NSSF SHIFTS GOALPOSTS WITH SH80TRILION TARGET

The biggest number in the National Social Security Fund’s (NSSF) latest results is not the Sh6.51 trillion it earned last year. It is not even the Sh32.8 trillion it now has under management.

It is Sh80 trillion.

NSSF has revised upwards the asset target under its 10-year Vision 2035 strategy from Sh50 trillion to Sh80 trillion after its performance suggested the old target would be reached far too early.

“We had to revise this because projections suggested Sh50 trillion was not ambitious enough,” NSSF Managing Director Patrick Ayota said.

Management reckons that at its current trajectory the Fund could reach Sh50 trillion around 2029 or 2030 — several years ahead of schedule.

You can see why.

"Assets under management jumped 26 percent in the year to June 2026, to Sh32.8 trillion from Sh26 trillion. Five years ago they stood at Sh15.6 trillion.

Sometimes numbers become so large that we lose perspective. So it is worth looking backwards.

Forty years ago, NSSF was a tiny institution whose assets were measured in billions, not trillions. Twenty years ago, it was still largely a compulsory savings scheme struggling with weak compliance, cumbersome systems and limited public confidence. By around 2010 it had just over Sh2 trillion in assets, customer satisfaction was below 50 percent and a benefit claim could take more than 100 days to process. About 10 years ago, assets were around Sh5.6 trillion. Today they are Sh32.8 trillion, customer satisfaction is 89 percent and benefits are processed in an average 4.5 days.

And another NSSF story recently almost snuck up on us.

When President Yoweri Museveni opened the new Marriott development in Kampala a few weeks ago, we learnt that NSSF had taken a 30 percent stake in the project, putting the overall project valuation at about Sh500 billion...

Think about that. Ugandan workers’ savings now have the muscle to take a substantial position in a Sh500 billion hospitality development.

The Marriott investment also tells us something about where NSSF’s growing financial muscle may increasingly be deployed.

Traditionally its core portfolio has been government securities, listed equities and real estate. Fixed income still accounts for 76.5 percent of assets, equities 18.4 percent and real estate 5.1 percent.

But management is looking for opportunities beyond these traditional investments.

The Marriott is a good example. NSSF says tourism is one of Uganda’s strategic growth areas. The investment case was based partly on data showing rising visitor arrivals but relatively short stays in Uganda — often two or three days compared with longer stays in neighbouring destinations.

One possible reason is the shortage of internationally recognised facilities capable of keeping high-spending visitors here longer.

So NSSF assessed the investment through both financial and social lenses: returns to members, employment, demand for agriculture and other supplies and the potential to attract conferences and international events.

That distinction matters. NSSF is not a development bank. It is investing workers’ money and every investment must first make financial sense.

But a Sh32.8 trillion Fund can increasingly do both — generate returns while financing productive capacity.

Infrastructure could be another frontier.

NSSF says it has already committed to the Jinja expressway project and is prepared to invest more as projects become investment-ready. Its message to government is straightforward: do the feasibility studies, complete the designs, acquire the rights of way and bring bankable projects to the table. NSSF can then provide long-term finance.

This is what a country with growing domestic savings should eventually look like.

The latest results show the firepower available. Total income surged 85 percent to Sh6.51 trillion. Realised income increased 24 percent to Sh3.88 trillion, interest income rose 21 percent to Sh3.49 trillion and dividend income jumped 55 percent to Sh369 billion...

Member contributions increased 13 percent to Sh2.42 trillion, while benefits paid rose 17 percent to Sh1.549 trillion.

But one number that particularly catches my eye is Sh180 billion.

That is how much Smartlife Flexi, NSSF’s voluntary savings product, accumulated in just 20 months following its November 2024 launch.

That surge in voluntary savings may be an important part of the journey to Sh80 trillion.

Growth can no longer depend only on compulsory deductions from formal-sector workers. There is a vast universe of businesspeople, professionals, informal workers and other Ugandans looking for credible places to accumulate long-term savings.

There will be mistakes along the way. NSSF officials made this point while discussing Uganda Clays, one of the Fund’s difficult historical investments.

No investor predicts the future perfectly. That is why you diversify.

The correct measure is not whether every investment succeeds, but whether the portfolio as a whole consistently grows members’ wealth.

And this is perhaps the bigger story behind the new Sh80 trillion target.

