The myth of the level playing field: Why SA’s wealth gap requires a redress

“Nobody owes you anything. Build your own wealth.”

Every South African debate about race, wealth and opportunity eventually arrives at that sentence.

There is truth in it. There is also a dangerous omission.

The argument assumes that everyone began from roughly the same place, and that today’s outcomes are explained mainly by today’s effort. That assumption is comforting. It is also inconsistent with most of what economists know about wealth.

Three questions are routinely confused in this debate. How much of wealth inequality is explained by inheritance? How many rich people inherited their wealth? And how much advantage comes not from inheritance itself, but from the privileges wealth creates – good schools, professional networks, stable families, financial security, social capital? These are different questions, and they have different answers.

Across advanced economies, economists comparing France, Spain, Britain and the US estimate that inheritances and gifts alone account for roughly a quarter to a third of wealth inequality. Add the rest of family background – parents’ education, occupation and social position – and the combined contribution ranges from more than a third to almost half.

Sit with that. In these economies, between a third and a half of the differences in wealth are linked not to what individuals create in their own lifetimes, but to advantages transmitted from previous generations. The rest comes from hard work, entrepreneurship, saving, investment, risk-taking, marriage and, yes, chance. Neither story is complete without the other.

Move to the very top of the distribution and inheritance grows heavier still. UBS calls it the Great Wealth Transfer: trillions of dollars passing from ageing billionaires to their children over the coming decades. In its 2023 billionaire study, the bank found – for the first time in the report’s history – that new billionaires had inherited more wealth than they had created. And on Forbes’ 2024 global rich list, every billionaire under 30 inherited their fortune.

None of this means entrepreneurship has died. Many fortunes are still built rather than received. It does mean that inherited capital is becoming steadily more important at the summit of the global economy.

South Africa adds another layer. Most countries wrestle with inheritance. We wrestle with inheritance and apartheid.

Apartheid did not merely determine who earned higher incomes. It determined who could accumulate productive assets at all. A wage ends with the month. An asset outlives its owner.

Property. Businesses. Pensions. Investments. Commercial farms. Urban land.

Those assets did not evaporate in 1994. They passed, as wealth usually does, from one generation to the next. Researchers at the London School of Economics, working through probate records, estimated in a 2024 study that 45% of white South African adults hold inheritable wealth of at least R250,000, compared with 3% of black adults – and that the gap narrowed only modestly between 2009 and 2019.

That is not simply history. It is history continuing to earn compound interest.

The interest shows up in the totals. South Africa’s wealth distribution remains among the most unequal on Earth. The most comprehensive estimates, based on tax and survey data to 2017, put 86% of personal wealth in the hands of the richest 10%, and 55% with the top 1% – about 350,000 adults.

Of course, inheritance is not destiny. Fortunes are squandered within generations. Entrepreneurs build extraordinary businesses from modest beginnings, and South Africa has seen real black wealth creation since 1994 – in mining, finance, technology, property and the professions. A growing black middle and upper class is one of democracy’s genuine achievements. But recognising new wealth does not erase inherited advantage, and recognising inherited advantage does not diminish individual achievement. Both are true at the same time.

Nor is inheritance only a cheque after a funeral. It is the parent who pays the university fees, the family friend who secures the internship, the neighbourhood where the school functions, the ease of knowing how banks and lawyers and universities work. None of it appears in a will. All of it compounds. The child who inherits R5-million starts ahead of the child who inherits nothing; so does the child who inherits no money but grows up where opportunity is ordinary.

Which brings us, unavoidably, to the three letters that end most South African dinner parties: BEE.

Parliament has spent this year relitigating them. The DA has tabled a bill to replace black economic empowerment altogether; the President has answered from the podium that “now is not the time to abandon BEE” but to make it more effective; and the trade and industry department has proposed amendments to the framework aimed at closing its loopholes. The country is arguing furiously about the instrument. It has almost stopped talking about the wound.

So let me concede the critics’ case first – not grudgingly, but fully – because much of it is true, and because defending the indefensible has cost transformation its moral authority.

I spent years in the Auditor-General’s office. I know what a gamed compliance regime looks like, and BEE as practised has too often been one. Fronting. Ownership that exists on paper and nowhere else. Scorecards satisfied while their purpose is defeated. The same politically connected names recycled through deal after deal, as though a nation could be empowered 40 at a time. Procurement premiums functioning as toll gates on the economy rather than ladders into it. When the state’s own department reviews the framework because empowerment has become associated with cronyism, the critics are not inventing things; they are describing them. A 2026 study by the Black Management Forum and Henley Business School Africa, surveying more than 500 managers, returned the same weary verdict: the principle of transformation broadly accepted, the practice experienced as a compliance exercise.

All of that is true. And here is where the argument usually goes wrong.

When the Auditor-General reports that a school feeding scheme has been looted, nobody concludes that the children were not hungry. We conclude that the scheme was corrupted, and that the people who corrupted it must be removed from it. The theft condemns the thieves. It does not abolish the hunger.

BEE’s capture does not refute the wound it was built to treat. The probate records do not care who fronted for whom. The 45% and the 3% sit there regardless, compounding quietly, indifferent to our disillusionment.

Notice, too, what the parliamentary fight actually concedes. The bill tabled to replace BEE declares, in its own defence, that “redress remains a national imperative”. The policy’s fiercest opponents no longer dispute the diagnosis. They dispute the prescription. That is not a small concession. It should be the starting point of the national conversation, not a footnote to it.

It is also why “scrap it all and let the market decide” is not the neutral option it sounds like. Markets do not erase history. They compound it. A colour-blind economy built on colour-coded assets does not produce a colour-blind outcome. It produces the probate records.

So the honest question is not whether South Africa needs redress. The arithmetic answers that. The honest question is what redress would look like if it were designed for the child at the back of the queue rather than the consortium at the front of it.

Begin with the category error. Apartheid created a balance-sheet problem: it determined who could own. BEE answered with an income-statement instrument: tenders, premiums, points – flows, not stock. We tried to cure an asset disease with a procurement prescription, and then wondered why the wealth never accumulated. Any honest successor starts by matching the remedy to the wound.

Four tests suggest themselves.

Count assets, not certificates. A policy meant to correct an asset gap should be judged by assets transferred, businesses built and balance sheets created – not points scored.

Reach people who will never see a boardroom. Title deeds for the 1.2 million state-built houses the government itself admits it still owes. Schools that function. Worker ownership that actually vests. First-generation capital for first-generation entrepreneurs. Empowerment that requires proximity to a tender is not empowerment; it is rationing.

Have a theory of its own ending. A transitional policy without a definition of arrival becomes permanent by default, and permanence corrupts. Tie the sunset not to a date but to the data – to the measurable closing of the asset gap the probate records describe.

Audit it ruthlessly. Empowerment stolen is empowerment denied twice: once to the person who never received it, and again to the policy whose name was used in the theft.

I should declare an interest. I am sometimes offered as the counter-example – the village boy from kwaNkabini who became a chartered accountant, proof that the ladder works if you climb hard enough. I decline the honour. I know what that climb required, and I know how many children I grew up alongside who were just as capable and are not writing columns today. The exception that survives the odds does not abolish the odds.

Not everyone began the race at the same starting line. Not everyone who finishes first cheated. And not everyone who finishes last lacked effort.

A mature society should be able to hold all three of those truths without embarrassment. Then it must do something harder: act on the first without dishonouring the other two.

We can rename BEE. We can reform it. We can abolish it tomorrow morning. What no parliament can repeal is the balance sheet apartheid left behind.

Until that balance sheet is closed, history will keep earning its interest. And the only question is who pays for it. DM