South Africa's "black diamonds" overtake whites

JOHANNESBURG, South Africa — Black South Africans sharing in the country’s economic successes are now free to choose where they live, but the geographic segregation imposed by the apartheid regime still weighs heavily on their decisions.

Thanks to a string of affirmative action policies intent on redressing the inequalities of the past and, at least until recently, years of sustained economic growth, South Africa has developed a sizable black middle class. Just how big remains the topic of hot debate, but at least one study estimates the new black middle class now has more spending power than the country’s white population.

Whites make up about 10 percent of South Africa's total population of 48 million and for generations they have dominated the middle classes. But now that blacks, who make up 79 percent of the population, are getting better education and employment opportunities, they are swelling the ranks.

Fifteen years after the end of apartheid, the quality of housing still varies greatly between the posh suburbs where the majority of the white urban population lives and the black townships on the outskirts of cities — which are not much more than dormitory towns made up of small, matchbox houses without good connections to electricity and water.

“There was quite a significant trend up until recently of moving from the townships to the suburbs and there is a very practical reason as to why this is the case,” said John Simpson, director of the University of Cape Town-based Unilever Institute of Strategic Marketing. “The suburbs typically are closer to the schools, closer to the shopping malls, closer to the transport and jobs and so on.”

Many Black South Africans enjoy their new middle class status, as shown in the slideshow below.

After South Africa’s first democratic elections in 1994, the government worked to boost the size of the country’s fledgling black middle class. Most of this was achieved through the Black Economic Empowerment program, where companies are rated in terms of their black ownership and the number of black executives and managers. Corporations that rank well on the B.E.E. scale are favored when it comes to government contracts and licenses.

Who is actually part of South Africa’s black middle class is not completely clear. Simpson said the group’s definition is based on lifestyle rather than a strict level of income. Middle class cannot be defined by income alone. Education, career paths and aspirations are also important features that determine who is in the middle class.

South Africa's "black diamonds," as the Unilever Institute calls them, score seven or higher on a scale of living standards of one to 10. The scoring system includes income and education levels as well as the type of occupation. In terms of earnings, 61 percent of black diamonds earn at least $800 a month, but households have often more than one wage earner. The category has seen a steady growth in recent years with a 15-percent rise to reach 3 million black diamonds in 2008, according to the Unilever Institute.

“As a group, the black middle class is the biggest spending group in South Africa at the moment,” Simpson said. “It probably overtook the whites, I would say, about 15 to 18 months ago.”

But Sipho Seepe, head of the South African Institute of Race Relations, said the size of the black middle class has been exaggerated. Seepe said that because the black middle class has been established in part through affirmative action programs and lucrative government positions for veterans of the liberation struggle, the favoritism has done little to improve the competitiveness of Africa’s largest economy.

“It’s also a middle class that is more dependent on government jobs, dependent on B.E.E. shares, not a group of entrepreneurs, and that is where the major weakness of the black middle class is,” Seepe said. “They are not creators of jobs.”

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John Loos, a property economist with First National Bank, said that as soon as they get a university degree, many young black professionals choose to move to formerly all white suburbs. These areas are attractive because they’re often located close to office jobs, fancy shopping malls and good-quality schools, which are priorities of the black middle class. Houses there are also considered good investments, Loos said.

A drawback to the white suburbs is that they are impersonal. Most houses are surrounded by high walls, and residents often don’t know their neighbors. Many new black residents say they miss the sense of community from the more tightly-packed townships.

More than 42 percent of the black residents of the formerly white suburbs say they would prefer to live in townships, and more than 60 percent of them still spend a lot of time there, according to the Unilever Institute’s research.

Things may be changing, however, to make the townships more appealing. Major retailers have been setting up stores in townships, and a very upscale mall was recently opened in Soweto. The next step is the arrival of large-scale employers in the townships.

“They’re all becoming more attractive places for people with purchasing power to stay, and I suspect that might just slow that brain drain out of the townships towards the suburbs,” Loos said.

One development that attempts to offer the best of both worlds is Cosmo City, a project north of Johannesburg that includes both subsidized housing for relocated inhabitants of nearby slums and up-market houses for professionals.

Petrus Magoele, 22, is one of those young professionals. He is a real estate agent who earns as much as $3,200 when he completes a sale — a huge sum by South African standards.

Sitting in a $100,000-house, Magoele acknowledged that Cosmo City, started in 2005, still lacks shops, but he said residents come here for the quiet and the lack of crime. And most of all, Magoele said, he appreciates the area’s friendly vibe.

“People who live here, they understand each other," he said, "and they help each other.”

Africa's middle class is a GlobalPost series to highlight the continent's key but under-reported population including education opportunities in Ghana, the challenge to Kenya's middle class, the struggles to rebuild a middle class after years of civil war in Sierra Leone and Liberia, and the diaspora of thousands of Africa's ambitious in the U.S. and Europe.