Claims of South Africa’s ‘spectacular transformation’ fact-checked

The Free Market Foundation’s Leon Louw argued there has been “spectacular” racial transformation in South Africa since apartheid ended. This is the first of two reports fact-checking the statistics he cited.

Did 1.2 million black people earn more than R400,000 in 2014? Are social grants the main source of income for 40% of black households? And did the percentage of black judges increase by 248% between 2000 and 2012?

These were some of the claims made by the head of South Africa’s Free Market Foundation. Leon Louw wrote that “despite the fact that there has been a spectacular amount of transformation [in South Africa], the established consensus is that little has changed and that whites still own everything”.

President of the Progressive Professionals Forum, Jimmy Manyi, quoted many of the claims verbatim in a City Press opinion piece. Editor of the Financial Mail, Tim Cohen, shared the article on Twitter, calling it a “tour-de-force by Leon Louw”.

But when Africa Check wrote to Louw asking for evidence to support the claims, it took him six weeks to provide a list of sources, but most of them did not support his claims or contained contradictory claims. He did not provide any evidence for four claims.

According to Louw “almost everything you ever read or hear about what share of something blacks or whites have is false”. So far Africa Check has found a lot of Louw’s claims to be false too.

Income

Claim

“The number of black people earning more than R400,000 a year grew 1,000% from 120,000 to 1.2 million between 2000 and last year; 90% are in the private sector.”

Verdict

unproven

Africa Check was unable to find any evidence that supported this claim.

South African Revenue Service (SARS) spokesman, Sandile Memela, told Africa Check that SARS is unable to provide a racial breakdown of taxpayers.

“Race is also not a question posed on individual tax returns. Furthermore ID numbers since the mid 1990’s  no longer carry the race of taxpayers and it is therefore not possible from SARS records to provide the breakdown as requested,” said Memela.

SARS has a breakdown of individuals by income groups dating back to 2003. In 2003 there were 76,954 taxpayers who earned more than R400,000 per year.

In 2015 the tax groupings changed and SARS no longer has a bracket for people who earn more than R400,000 a year. Their new brackets show that in 2014 1,199,990 taxpayers earned more than R300,000 per year and 480,435 taxpayer’s earned more than R500,000 a year.

Based on this information, Memela said it was “unlikely” that 1.2 million black people earned more than R400,000 in 2014, as just under 1.2 million people – of all races – earned over R300,000 that year. A smaller number will have earned more than R400,000 per year and not all of them will have been black South Africans.

However, the SARS statistics will exclude people who either evade or avoid tax.

“The key issue is that the statistics refer only to taxable income declared and the position of a number of individuals may be different,” national head of tax practice at law firm Cliffe Dekker Hofmeyr, Emil Brincker, told Africa Check.

Property ownership

Claim

“Latter-day racists who demand coercive land redistribution do not know that black buying has grown to 50% of all voluntary transactions.”

Verdict

unproven

The source provided by the Free Market Foundation, First National Banks’ Estate Agent Survey for last year, states that buying in “former white suburban areas” by “previously disadvantaged” population groups comprised 49.2% of total buying in 2014 – with white people’s share making up the rest.

The report did not explain FNB’s methodology. Asked by Africa Check, the bank’s household and property sector strategist, John Loos, said that they survey 150 estate agents in South Africa’s six metropolitan areas each quarter.

“We don’t ask for the number of buyers or transactions,” Loos explained. “Rather, we ask them to provide an estimated percentage of buyers that they experience to be ‘black’, ‘coloured…’ etc.”

The survey is not nationally representative and is based on estate agents’ opinions, not transaction data. As Africa Check previously reported, South African title deeds do not list the race of owners since 1994, making it impossible to calculate the actual share of black property buying.

Judiciary

Claim

 “The percentage of black judges increased 248% from 25% to 62% between 2000 and 2012.”

Verdict

incorrect

As it stands, the claim is mathematically incorrect. The percentage increase from 25% to 62% is 148% – not 248%.

To prove his claim, Louw’s office sent Africa Check a link to a May 2013 article by deputy minister of Justice and Constitutional Development, Andries Nel, who wrote that 62% of judges were black, including coloured and Indian judges. This is also the share stated in the department’s 2012/13 annual report.

But using these figures, the claim is still incorrect. In 2000/01, 30% of judges were black, coloured or Indian. The increase between then and 2012/13 is 107% – not 248%.

Literacy

Claim

“Youth illiteracy is nearly nonexistent at 4%.”

Verdict

incorrect

Verdict: Incorrect

To support this claim, Louw provided a presentation which contained an unreferenced and undated claim that “youth literacy” was 2% – not 4% as he claimed in the article.

South Africa’s National Youth Policy defines the youth as people aged 14 to 35. In 2014 the General Household Survey reported that there were 21.5 million people in this age group.

Service delivery statistics manager at Stats SA, Niël Roux, previously told Africa Check that the survey measures literacy through self-assessment, not a literacy test. Respondents are classified as illiterate when they report that they have a lot of difficulty reading and writing, or are unable to read or write.

According to this assessment, 1.5% of South Africa’s youth were illiterate.

Stats SA also releases an estimate of how many people are “functionally literate”, which refers to people who have completed at least Grade 7 of schooling. People with this level of schooling are believed to have a “level of reading and writing which adults are thought to need in modern complex society”.

According to this definition, 12.5% of youth were considered functionally illiterate in 2014.

Share of ownership

Claim: “Blacks are approaching or have surpassed 50% in almost everything…”

1) Medical aid membership

Verdict: Correct

South Africa’s Council for Medical Schemes reported that in 2014 the country had 8,814,458 medical scheme members. The council is a statutory body that regulates and supervises private health financing through medical schemes.

However, the council’s general manager for stakeholder relations, Elsabé Conradie, told Africa Check that they did not collect information on the race of scheme members.

Data extracted from Stats SA’s 2014 General Household Survey shows that an estimated 9,624,786 people in South Africa were “covered by a medical aid or medical benefit scheme or other private health insurance” that year. Of these, 47% were African/black, 36% were white, 10% were coloured and 7% were Indian/Asian.

Conradie said the Stats SA estimate was higher because it included a number of other health care insurance products.

2) Credit cards

Verdict: Unsubstantiated

Louw cited Vivian Atud, who was previously an economist at the Free Market Foundation. Atud told Africa Check her research was based on “public information and other privately sourced information”. She said she would send us a copy of a study to support the claims, but at the time of publishing we had not received it.

In the meantime, Africa Check tried to find other data on the racial breakdown of credit card ownership in South Africa.

Both South Africa’s National Credit Regulator and the South African Reserve Bank said that they did not have such information. The bank’s media coordinator, Candice Jeffreys, advised Africa Check to approach commercial banks for the information.

We checked with Standard Bank, but spokesman Ross Linstrom said the bank does not require people to disclose their race when applying for a credit card.

Welfare

Claim

“Social grants are the main source of income for 40% of black households.”

Verdict

incorrect

Louw said the source for the claim was the South African Institute for Race Relations, but did not provide further details.

Data from Stats SA’s 2014 General Household Survey found that a total of 46.5% of black households receive grants.

Service delivery statistics manager at Stats SA, Niël Roux, told Africa Check that less than a quarter (24.3%) of black households were dependent on grants as their primary source of income.

 

Additional Reading

COMMENT: Where’s the evidence for the Free Market Foundation’s ‘facts’?

More claims of S. Africa’s ‘spectacular transformation’ fact-checked

Race, poverty and inequality: Black First Land First claims fact-checked

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