"NSSF has evolved from a relatively modest compulsory savings scheme into the biggest pools of indigenous capital Uganda has ever created...

Now imagine what Sh80 trillion can do.

BOOK REVIEW: BEFORE GOVT BLAMES THE MARKET, UNTIE ITS SHOE LACES

Book: The Heart of a Cheetah: How We Have Been Lied to about African Poverty, and What That Means for Human Flourishing

Author: Magatte Wade

Imagine entering Usain Bolt in a 100-metre race, tying his shoelaces together, putting a sack of cement on his back and then, when he finishes last, announcing triumphantly that sprinting does not work.

That, in many ways, is what African governments have done to the private sector.

Which is why Magatte Wade’s TheHeart of a Cheetah resonated so strongly with me.

Wade, a Senegalese entrepreneur, is a woman after my own heart. Her central argument is simple: Africa’s best chance of escaping poverty lies not in more aid, more government enterprises or another round of grand development plans, but in unleashing entrepreneurs...

I agree.

Africa is not short of ambitious people. Neither are we short of resources. We have minerals, agricultural land, energy, young populations and increasingly large markets.

What we have consistently lacked is an environment that allows Africans to turn all these advantages into wealth.

And this is where Wade makes one of her most important observations.

Across the continent, governments are creeping back into business, often on the argument that the free market has failed.

But what free market?

Take Uganda.

In the World Bank’s final Doing Business rankings in 2020, Uganda ranked 116th out of 190 economies overall. We were 169th for starting a business and 168th for getting electricity.

Then we turn around and say the private sector has failed.

Failed under what conditions?

"Entrepreneurs operate with expensive electricity, inadequate infrastructure, costly credit, bureaucracy, licences, taxes, unpredictable regulation and delays moving goods.

Then government looks at the resulting weak private sector and declares: “You see? Markets do not work. Government must intervene.”

You cannot tie Usain Bolt’s shoelaces together and then conclude that sprinting does not work.

That argument should make us nervous because we have seen this movie before.

After independence, much of Africa embraced socialism and state capitalism. Governments owned banks, hotels, factories, farms, transport companies and trading enterprises.

The reasoning sounded noble.

The private sector was weak. Local capital was scarce. Government therefore had to step in and lead development.

What followed in many countries was predictable.

State enterprises became centres of inefficiency and patronage. Losses were covered by taxpayers. Jobs became political rewards. Procurement enriched connected insiders.

"Socialism did not abolish elites.

It simply created a different route into the elite...

Instead of creating wealth by satisfying customers, the quickest route to wealth became proximity to government.

And that is what worries about the renewed enthusiasm for government getting directly back into business.

Already, some interventions dressed up as industrial policy look suspiciously like mechanisms for appropriating public money for the benefit of a connected few...

Government announces a project.

Taxpayer money is allocated.

There is a commissioning ceremony, flags, speeches, television cameras and photographs of important people cutting ribbons.

Then come the questions that really matter.

Where are the sales?

Where are the profits?

Where are the exports?

Where is the return on taxpayers’ capital?

Silence.

A private businessman does not have that luxury. If nobody buys his product, he eventually closes shop.

Government can return to Parliament and ask for another appropriation.

This is why Wade believe the free market remains Africa’s best chance of prosperity.

Not because markets are perfect. They are not.

Not because businessmen are saints. They are not either.

But markets impose a discipline that government enterprises rarely face. You must produce something people want, at a price they are prepared to pay. If you do that well, you grow. If you do it badly, someone else takes your customers.

That constant pressure to improve is where productivity, innovation and ultimately wealth come from.

Government has a critical role in this process, but it is a different role.

"Government should protect property rights, enforce contracts, maintain security, educate people, build infrastructure, ensure reliable electricity and maintain macroeconomic stability.

In other words, government should make it ridiculously easy to do business...

Then a virtuous cycle begins.

Businesses grow and employ people. Workers earn incomes and consume more. Companies make profits and reinvest. Government collects more tax from a larger economy without necessarily increasing tax rates.

Those revenues finance better infrastructure and public services, which lower the cost of doing business further.

More investment follows.

The economy expands again.

That is the cycle we should be chasing.

Instead, too often we do the reverse. We tax a small formal private sector more heavily, regulate it more aggressively and then use some of those taxes to finance government businesses that compete against it.

