Inequality levels in Cape Town are at its highest ever in the past 10 years, compounded by the drought that is ravaging the economy which is growing more slowly since the 2008 global financial crisis.
Figures in the Western Cape Municipal Economic Review Outlook show that the inequalities in income distribution within the Cape Metro remain the highest in the province. The review outlook was presented by Finance MEC Ivan Meyer in the Legislature last week.
Cape Town is the most unequal part of the province, followed by the Cape Winelands and Garden Route.
The Gini coefficient is a measure of statistical dispersion intended to represent the distribution of income among a nation’s residents. The figure varies between 0, which is an indication of complete or perfect equality and 1, which represents complete inequality in income distribution. The closer to 1 means more and more inequality exists and the closer to 0 shows less and less inequality.
“Inequalities in income distribution are generally high in almost all the regions of the province, with all Gini coefficients tending closer to 1 than to 0 in the past 10 years.
The recent drought and difficult economic conditions ever since the recession have translated to rising inequalities in income distribution, with sharp increases reported for last year in all regions of the Western Cape, except for the Cape Metro area,” Meyer said in the report.
The government also analyses expenditure by households on different product categories as well as on services to establish the disparities in income distribution.
Figures show a decline in household expenditure on durable goods in all planning districts across the Cape Metro area in 2008 and 2009 during the recession and another dip between 2014 and 2016 when economic activity slowed down. On the contrary, expenditure on non-durable goods has been growing by more than 5% across all Cape Metro districts as households who cannot afford durables spend their disposable income on basic necessities,” Meyer said.
Statistics show that more than half of the informal dwellings in the Cape Metro are found within the Khayelitsha/Mitchells Plain planning district (134 493 dwellings) in 2017. Other areas with large numbers of informal dwellings include the Cape Flats (44 848), Tygerberg (17 123) and Blaauwberg (16 699) planning districts. Table Bay is estimated to have 9 584 informal dwellings, the least in the Cape Metro area. Informal dwellings remain a cause for concern for municipalities due to the substantial cost to provide free basic service.
Outgoing Cape Town mayor Patricia de Lille said the City will spend R2.1billion on the development of new housing opportunities over the next three financial years.