SOUTH AFRICAN ECONOMIC OVERVIEW

South Africa is a nation of 44.5 million people Living in a country more than twice the size of France Until 1994. Three-quarters of it citizens; had no say in the running of their own country and no prospect of it. Since the abolition of apartheid. The nation has undergone huge change. With education, employment, and economic reforms that were unthinkable under the former regime. The emphases has been on getting South Africa back on its feet and eliminate the inequalities of the past without jeopardising the future. Just sorting out sound public finance strategies is a monumental task... Public institutions – national, provincial and local government had to he transformed to manage budgetary and financial coordination’s: expenditure frameworks had to be set. And the restructure state assets had to be agreed. In short,. The entire South African establishment was shaken from the bottom up Rather than fall into ruin - or worse. Marxist rule. Like many predicted — South Africa has prospered like no other nation in Africa.

Luckily, South Africa has always. Had immense natural resources the very thing that set the province apart in the first place - namely. Its vast supply of gold, diamonds, and other minerals Of course, once South Africa was seen to have mended its ways and embraced democracy, international trade sanction; were dropped and visitors once again came streaming into this unique and impressive land. The country has seen modest but steady growth of three a year over the past decade. Since 1994 international air traffic movements have increased by more than 70 Percent and the number of departing international passengers by 85 percent to 2.6 million. The total number of departing passengers rose by 3.1 million to9.5 million and aircraft landings increased by 60.000 to 190.000 over the five year period

What’s more, the airline industry is expected to continue growing at an average annual rate of approximately 30 percent until the year 2030. Johannesburg International Airport is to spend R 3 .4bn upgrading security and facilities ahead of the 2010 Football World Cup, and another R8bn by 2012 on building a new terminal to meet the demand of fast- growing passenger numbers The upgrades will enable the airport to handle the giant Airbus A38O and the rapid rail link between the airport. Johannesburg and Pretoria.

In addition to this, South Africa’s ports Richards Bay. Durban. East London. Port Elizabeth. Mossel Bay. Cape Town and Saldanha - have all been stretched to meet demands They count for seven out of Africa’s16 largest ports and have daily cargos streaming in and out in Europe, Asia, the Americas and the east and west coasts of Africa.  Located at the southern tip of the Dark Continent, bridging the point between east and west. South Africa has truly become a global transportation hub in 2002. South African ports handled an average of 13.000 vessels carrying 500 million tons of cargo annually — that’s just20 percent less than the UK. In fact, a new major deepwater port is currently under development in Coega, 20 kilometres east of Port Elizabeth. R5bn Rand has been ploughed into the new port, which promises to anchor South Africa as the focal point of shipping trade in the region.

South Africa’s per capita GDP corrected for purchasing power parity, now positions the country as one of the 50 wealthiest in the world. Head and shoulders above the rest of the continent, it is shaping up as Africa’s very own superpower it’s estimated that the nation accounts for up to .30 percent of the gross domestic product of the entire continent. The Rand, the worlds most actively traded emerging market currency. Was recognized by the Bloomberg Currency Scorecard as the best performing currency) against the US Dollar between 2002 and 2O05. The Rand is now part of the continuous linked settlement (CLS), which eliminates the risk associated with trading currencies across time zones.
“The - economic outlook is exceedingly favourable-
more promising than has been seen in 40 years”. South Africa’s Finance Minister Trevor Manuel told the National Assembly during his 2OO6/07 budget speech. “Our policy stance, unlike that of 40 years ago emphasize development opportunities for all South Africans. Built on a foundation of social solidarity and a shared economic destiny. Most of South Africa’s resources .are focused on four main urban areas. Namely Cape Town, Port Elizabeth, Durban and Pretoria-Johannesburg. It’s here where wealth and the professional classes are based.
Of course, reforms have meant that a new black middle class is gathering pace in the suburbs but many South Africans remain poor and unemployment is high- around 30 percent.
Economists believe that the economy would need to almost double to at least five to six percent a year to absorb the surfeit of job seekers. Economic growth will stimulate investment and make it worthwhile for companies to employ people. Which in turn massage the poverty trap and help reduce South Africa’s notorious crime rate. Thabo Mbeki succeeded Nelson Mandela as South Africa’s leader when he stepped down in 1999. Mbeki has since been elected for a second five-year term following the landslide general election victory of his governing African National congress ANC in 2004

Mbeki is committed to helping his country fulfil its promise by addressing the legacies of South Africa’s social shortcomings. Since the fall of apartheid in 1994 an additional 10 million people now have access to fresh water, four million to electricity and 1.5 million new homes have been built, South African officials say next on the list is education and skill development
The president explained to South Africa’s parliament in Cape Town that the government’s growth strategy, “confirmed the need to expand our small, medium and micro enterprise SMME) sector. Paying particular attention to broad-based black economic empowerment and the development of is women and the youth.
‘Our experience with regard to the development of this sector indicates that we must pay particular attention to issues of access to capital, Entrepreneurial training assistance with marketing and the development of cooperatives.
“We will also speed up the consultative process to determine the measures to take to improve the regu1atory climate and facilitate expansion of this sector.”
In Feb 2006. A leading UK telecommunications corporation went some way to realizing Mbeki’s c plans. Earlier this year,
Talk-talk announced plans to spend R 200m setting up
two call centers - one in Cape Town and the other in
Johannesburg. It’s the highest foreign investment yet in
South Africa’s burgeoning info service industry Talk Talk isn’t the only company that is piling money into the region. The Western Cape is also home to call centres for Barclays, JP Morgan, Lufthansa, The Budget Group Merchant Asda, Dialogue and STA Travel. Investment in the area leapt by 20 percent between 2004 and 2005. With nearly RI bn of foreign money being pumped into the service industries.