Question

In United State of America they say a billion is thousands million what is a billion in south africa

Answer 1

Note : The Question is not too clear on what exactly is to be explained.However, I will try and answer from Finance and economics point of view.

Technically speaking from mathematical point of view, 1 Billion = 1000,000,000 and 1 million = 1000,000. So logically speaking, 1 Billion = 1000 Million

A country's purchasing power of its currency depends on the Inflation and monetary policy of the central bank of the country. For instance, in a country like Zimbabwe, where there is hyper-Inflation, 100-trillion-dollar Zimbabwian note is worth just 40 U.S.cents.

Currently in US, the inflation is at 1.8%. To put it in simple words, what we can buy with $100 today, we will need to pay $101.8 in a year probably. That means everything else remaining constant, the purchasing power of US Dollar has gone down. So if I have $1 Billion today, it will be worth $0.982 Billion. In similar term, the inflation in South Africa is 4%. So a $1 Billion today will be worth $0.960 Billion. Inflation eats the purchasing power of money.Hence, if you wish to invest this $1 Billion for a year, you would at least want a 4% return just to beat inflation and on top of it the risk free rate of return as you are sacrificing on the present consumption and if there is any credit risk involved, you would want to embed that too in your required rate of return.

Another way to look at this statement “In United State of America they say a billion is thousands million what is a billion in south Africa” is from people perspective. There are close to 2153 billionaires according to Forbes' 2019 "World's Billionaires" list. So for these super rich people, who are just a handful in number in thousands, a billion is like million now. Their standard of living, quality of life, way of spending is way above the national average. For us ,may be spending $8000 on a flight trip between Los Angeles and New York. , may be too high , but for billionaires, spending millions on private jet is like a walk in the park.

But in contrast, South Africa just has 5 Billionaires according to the Forbes' 2019 "World's Billionaires" list. So from similar analogy, a billion is just 5 people’s thousands perhaps. They are in super minority and can spend millions like thousand and still laugh all the way to a bank.

Do let me know , if this inference of mine worked or not. All the Best!