[Opinion] SA policy status quo harming black people the most

This reality is borne out by the latest Macro Review report from the Centre for Risk Analysis, South Africa’s Quality of Life Index. The index uses 10 indicators to determine the quality of life for South Africans by province and race, with a score of 0 indicating worst performance and a score of 10 indicating best performance.

The final QOLI score for black South Africans was a mere 4.6, trailing its white, Indian/Asian and coloured counterparts with scores of 7.4, 6.7 and 5.7 respectively.

Moreover, in certain indicators, black South Africans performed far worse than the other population groups.

Since the 1990s, the ANC-led government enacted several redistributive policies such as the Employment Equity Act, the Preferential Procurement Policy Framework Act and the Broad-Based Black Economic Empowerment Act, to rectify the injustices of the past and enhance black people’s participation in the economy.

But these policies have achieved the opposite of their intended purpose.

Half (47%) of black South Africans are now unemployed. That is four times higher than the rate of 9.8% for white South Africans. Almost a third (27.4%) of black households experience irregular or no waste removal – three times higher than Indian/Asian households (6.1%). Only 9.8% of black people are members of a medical aid – half the rate of 19.6% for coloured people and nearly 8 times lower, when compared to the rate of 75.8% for white people.

Not only have these redistributive policies failed to improve the quality of life of black people, but in some cases, it has made life much worse.

A paper from Harvard’s Growth Lab contends that Black Economic Empowerment and race-based procurement policies have created a patronage network that burdens state entities and undermines their core functionalities.

Regular load-shedding for nearly two decades has significantly hindered job creation, especially in poor areas.

Ceased operations

According to the Nedbank Insights Report on an investigation conducted in partnership with the Township Entrepreneurs Alliance (TEA), 64% of small township businesses ceased operations during load-shedding, and almost 66% of business owners had to cut jobs because of load-shedding.

Research by the Institute of Race Relations showed that due to the National Minimum Wage (NMW), an estimated 430,000 jobs have been lost over the last five years. In 2024 alone, an estimated 227,800 jobs were destroyed.

Small and medium-sized businesses, with fewer resources and funds, often cannot afford to pay their workers wages that are in line with the NMW. This often forces them to downscale their operations or implement job cuts. Both instances lead to fewer job opportunities.

In addition, a two-point VAT increase would have been disastrous for ordinary South Africans, and especially for the poor, who spend a far greater share of their income on consumption than the rich.

The only viable path to addressing South Africa’s stark inequalities lies in policies that accelerate economic growth and job creation, which is only possible in a free market environment.

Several countries that were extremely poor not so long ago managed to become wealthy and significantly improve the quality of life of their citizens by implementing free-market ideas. These include countries such as Singapore, South Korea, and the United Arab Emirates (UAE), which rank highly on the Fraser Institute’s Economic Freedom of the World Index.

The Index measures the degree to which people in 165 jurisdictions around the globe are allowed to make their own economic choices. The latest index ranks Singapore as 2nd, South Korea as 32nd, and the UAE as 45th. South Africa, where the government is increasingly encroaching on individual rights and property protections, is ranked at 81st.

Economic freedom

Recent legislation such as the Land Expropriation Act, the National Health Insurance Act and the BELA Act will further harm South Africa’s economic freedom rankings and therefore the country’s growth prospects.

If the government is serious about reducing inequality in South Africa and creating a better life for millions of black South Africans, then it should move away from redistributive and clientelist policies that have clearly proved to be ineffective.

By prioritising an environment conducive to entrepreneurship, investment, innovation, and property rights, South Africa will finally be able to improve the quality of life for all its residents.

Article originally appeared here.