The Common Sense recently estimated that black South Africans hold 66.55% of the locally owned capital on the Johannesburg Stock Exchange (JSE), compared with 33.45% held by white South Africans. That estimate excludes foreign investors and uses the broad definition in the broad-based black economic empowerment Act, which includes black, coloured, and Indian South Africans.

The Common Sense has now done a per capita analysis of its original data. That analysis was done as follows:

• •Black South Africans:
  • •66.55% (the share of the local JSE held by black South Africans) of R16.2 trillion (the locally held market capital of the JSE) = R10.8 trillion (the value held by black South Africans).
  • •R10.8 trillion ÷ 58.5 million black people (the number of black people in the country) = R184 604 per person
• •White South Africans:
  • •33.45% of R16.2 trillion = R5.4 trillion
  • •R5.4 trillion ÷ 4.5 million white people = R1 206 237 per person
• •Ratio of white to black per-person JSE wealth: R1 206 237 ÷ R184 604 = 6.5 times higher

This means that a white South African has roughly 6.5 times as much JSE-linked wealth as a black South African.

The per-person figures reflect a South Africa where a long-established white middle class sits alongside a black middle class that is still emerging.

The following two structural factors help explain why average JSE wealth per black person remains far below that of white people: high unemployment and a younger population.

1. High Black Unemployment Closes the Pathway to the Middle Class

The biggest constraint on wealth creation for the black population is the lack of formal employment. Investing on the JSE starts through pension funds, and retirement savings starts with a formal job, yet unemployment among black South Africans stands at 36% compared to 8% among white South Africans.

The Common Sense has previously highlighted two structural reasons for this. South Africa's fixed investment rate, the spending that builds factories, mines, and infrastructure and creates formal jobs, is around 14% of GDP, well below the levels maintained by many emerging-market peers. Manufacturing, historically one of the main routes from poverty into the middle class, has declined from around a quarter of GDP in the 1960s to about 12% today.

A constrained formal economy means fewer workers entering pension systems, fewer people accumulating assets, and fewer people participating directly in private ownership.

2. A Much Younger Black Population Means Less Time to Build Wealth

The second factor is age. Black South Africans are, on average, much younger than white South Africans, and that matters when measuring wealth. Retirement savings are built over decades through contributions and compound returns.

Statistics South Africa shows that 29.0% of white South Africans are older than 60, compared with just 7.8% of black South Africans. The median age of black South Africans is 27, compared with 45 for white South Africans.

A younger population has had less time to accumulate assets and benefit from long-term investment growth. More black South Africans are still entering the labour market or beginning to save, while a larger share of white South Africans is already at the stage of life where accumulated wealth is highest.

Closing the per-person wealth gap requires a growing economy that creates formal jobs, expands the middle class, and allows millions more black South Africans to save and invest over time to take advantage of the wonder of compound interest.