South Africa remains at forefront of growth and development on the continent

In 2015 South Africa celebrated two decades since the end of the apartheid system, a watershed moment that in many ways marked the rebirth of the country. The 1994 elections – the country’s first multi-racial and fully open polls – were fêted around the world, and such was the momentousness of the occasion that people across the country waited in queues for hours to vote.

The years since 1994 have not always been easy for the “Rainbow Nation”. Official unemployment remains extremely high and the country has been buffeted by the weakness of the global economy, while labour stoppages and power outages have hit the industrial and mining sectors – all of which has impacted household consumption and crime.

However, in spite of the current challenges, South Africa has seen a remarkable amount of progress since 1994. Nominal dollar-denominated GDP has nearly tripled, from $136bn in 1994 to $350bn in 2014, while per capita GDP has increased by more than 30% over the same period despite a jump in population figures of 12m.

Similarly, the economy has been expanding at a substantially faster rate under democratic rule; between 1980 and 1994 average annual real GDP growth rates stood at 1.4%, whereas between 1998 and 2012 the figure was 3.2%.

Constitution

Chief among South Africa’s successes is the country’s constitution, which was written in the early post-apartheid era following the 1994 elections. The three parties that made up the Government of National Unity – the African National Congress (ANC), the National Party (NP) and the Inkatha Freedom Party (IFP) – established the core principles on which the country’s future was to be built. These negotiations led to a constitution that is considered to be one of the most progressive in the world today. It is perhaps best known for its second chapter, the Bill of Rights, in which the questions of human rights are expounded upon over 35 sections. Its authors also included a further chapter establishing a number of related commissions and offices, like the South African Human Rights Commission and the Commission for Gender Equality.

To date, the constitution has been left largely intact, and the 16 amendments since it came into effect in 1997 are considered uncontroversial.

Government 

South Africa is a constitutional democracy with a three-tier system. The parliament is bicameral, with a 400-seat National Assembly and a 90-seat National Council of Provinces.

The lower house, the National Assembly, includes 350-400 members elected to five-year terms. The upper house, or the National Council of Provinces (NCOP), comprises 10 representatives from each province, 60% of whom are permanent members, while the remaining 40% are specially appointed delegates. The National Assembly has a mandate to pass legislation, represent public interests and act as a check on executive power, while the NCOP represents provincial concerns.

Executive leadership lies with the president, who is elected by the assembly, which in turn is elected by proportional representation. Like members of the National Assembly, the president of the republic stands a five-year term, and is allowed to serve no more than two terms consecutively.

The president is responsible for appointing and dismissing a deputy president, ministers and deputy ministers. Ministers are selected primarily from members of the National Assembly, though the president is allowed to appoint a maximum of two non-member ministers.

South Africa’s independent judicial system is made up of constitutional, appeals, high and magistrates’ courts, in addition to local-level judiciaries, including small claims, traditional and community courts, among others. The three branches of South Africa’s government are spread around the country. The executive authority and federal administration is headquartered in Pretoria, the National Assembly is located in Cape Town and the Constitutional Court sits in Bloemfontein.

Elections

South Africa has held five general elections since 1994, all of them won by the ANC. In the most recent election, which took place in May 2014, the ANC won more than 62% of the vote, and Jacob Zuma, its leader and the incumbent president, was re-elected. This most recent election was the first since Mandela’s death in December 2013, and was also the first in which the country’s born-free generation – that is, those citizens born after 1994 – was eligible to vote.

Since winning some 63% of the seats in the newly formed National Assembly in 1994, the ANC has dominated politics in South Africa. In 2004 the party won almost 70% of the vote.

Since then support for the ANC has tailed off somewhat – in 2009 it won 66% of the vote, for example, and in 2014 this number dropped further – though it has clearly retained broad support among the general population.

While the ANC won the 2014 elections handily, several other political parties have gained ground over the past decade. The Democratic Alliance (DA), which traces its history back to the anti-apartheid Progressive Party in the 1960s, won over 22% of the vote in 2014, up from 16.6% in 2009 and 1.7% in 1994. The DA is led by Mmusi Maimane, who recently took over from Helen Zille, a former mayor of Cape Town and since 2009 the premier of Western Cape, which was the sole province not won by the ANC in the 2014 election.

A newer player in South African politics is the leftist Economic Freedom Fighters (EFF) party, which was established in 2013 by Julius Malema, a former president of the ANC Youth League and current leader of the EFF. The party won more than 6% of the vote in 2014, largely on the back of a plan “to use political power to realise economic justice”, according to the party’s election manifesto. Key policies put forward by the party during the election included the nationalisation of South Africa’s mining industry, among others.

Other parties that won seats in the National Assembly in 2014 election include the Inkatha Freedom Party, the Congress of the People, the African Christian Democratic Party and the Agang South Africa Party, among others.