Then we complain that enterprise is weak.

And dare I say it, we should remember where this road can end.

Many African economies travelled it in the 1970s and 1980s.

"Governments accumulated loss-making parastatals. Budget deficits widened. Debt mounted. Foreign exchange became scarce. Economies stagnated.

Eventually we went back, cap in hand, to the World Bank and IMF and were prescribed the dreaded Structural Adjustment Programmes...

Privatise.

Liberalise.

Cut subsidies.

Reduce government spending.

Allow markets to work.

SAPs remain a dirty word in much of Africa, and understandably so. The adjustment was painful and, in some cases, brutally implemented.

"But we should remember what brought us to the hospital.

If we rebuild the same bloated state enterprises, finance politically connected projects indefinitely and crowd out private capital, we should not be surprised if we eventually require the same unpleasant medicine...

There is an irony here worth appreciating.

We may spend the next decade claiming the free market failed, only to eventually invite the World Bank and IMF back to tell us to embrace the free market again.

Better not to make the journey.

The Heart of a Cheetah is ultimately an optimistic book because Wade refuses to accept that Africa is condemned to poverty.

Africa does not need governments trying to outrun the cheetahs.

It needs governments to build the roads, provide the electricity, enforce the rules, protect property and then get out of the way.

Untie the entrepreneurs’ shoelaces.

Clear the track.

Let the cheetahs run.

Because the road back to Structural Adjustment Programmes may well be paved with loss-making government enterprises.

NRM’S BIGGEST SUCCESS MAY BE WHY THE YOUNG ARE ANGRY

One of the NRM’s biggest problems after 40 years in power is that some of its greatest achievements are being discounted precisely because they have lasted so long.

Give people an inch and, quite naturally, they will want a mile.

For much of Uganda’s first quarter-century after independence, the questions were painfully basic. Will I get home safely tonight? Will my property still be mine tomorrow? Will there be sugar, soap or salt in the shops? Will another coup or war overturn everything?

Today those questions sound almost absurd.

That, whatever else one thinks about the NRM, is part of its achievement.

Its two greatest legacies will probably be the restoration of security and the revival of an economy wrecked by political turmoil, economic mismanagement and war.

Younger Ugandans often roll their eyes when older people say: “At least we can sleep.”

It sounds like an embarrassingly low bar.

But those five words carry a deeper meaning.

People who lived in Kampala in the early 1980s remember a city that was often compared to Beirut: gunfire, curfews, roadblocks, armed men and the uncertainty of whether you would make it home.

So “at least we can sleep” is not really about bedtime...

It is shorthand for restored security.

And security underpins almost every economic gain we have made since.

You do not build factories, banks, hotels, telecom networks or supermarkets where property rights are meaningless and armed men can undo years of work in one afternoon.

Security was the foundation.

Everything else came on top of it.

But success resets expectations.

A Ugandan born in 2000 is not going to congratulate government because soldiers do not routinely drag people out of their homes at night.

Why should they?

Security is what governments are supposed to provide.

Their questions are different.

Where is my job? Why is housing unaffordable? Why am I still dependent on my parents after university? Why do connections sometimes seem to count for more than competence?

These are legitimate questions.

The same generational disconnect applies to liberalisation.

Many younger Ugandans do not realise how many things they now treat as basic were once privileges.

Take the telephone.

There was a time when getting a telephone line from Uganda Posts and Telecommunications Corporation could take years. You filled in forms, followed up repeatedly and hoped your application had not disappeared into the mountains of paperwork.

"Today there are more telephone users than there were Ugandans in 1986...

That is not a small transformation.

The same applies, to varying degrees, to electricity, banking and the internet. Goods and services once concentrated among government offices, big companies and a narrow urban elite are now accessible to millions.

None of this means access is universal or affordable enough.

It simply means progress happened.

And this is where the NRM’s next challenge lies.

"The gains of the last four decades will remain politically fragile if too many Ugandans believe they have been captured by a relatively small urban elite...

There is still much to achieve in narrowing disparities in wealth, income and opportunity.

For the urban graduate, frustration may mean a poorly paid job, expensive rent and the feeling that connections matter too much.

For the rural young person, it may mean poor roads, weak schools, limited access to finance, unreliable power and little realistic chance of moving from subsistence to wealth creation.

Economic growth is not enough if too many people remain spectators.

