Research Brief
Extreme inequalities

The distribution of household wealth in South Africa

South Africa is, by most contemporary measures, the most unequal country in the world. Yet, relatively little attention has been given to country’s wealth inequality. It is crucial to accurately measure the concentration of wealth inequality over time, identify the root causes of the current persistence of extremely high levels of inequality in South Africa, and eventually understand how to best overcome it.

In South Africa, net household wealth is extremely unequally distributed — the top 0.01% (3,500 individuals) own 15% of aggregate national wealth, more than the bottom 90% of the adult population (32 million individuals)

All forms of assets are unequally distributed — notably 99.8% of bonds and stock, which account for 35% of total wealth, are owned by the richest 10%

There is no sign of decreasing wealth inequality since the end of apartheid, and these levels of concentration greatly exceed wealth inequality estimated in other countries

This brief looks into the evolution of wealth inequality during 1993–2017. The evolution of income inequality is relatively well known from the existing literature, but no previous study has attempted to track wealth inequality over time.

Household wealth is extremely concentrated

In South Africa, net household wealth is extremely concentrated, with the top decile owning 86% of total net wealth (see Table 1).

Net household wealth is also extremely concentrated within the top 10%. The top 1% of the South African adult population (350,000 individuals) own 55% of aggregate personal wealth, and the top 0.1% alone (35,000 individuals) own almost a third of wealth. The top 0.01% of the distribution, amounting to some 3,500 individuals, own about 15% of household wealth, greater than the share of wealth owned by the bottom 90% of the population consisting of 32 million individuals.

The bottom 50% of the South African population have negative net worth: the levels of the debts that they owe exceeds the market value of the assets they own.

Table 1: The distribution of personal wealth in South Africa in 2017

  Number of adults Wealth threshold, ZAR Average 
(2018 ZAR)
Average (2018 PPP $) Wealth
share, %
Full population 35,400,000   326,000 $52,200 100
Bottom 90% (p0p90) 31,860,000   94,100 $15,100 14.4
   bottom 50% (p0p50) 17,700,000   -16,000 $-2,600 -2.5
   middle 40% (p50p90) 14,160,000 27,700 138,000 $22,000 16.9
Top 10% (p90p100) 3,540,000 496,000 2,790,000 $447,000 85.6
   top 1% (p99p100 354,000 3,820,000 17,830,000 $2,860,000 54.7
   top 0.1% (p99.9p100) 35,400 30,350,000 96,970,000 $15,540,000 29.8
   top 0.01% (p99.99p100) 3,540 146,890,000 486,200,000 $77,920,000 14.9

Notes: The table shows the distribution of household wealth in South Africa in 2017. The unit of observation is the individual adult aged 20 or above. Wealth thresholds are in 2018 ZAR. Source: authors’ computations based on the combination of surveys, national accounts and tax micro data.

The top 10% own more than 55% of all forms of assets, including pension assets, housing wealth, business assets and currency, notes and coins (see Table 2). They own more than 99% of all bonds and stock held in the economy. Currency and housing wealth are the least concentrated form of wealth, but low wealth groups only possess a small share of them: the bottom 50% of the wealth distribution own about 10% of currency, notes and coins, and less than 15% of housing assets.

Table 2: Share of total assets held by wealth group by asset class, 2017

  Currency, % Business
assets, %
Housing, % Pension/life Insurance, % Bonds and
Bottom 90% (p0p90) 37.3 20.4 41.2 36.2 0.2
   bottom 50% (p0p50) 9.7 1.4 14.0 5.3 0.0
   middle 40% (p50p90) 27.7 39.1 27.2 30.9 0.2
Top 10% (p90p100) 62.7 59.6 58.8 63.8 99.8
   top 1% (p99p100) 10.6 41.9 27.8 14.1 95.2
   top 0.01% (p99.99p100) 1.5 13.4 8.5 2.1 62.7
% of total assets 0.6 3.6 28.8 32.5 34.6

Notes: The unit of observation is the individual adult aged 20 or above. In 2017, the top 1% of South Africans in terms of net worth owned 95% of the bonds and corporate shares in the economy. Bonds and shares represented 34.1% of total household assets in the economy at this date. Figures may not add up due to rounding. Source: authors’ computations based on the combination of surveys, national accounts and tax micro data.

This concentration has remained stable over time, with no decline since the end of apartheid. In comparative perspective, South Africa appears to be the most unequal country in terms of wealth among all developed and developing countries for which comparable data is available (see Figure 1). The top 1% wealth share stands at 55% in South Africa, as compared to about 40% in the United States and Russia, 30% in China and India, and less than 25% in France and the United Kingdom.

Urgent need for better data

These estimates provide for the first time detailed information on the distribution and composition of wealth in South Africa over time. To do this, all existing data sources on wealth, including macroeconomic data, all relevant household surveys, and newly available tax microdata for 2010–17 were contrasted. Several estimation methods were combined, tax microdata was merged with surveys to account for the fact that higher incomes are better captured by tax data, and the resulting distribution was made consistent with the national accounts totals.

Such levels of wealth concentration affect the economy by undermining representativity of democratic institutions, reinforcing anti-competitive market structures, and depriving the poorest of endowments needed to resist shocks and realize their full potential

Wealth inequality is likely to persist if there are no strong counterbalancing mechanisms. Potential policy options may include reforming the tax code to limit trusts’ shielding legal power, progressive wealth tax, regulated expropriations, limiting new acquisitions, and broadening estate duty tax base and increasing its rate

These results flag the precarity of the majority of individuals with low or negative net worth. Policy-makers should urgently direct attention to policies enabling greater security to the general population

However, before deciding on the range of policy reforms there is an urgent need for better data on wealth and capital incomes, especially on dividends and financial assets held through trusts

The research work revealed the crucial lack of fully comprehensive and reliable data available to directly measure the distribution of wealth in South Africa. There is urgent need for better data on wealth and capital incomes, and especially on dividends and financial assets held through trusts. This data is already in part collected through the administration of the dividends tax and through the ITR12T tax forms filed by trusts. It would be valuable for the South African Revenue Service (SARS) to develop and consolidate this data for policy research. Getting access to it would be crucial to provide more accurate estimates and to inform policy-making in the future.