GROWTH & INVESTMENT
How socio-economic realities
in South Africa impact on growth and investment
The international evidence on the relationship between economic growth, stability and levels of inequality among the citizens of a country is quite clear – the more equal a society, the more likely it is to be stable and the more likely the society is to have higher levels of economic growth (Wilkinson and Pickett, 2009). Conversely, high levels of inequality are a barrier to economic growth and social stability (Francis, Valodia and Webster, 2020). By Professor Imraan Valodia and David Francis, Southern Centre for Inequality Studies, University of the Witwatersrand
54 sabusinessintegrator.co.za
Prior to the Covid-19 pandemic, which has had a devastating impact on the country, the socioeconomic situation in South Africa was already precarious. South Africa is one of the most unequal countries in the world. The Gini co-efficient is the most common measurement of levels of inequality. The Gini is an index between 0 and 1 which measures the distribution of income in a country and shows how the distribution of income differs from total equality, measured as zero and total inequality, measured as 1, where only the top income earner would get all of the income in that country.