The next phase must therefore be about widening ownership of the gains already made.

More Ugandans need to own productive assets. More farmers need to move into commercial agriculture. More small businesses need to become medium-sized businesses. More households need access to good education, affordable credit, reliable electricity and functioning markets.

The question can no longer simply be whether Uganda is richer than it was in 1986.

The question is how widely that prosperity is shared.

There is, however, another danger: assuming all this progress was inevitable.

It was not.

Countries can go backwards.

Economies can collapse.

Institutions can be destroyed far faster than they are built.

"One symptom of our fading historical memory is the growing revisionism around Idi Amin, especially the claim that expelling Asians in 1972 was some heroic act of economic nationalism...

It was not.

The expulsion removed people who had accumulated commercial knowledge, capital, supplier relationships and management experience over generations and handed businesses to politically favoured beneficiaries, many of whom had neither built them nor knew how to run them.

Factories collapsed. Shops emptied. Supply chains broke.

Ironically, Asians later returned and are today, once again, among the main drivers of Uganda’s commercial and industrial life.

There is a lesson there.

Capital is not created by confiscation.

Entrepreneurial ability cannot be transferred by presidential decree.

"Prosperity cannot be redistributed before somebody creates it...

A generation that never experienced the destruction can afford to romanticise it.

History without memory easily becomes mythology.

None of this gives the NRM a permanent pass.

Forty years later, telling a 25-year-old that things are better than they were in 1986 is not an economic programme.

"Young Ugandans are right to demand the mile.

But they should also understand how we got the inch...

The NRM should not expect eternal gratitude for restoring security and rebuilding the economy. Equally, younger Ugandans should resist the idea that today’s relative stability and abundance simply happened.

They were built.

And they can be destroyed.

The real task now is to preserve the foundations while making sure the prosperity built on them spreads beyond Kampala, beyond the politically connected and beyond the already comfortable.

Because “at least we can sleep” should not be the end of Uganda’s ambition.

But neither should we forget why, once upon a time, being able to sleep was an achievement.

MUSK, MARKETS AND THE EXPORT TEST

I have just finished Walter Isaacson’s biography of Elon Musk and came away with mixed emotions — awe at what one man has achieved in a lifetime and some horror at the person he appears to have had to become to achieve it.

 Musk is only a few months older than me. That makes the reading uncomfortable.

 Isaacson portrays a man of extraordinary imagination, risk tolerance and focus, but also one who can be abrasive, insensitive and brutally demanding. Employees, friends and even family can become collateral damage to the mission.

 No candidate for beatification here.

 Isaacson, who also wrote the excellent biography of Steve Jobs, has a rare ability to get behind the caricature served up by the media and ferret out what drives his subjects. Yet despite the book running to hundreds of pages, I finished it feeling he had only scratched the surface of Musk’s complicated personality and even more audacious vision.

 Tesla was the announcement

 SpaceX can only be described in superlatives. Reusable rockets have changed the economics of going into space.

 But for me Tesla is what announced Musk to the world as a bona fide genius.

 Starting a new automobile company is close to madness. Cars require huge amounts of capital, complicated supply chains, technology, distribution networks and consumer trust.

 Tesla did not merely survive.

 It made electric cars desirable and forced virtually every major car manufacturer to rethink its future. Then it pushed into batteries, software and autonomous driving. I cannot wait to own a genuinely self-driving car — Tesla or otherwise.

 And then came the ultimate capitalist validation: the market.

 Investors valued Tesla above several of the world’s largest traditional car manufacturers combined.

 You can argue they are wrong. You can argue Tesla is overvalued.

 But they are putting their own money behind that judgement.

 For us free-market adherents, that is the holy grail.

 Yes, government helped

 Tesla’s rise was not a pure free-market fairy tale.

 It benefited from government support, including a $465 million US government loan, which it repaid early. America also protects its industries; Chinese EVs face punitive tariffs in the US market.

 So yes, protectionism and state support are part of the story.

 But there is an important distinction.

 At its best, state support helps a company become strong enough to compete globally. It does not permanently shield it from competition...

 You can provide finance, infrastructure, research support and even temporary protection.

 But eventually the company must leave the nursery and fight.

 The export market is brutal.

 That brutality is useful.

 Then came BYD

 Some will say it is unfair to compare Uganda’s Kiira Motors with Tesla.

