 4,2% and among whites by 7,3%. Disparities in ageing by province and population group have a historical context that can be traced to fertility, mortality and migration streams over time.

The growing proportion of elderly in South Africa is indicative not only of a country that is on a demographic and health transition but also alerts us to the new social, health and financial demands South Africa is bound to face. South Africa experienced a decline in life expectancy at birth between 2002 and 2006. Expansion of health programmes to prevent mother-to-child transmission and to improve access to antiretroviral treatment (ART) has helped to turn this around, and there has been a marked improvement in life expectancy in South Africa between 2007 and 2017. By 2017, life expectancy at birth is estimated at 61,2 years for males and 66,7 years for females.

The expansion of health programmes related to HIV has contributed to a decline in deaths due to communicable diseases such as HIV and TB. Focus now lies on programmes to combat the increase in deaths due to non-communicable diseases such as heart disease, diabetes, etc., particularly among those aged 65 and older.

A primary goal of the Sustainable Development Goals is to "leave no one behind". Monitoring and reacting to the changing population is essential for achieving this objective. To address the continent's integrated plan to bring about prosperity, the African Union has placed the inclusion of the elderly as a central focus of Agenda 2063. More locally, the National Development Plan of South Africa is tasked with protecting the growing proportion of elderly in the country, catering to their social, economic, and general well-being. Stats SA's mid-year estimates provide data that inform policy surrounding the NDP and its targets.

Download the latest Mid-year population estimates report for 2017, the unit data and media release presentation here.

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New mid-year estimates reveal ageing population | Statistics South Africa

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The latest mid-year population estimates produced by Statistics South Africa (Stats SA) show that South Africa's population is estimated at 56,5 million people. The estimates indicate that the proportion of elderly (60 years and older) in South Africa is growing, reaching 8,1 % in 2017.

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International migrants in South Africa by origin

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International migrants in South Africa by origin

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Inequality in South Africa: A Post-Apartheid Analysis

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Inequality in South Africa: A Post-Apartheid Analysis

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By Alireza Saniei-Pour
Twenty years after South Africa's transition to democracy, inequality continues to be a major concern in the country, with stark contrasts between the haves and have nots. Troublingly, despite policy reforms aimed at reducing inequality, South Africa still has a two-tiered economy, and lacks the "stepladder" positions that allow for the growth of the middle class.

Current evidence shows that increasing wage differentials between people at the 90 th and 50 th percentiles are driving this persistent inequality. Contrary to the popular belief that inequality is growing between those at the top and bottom of the economy, it is the gap between the 90 th and 50 th percentiles that grew the fastest in the ten years after the transition to democracy. In fact, the wage distribution gap has decreased between both the 90 th and 10 th and the 50 th and 10 th percentiles, suggesting that is the inability to rise from the working and lower middle class that defines South African inequality. When considering real wages (wages irrespective of inflation), observations point to stagnation at the middle of the distribution. Recent evidence reveals that while large gains were made at the 90 th percentile as well as the 10 th in respect to the median level, those at the middle of the distribution have not benefitted in real terms.

Given the current emphasis on the rise of the African middle class, understanding the factors that contribute to the existing wage inequality - and the resulting difficulties of entering the middle class, is crucial.

The persistence of high wage differentials in the middle class is reflective of a dividing line that separates the few skilled workers from the majority who remain unskilled. With wages rising for skilled workers, the stagnation of wages in real terms for unskilled workers acts as a barrier to the exponential growth of the middle class. This is especially true in South Africa, where unlike in OECD countries, income per capita remains low. South African economist Reza Daniels has argued that "this kind of change has the potential to create a scarce skills shortage, where both absolute and relative shortages of [service] sector workers could be experienced." Subsequently, an even higher skill premium is created for those in the position to take advantage of this scarcity. Thus, it is evident that the key to reducing the persistent wage inequality is to decrease the skills premium.

The distinction between skilled and unskilled workers has to do with different levels of education and training. According to the National Qualifications Framework, low/unskilled workers are those with pre-matric educational levels while intermediate and high-skilled workers are those who have enrolled in learnership programs or pursued a higher education degree, respectively. In order to decrease the skill premium, education and training levels needs to increase. Higher education levels not only have a positive correlation with higher productivity, but as a result of the decrease in wage inequality they also contribute to the expansion of the middle class.

