South Africa today

This is South Africa in the 21st century: modern, vibrant and productive, rooted in Africa – and in close touch with the world at large.

A minibus taxi rank in Johannesburg. In order to get rid of unsafe taxis on the roads, the Department of Transport is implementing its R7.7-billion taxi recapitalisation programme. (Image: Brand South Africa)

Brand South Africa Reporter

The southernmost tip of Africa is home to a nation on the rise – a place where a warm-spirited and inventive people, great natural wealth and breathtaking landscapes come together to create fresh opportunities and new ways of doing things.

This is South Africa in the 21st century: modern, vibrant and productive, rooted in Africa – and in close touch with the world at large.

Since the end of apartheid in 1994, the consolidation of democracy and enviable economic stability has created both a new set of opportunities, and challenges all aimed at social transformation.

Taking local conditions and international best practice into account, South Africa has launched a range of strategic initiatives to accelerate development and growth that will benefit the entire population and defeat poverty and the legacy of under-development.

The programme of reconstruction and development complements its vision of a world characterised by democracy, peace, prosperity and social progress for all.

Economic growth

South Africa is now entering the ninth year of the longest economic upswing since national accounts have been recorded, and the UN Conference on Trade and Development (Unctad) now ranks the country among the E7 – or Emerging 7 – group of nations comprising the strongest economies of the South.

National income has risen by 22% per person since 1999, with increases across all income groups.

Employment is rising faster than at any point since the 1960s. Fixed investment has increased sharply since 2002, by over 10% a year.

The economy is expected to grow by 4.5% in 2008, before returning to about 5% a year in 2009 and 2010.

South Africa is committed to the New Partnership for Africa’s Development (Nepad). The continent is a key trading partner for South Africa.

South African trade with Africa has grown by roughly 659% since 1994. Exports to the continent increased from Us$1.3-billion in 1994 to $7.6-billion in 2006, while imports increased from a low base of $0.4-billion to $4.2-billion.

South Africa is the single largest source of foreign direct investment in Africa.

Domestically, investment as a percentage of GDP has already risen above 21%, from 15% in 2002. This is a result of fixed investment growing by well over the 10% target set by the national economic plan known as the Accelerated and Shared Growth Initiative for South Africa (Asgi-SA).

Government infrastructure expenditure and spending on preparations for the 2010 Fifa World Cup – the first football World Cup to take place in Africa – has made a significant contribution to domestic investment.

2010-related investments make up less than 10% of government expenditure, which means investment acceleration is intrinsic to but not monopolised by the 2010 Fifa World Cup.

It is the most sustained, broadest and greatest investment surge in South Africa’s recorded economic history, and it will continue long after the biggest sporting event in the world in 2010.

For South Africa, hosting the best ever World Cup will be part of building a nation united in its diversity, living the values of equality, non-racialism, non-sexism and human solidarity.

2010 World Cup and beyond

The government has invested in the 2010 Fifa World Cup because doing so will build a better life for all. In the 2007/08 Budget, the government allocated $1.3-billion for transport and supporting infrastructure for the World Cup. A further $1.25-billion will be used for stadiums. The Budget also provides for sports and recreation programmes, volunteers, arts and culture programmes, costs associated with safety and security, and emergency medical services.

This investment in 2010 projects will ensure that the government fulfils its guarantees to Fifa, and allow the country to take advantage of the opportunity to leave a developmental legacy, speed up economic growth and halve poverty and unemployment by 2014.

Between 2006 and 2010 the government will invest more than $59-billion in infrastructure, from rail freight services and energy production to communications, airports and upgrading of ports of entry. It will also spend more on health, housing, safety and security and education.

An important element of the 2010 legacy for South Africans and post-World Cup visitors to the country is a range of public transport systems that will benefit major urban centres and communities that need to access such centres.

Priority has been given to World Cup-related projects, with the public and private sectors currently collaborating on a range of projects, including:

  • Inner-city mobility systems;
  • Links between airports and city centres, and the integration of different modes of transport;
  • Bus Rapid Transit systems;
  • Preferential facilities for high-occupancy vehicles; and
  • Call centre services and information technology and telecommunications systems to support the planned infrastructure.

