South Africa

Friedrich Naumann Foundation
African Regional Office Johannesburg

Contact

Friedrich Naumann Foundation

P.O. Box 1130,
Parklands 2121
Republic of South Africa

E-Mail: africa@fnf.org.za

http://www.fnf.org.za

Other country offices:

• Senegal

• Ghana

• Nigeria

• Tanzania

• South Africa

• Zimbabwe

More information about FNF South Africa:

-Partners of FNF

-Media online

Economic policy in South Africa is guided by the ANC's core policy document, Growth, Employment and Redistribution: a Macroeconomic Strategy.

The  government made successful efforts in the last years to reduce both budget deficit and inflation. However the medium-term expenditure framework indicates a slightly expansionary policy approach.

Meanwhile an enormous unemployment rate (28 %) puts pressure on the government, which now  presses ahead with its long-awaited privatisation programme, it should help attract more substantial inflows of capital in 2002-2003. But South Africa is faced with investors' negative sentiments.

Even South African business leaders are not sure that the country provides the best place in which to commit their capital and themselves over the long term, mentioning among other things inflexible labour markets and a regulatory environment for business employment generally. The numbers of South African stock companies listed abroad speaks for itself.

Apparently President Mbeki is aware of the problem. For gaining investors he has been started diplomatic effort, which guide him to international conferences and business meetings worldwide. According to him South Africa intends to take part at the globalisation.

But there is still stubborn residence inside the ANC against a liberal policy guided by privatisation, deregulation and open markets. As the ANC national congress approaches, Mr Mbeki will come under pressure not only from opposition parties and radical elements within the tripartite alliance, but from within the party itself. Both socialist COSATU and communist SAPC will question the results of GEAR and remember the president at his election promise of improving the standard of living for the black masses. Such a power struggle will be a distraction and have an adverse effect on governance.

Furthermore the recent decline in the rand has taught the South African monetary authorities a tough lesson: the currency depreciated more than 40% in 2001 and the dollar affects commodities directly.

Statistics drive one other point home, which is challenging for the government: the country is not serious about addressing the challenges facing the small business sector, which is where jobs are created. A large number of South Africans already went in the informal sector instead of earning nothing. On the other hand many skilled people leaving the country to work overseas.

South Africans legal opposition, the Democratic Alliance is by far not strong enough to replace the government. At the moment the DA is rather kept with itself: after a party in fight the smaller NNP, the former apartheid party, cancelled the partnership with the DP and crossed the floor straight to the ANC.

A major threat for the economy is HIV/Aids. An estimated 5 million people are expected to die by this disease within the next five years. A clear policy to fight HIV is not visible yet. Housing and the delivery of clean water and electricity to the informal settlement and townships remain unsolved problems up to now.

Kids of Soweto

Businessmen

Skyline/De Beer Tower