In a recent paper for the Southern Africa Labour and Development Research Unit, economists Miquel Pellicer and Vimal Ranchhod show how "high inequality leads to low levels of skill accumulation, which in turn consolidates the high levels of inequality." This is particularly true in the transition to tertiary education, where despite a high return on the skills gained, access to higher education remains limited. In South Africa, both the inability to access credit markets and the opportunity costs of sending a child to college have proven to be major barriers for low-income families that cannot reach a sufficient level of education to overcome the skills gap.

Creditors place a premium on family background, where a privileged cycle exists for families in the top percentiles and a vicious one for those with lower incomes. From a financial institution's point of view, the perceived risks in terms of moral hazard and asymmetric information are greater for those coming from lower echelons. Furthermore, financial institutions perceive higher default risks for low-income applicants as the ratio of loan to total wealth is greater. This creates an imperfect market that favors the affluent in expense of the poor.

Opportunity cost- in this case, the opportunity to engage in economic activities that one forgoes while pursuing higher education- is another barrier to tertiary education for poor and working class families. Although the rate of return for pursuing tertiary qualification is high, young adults in poor communities often work and play a meaningful role in supporting their families. Their position as breadwinners by necessity makes current wages more important than the foreseeable benefits of continuing school. Since children can earn more the older they get, the opportunity cost of education increases with age, and it becomes more likely that children will leave school with each year they progress.

Wage inequality in present-day South Africa is driven by a skills premium that has grown due to both technological change and prevailing poverty traps that prevent the unskilled segments of the population from gaining an education that would allow them to access the skilled labor force, and thus the middle class. Accordingly, any proposed policy solution, or any effort to make South Africa's middle class a meaningful engine of growth and development, must take these factors seriously.

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Alireza Saniei-Pour is a Canadian postgraduate economist and research contributor for Fireside Research. He is based in Cape Town, South Africa, affiliated with the University of Cape Town.
[Photo courtesy of Jorge Láscar]

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Inequality in South Africa: A Post-Apartheid Analysis | World Policy Institute

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By Alireza Saniei-Pour Twenty years after South Africa's transition to democracy, inequality continues to be a major concern in the country, with stark contrasts between the haves and have nots. Troublingly, despite policy reforms aimed at reducing inequality, South Africa still has a two-tiered economy, and lacks the "stepladder" positions that allow for the growth of the middle class.

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South Africa Wants to Resuscitate Its Arms Industry

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South Africa Wants to Resuscitate Its Arms Industry

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Apartheid-era manufacturers desperate for investment

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by PETER DÖRRIE

It's the most advanced defense industry you've probably never heard of. South Africa's arms manufacturers produce high-tech weapons and vehicles that have little to do with crude Soviet-era weaponry common throughout the rest of the continent.

Formed under the Apartheid regime, South Africa's arms industry produces some of the best mine-resistant vehicles, modern guided weapons, secure communication technologies, aerospace components and its own attack helicopters.

"The South African defense industry was almost a direct and deliberate creation by the Apartheid government, to create an almost self-sufficient yet technically sophisticated defense industry," explains John Stupart, editor of the online African Defense Review.

But Pretoria's arms industry is recovering from more than 20 years of relative decline, beginning during Apartheid and continuing over the following decades.

When the autarkic and repressive Apartheid regime gave way to a multi-racial democracy in 1994, South Africa's military changed, too. It's now one of the most heavily-armed contributors to United Nations peacekeeping missions in Sub-Saharan Africa.

The United Nations imposed an arms embargo on racist South Africa in 1977. At the same time, the South African military was heavily involved in the Angolan Bush War, a decades-long conflict that ended in 1989.

South Africa intervened militarily in several other countries in the region, and provided aid to the white-ruled Rhodesian regime in what is today Zimbabwe.

"In the process of developing its arms industry, it actually took the South African economy from being basically a mining and farming economy, to being an industrialized economy, including precision engineering and computer technology," explains Helmoed Heitman, an independent South African defense analyst.

During the '60s and '70s, South Africa's military industry became largely self-sufficient. Successful developments from this period include the Casspir armored personnel carrier and the Ratel infantry fighting vehicle.

"During the Angolan Bush War, our Ratel infantry fighting vehicles were engaging T-55 tanks," Stupart recalls.

The Ratel's high mobility and versatility made up for its comparably high price and lack of armor. Because of white-ruled South Africa's experience fighting insurgencies, vehicles like the Casspir and the Ratel incorporated anti-landmine features, including v-shaped hulls.

