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South Africa

Last updated March 2008

South Africa today is a key African nation at a critical point in its evolution. The country's growing regional influence, its progress toward overcoming racial discrimination and its widening economic inequalities are representative of sub-Saharan Africa's wider struggle to channel its great potential towards meeting its peoples' needs.

In the years following its first democratic elections in 1994, South Africa has made important progress in overcoming the legacy of the apartheid era. President Thabo Mbeki's African National Congress (ANC) government, which returned to power in the April 2004 elections, has been taking steps to expand access to health care, education, housing and other basic services for the majority of South Africans. But even with a relatively strong economy and an important political presence on the international stage, the country still faces significant economic and social challenges, not least of which is the HIV/AIDS crisis, which now claims the lives of an estimated 1,000 South Africans each day.

Over half of the total population of South Africa lives below the poverty line, and unemployment rates are very high: over 25%. A serious level of income inequality persists, with whites earning on average nine times more than those populations marginalized during apartheid. More than 60% of Blacks in South Africa live in poverty, compared to 3% of whites. The transfer of economic ownership to the Black majority is proving slow; critics argue that it has created a Black elite, an increasing source of disillusionment among many ANC supporters.

President Mbeki has identified land reform as a necessary measure in transforming South African society, but the actual redistribution process has been difficult. The goal is for 30% of land to be Black-owned by 2014. The current level is just 16%, and only 4% of land has been transferred so far.

The HIV/AIDS crisis is a major challenge confronting the Mbeki government and the people of South Africa. An estimated 5.5 million, or about one in ten South Africans are living with HIV/AIDS, making it the country with the largest number of people living with HIV/AIDS in the world, and the epicenter of the pandemic on the African continent.

Young women living in informal settlements experience the highest risk of becoming HIV positive. The overall HIV prevalence rate has increased dramatically from 11.4% in 2002 to 18.8 percent in 2005. In the most recent HIV/AIDS surveillance reports of 2007, South Africa's Department of Health revealed a slight decline in prevalence among pregnant women, which may indicate a broader decline in new infections, although the impact of the disease varies greatly across provinces

HIV prevention efforts were initiated relatively early, but only in late 2003 did the government commit itself to a comprehensive program to provide antiretroviral therapy for those living with HIV/AIDS, after pressure from activists and campaigners. This delayed response has been a major criticism of the Mbeki government by civil society in South Africa and by supporters globally. In 2006, President Mbeki promised greater collaboration with key civil society organizations such as Treatment Access Campaign. In 2007, the state launched a four-year intersectoral Strategic Plan for HIV/AIDS to upgrade these earlier efforts to expand access to treatment.

HIV/AIDS spending has figured prominently in government budgets, but a lack of human resources and proper infrastructure, among other factors, have stood in the way of quick and effective program implementation. Two out of three South Africans in need of antiretroviral drugs were not in treatment by 2006, according to a report released by the World Health Organization in 2007.

In economic terms, South Africa has the largest and most diversified economy on the continent and is one of the most important U.S. trading partners in sub-Saharan Africa. South Africa remains the largest market for U.S. exports in the region, accounting for roughly 36% of U.S. sales to the continent and nearly twice the share of the country next in line, Nigeria. Negotiations on a Southern African Customs Union (SACU) free trade agreement with the U.S., in development since 2003, have progressed with difficulty and South Africa has encouraged the U.S. to be more flexible. Through the African Growth and Opportunity Act (AGOA), SACU countries presently have duty-free access to the U.S. market for most of their exports.

In 2008, a new economic challenge has emerged for South Africa: an "electricity emergency." Eskom, the government-dominated parastatal company that provides most of the country's power, has proven unable to meet South Africa's rising energy demands. The mining industry, which accounts for 60% of South Africa's exports, is particularly affected, and was forced to actually shut down for several days in January 2008. Growth rates are slipping to below 5%, and the economic downturn fed by the energy crisis is translating into increased public frustration with the government.

President Mbeki has admitted that poor government planning is at fault for the failure to accurately anticipate and prevent the shortfall. Although the situation now risks triggering a regional economic downturn across Southern Africa, the major changes in energy policy Eskom must rapidly undertake also present an opportunity for South Africa to emerge as a continental leader in developing environmentally friendly electricity sources such as wind or solar power. In the meantime, however, South Africans are faced with rolling blackouts, which are expected to occur periodically until 2013.

Mbeki is due to step down from his post as president in 2009, after serving the constitutional maximum of two terms in the presidency. The December 2007 ANC election results placed Mbeki's rival and former deputy president, Jacob Zuma, at the helm of the ruling party, and therefore in a strong position to win the presidency next year. While Zuma is a controversial figure (he was charged with rape in 2005 and acquitted in 2006, and still faces corruption charges) it is unclear how he would govern were he elected president.

South Africa is a key player in the southern Africa region and on the continent as a whole. Post-apartheid ANC governments, under Nelson Mandela and now Thabo Mbeki, have provided important leadership for peacemaking efforts in Burundi, in the Democratic Republic of Congo and elsewhere in Africa. South Africa played a key role in crafting the New Partnership for African Development (NEPAD) and in initiating the creation of the African Union (AU) from the Organization of African Unity (OAU ). The South African government has also led regional multilateral negotiations under the auspices of the Southern African Development Community (SADC) to resolve the political conflicts in neighboring Zimbabwe.

South Africa's role as an African powerbroker depends not only on its commitment to pan-African priorities but also on the country's ability to overcome the economic and social challenges that are the heavy legacy of the apartheid era. A decade of structural adjustment has undermined efforts to address poverty, fully fund social services and fight HIV/AIDS. U.S. and international support in all these areas can play an important part in South Africa's continuing transformation.

Links

South Africa 2006: Challenges for the Future
"This paper by Richard Knight examines the current economic and development challenges faced by South Africa..." Go >

South Africa 2006: Population and HIV/AIDS
"This paper by Richard Knight provides information on the status of the HIV/AIDS pandemic in South Africa..." Go >