 I think the opposite.

 Who exactly are we supposed to compare it with?

 When Kiira sells a bus in Nairobi, Lagos, Dar es Salaam or Johannesburg, the buyer will not lower his expectations because Uganda is a developing country.

 He will compare price, reliability, range, financing, technology and after-sales service against every available alternative.

 And increasingly that means China.

 In fact Tesla may now be the kinder comparison. BYD sold more fully electric vehicles than Tesla in 2025 and is also a major global electric-bus manufacturer.

 That is the market Kiira Motors is entering.

 Like it or not, Tesla and BYD are the competition.

 The import-substitution trap

 This is also why I have always been suspicious of import substitution.

 There is nothing wrong with producing at home what we currently import. The problem starts when import substitution becomes a policy for protecting companies from competition rather than preparing them for it...

 Then the incentives turn upside down.

 Instead of becoming more efficient, the company learns to lobby government. Instead of improving its product, it seeks tariffs, tax breaks, procurement preferences and protection from foreign competitors.

 That is how cronies are created.

 And once protected firms are guaranteed a market, innovation suffers. Why improve quality or lower prices when the customer has nowhere else to go?

 The taxpayer becomes a double loser.

First, billions of shillings can disappear into enterprises that never become commercially viable.

Then the same taxpayer, now acting as a consumer, pays again through higher prices, poorer quality or inferior services because competition has been suppressed...

Export-led growth imposes a much healthier discipline.

The Kenyan, Nigerian or South African buyer does not care who your minister is. He does not care how patriotic your industrial policy sounds.

He wants value.

 

Politicians love inputs

This brings us back to Kiira Motors.

Politicians love inputs.

We allocated billions. We built a factory. We installed a production line. We trained engineers. We made a bus.

Cut ribbon. Take photographs. Mission accomplished.

Except business does not work like that.

The private sector is judged by outputs and outcomes because the market is an unforgiving auditor.

How many buses did you make? How many did you sell? At what margin? Did customers return? Can you export? Can you finance the next production cycle from revenues rather than another government appropriation?

The issue is not whether Ugandans can build buses.

 Obviously we can.

 The issue is whether we can build buses that strangers will buy with their own money.

 That is a completely different test.

 If Kiira can sell hundreds and eventually thousands of buses across Africa against BYD and other manufacturers, government should back it enthusiastically.

 But if after hundreds of billions of shillings we are still mainly celebrating factories, prototypes and government procurement, we should ask whether that capital might produce higher returns elsewhere.

 Musk’s story reinforced something very simple.

 Capitalism does not care about good intentions.

 Eventually somebody who does not have to buy your product must reach into his pocket and pay for it.

Tesla passed that test.

BYD has passed it on an even larger scale.

Kiira Motors must too.

UGANDA CAN’T BUILD A $500B ECONOMY ONE PLOT AT A TIME

For decades, Uganda’s housing strategy has been simple: leave it to the individual.

A Ugandan buys a 50-by-100-foot plot beyond the city and builds slowly. First the foundation, then the walls. The roof may come two years later. Windows and doors follow when other obligations allow.

This model has produced millions of homes. But individual development has reached its limit and is failing to keep pace with urbanisation.

That came into focus during a post-budget dialogue on decent housing hosted by the Uganda Society of Architects. Participants asked whether the national budget and Uganda’s institutions are responding adequately.

The numbers suggest they are not.

"Uganda’s urban population is growing by more than five percent annually. The industry delivers about 60,000 housing units a year against estimated demand of 344,000...

 The country already has a housing deficit of about 2.4 million units, projected to rise to 4.5 million by 2035.

No number of individuals laying one brick at a time can keep pace.

The market worked—up to a point

This column has argued that government’s dismal of some people’s clamouring for rent controls was coreect.

Capping rents and restricting advances would have discouraged investment. Less investment would reduce rental supply and eventually push rents higher—the opposite of what the regulations intended.

As private investment increased, landlords who once demanded a year’s rent in advance began accepting six months, three months and, in some places, one month. Competition was improving the terms.

Dollar rents and punitive advances were symptoms of scarcity. Where demand exceeded supply, landlords held all the cards. Increase supply and power shifts towards tenants.

That logic remains valid. But markets regulate prices only when supply can respond.

Uganda’s individual builder has run into expensive land, costly infrastructure, high taxes, uncertain tenure, short-term finance and fragmented planning.

