How much money South Africa’s richest 1% controls

Multinational charity group Oxfam International has published its annual wealth inequality report, ahead of the World Economic Forum’s 2021 virtual Davos Agenda starting this week.

The group’s annual report focuses on the concentration of wealth on a global scale, with its 2021 edition stating that “inequality kills” while calling for unparalleled action to be taken to combat unprecedented inequality in the wake of Covid-19.

It highlights how billionaire wealth has rocketed over the last two years as the economic effects of the Covid-19 pandemic continued to ravage the poor – with researchers arguing that the obscene levels of inequality between the super-rich in the top 1% and the rest of society are directly leading to millions of deaths.

Oxfam said that, conservatively, inequality contributes to the death of at least 21,000 people each day, based on deaths globally from lack of access to healthcare, gender-based violence, hunger, and climate breakdown.

“Billionaires’ wealth has risen more since Covid-19 began than it has in the last 14 years. At $5 trillion dollars, this is the biggest surge in billionaire wealth since records began,” it said. “Billionaires have had a terrific pandemic. Central banks pumped trillions of dollars into financial markets to save the economy, yet much of that has ended up lining the pockets of billionaires riding a stock market boom.

“Vaccines were meant to end this pandemic, yet rich governments allowed pharma billionaires and monopolies to cut off the supply to billions of people. The result is that every kind of inequality imaginable risks rising. The predictability of it is sickening. The consequences of it kill,” the group said.

Among its findings, the charity group highlighted that:

• The wealth of the 10 richest people has doubled since the pandemic began – while the incomes of 99% of humanity are worse off, because of Covid-19.
• The 10 richest people in the world own more than the bottom 3.1 billion people, combined.
• If the 10 richest billionaires spent a million dollars each a day, it would take them 414 years to spend their combined wealth.
• If the richest 10 billionaires sat on top of their combined wealth piled up in US dollar bills, they would reach almost halfway to the moon.
• A 99% windfall tax on just the Covid-19 wealth gains of the 10 richest would still leave them $8 billion richer than they were before the pandemic.

Oxfam recommended permanent wealth and capital taxes on the wealthy as a solution to the growing inequality in the world and said governments should use the proceeds on progressive spending on universal healthcare and social protection, climate change adaptation, and gender-based violence prevention and programming.

South Africa

South Africa’s billionaires were also net beneficiaries of the economic turmoil brought about by the pandemic, with the country’s five listed dollar billionaires seeing their collective wealth increase by $4.8 billion between 2020 and 2022 – a gain of 23%.

Using Oxfam’s metrics, South Africa’s richest person, Johann Rupert, could spend $1 million a day for the next 28 years before his wealth would be used up. If he were to spend locally – in rands – he could spend R1 million a year for the next 440 years.

According to the Pietermaritzburg Economic Justice & Dignity Group (PMBEJD), more than half the South Africa population – 30.4 million people – currently live below the upper-bound poverty line of R1,335, or R45 a day.

A quarter of the population – around 14 million – lives below the food poverty line of R624 a month, or R21 a day.

Looking at South Africa’s broader wealth, finance group Credit Suisse’s 2021 Wealth Databook shows that the country’s richest 1% currently hold about 41% of the country’s total wealth – estimated in 2021 at $763 billion. This is up significantly from the 35% recorded in 2019.

This elite group of around 376,000 people – based on the adult population of 37.6 million – control around $311 billion of South Africa’s total wealth. Averaged out, this is $828,000 per person (R11.8 million).

These figures are up from 2019 when the data was last recorded by Credit Suisse, where the average one-percenter was worth $750,000 at the time. Over the same period, total wealth in South Africa declined by around $35 billion.

Breaking down Credit Suisse’s data further, it’s apparent that South Africa’s wealth is highly concentrated among the super-rich. Approximately 80% of total wealth is held by 10% of the adult population – but the biggest chunk of this is held by the top 1%.

According to Credit Suisse, wealth per adult amounted to roughly $20,300 (R289,300) at the end of 2020. However, wealth per adult in the top 1% averages $828,000 – among the top 10%, it averages $162,000.

Looking at the balance, the remaining 90% of the population controls only 20% of the country’s wealth and has a wealth per adult figure of only $4,500. This aligns with Credit Suisse’s data which records the median wealth per adult in South Africa at $4,523.

* Top 10% figures include the top 5% and top 1% numbers

Read: The richest people in South Africa at the start of 2022