We must prioritise early childhood development to address South Africa’s inequality emergency

The world faces an ‘inequality emergency’, says Nobel Laureate economist Joseph Stiglitz in a report commissioned before the G20 Leaders’ Summit in South Africa.

Our country is often cited as the most unequal society in the world, yet paradoxically is also classified as a middle-income country.

The latter may create the impression that we have the means to respond to deep deprivation, but in reality, our systems are buckling under pressure. Significant investment, particularly in early childhood development (ECD), is needed for inclusive and sustainable development.

In South Africa, the legacy of colonialism and apartheid has concentrated wealth among whites, who constitute less than 8% of the population. More than two-thirds of the population struggles to survive – the estimated poverty rate is 68%. Unemployment reached 31.9% by the third quarter of 2025, with women and youth most affected. The cycles of inequality and poverty perpetuate because there is a lack of investment in systems that can potentially address the root causes.

What can be done to redress the balance?

The famous Heckman Curve shows that investment in young children yields the highest returns. This is through the creation of human capital needed for economies to diversify and grow, and for societies to reduce structural inequalities.

Investment in early childhood development offers immediate returns as well. Our ECD sector is women-led, and the expansion of services can create thousands of jobs and microenterprise opportunities. The supply of affordable childcare also frees female caregivers to pursue job opportunities. This boosts women’s economic participation and drives overall economic growth.

Families need equitable access to quality ECD

If every child born today and tomorrow and the next had enough love, enough food, safety, and brainpower, then the vicious cycles of poverty and inequality would be broken. But that will require systematic and sequential responses that change their life prospects bottom-up.

The inequality trend starts early, when pregnant women and young children do not receive adequate nutrition. The Food and Nutrition Security Survey shows that one in four children under the age of five is stunted, an indicator of chronic under-nutrition that affects physical and cognitive development. This impact is carried throughout their lives.

The Thrive by Five Index 2024 found that less than half of four-year-olds attending an early learning programme were developmentally on track for their age – the consequence of insufficient nutrition, growth, and stimulation in their first three years of life.

These children are likely to struggle to learn when they get to school, they may not complete schooling and will battle to find employment. And still, these children who are in early learning programmes are better off than those who aren’t.

According to the Index, the rate of stunting is 2½ times higher among four-year-olds who don’t attend early learning programmes, most probably because their caregivers can’t afford the fees. The South African Early Childhood Review 2024 found that around 1.15 million children aged from three to five years old are not enrolled in any Early Learning Programme (ELP), with cost the main barrier.

The consequence of inequality is the erosion of human capital. When young children are undernourished, poorly stimulated and excluded, productivity and innovation decline.

With more than two-thirds of children in South Africa living in poverty and exposed to developmental risk, the scale of the problem can be addressed only through systemic reform of government-led services and support through community networks. Without investment in our systems, persistent inequality will continue to undermine South Africa’s ability to grow and compete.

Positive progress

There are some green shoots in the ECD landscape. Recent research shows that poor outcomes for children from low-income households are not inevitable and that high-quality programmes can significantly improve early learning outcomes.

The substantial new allocation of R10-billion to ECD in the 2025 national budget can make a significant dent in making ECD more affordable for caregivers who can now send their children to government-subsidised programmes – if it is implemented timeously and effectively.

Invest in ECD to stimulate economic growth

South Africa’s economy cannot rely on a small class of elites. The whole nation needs to be educated and healthy to contribute to inclusive economic growth.

President Cyril Ramaphosa said the inequality report was a “blueprint for greater equality” which South Africa wanted to put on the international agenda through its G20 presidency. Let’s begin with investing in every aspect of ECD. DM

Zaheera Mohamed is the CEO of Ilifa Labantwana and David Harrison is the CEO of the DG Murray Trust.