The Apartheid regime also produced a lot of hardware in the 1970s and early 1980s. Later in the decade, it pulled troops from Namibia and engaged in peace talks with the ANC. South Africa ratcheted down defense spending.

The end of Apartheid in 1994 marked a turning point for South Africa's defense industry. Nelson Mandela, the head of the African National Congress and the country's first black president, pushed to demilitarize the country's foreign policy.

Many South Africans questioned whether it was worth supporting a huge military, which had for decades repressed national liberation movements at home and elsewhere in Africa. Government spending moved away from internal security and the military-and toward economic development and social policies.

In effect, South Africa inherited a surplus of aging equipment from the '70s-without enough money pay for upkeep and replacements. And in the 1990s, acquisition and research spending froze almost completely, Stupart and Heitman tell War Is Boring.

"The government hasn't done much to further the industry," Heitman says. "They don't really go out and push [for South African products]."

Case in point-the Rooivalk attack helicopter.

Originally developed as an answer to the increasingly conventional nature of the Angolan Bush War in the 1980s, the Rooivalk finally entered production in 1990, one year after the end of that conflict.

Despite being "on paper the best helicopter you could buy in the late 1990s and early 2000s," according to Stupart, the state-owned firm Denel Aerostructures produced a mere 12 of the machines for the South African National Defense Force.

Without any combat deployments and lacking a government actively pushing the product, the expensive Rooivalk was beat to the market by cheaper and more marketable Russian gunships.

But the fortunes of the embattled industry began to change toward the end of the 1990s with the South African Arms Deal.

Officially known as the Strategic Defense Package, the Arms Deal was a $4.8-billion acquisition of warships, fighter aircraft and main battle tanks. To this day, it's marred by corruption allegations, with current president Jacob Zuma allegedly playing a key role in the violations.

An important component of the Arms Deal was a mandate that foreign bidders must cooperate with local defense companies. "They came and looked and they were surprised actually at what they found in terms of capability and capacity," Heitman recalls. "That led to several companies buying into local companies."

Aerospace companies did especially well, with Saab setting up shop to produce parts for the Gripen fighter in cooperation with Denel. There was another influx of cash when Airbus contracted Denel and other companies to contribute to the A400M military transport aircraft.

"The most sophisticated sector in the South African defense industry now would be aerospace," Stupart says.

"They do a Hell of a lot for the A400M. And it's a lot of sophisticated stuff. They are not just like mechanics, bolting shit together, they are actually designing the pieces."

But the South Africa military industry "is not in terribly good shape," Heitman points out. "The armored vehicle industry did well out of the Iraq and Afghanistan wars. And the guided missile people did well, because they make guided missiles that actually work and cost less than anybody else's."

"But without an uptick in R&D funding and an uptake by the SANDF, it is going to run out of new products and then it will fold," he adds.

In the long run, no defense industry can survive without at least some local procurement, and the SANDF hasn't spent any serious money in almost a decade.

But this likely to change-and soon. Much of South Africa's military hardware is getting old. At the same time, Pretoria's military is more active than ever, contributing heavily to peacekeeping operations, including in the Democratic Republic of the Congo.

The 2014 Defense Review, an independent report on the state of South Africa's armed forces, asked the government to step up military spending considerably, or accept that the SANDF won't be able to fulfill its core duties within a few years.

At the moment, parliament has held up the Defense Review, but neither Heitman nor Stupart doubt its recommendations will make it into law.

The level of actual funding that will follow is unclear, but "if it is just 50 percent of what they recommended, there will be quite a flow of capital into the industry," Heitman says.

The South African government won't attempt to rebuild an arms industry that will make the country completely self-sufficient like in the '70s and '80s, he predicts. But even if parts of the new military spending go toward foreign companies, these firms will have to invest in South Africa, as well.

"The overall impact, if it is implemented, is going to be pretty positive," he says.

A new wave of locally designed or produced material in the hands of an active South African military could also make the country's firms more competitive on the international market. But these companies sell niche products-such as mine-resistant vehicles-and won't be able to play on the same level as the United States, Russia or China.

There's another reason why South Africa will struggle. The country has strict export regulations that make it impossible to enter the mass market, Heitman says.

There are good reasons for this. For one, there are relatively few buyers of expensive military hardware globally.

