Former President Nelson Mandela's economic legacy lives on

13 December 2013

Niko Allie

During the official ten day period of mourning we have witnessed thousands of South Africans from all walks of life pay tribute to former President Nelson Mandela. People have also used this period to reflect on our journey from apartheid to democracy.

The fight for freedom and democracy took on many forms; we had to defeat a system that entrenched white dominance in every sphere of life. It not only served to deny black people their basic human rights, it also denied them the opportunity to participate in the economy.

In November 1993 Nelson Mandela wrote an article titled: “South Africa`s Future Foreign Policy”, in which he outlined the gloomy state of affairs in our country at the time.

“Poverty is manifested in extremely high levels of unemployment in South Africa, widely estimated to be above 40%, and by very poor social and economic indicators for the black population, particularly in the rural areas. These problems are compounded by the fact that inequalities remain entrenched on racial lines,” he said.

He continued: “A recent World Bank report estimated that South African whites have a personal per capita income level that is 9.5 times higher than Africans, 4.5 times higher than people classified as coloured by the apartheid system, and 3 times than Asians. Patterns of inequality extend beyond this to the provision of services, access to education, employment opportunities, and wealth generation - all still heavily inclined toward the white population.

” Upon taking the reins of the country, Nelson Mandela and the leadership collective realised that the yoke of apartheid would only truly be broken through a new economic legacy. His government unveiled the Growth, Employment and Redistribution (GEAR) programme.

GEAR was a macroeconomic strategy adopted by the Department of Finance in June 1996 aimed at strengthening economic development, broadening of employment, and redistribution of income and socioeconomic opportunities in favour of the poor.

The new democratic government also unveiled a social development policy; the Reconstruction and Development Programme (RDP) aimed to address needs such as housing, land, health, education and basic services.

These two policies which were implemented at the dawn of our democracy continue to underpin our fight for a better life for all.

We have created a more inclusive economy that seeks to address the needs of all the South Africans. Our economy has expanded 83% since 1994. National income per capita has increased from R27 500 in 1993 to R38 500 in 2012 – an increase of 40%.

Total employment has increased by more than 3.5 million since 1994. The lives of the black majority who were completely marginalised under apartheid has also changed for the better. Government’s Broad-based Black Economic Empowerment (BBBEEE) strategy, which is one of our redistributive measures, has broadened the economic base and ensured the participation of all South Africans in growing the economy.

According to National Treasury and Ernst and Young respectively, government has since 1995 recorded over R600 billion in BEE transactions and 1 500 publicly announced BEE ownership transactions worth at least R533 billion. The policy has also increased the participation of women in managing and owning new enterprises.

A recent report from the University of Cape Town’s Unilever Institute of Strategic Marketing, indicates that South Africa's black middle class has more than doubled over the last eight years, growing from 1.7-million South Africans in 2004 to an estimated 4.2-million in 2012.

The number of black South Africans in employment has doubled since 1994. The proportion of black people in top management positions has almost doubled since 2000, from 13% to 24%. The number of judges who are black has increased from 25% to 62% since 2000.

In current prices, average individual monthly earnings from employment of black-Africans have increased by 90% since 2006.

In 1991 only 21% of black South Africans were awarded university and university of technology degrees; this figure increased to 53% by 2011.

Since 2001 we also witnessed a dramatic decrease in South African adults at the lowest living standard; it dropped from 11% in 2001 to 1% in 2011. The Living Standard Measures (LSMs), group people according to objective criteria, such as whether they are urbanised, own motor vehicles or major appliances, or having running water or a flush toilet in or outside their home.

Over the last decade there has been a marked migration from the bottom three (1- 3) to the middle four (4-7) LSMs, thus showing a general increase in living standards.

As government we are proud that South Africa has changed for the better since 1994 because of polices aimed at ensuring a better life for all. The journey for economic emancipation that Madiba and the leadership collectively embarked on in 1994 continues through our prudent fiscal policies and the active promotion of black economic empowerment.

Niko Allie woks at Government Communications and Information System (GCIS)