Between the government and the private sector, the transport sector is committed to ensuring that the event in 2010 takes place in a seamless and error-free transport system.

In November 2007, South Africa made a strong, positive impression on the Fifa family and the world’s media as it hosted the Preliminary Draw for 2010.

Staged in the Indian Ocean city of Durban, the Preliminary Draw was the first official Fifa event connected to Africa’s historic first World Cup, and showcased South Africa’s organisational and logistics capacity, as well as its ability to work efficiently with international partners in various sectors.

Attracting investment

While South Africa pursues its growth objectives, a growing number of foreign investors share South Africans’ own confidence in the growing economy.

South Africa ranks 52nd out of 157 countries in the world in terms of economic freedom, according to the Index of Economic Freedom 2007, while global management consulting firm AT Kearney regards the country as the 18th most attractive foreign direct investment destination worldwide.

Public spending has doubled in real terms since 1994, at an annual rate of 9.4%.

Foreign investment has grown robustly in recent years. 2007 produced China’s largest foreign investment in the banking sector – a 20% stake in South Africa’s Standard Bank bought by the Industrial and Commercial Bank of China, the largest single FDI deal ever done by China. This follows an earlier investment in a major South African banking group by the UK’s Barclays Bank.

The economy also attracted investment in the automotive, hospitality and business processing sectors during the last 12 months.

Tackling poverty

Creating more jobs is the central challenge in reducing poverty. South Africa therefore takes pride in the fact that unemployment has fallen by about 6% between March 2003 and March 2007. This marks the strongest job creation performance since 1994.

In terms of social transformation and creating a better life for all its people, South Africa faces significant challenges but has also recorded significant successes.

Rising employment, rising wages and tax relief for lower income earners due to efficient tax collection are among the factors responsible for reduced poverty. This is alongside the provision of social grants to 12-million vulnerable South Africans. This is four times the number of grants provided just eight years ago.

As life has improved for the poor, the proportion of households who use electricity increased from 56% in 1996 to 80% in 2007.

The proportion of households who have access to piped water in their homes or on site increased from 61% in 1996 to 70% in 2007.

South Africa’s investment in education has tripled since the end of apartheid in 1994. As a percentage of total government spending, the country’s education budget is among the highest in the world.

Of South Africa’s over 12-million potential learners, more than 90% are in school – a far higher enrolment rate than in most developing countries.

Overcoming skills shortages

Professional skills in engineering, science, finance and management, as well as technical and artisan skills, are critically needed as the South African economy expands.

The government, business and labour unions have come together to identify how to overcome skills shortages. This collaboration has identified key measures such as mentoring, fast-tracking trainees with overseas job placement, special training programmes, re-employing retired persons and expatriate South Africans, and drawing in immigrants.

Targeted interventions in the key areas of mathematics and science have steadily been recording good progress. Five hundred and thirty schools have been targeted to double the maths and science graduate output to 50 000 this year.

Other challenges

South Africa’s economic growth demands a healthy population and workforce. To address the challenge created by HIV/Aids, the government has a comprehensive plan that is the largest programme of its kind in the world.

Providing safety and security for citizens, visitors and investors is another major priority for South Africa, with the police service building and revitalising partnerships with all sectors of society to combat crime.

The South African Police Service budget has grown by 58% since 2003, enabling reductions in certain key categories of serious crime.

Currently, the police service has a personnel of just over 160 000, which will grow by more than 30 000 by 2010. This will ensure safe communities in South Africa and create a secure environment for the football World Cup.

In the sports, social and cultural arena, South Africa’s victory in the 2007 Rugby World Cup and other achievements in these areas have built an enormous sense of national pride, supported by business confidence.

South Africa’s performance in recent years has yielded an emerging economy and force for good in the world that offers opportunity at home and to those around the world in search of new horizons and markets.

South Africa is a nation where opportunity outstrips challenge, but where challenges are clearly understood, faced and solutions are found.

South Africa is Alive With Possibility.

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