How poor are South Africans compared to the rest of the world?

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South Africans are significantly poorer than the global average, and the gap continues to grow.

According to BusinessTech and Investec Wealth & Investment International, the country’s economic stagnation since 2010 has left its people trailing far behind the rest of the world.

In 2023, South Africa’s Gross Domestic Product (GDP) per capita, adjusted for purchasing power parity (PPP), was $15 194. The global average was $22 850. That’s a vast difference of over $7 656 per person.

South Africa’s GDP falls far behind

This means that, on average, South Africans are producing and earning far less than the average person globally, about $7 656 (+/-R136 000) less in 2023.

The turning point came in 2010, when South Africa’s GDP per capita started falling behind global trends.

“You can see a decoupling of South Africa’s gross domestic product per capita from the rest of the world in 2010,” Osagyefo Mazwai, an investment strategist at Investec Wealth & Investment International, said as per BusinessTech.

Since then, the economy has been bogged down by a toxic mix of rolling power blackouts, corruption, high crime rates, collapsing infrastructure, and questionable foreign policy choices. These factors have combined to drag growth down to a crawl.

According to Investec’s analysis, the economy is 37% smaller than it could have been if it had kept pace with its emerging-market peers.

To close the gap with the global average in the next decade, South Africa would need to grow its GDP per capita by 8% per year, not something easily attained, Mazwai said.

That’s well above the 5.9% average growth rate for middle-income countries since 1991, and nearly double the global average growth rate of 4.4%.

“You need to be exceptional in your GDP growth outcomes, and even in that environment, you only get back to the global average,” Mazwai added.