How do South Africans’ incomes compare to the global average?

South Africans earn far less than the global average, and the gap keeps widening.

BusinessTech and Investec Wealth & Investment International report that the country’s economic stagnation since 2010 has caused its citizens to fall significantly behind the rest of the world.

In 2023, South Africa’s GDP per capita, adjusted for purchasing power parity (PPP), stood at $15 194—while the global average reached $22 850. That’s a substantial difference of more than $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.