The London School of Economics and Political Science (LSE) has drawn attention to the slow pace of wealth redistribution in South Africa, with the country still grappling with its legacy of racial inequality 30 years after apartheid.
The research paper, “Inherited wealth in post-apartheid South Africa: new perspectives from probate records”, published by LSE’s International Inequalities Institute, provides new insights into the extent of the racial wealth gap.
The study, led by Rebecca Simson, a PhD graduate focusing on social and economic changes in postcolonial Africa, analysed probate records—documents concerning the distribution of deceased individuals’ estates—to evaluate the extent to which Black South Africans have gained ownership of white-owned housing.
The results are striking: only 3% of Black South Africans hold inheritable assets worth at least R250,000, compared to 47% of white South Africans, 8% of coloured South Africans, and 43% of Asian South Africans.
This stark contrast highlights the ongoing challenges in addressing the racial wealth gap in the country, casting doubt on the effectiveness of some of South Africa's wealth redistribution strategies, including broad-based Black Economic Empowerment (BEE), affirmative action, and land reform.
The paper attributes the slow progress to the ANC’s cautious stance toward white-owned capital and the continued respect for private property rights.
“South Africa’s negotiated political transition from apartheid to majority rule impressed the world with its peacefulness. Unlike the many violent regime changes in history, South Africa managed the transition to democracy without any economic contraction, and the outflow of white-owned capital and skill remained manageable,” the paper states.
“An important aspect of this negotiated transition was the ANC’s careful approach towards white-owned capital and broad respect for private property rights. The absence of forced wealth transfers meant that non-white wealth accumulation in the new South Africa proceeded at a slow pace.”
Asset Transfers
The study also reveals that most Black estate holders reside in urban areas, with just 17% in former homelands and 42% in apartheid-era townships.
This suggests that the privatization of township housing in the 1980s and 1990s has been one of the most significant forms of asset transfer in post-apartheid South Africa.
“The rate at which Black South Africans have acquired historically white-owned housing stock still appears to be quite low,” the study notes.
The paper suggests that, based on the terms of the transition discussions, the government had fewer options for achieving a more equitable wealth distribution.
One of the most prominent policies from the post-apartheid era is BEE, which encourages the voluntary transfer or sale of shares to non-white owners (often facilitated with loans from state-owned banks), the sale of public companies to Black businesses, and preferential treatment for Black-owned companies in government contracts.
“However, through the early 2000s, these policies had modest success in increasing Black economic control. Recently, South Africa has been engaged in debates over a proposed constitutional amendment to Section 25, which would permit land expropriation without compensation, under certain conditions.”
Additionally, the Reconstruction & Development Programme’s housing projects have likely represented the largest asset transfer for lower-income households. Since 1994, the government has built approximately five million subsidized homes, mostly in urban areas, which residents can eventually register under formal property titles.
Little attention has been paid to broadening the ownership of middle- and upper-class housing stock, a significant portion of overall household wealth in South Africa.
“The highly uneven racial distribution of inherited wealth and the spatial separation of wealth among different racial groups suggest limited progress in wealth redistribution in this key asset class.”
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