South Africa’s inequality has not changed in the past decade, with the richest 10% holding about 86% of the country’s total wealth, underlining the mammoth tasks before the government to lift millions of citizens out of poverty.
Data from the latest World Inequality Report, which says inequality is a political choice, shows the income gap between the top 10% and the bottom has increased over the past decade — a period that saw economic stagnation plus a downturn in foreign investment
“Average income per capita is around €8,800 [R174,079.84] purchasing power parity (PPP), and average wealth stands near €29,000 [R573,718.60] PPP. The income gap between the top 10% and the bottom 50% increased, moving from 103 to 118 between 2014-24,” the report states.
“Overall, income and wealth are extremely concentrated in South Africa, with persistent disparities and limited change over time.”
South Africa’s deep inequality has seen successive governments since 1994 increase spending on the “social wage”, with about 18-million citizens receiving social grants.
The World Inequality Report 2026 updates the 2022 and 2018 editions and finds that while the world has got richer it has also become more unequal.
“Inequality is a political choice. It is the result of our policies, institutions and governance structures. The costs of escalating inequality are clear: widening divides, fragile democracies and a climate crisis borne most heavily by those least responsible,” the report reads.
“But the possibilities of reform are equally clear. Where redistribution is strong, taxation is fair and social investment is prioritised, inequality narrows. The tools exist. The challenge is political will.
“The choices we make in the coming years will determine whether the global economy continues down a path of extreme concentration or moves towards shared prosperity.”
But the possibilities of reform are equally clear. Where redistribution is strong, taxation is fair and social investment is prioritised, inequality narrows. The tools exist. The challenge is political will.
— World Inequality Report 2026
The report comes as Stats SA reported the country’s poverty headcount has dropped sharply over the past 17 years, with the proportion of citizens living below the lower‑bound poverty line falling to 37.9% in 2023.
This is according to Stats SA’s newly rebased poverty lines. The line, set at R1,300 per person a month in 2023 prices, captures households struggling to balance food and non‑food essentials. The decline from 57.5% in 2006 represents a 19.6 percentage‑point reduction, a shift the government hailed as evidence that social protection and targeted interventions are making a measurable impact.
At least 23-million South Africans are still considered poor, Stats SA said, using the lower‑bound threshold. This is about 2.5-million fewer than in 2015, confirming gradual progress but underscoring the scale of deprivation.
The rebasing exercise draws on the income & expenditure survey 2022/23, the first to use computer‑assisted personal interviewing rather than paper questionnaires. Stats SA, working with the World Bank, constructed a new reference food basket and adjusted for housing costs, spatial price differences and household size.
The rebased series replaces the 2011 lines derived from the 2010/11 survey, with CPI deflators applied to ensure comparability across 2006, 2009, 2011, 2015 and 2023.
The report sets three thresholds: the food poverty line (R760), the lower‑bound poverty line (R1,300) and the upper‑bound poverty line (R1,565). The food poverty line marks the minimum cost to meet daily energy needs, while the upper‑bound line reflects households able to meet food needs and spend modestly on non‑food items.
Stats SA noted poverty reduction has been most pronounced among black and coloured populations, reflecting the effect of targeted social and economic programmes.
The report also disaggregates poverty by gender, household composition and province, showing that rural households and female‑headed households remain disproportionately affected.
Provinces such as Eastern Cape and Limpopo continue to record higher poverty headcounts, while Gauteng and Western Cape show lower rates but face urban non‑response challenges.
The poverty gap, measuring the depth of poverty, has narrowed since 2006 but remains significant. The report highlights that service access has improved: more households have electricity, piped water and sanitation, though inequalities persist. Housing valuation methods, particularly predicted rents for owner‑occupiers, remain a sensitive factor in welfare measurement.
Despite the decline, nearly two in five South Africans remain below the line. Urban non‑response rates were high in metros such as Tshwane at 43.3% and Johannesburg at 34.6%, raising questions about whether poverty in dense urban areas is fully captured. Experts warn structural inequality, limited job creation and uneven access to services continue to constrain progress.
The new poverty lines confirm social grants and economic support have reduced hardship, but they also highlight the scale of the challenge that remains. Stats SA’s rebasing exercise provides policymakers with sharper tools, but the data underscores that poverty reduction must be accelerated if South Africa is to meet its 2030 development goals.
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