Rich black people still, well, rich

While the world is struggling to get to grips with one of the worst financial crises since the Great Depression, South Africa’s growing black middle class was weathering the storm well according to a recent survey.

A TNS Research Surveys report showed that the black middle class of about three million people colloquially known as the “Black Diamonds” was proving resilient to the global financial crisis on the back of spending power that grew by more than a third in 2007.

The survey also found that the spending power of this black class now matched that of the white population, which is of similar size, in South Africa for the first time.

According to Rudo Maponga of TNS Research Surveys, “The most impressive finding is that they have shown resilience to the global and domestic financial decline, increasing their spending power from R180-billion (about $20-billion) in 2007 to R250-billion this year.”

A previous TNS survey had shown that only 10 percent of the black diamonds were affected by the global credit crunch and higher interest rates, which could lead to asset repossessions.

“The black diamonds’ earning power has increased and the majority of them are becoming more financial savvy, which minimises the risk of getting caught up in debt,” said Maponga.

According to the survey, black women in this class accounted for 40 percent of the R120-billion spent annually but South African women.

“Almost half of the women interviewed said they earned over 50 percent of the household income, whilst over 80 percent said they were the main household decision makers when it came to the majority of purchases,” said Maponga.
The survey, which polled 1500 black people in major urban areas, took place in August.

Since 1994 South Africa, the black middle class has expanded at one of the fastest rates in the world, mainly as a result of pro-black policies aimed at expediting black business interests to deal with apartheid imbalances that advantaged the white population and left the black population mostly in poverty.

However, critics believe these black empowerment policies are making business in South Africa inefficient and expensive while not reaching the majority of poor black households. Elitism is also a problem, as many of the now rich businesspeople were not necessarily poor to start with, coming from positions of advantage in the former homelands.