The next phase of urbanisation cannot be built one plot at a time.

The five-dollar opportunity

This is not only a social challenge. It is a major economic opportunity.

Government wants to grow Uganda’s economy tenfold to about $500 billion by 2040. Real estate should be one of the principal engines of that ambition.

Using the sector’s commonly cited multiplier, every dollar invested in real estate can generate about five dollars in wider economic activity.

A housing project employs professionals, artisans and labourers. It buys local materials and creates business for transporters, banks, insurers, hardware shops and furniture makers. Once occupied, it generates demand for utilities, schools, retail and transport.

"Housing construction has a high employment multiplier, uses substantial domestic materials and can mobilise household savings into long-term productive investment...

Housing is not merely where people sleep. It is an economic production line.

Government has made housing expensive

Government cannot demand affordable housing while making development unaffordable.

Roads, drainage, electricity, water, sewerage and other public goods can account for about 40 percent of development costs. Yet developers are expected to provide them and recover the expense from buyers or tenants.

Residential developers also pay 18 percent VAT on building materials. Because residential sales are generally exempt, that input VAT is not recoverable and becomes a permanent cost.

On sh100 million worth of taxable materials, sh18 million is added before land, finance, labour, professional fees and profit.

Government then wonders why developers build for the wealthy.

About 76 percent of Ugandans can afford homes valued at only sh12 million to sh24 million, while a formal starter house costs about sh150 million. An estimated 96 percent cannot afford the cheapest standard house produced by formal developers.

That is not merely an affordability gap. It is a market-design failure.

A private house, a communal asset

"Housing must stop being treated as merely a private responsibility.

It is a public obligation, an economic necessity and increasingly a security and safety issue...

Unplanned urbanisation produces flooding, congestion, crime and unsafe settlements. Factories appear next to homes. Roads and drainage arrive only after thousands have settled.

The house may be privately owned, but much of its value is communal. It comes from roads, drainage, sewerage, electricity, schools, security and orderly land use.

Uganda needs more housing cooperatives, condominiums, land pooling and public land banking. Neighbouring landowners should combine plots rather than develop independently.

Zoning must also be enforced. Productive cities cannot emerge where factories, schools, warehouses and residences are mixed without regard to safety or infrastructure.

Government must become a participant

Government must move beyond being a catalytic agent.

It should become a direct participant—not necessarily by laying every brick, but by assembling land, installing infrastructure, supplying patient capital, guaranteeing projects and partnering with institutional developers.

Resolving the uncertainty around Libya’s shareholding in National Housing and Construction Corporation is central to this shift. The dispute has constrained government’s ability to recapitalise NHCC and use it as a national housing-delivery vehicle.

Once resolved, NHCC should develop serviced land, rental housing, apartments and affordable units in the tens of thousands, not a few hundred expensive houses.

There are encouraging signs. Government has capitalised Uganda Development Bank by about sh1.6 trillion over five years and earmarked another sh440 billion, some of which is expected to support real estate developers.

But the scale must be greater.

Uganda’s commercial banks cannot finance this transformation alone. A single development may require sh80 billion, forcing banks to syndicate.

The country needs housing bonds, mortgage refinancing, pension-fund participation and specialised long-term finance.

"Tax relief should expand supply rather than subsidise individual buyers. Government can service land, reduce taxes on affordable-housing inputs and support developers capable of producing thousands of units.

The Uganda Society of Architects’ post-budget dialogue was about whether Uganda understands that real estate is also a growth, productivity, safety and national-development issue.

To build a $500 billion economy, Uganda must start building at institutional scale.

SOUTH AFRICA’S XENOPHOBIA IS THE BILL FOR A BROKEN PROMISE

South Africa’s latest xenophobia—they call it Afrophobia now, flare-up appears, at first glance, to be about foreigners.

It is not.

Foreigners are simply the easiest target. They run the spaza shop. They sell on the pavement. They compete in the informal economy. They are visible in communities where unemployment, poverty and frustration have become daily realities.

But the anger is not really about them. It is about a promise made in 1994 that remains largely unfulfilled.

Political freedom arrived. Economic freedom did not.

"When apartheid ended, South Africa faced a historic challenge: how to dismantle centuries of economic exclusion that doomed the black majority to serfdom and give them a genuine chance at climbing the social ladder...

