Inequality still plagues South Africa - CNBC Africa

Inequality still plagues South Africa

Southern Africa

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Affirmative action and Black Economic Empowerment policies were implemented to offer redress from the past. PHOTO: Getty Images

“Let’s start by defining what we mean by inequality. We are fundamentally different in interest and needs and capabilities. Different kinds of professions give different kinds of rewards,” Vivian Atud, managing director of Atud and Associates Consulting, told CNBC Africa.

“That in itself would naturally result in inequality, irrespective of what kind of economic system in place.”

(WATCH VIDEO: The wealth inequality debate)

Atud added that a prime example of inequality in South Africa was during its apartheid era, when certain polices were implemented for the benefit of the white population to accumulate a lot more wealth and privilege than another.


“As South Africa today, we still grapple with [the past] and we’re still asking ourselves [whether] it is a big problem, should South Africa be concerned about this. For me, the answer yes, because South Africa has been rated one of the most unequal economies in the world,” Atud explained.

“We also have a country where we’ve seen people psychologically distressed in various industries, prolonged strikes, people complaining about executive pay, so it’s a topical issue that as an economy, we can’t shy away from.”

(READ MORE: Income inequality remains a big challenge in S.Africa)

Quantifying the problem, according to Atud, is however a necessary step in solving it. The reviewing of economic policies such as Affirmative Action and Black Economic Empowerment, in particular, should be further examined to rectify the current inequalities.

The policies were originally implemented to redress the past’s institutionalised inequalities.

“Government policies, in their current form, have created certain incentives. These incentives are where the economics of inequality comes into play. We need to start asking ourselves what the kind of incentives and disincentives we have had from certain policies, [and those] that are able to create prolonged economics.”