Parliamentary Caucus

15 September 1997

THE SOUTH AFRICAN ECONOMY

The dramatic transformation occurring in our country is providing many
of our citizens with access to services and security that they have never
had before. This is being matched by a revitalisation of our economy, reversing
the stagnation of the last years of apartheid.

Under Minister Manuel`s dynamic economic leadership the South African
Economy, with GEAR providing a clear framework for economic development
and growth, is beginning to fulfil the promise of a better life for all.

Gross Domestic Product & Gross National Product

• South Africa has a GNP per capita of about R6,600. This puts us in
  the category of developing countries. We have a GNP per capita similar
  to that of Algeria, Uruguay and Argentina. But this does not take into
  account that we have a very uneven distribution of income between the richest
  and the poorest.
• We also have the largest economy in our region with GNP per capita
  8 times larger than Zambia. Our GDP is 21 times greater than that of Zimbabwe.

Economic Growth

• When the National Party was in power the economy was shrinking.
• Since the ANC came into government the South African Economy has been
  growing. In 1996 growth was 3 per cent.

Inflation

• Under the ANC the inflation rate has declined from well over 10 per
  cent for twenty years before 1994, to under 10 per cent. In 1986 inflation
  was 18 per cent.

Exchange Rates

• Between the end of 1995 to the end of 1996 the rand depreciated 21.9
  per cent for various reasons, including unfounded rumours about the President`s
  health. The result of this was that exports increased dramatically as our
  goods became much cheaper in export markets.
• Exports for the first half of 1997 were 22.5 per cent higher than the
  first half of 1996.

Government Debt

• Foreign debt makes up 2.2 per cent of GDP, while domestic debt is 56.0
  per cent of GDP.
• Because of the irresponsible spending of the past, we must now spend
  6,5 per cent of GDP on paying interest on these debts. We spend R39.643
  billion on interest, about 6 times what we have available to spend on education.
• Under the NP the government was spending up to 10 per cent more than
  it was receiving in revenue. The ANC has brought the deficit down to 5.1
  per cent in 1996, and is hoping for 4% in 1997.

Foreign Trade

• Foreign trade makes up 53.4 per cent of our GNP.
• Since the ANC came into government exports have increased dramatically.
  From 1995 tp 1996 exports rose by 21.5 percent and continues to rise.
• In 1996 the value of merchandise exports was almost 22 per cent of
  GDP, almost twice as high as the average between 1960 and 1990.

Gold

• Gold has declined in importance as the price of gold has fallen, and
  gold becomes more expensive to mine.
• In 1990 gold accounted for over 30 per cent of total export earnings,
  while in 1997 it will be around 18 per cent.
• Gold production remains important because of the large number of people
  employed on the mines.

Manufacturing

• Under the ANC the importance export of manufactured goods has increased
  from 15 per cent in 1990 to over 30 per cent of total export earnings in
  1997.
• The ANC is committed to developing the skills of our citizens and providing
  the infrastructure to develop this sector.

Small Enterprise

• The ANC is committed to developing participation in the Economy by
  all citizens by developing the small and medium enterprise sector.
• Since 1995 the Department of Trade and Industry has been developing
  support structures for small and medium enterprise, such as Ntsika Enterprise
  Promotion Agency, Khula Enterprise Finance, NSBC and the SBDC.

Tourism

• The ANC has placed South Africa on the map as one of the worlds fastest
  growing tourist destinations. Tourism makes up 4.7 per cent of the GDP
  (more than agriculture).
• Since 1994 tourism has increased dramatically - by 23 per cent in 1994-1995
  - and still continues to grow.
• Tourism has the potential to become South Africa`s fastest growing
  sector. In Portugal, the tourist industry generates more income than the
  entire gold mining industry in South Africa.