Why the Gini coefficient remains crucial for understanding inequality
The Gini coefficient is not the full story of inequality in South Africa, but it remains an important chapter.
Image: Ron AI
THE rubric of robust statistical measures is essential for evaluating policies and plans within the context of democratic governance.
A RECENT Sunday Independent article questions the relevance of the Gini coefficient as a measure of inequality in South Africa, describing it as outdated, narrow, and even politically manipulative.
It argues that the Gini fails to account for social grants, informal economies, and the growing black middle class, concluding that we must retire it and replace it with a new, locally informed metric.
The critique is welcome and necessary. As Statistician-General, I support public scrutiny of the tools we use to measure our society. But I caution against discarding useful instruments because they are imperfect. The Gini coefficient is not the full story of inequality in South Africa, but it remains an important chapter.
Developed in the early 20th century, the Gini coefficient is a single statistic that indicates how evenly (or unevenly) income or wealth is distributed. It is widely used by national and international bodies, especially in relation to the Sustainable Development Goals (SDGs), particularly Goal 10, which focuses on reducing inequalities.
This commitment is reflected in Agenda 2063, the African Union's (AU's) socio-economic transformation plan. It is embedded in South Africa's National Development Plan (NDP), which aims to reduce our Gini from 0.69 to 0.60 by 2030.
The article makes a valid point: inequality is complex, and no single measure can capture it all. The Gini does not reflect the value of the 'social wage' — free education, healthcare, grants, housing subsidies — and may undercount informal economic activity. But it is not meant to measure everything.
It is one tool among many, and it tells us something important: South Africa remains one of the most unequal societies in the world, even if we have made real progress in reducing poverty. As a statistician, I use it as part of my statistical toolkit.
Statistical measures are essential for data analysis and informed decision-making, revealing patterns and trends. In his 2005 paper, Aziz Othman emphasises that effective policies rely on quality data. There is a growing shift among governments and organisations from opinion-based to evidence-based policy, underscoring the need for credible statistical analysis in policy formulation.
National statistical agencies in the United Kingdom and Australia also produce Gini coefficient statistics relevant to their contexts. This highlights the importance of continuous monitoring of income inequality and the integration of statistical methods into policymaking, as discussed in Othman's paper.
With more than 30 years of experience in producing official statistics at both national and continental levels, I have come to understand that poverty and inequality are complex issues that span social, economic, and political dimensions. This complexity shows that a single measure cannot fully capture these challenges.
Thus, using various statistical methods is essential. Statistics SA (Stats SA) employs three main approaches to assess poverty: traditional money-metric measures based on national poverty lines, multidimensional methods like the SA Multidimensional Poverty Index (Sampi) and Child Multiple Overlapping Deprivation Analysis (Moda), along with subjective assessments that reflect personal views of poverty.
Similarly, in analysing inequality, the Gini coefficient is but one of several metrics used by Stats SA to quantify economic disparities. Additional indicators include inequality experts Henri Theil's indices, Anthony Atkinson's indices, and Alex Sumner's Palma ratio.
Each of these measures possesses distinct strengths and weaknesses, yet all are widely recognised and used by National Statistical Offices (NSOs) and scholars globally to elucidate the structure and magnitude of inequality within a nation.
It is important to note that the Gini coefficient facilitates understanding income and expenditure distributions across households rather than functioning as an all-encompassing indicator of inequality, contrary to what the article may imply.
Furthermore, additional measures based on asset data, service delivery data, and labour market information produced by Stats SA are also useful for understanding the broader issue of inequality beyond economic indicators such as the Gini coefficient.
The simplest approach to measuring income inequality involves segmenting the population or households into quintiles, ranging from the poorest to the richest, and analysing the distribution of income or expenditure across these segments.
Recent Income and Expenditure Survey (IES) results indicate that about 75% of white-headed households are within the upper income quintile. Conversely, nearly half (45.1%) of black African-headed households fall within the lowest two quintiles in terms of income. Similar trends are observed in expenditure, where about 45.3% of black African-headed households are also categorised within the bottom two expenditure quintiles.
This data underscores the significant disparities in economic status between these demographic groups.