Provinces

After the end of apartheid, the four provincial governments were expanded to a total of nine: Eastern Cape, Free State, Gauteng, KwaZulu-Natal (KZN), Limpopo, Mpumalanga, North West Province, Northern Cape and Western Cape. Each local government has basic autonomy concerning local matters within their province. Functions of government are separated between regions. Power is further decentralised in local authorities across South Africa’s 278 municipalities.

Since the establishment of a democratic South Africa in 1994, and the creation of nine provinces from the original four, the role of regional government has become a prominent topic in political debate. In the 1990s several parties called for a greater role for provincial authorities, to counter the power of the central government in Pretoria.

While the ruling ANC has largely stood for a strong central government, the capacity of local and provincial government to provide services and infrastructure to millions of South Africans has remained central to the evolution of the country during the post-apartheid period.

In 2015 the provincial governments received 43% of nationally raised revenue, according to the National Treasury budget speech in February, with the national government getting 48% and local governments 9%. Each of the nine provinces enjoys significant scope to craft policy and bolster economic development at the regional level.

Debate

However, the federal system has been a source of tension as well. Despite encouraging each province to implement a growth and development strategy and drawing up guidelines for the purpose in 2005 in a bid to empower local government to bring about change, the level of government that is best suited for carrying out development programmes has been frequently debated. In 2007, for example, three government ministers – Mosioua Lekota, then minister of defence; Trevor Manuel, then minister of finance; and Sydney Mufamadi, then minister of provincial and local government – called for a reduction in the number of provinces as well as a review of the relationship between national and local authorities, with the aim of allocating more power to the central government.

Although the debate has continued, no concrete action has been taken and for the time being the current provincial make-up looks set to remain in place. What is beyond dispute, however, is the major discrepancy in the economic capacity and development of South Africa’s nine provinces. Gauteng, KZN and the Western Cape combined account for 64.4% of the country’s GDP, while the Northern Cape contributes 2.2%. These three provinces, which are home to South Africa’s largest cities (Johannesburg, Durban and Cape Town), dominate the country’s economic landscape.

However, rural provinces – such as Mpumalanga, which has a population one-third the size of that of Gauteng but which accounts for the vast majority of South Africa’s coal production – have been looking to leverage their natural strengths, which include extractive resources as well as land, to boost capital flows and encourage development.

Fixing The Past 

Redressing historical inequality has been one of the most challenging objectives of South Africa’s successive post-apartheid governments. Dozens of reforms and initiatives have sought to tackle the issue with varying degrees of success; however, the stubbornly persistent gap in income and mobility among citizens has proven difficult to close. Policies range from land redistribution – although on a far different scale to what neighbouring Zimbabwe had attempted years earlier – to affirmative action. These policies have resulted in greater diversity in the country’s upper income segments, but the effects of this still have yet to trickle down to the population as a whole. Part of these efforts include the BroadBased Black Economic Empowerment Act of 2003, commonly referred to as BEE, which sets out the government policy of situating black economic empowerment “within the context of a broader national empowerment strategy”.

The broad objectives of the BEE policy include an alteration to the racial composition of ownership and management structures of enterprises as well as in skilled occupations, increased access to finance for black people, the empowerment of rural communities, the development of black South Africans as a human resource through programmes such as mentorships and internships, preferential government procurement policies for black-owned businesses, and the promotion of black women as owners and managers of new enterprises.

In practice, state bodies must comply with BEE principles as defined by a set of more explicit codes published in 2007, while their compliance is measured against the simultaneously issued BEE Scorecard. Private companies must apply the codes if they wish to conduct business with the state, and they are encouraged by the preferential procurement policy to observe them in their interactions with each other. Multinationals unable to comply with the ownership element of BEE, which is usually satisfied through the sale of shares to black South Africans, may make an “equity equivalent” contribution measured against 25% of the value of their local operations, or against 4% of their total revenue annually over the measured period.

Security

Crime, a side effect of high levels of poverty, continues to be a difficult issue facing South Africa’s leaders. Security has become a headline-grabbing concern, and while the sensationalism often outweighs the reality of the situation, the cost of violent crime and petty theft continues to take a toll on the quality of life.

For the year ending in March 2015, South Africa reported a rise in murders for the third consecutive year, from around 32.1 per 100,000 in the prior year to 33 per 100,000, though it is worth highlighting that the number is roughly half what it was in 1994, when it averaged 64.9 per 100,000.

The South African police force has combated the problem of crime by increasing the number of detectives and the size of the special investigation teams, as well as by improving training programmes for officers. This effort has led to higher arrest rates and an overall fall in crime. Reports of certain types of violent crime have also eased slightly in the past few years. For example, cases of common assault recorded by the police decreased by 2.8% between 2013/14 and 2014/15.

Outlook

South Africa has made tremendous progress following a peaceful transition to democracy in 1994. Efforts to redress historical inequality have been notable, and continued public spending emphasis on poorer segments of society has contributed to improving social development indicators in areas such as health and education. However, issues including high inequality and unemployment rates remain major obstacles for the country to overcome going forward. After years of strong growth, South Africa’s economy is forecast to continue to expand, albeit at a slower pace, with the country set to remain at the forefront of growth and development on the continent.