Rebuilding social cohesion is essential to SA's economic development

Overview

South Africa has made tremendous strides as a nation over the past three decades. The Human Development Index (HDI) has classified the country in the ‘high human development’ category since 2012, reflecting progress made in improving the country’s health, education and quality of living outcomes since the dawn of democracy. 

However, South Africa’s challenges remain numerous: it is the most unequal country in the world from an income perspective and also has the highest youth unemployment rate in the world. The civil unrest in KwaZulu-Natal and parts of Gauteng during July 2021 occurred within this context of multiple socio-economic challenges, and concerns remain that many of the driving forces behind the 2021 unrest — including inequality and unemployment — have not improved over the past year. 

The growing gap between the ‘haves’ and the ‘have-nots’ is a key driver for the decline in social cohesion across many societies and economies, including South Africa. Our latest research looks at the evidence pointing towards a decline in South Africa’s social cohesion in recent years. Social cohesion is defined in the local context as comprising the following five pillars: 

1. Inclusion in economic and social life;

2. Acceptance and belonging in society;

3. Social relationships and trust;

4. Participation in political life; and 

5. Trust in the legitimacy of institutions. 

At the same time, the public sector is overwhelmed; stretched in every direction to cope with these and other challenges.

Download the Rebuilding social cohesion publication here

Purpose-driven companies can help reverse the deterioration in South Africa’s social cohesion

The risk faced by South Africa at present is that the breakdown in social cohesion experienced in recent years continues on a negative trend over the short- to medium-term. For private companies, this increases operational and security risk for business activities. PwC survey data shows that local business leaders are very concerned about the impact of social inequality on their businesses.

However, with this research, we also deliver a message of hope. South African companies can make a meaningful and sustainable impact on their communities by adopting the right strategy for their business and stakeholders. The private sector will need to play an increasingly important role in helping the state address socio-economic challenges – specifically at the community level. 

A new approach to making an impact on communities and society as a whole

This report advocates for a new approach to making an impact on communities and highlights the tools available to the private sector to adapt their impact strategies to help rebuild social cohesion. While Corporate Social Investment (CSI) increased from approximately R7bn in 2012 to R10bn in 2021, reporting in annual reports on the quantum of CSI spend is not enough. Organisations can only have a meaningful impact on social cohesion by deliberately taking a purpose–driven approach to their general business operations with a focus on the five pillars of social cohesion.

Addressing the breakdown in social cohesion at a community level can best be achieved by implementing a comprehensive Environmental, Social, and Governance (ESG) approach that is embedded within an organisation’s core business strategy. ESG is more than ticking boxes: it is about making a difference by creating sustained outcomes that drive value and fuel growth while strengthening our environment, societies and governance structures. 

This report provides practical examples of how PwC is working with private sector organisations to improve their impact and help rebuild social cohesion in South Africa. This includes information on our work with a water user association in the north of the country as well as the services that we deliver to help our clients implement living wages.