The findings illustrate a significant disparity in income and expenditure per capita, clearly highlighting the entrenched income inequality in South Africa, particularly affecting black African-headed households. Notably, nearly 57% of households within the lowest income quintile are female-headed. However, this proportion diminishes across the quintiles, with 49.5% of the second quintile, 42.9% in the third, 34.5% in the fourth, and only 33.5% in the upper quintile.
This decreasing representation of female-headed households in higher quintiles underscores the persistent issue of gender inequality within the socio-economic landscape. South Africa has extensive survey data on individual and household welfare from Stats SA, which offers various indicators of poverty and inequality.
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Why the Gini coefficient remains crucial for understanding inequality
The Gini coefficient is not the full story of inequality in South Africa, but it remains an important chapter. Image: Ron AI THE rubric of robust statistical measures is essential for evaluating policies and plans within the context of democratic governance. A RECENT Sunday Independent article questions the relevance of the Gini coefficient as a measure of inequality in South Africa, describing it as outdated, narrow, and even politically manipulative. It argues that the Gini fails to account for social grants, informal economies, and the growing black middle class, concluding that we must retire it and replace it with a new, locally informed metric. The critique is welcome and necessary. As Statistician-General, I support public scrutiny of the tools we use to measure our society. But I caution against discarding useful instruments because they are imperfect. The Gini coefficient is not the full story of inequality in South Africa, but it remains an important chapter. Developed in the early 20th century, the Gini coefficient is a single statistic that indicates how evenly (or unevenly) income or wealth is distributed. It is widely used by national and international bodies, especially in relation to the Sustainable Development Goals (SDGs), particularly Goal 10, which focuses on reducing inequalities. This commitment is reflected in Agenda 2063, the African Union's (AU's) socio-economic transformation plan. It is embedded in South Africa's National Development Plan (NDP), which aims to reduce our Gini from 0.69 to 0.60 by 2030. The article makes a valid point: inequality is complex, and no single measure can capture it all. The Gini does not reflect the value of the 'social wage' — free education, healthcare, grants, housing subsidies — and may undercount informal economic activity. But it is not meant to measure everything. It is one tool among many, and it tells us something important: South Africa remains one of the most unequal societies in the world, even if we have made real progress in reducing poverty. As a statistician, I use it as part of my statistical toolkit. Statistical measures are essential for data analysis and informed decision-making, revealing patterns and trends. In his 2005 paper, Aziz Othman emphasises that effective policies rely on quality data. There is a growing shift among governments and organisations from opinion-based to evidence-based policy, underscoring the need for credible statistical analysis in policy formulation. National statistical agencies in the United Kingdom and Australia also produce Gini coefficient statistics relevant to their contexts. This highlights the importance of continuous monitoring of income inequality and the integration of statistical methods into policymaking, as discussed in Othman's paper. With more than 30 years of experience in producing official statistics at both national and continental levels, I have come to understand that poverty and inequality are complex issues that span social, economic, and political dimensions. This complexity shows that a single measure cannot fully capture these challenges. Thus, using various statistical methods is essential. Statistics SA (Stats SA) employs three main approaches to assess poverty: traditional money-metric measures based on national poverty lines, multidimensional methods like the SA Multidimensional Poverty Index (Sampi) and Child Multiple Overlapping Deprivation Analysis (Moda), along with subjective assessments that reflect personal views of poverty. Similarly, in analysing inequality, the Gini coefficient is but one of several metrics used by Stats SA to quantify economic disparities. Additional indicators include inequality experts Henri Theil's indices, Anthony Atkinson's indices, and Alex Sumner's Palma ratio. Each of these measures possesses distinct strengths and weaknesses, yet all are widely recognised and used by National Statistical Offices (NSOs) and scholars globally to elucidate the structure and magnitude of inequality within a nation. It is important to note that the Gini coefficient facilitates understanding income and expenditure distributions across households rather than functioning as an all-encompassing indicator of inequality, contrary to what the article may imply. Furthermore, additional measures based on asset data, service delivery data, and labour market information produced by Stats SA are also useful for understanding the broader issue of inequality beyond economic indicators such as the Gini coefficient. The simplest approach to measuring income inequality involves segmenting the population or households into quintiles, ranging from the poorest to the richest, and analysing the distribution of income or expenditure across these segments. Recent Income and Expenditure Survey (IES) results indicate that about 75% of white-headed households are within the upper income quintile. Conversely, nearly half (45.1%) of black African-headed households fall within the lowest two quintiles in terms of income. Similar trends are observed in expenditure, where about 45.3% of black African-headed households are also categorised within the bottom two expenditure quintiles. This data underscores the significant disparities in economic status between these demographic groups. The findings illustrate a significant disparity in income and expenditure per capita, clearly highlighting the entrenched income inequality in South Africa, particularly affecting black African-headed households. Notably, nearly 57% of households within the lowest income quintile are female-headed. However, this proportion diminishes across the quintiles, with 49.5% of the second quintile, 42.9% in the third, 34.5% in the fourth, and only 33.5% in the upper quintile. This decreasing representation of female-headed households in higher quintiles underscores the persistent issue of gender inequality within the socio-economic landscape. South Africa has extensive survey data on individual and household welfare from Stats SA, which offers various indicators of poverty and inequality.