Deals can be worth hundreds of billions of dollars. This concentrates decision-making about what to buy into the hands of the few, or even a single person ... like a president. This quite inevitably makes the arms trade one of the most corrupt industries in the world.

The South African defense industry "is unwilling to pay bribes," Heitman explains. "That makes it difficult in many countries, were it is the only way to get an order."

To be sure, if South Africa paid bribes to corrupt regimes, it could increase its short-term profits. But long-term fortunes are better served by not doing this, and focusing on sophisticated products that target niche markets-while convincing buyers with capabilities and not kick-backs.

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South Africa Wants to Resuscitate Its Arms Industry

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by PETER DÖRRIE It's the most advanced defense industry you've probably never heard of. South Africa's arms manufacturers produce high-tech weapons and vehicles that have little to do with crude Soviet-era weaponry common throughout the rest of the continent.

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South Africa is situated in the global South

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South Africa is situated in the global South

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The global south generally "lacks appropriate technology, it has no political stability, the economies are disarticulated, and their foreign exchange earnings depend on primary product exports."

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Despite a drop in the number of tourists visiting South Africa, the tourism industry continued to create jobs in 2015. Stats SA's latest release of its Tourism Satellite Account for South Africa report provides an overview of tourism's contribution in terms of employment, its impact on the gross domestic product (GDP) and spending.

The number of overseas tourists to our shores declined in 2015, falling from 9,5 million in 2014 to 8,9 million in 2015 ¹. The drop in the number of visitors didn't slow the tourism industry's contribution to employment, though. The industry created 32 186 new jobs in 2015, raising the tourism workforce from 679 560 individuals in 2014 to a total of 711 746 individuals.

Currently, one in 22 employed people in South Africa work in the tourism industry, representing 4,5% of the total workforce. In fact, tourism surpasses mining as an employer. The mining industry employed about 462 000 individuals in the quarter ending December 2015 ².

However, whereas mining contributed 8,0% to the South African economy in 2015 ³, the tourism industry's contribution was 3,1% ⁴. In other words, for every R100 produced by the South African economy, R3,10 was a result of tourism. This makes the tourism industry larger than the agriculture industry, the latter having contributed only 2,4% to the economy in 2015.

The fall in the number of visitors did seem to soften total tourism spend, however. Even though tourists spent more money in 2015 than they did in 2014, the rate of growth in spending was lower compared with previous years. Tourists spent a total of R249,7 billion in 2015, a rise of 3,5% from R241,2 billion in 2014. This rise was lower than those recorded for 2013-2014 (10,5%) and 2012-2013 (9,2%).

The growth rate in spending was notably lower for international tourists. Inbound tourism spending rose by only 1,9% in 2015 compared with 2014, far lower than the 13,3% rise recorded for 2013-2014. Domestic tourists increased their spending by 4,8% over 2014-2015 compared with 8,3% over 2013-2014.

Domestic tourism is the main contributor to total tourism spending, with local travellers having contributed 56,4% (or R140,9 billion) to the total in 2015, compared with international visitors who contributed 43,6% (R108,8 billion).

To find out more, download the Tourism Satellite Account, 2015 report here.

¹ Sourced from Stats SA's annual tourism reports. Visit the archive here.

² Quarterly Employment Survey, December 2015. Download the release here.

³ Gross domestic product (GDP). Figures were calculated from "1. Prod AN" in the Excel file GDP P0441 Q3 2016, available here.

⁴ Percentage contribution to value added. Contribution to total GDP was 3,0%.

Click on the infographic below to enlarge.

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Tourism: jobs, the economy and spending | Statistics South Africa

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Despite a drop in the number of tourists visiting South Africa, the tourism industry continued to create jobs in 2015. Stats SA's latest release of its Tourism Satellite Account for South Africa report provides an overview of tourism's contribution in terms of employment, its impact on the gross domestic product (GDP) and spending.

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South Africa encourages foreign investment in both the public and private sectors. The potential attractiveness of South Africa is high, compared to other countries in the region, but its performance is relatively weak for FDI attraction, despite progress owing to investment potential in infrastructure.

South Africa has many attractive assets for investors such as an important demography, a diversified, productive and advanced economy, abundant natural resources, a transparent legal system and a certain political stability.

However, the country suffers from high crime rate, increasing social unrest, high levels of corruption and structural issues in electricity supply and logistics.