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Almost half-way through his first term
as President, Mbeki is having some measure of success on the economic
front. Although there is still a long way to go to alleviate poverty,
the percentage of people who are regarded as the poorest of the
poor has dropped from about 20% in 1994 to roughly 5% last year.
The number of workers earning more than $600 a month has increased
from 10% to 18%. Water delivery has improved by 85%, half of rural
homes now have access to electricity and the literacy rate has
gone up at least 10%. Most South Africans now have access to a
telephone link, and some 7 million actively use mobile phones.
The Internet, e-mail and e-business are widespread.
Unemployment, officially around 30%, unofficially 41.5%, continues
to cloud the horizon. A plan to address that problem by limiting
immigration will probably just worsen another one: a shortage
of skilled labor. Still, development projects in many major cities
are beginning to absorb some of the urban jobless. A huge convention
center being built in Cape Town is already booked until 2010.
And a planned deepwater port and duty-free industrial development
zone at Coega, near Port Elizabeth in the Eastern Cape —
probably the single largest long-term investment in the country's
history — is expected to provide thousands of jobs.
South Africa, meanwhile, is enjoying a tourist boom, with an increase
in airline passengers and travelers on cruise ships taking the
safe route around the Cape rather than risk the unrest surrounding
the Suez Canal. Next year, for the first time, South Africa will
host the international cricket World Cup. Two years ago, the South
Africans lost by one vote to Germany in the bid for the 2006 soccer
World Cup.
Although Europe remains South Africa's biggest trading partner,
commerce with Africa has been expanding. South Africa is Mozambique's
largest investor with more than 250 companies operating there.
Since 1994, trade with Nigeria has rocketed. South Africa's satellite
communications company MTN has invested more than $425 million
in the Nigerian cell-phone network. National power company Eskom
has secured contracts in several African countries, and South
African mining companies are operating all over the continent,
as is South African Breweries (SAB). Last week, SAB bought Miller
Brewing Co. for $5.6 billion, making it the world's second-largest
brewer.
Last week the partially privatized national landline operator,
Telkom, announced a partnership in a fiber-optic cable that will
link Africa not just with Asia, Europe, Australia and the U.S.
but also with itself. The link — Telkom has an $85 million
stake in the $650 million deal — involves an undersea cable
from Portugal to West Africa and Cape Town, and another from Cape
Town to India and Malaysia. "This is tangible proof of the continent's
determination to take its rightful place in the global economy,"
says Telkom's chief executive, Sizwe Nxasana. After a brief and
sudden plunge of the South African rand at the end of last year
— a phenomenon that resulted in a government inquiry into
foreign exchange and bank transactions — the currency has
recovered the almost 40% it lost to the U.S. dollar. South Africa
is still one of the world's biggest exporters of gold and other
precious and base metals. Both platinum and gold prices have soared
in recent months, boosting profits for local companies and tax
revenues for the state. "We have a much stronger economic climate
in South Africa than in many other developing countries,'' says
Revenue Services Commissioner Pravin Gordhan. A special fraud
unit improved tax collection by $430 million last year, enabling
the government to cut corporate income-tax rates from 48% to 30%.
As South Africa last week geared up for the wef meeting, which
will be heavily devoted to NEPAD, Mbeki, speaking in Parliament
in Cape Town, proudly outlined South Africa's leadership role
in the initiative. What remains now, he said, is for the principles
of NEPAD to be converted into action. Mbeki's job as a salesman
is nearly over. His dream of an African renaissance now rests
in the delivery.
With reporting by SUE CULLINAN/London
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