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Its coordination includes an Inter-Ministerial Committee chaired by the Deputy President, a Steering Committee of sectoral leaders, and a Secretariat based at NEDLAC. Yet the structure, while appearing inclusive, masks top-down control and leaves open questions of oversight, transparency, and independence. In a country increasingly characterised by the symptoms of a failing state, democratic erosion, economic dysfunction, and deepening public disillusionment, President Cyril Ramaphosa's renewed call for a National Dialogue demands urgent and critical scrutiny. Marketed as a nation-building initiative rooted in inclusivity and moral renewal, this dialogue, backed by an anticipated and staggering R700 million budget, emerges not as a bold new chapter in South Africa's democratic project, but rather as a strategic, and arguably self-serving, manoeuvre by a presidency mired in crisis. While dialogue is undeniably a vital tool in healing fractured societies and fostering inclusive democratic participation, its potency is dangerously undermined when it is co-opted as a smokescreen for political self-preservation. When those leading the call for national dialogue are themselves implicated in the very crises they purport to resolve, the process risks devolving into a performance of consultation rather than a pursuit of justice. Dialogue, in such cases, becomes not a space for truth-telling and collective agency, but a carefully choreographed theatre of deflection, where accountability is diluted and systemic rot is masked behind the language of renewal. The true tragedy lies in the erosion of public trust, as citizens grow weary of being summoned to a conversation that merely serves to sanitise the image of leadership while the root causes of disillusionment, corruption, inequality, unaccountability, and unkept promises remain unaddressed. Thus, the problem is not with dialogue itself, but with its manipulation into a tool of political survival rather than societal transformation. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Far from embodying the spirit of genuine public engagement, the dialogue appears to function as a symbolic performance, carefully choreographed to legitimise the controversial 'Government of National Unity' (GNU), a grand political coalition of convenience, while shielding the President from meaningful accountability. At a time when South Africa is reeling from extraordinarily high unemployment rates, billions in unaccounted-for COVID-19 relief funds, unmet anti-corruption promises despite over R1 billion spent on the State Capture Commission, and the persistent stain of record-breaking inequality, this repackaging of elite consensus under the guise of public consultation serves less as a moment of national renewal and more as a mask for political inertia and stagnation. President Ramaphosa has repeatedly evaded accountability, from the courts' sealing of the funders of his CR17 campaign to his choreographed evasion of prosecution over the Phala Phala scandal, and his murky ties to Glencore, a multinational corporation convicted of corruption. Unfortunately, Ramaphosa remains suspended in a legitimacy crisis, presiding over a nation that no longer trusts its institutions or the moral authority of its leadership. We warrant interrogating the motives, structure and implications of Ramaphosa's National Dialogue, exposing it as a costly exercise in obfuscation, elite preservation, and democratic deferral. The invocation of historical continuity with earlier dialogues like CODESA and the Truth and Reconciliation Commission, both often uncritically celebrated, attempts to root the initiative in national tradition. However, such parallels are romanticised and deeply misleading. Past dialogues often resulted in elite pacts that deferred economic transformation and marginalised grassroots voices. Without addressing the exclusions of these earlier processes, the call for continuity becomes performative nostalgia. Ramaphosa's emphasis on national unity comes amid systemic crises: poverty, inequality, crime, corruption, and alarming unemployment. Yet appeals to unity can obscure the state's role in perpetuating these crises. Genuine unity must emerge from structural change, not rhetorical overtures. If the dialogue becomes a mechanism to pacify dissent or dilute public anger, it risks deepening disillusionment rather than healing it. The R700 million allocated