Miyelani Mkhabela, economist and director at Antswisa Transaction Advisory. Photo: Supplied
Miyelani Mkhabela, economist and director at Antswisa Transaction Advisory. Photo: Supplied

WATCH: Alexandra and Gugulethu … heritage signs of inequality in South Africa

By Miyelani Mkhabela Time of article published Nov 5, 2019

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JOHANNESBURG – South African black people were excluded in the economic activity ranging from all business activities,  employment opportunities and better education causing them not to have traits and leadership capabilities to compete and run a big resource-based economy. 

Black people were not given an opportunity to participate in the economic activity that caused them to be unemployed, not having houses (Alexandra and Gugulethu are heritage signs of inequality in South Africa), not given an opportunity to contribute to their pension. 

When a person is unemployed for 12 years, economically, it’s regarded as a challenge that has undesired outcomes of poverty, that's the reason inequality is so catastrophic and traumatizing in South Africa. 

Fellowship of the Believers portrayed reforms to deal with inequality in the beginning of the New Testament:

42 They devoted themselves to the apostles’ teaching and to fellowship, to the breaking of bread and to prayer. 43 Everyone was filled with awe at the many wonders and signs performed by the apostles. 44 All the believers were together and had everything in common. 45 They sold property and possessions to give to anyone who had need. 46 Every day they continued to meet together in the temple courts. They broke bread in their homes and ate together with glad and sincere hearts, 47 praising God and enjoying the favor of all the people. And the Lord added to their number daily those who were being saved.

There is no growth or expansion of the economy when we don't uphold natural principles of sharing resources. Multiplication only happened because people were sharing and taking innovative advisory, then breakthrough was witnessed.

There is inherent inequality emanating from inequality of opportunity that was historically been witnessed by black people over 300 years. A transformational fund was not created to finance any black person that was historically disadvantaged with 100 to 150 thousand rands for any black person alive. So this poor portion of the society has something to buy bread for three months.

Post-democracy, we have witnessed a trend where very few people are active in the economy, precisely families that are linked with past exiles and Roben Islandis stalwarts leaving the other 80 percent of black people out of the economic activity.

The second aspect that has caused inequality post-democracy is the aggressive corruption of state resources that makes South Africa with so many systematic corruption commissions such as State Capture, PIC Commissions as large corruption activities.

The South African constitution is analysed to be contributing to inequality, the constitution leave the past accumulation of resources as it is and still not come with policy guidance to share resources in an equitable way.


A drone captured these shocking photos of inequality in South Africa. | Johhny Miller

The National Treasury Preferential Procurement Policy Framework Act of 2000 and reviewed 2017 with new implementation rules still favours white large companies. 

The procurement points in pricing and broad-based black economic empowerment (B-BBEE) level one and two are a strategic business secret for large companies. Large companies are able to price lower where a smaller company will make a big loss then collapse and exit the market. 

While reflecting on political funding, it came to my attention that ANC was questioned on being financed by white companies because transformation hasn't taken place in South Africa. Black companies can't fund political parties because the markets are hostile and volatile for them. We draw lessons of inequality in political funding. 

This Preferential Procurement Policy Framework Act (PPPFA) is wrongly placed at the National Treasury as they are not directly responsible for the transformation of small and medium enterprises (SMEs) including black startups.

Our experience in transformation confirms that it was very difficult for black professionals and business organisations to engage with the National Treasury on this policy as the minister was unavailable. Looking at 2008-2014, government was not available to listen to the people when they wanted reforms that would make the rightful voters to engage with their own government. This has caused problems in South Africa as SMEs are unable to operate at this market. 

South Africa’s business structure and it's platform haven’t changed while the PPPFA has no preference norms that benefit black people – this policy is part of the policies that questions the professional seasoning of government human capital and our South African black lawyers.

The legal profession needs a modules that will instill consciousness to our legal professionals as many of them are very far from questioning the constitution of this country. We don't have black lawyers that are constitutional experts as activists 25 years of democracy.

The Statician-General has released statistics that South Africa has 29.1 percent unemployment and about 36 percent full unemployment, with about 60 percent youth unemployment and 38 percent women unemployment. 

Post-democracy, this is the main thing that perpetuates inequality and Gini coefficient to be so high in South Africa. South African inequality is said to be the highest in the world. The gross domestic product (GDP) per capita doesn’t represent the actual GDP divided by the population of South Africa.

South Africa has historically very rich people that are part of the global richest people who continue to be selfishly prosperous and stretching so far to people who don't have a fat cook for breakfast which in South Africa is 50 cents.


In passing, South Africa needs pension funds reforms to allow pension funds trustees to finance projects that will expand the economy. Risk can be mitigated but it’s not healthy for a country that has a poor nation and a rich nation. We need to start building a legacy for the future generations.

In democracy, the government of South Africa hasn't come with a balanced solution for the resources that must be shared by all people as per the ANC Freedom Charter. The Freedom Charter became a Bible for the Pharisees, they don’t act on it, it is raised up towards elections only and thereafter it is forgotten, along with the people.

When I want to see inequality, I tour around Alexandra – seeing kids who are cut by bottles when they are at the age of three and five years. Alexandra is a retail employment feeder to the cheep labour at Africa’s richest city Sandton. 

What needs to be done in South Africa?

  • Firstly, South Africa must change the Constitution to guide the nation and redress the impurities of the past.
  • Secondly, business policies such as PPPFA must be moved to Department of trade and Industry (dti) to have one minister accounting to the nation with no delays.
  • Thirdly, the ruling party must implement transformation to benefit the historically disadvantaged South Africans. 

Unity in South Africa must be inspired by sharing resources and equality of opportunities. Black people still don’t have opportunities mainly women and youth. Women and youth work so hard with no luck of success. This must change, we need to motivate our youth and prepare them to have confidence to compete globally. When you you empower women and youth, you build a strong nation. 

The next local government elections will be determined by inequality and we will see black people voting in portrayal of anger as they are generally not experiencing service delivery. 

South African listed companies must take a position to build this country, we know that they are contributing to the country not growing in having reserves not invested to the country that give them profits. For this country to get back to work, we must love each other and live in a rainbow nation that shares. 

The youth will be very hard growing up seeing a culture that is not building the nation but showing power through resources. We must all be mindful and do what is acceptable in society.

Public and private sector corruption must come to an end. Systematic corruption is a threat to economic development, a developmental state or emerging markets and a big threat to job creation.

The ruling party must correct this challenges that are causing less participation and barriers to entry for black people in the mainstream economy. This will assist in reducing inequality and balancing the Gini coefficient. 

Miyelani Mkhabela is an economist and director at Antswisa Transaction Advisory.


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