Apartheid had not only denied people the vote. It had denied them land, quality education, capital, networks, decent housing and the ability to accumulate wealth across generations.

The new democratic state therefore needed urgency.

It needed to build schools that worked and boost job creation by expanding infrastructure, support entrepreneurs and ensure that millions who had been deliberately excluded could participate meaningfully in the economy.

Because political freedom without economic progress was always going to create disappointment.

Black Economic Empowerment was part of that response. It was necessary. A country that had excluded black people from ownership and leadership could not simply pretend the past did not exist.

But BEE was never going to solve everything.

A few people entering boardrooms could not compensate for millions of children receiving poor education. A handful of black billionaires could not transform communities where unemployment remained high, electricity unreliable and small businesses struggled to survive.

The problem was not that some black South Africans became wealthy. Every functioning economy creates winners. The problem was that too many people saw no realistic path to becoming one of them.

That is where resentment grows. Inequality becomes dangerous when people believe the ladder has been removed...

And South Africa is not merely unequal. It is almost in a category of its own.

The World Bank has ranked it as the most unequal country in the world, while the World Inequality Database shows that the richest 10 percent take roughly two-thirds of national income, leaving the bottom half with only a tiny share. In Sweden, by contrast, the bottom half takes about a quarter of national income.

That comparison matters.

It shows that South Africa’s problem is not just poverty. It is the architecture of opportunity. In a more normal society, inequality can be softened by the belief that the system is open, schools work, capital is accessible and effort can still move a family from the bottom to the middle. In South Africa, too many people do not see that path.

The legacy of apartheid did not end with apartheid.

It compounded.

It compounded through land ownership. It compounded through education. It compounded through access to capital. It compounded through where people lived, which schools they attended, what networks they could enter and what assets their parents could pass on.

That is why South Africa’s Gini coefficient remains among the highest ever recorded for a major economy. This is not accidental inequality. It is inherited inequality, reinforced over time.

A poor person can accept that someone else has a bigger house or a better car if they believe their own child has a fair chance of achieving the same. But when opportunity appears reserved for those with political connections, wealth begins to look less like success and more like privilege.

This is the uncomfortable reality of post-apartheid South Africa.

The country moved from a system where race determined economic opportunity to one where political access often became a powerful advantage. The rise of a connected black elite was an important correction to apartheid exclusion, but it also created a new frustration among ordinary citizens who feel they were left behind....

Many fought for liberation together. Yet decades later, some live in first-world luxury while others continue to  grovel under sub-human conditions.

That gap is politically explosive.

The statistics explain the anger.

South Africa’s unemployment rate remains among the highest in the world, with young people carrying the heaviest burden. Millions of young South Africans have grown up after apartheid, hearing that freedom had arrived, only to discover that economic opportunity remains painfully limited.

They see politicians and businesspeople with access and influence moving ahead while they struggle to find work.

Then someone tells them the problem is the foreigner.

And the match is lit.

"This is why xenophobia keeps returning. It is not because migrants suddenly become the cause of South Africa’s problems. It is because they become a convenient explanation for problems that are much deeper...

The foreign shopkeeper becomes a symbol of economic frustration.

The reality is more complicated. Migrants are a small share of South Africa’s population, and there is little evidence that they are responsible for unemployment, crime or failing public services. Many migrants are simply doing what South Africa has struggled to encourage enough of its own citizens to do: start small businesses, take risks and compete in difficult conditions.

The tragedy is that their success often becomes a source of anger rather than a lesson.

A society with millions of unemployed young people cannot survive on blame. It needs opportunity.

When leaders fail to provide answers, scapegoats become attractive.

This is where politics enters.

The African National Congress (ANC), once the unquestioned symbol of liberation, has lost much of its dominance. Its loss of a parliamentary majority in the 2024 election reflected growing public frustration with unemployment, corruption and poor service delivery.

A weakened liberation movement faces a difficult temptation: to explain failure or to distract from it.

"foreigner becomes useful because he shifts attention away from the broken municipality, the failed school, the corrupt tender and the political insider who became wealthy without creating broad prosperity...

But South Africa cannot build a future by attacking people who are also trying to survive.

The real challenge remains the same one that existed in 1994: turning political freedom into economic mobility.

And like every unpaid bill, the longer it is ignored, the more painful the final payment becomes.