to this process is both ethically and economically indefensible. In a country grappling with failing public services, mass unemployment, and chronic inequality, such a sum represents misplaced priorities. It also raises the spectre of procurement abuse and elite enrichment through politically connected consultancies. The dialogue risks being perceived as a procurement bonanza masquerading as a civic renewal. Volunteerism, not financial excess, should underpin participatory democracy. If civil society, faith-based organisations, and community leaders are expected to engage, their participation should stem from moral commitment, not monetary incentives. The budget undermines the ethos of civic mobilisation and reinforces the perception of a state addicted to performative governance. The proposed group of eminent persons, intended to steer the process, raises concerns about legitimacy and representativeness. Too often, such groups are curated to exclude dissenting voices and elevate those aligned with the President. This risks turning the eminent person group into a curated echo chamber rather than a forum for critical engagement. Without accountability mechanisms, it becomes a technocratic buffer shielding the state from scrutiny. The promise of delivering a shared national vision and a social compact is fraught with contradictions. South Africa's political and economic fractures cannot be papered over with aspirational language. Without addressing systemic inequalities and redistributing power, the compact risks becoming an exercise in the lowest-common-denominator consensus that prioritises stability over justice. Claims that the dialogue will inform Vision 2030 and the National Development Plan must be treated with caution. South Africa suffers not from a lack of policy frameworks but from weak enforcement, lack of political will, and institutional incoherence. Without binding mechanisms for implementation and monitoring, the dialogue's outcomes may simply gather dust. Stakeholder buy-in is frequently cited, yet seldom interrogated. Who are these stakeholders, and how are they selected? If civil society is co-opted into legitimising predetermined agendas, or if critical voices are excluded, then buy-in becomes a euphemism for top-down control. The dialogue's legitimacy depends on its ability to disrupt, not entrench, existing power structures. Unity, as presented, appears more as political camouflage than a genuine commitment. The dialogue provides a convenient narrative cover for the 7th Administration's 'Government of National Unity', a grand coalition that serves political elites rather than the public. In doing so, it risks silencing dissent, stabilising elite bargains, and consolidating Ramaphosa's tenuous grip on power to ensure the fate of recalling his predecessors [ Mbeki and Zuma] suffered is avoided. Why now? The timing coincides not with a sudden eruption of national crisis, these crises are long-standing, but with Ramaphosa's need to paper over his direct failure of leadership. The dialogue deflects from the state's failures and attempts to reposition the President as a unifier rather than a figure presiding over institutional decay. Calls to shape a common ethos or build national direction ring hollow in a context of widespread mistrust. Unity without justice is pacification; participation without accountability is tokenism. The risk is that the process becomes another technocratic ritual, managed from above, and disconnected from the needs and aspirations of the people. The proposed National Dialogue, far from being a platform for transformation, emerges as a shield for political stagnation. It reflects a government increasingly reliant on symbolic politics, bureaucratic rituals, and costly consultations to mask the absence of structural reform. Until South Africa's leadership demonstrates genuine accountability, moral courage, and ethical governance, no amount of dialogue—however lavishly funded—can rescue the nation from its democratic malaise. What South Africa needs is not another elite-managed conversation, but a democratic reckoning, a redistribution of power, and a reimagining of governance rooted in justice, equity, and the dignity of all its people. * Clyde N.S. Ramalaine is a theologian, political analyst, lifelong social and economic justice activist, published author, poet, and freelance writer. ** The views expressed do not necessarily reflect the views of IOL, Independent Media or The African.
