The GDP per capita gap with the upper half of OECD countries has failed to narrow since the transition to majority rule, although there has been some convergence in the last few years. Compared with other non-OECD countries, an unusually large part of the gap is explained by low labour utilisation. A large expansion of social grants has been important in alleviating poverty, but structural reforms would help speed up convergence to OECD income levels. The GDP per capita gap with the upper half of OECD countries has failed to narrow since the transition to majority rule, although there has been some convergence in the last few years. Compared with other non-OECD countries, an unusually large part of the gap is explained by low labour utilisation. A large expansion of social grants has been important in alleviating poverty, but structural reforms would help speed up convergence to OECD income levels.