South Africa is a priority country of SECO’s economic cooperation and development. More than 25 years after a largely peaceful transition that ended Apartheid, the country remains a lively and functioning democracy. To support the country in tackling various challenges, SECO supports South Africa to promote a more viable and resource-efficient private sector and reliable economic framework conditions.
South Africa is the second largest economy on the continent with a well-developed infrastructure in its large urban centres, a solid financial sector, excellent academic institutions and a resource-rich environment. Strong democratic institutions, an independent judiciary, critical and free media and an engaged citizenry have been the greatest achievements since the founding elections of 1994. In addition, South Africa has made significant strides towards increasing the access to basic education, primary healthcare, establishing a large free basic services programme in poor communities and broadening social protection through grants.
Over half of the young people are unemployed
Today, however, South Africa is facing an extraordinary set of challenges. Nowhere else in the world inequality is as high as in South Africa. During the last decade, there has been consistent low growth, an increasing dependence on the informal sector and a weakening of political institutions. The legacy of the Apartheid-era spatial planning is still hampering the competitiveness of urban areas, revealing a critical need for better and more inclusive infrastructure development. Further, the fiscal position is deteriorating, resulting from weak economic growth and the precarious finances of state-owned enterprises. Poverty has remained high and the unemployment rate has reached 30 percent overall, with over 50 percent for young people.
What are SECO’s objectives?
SECO supports South Africa in:
- Promoting a viable and resource-efficient private sectorSECO supports capable and innovative entrepreneurs, and fosters access to sustainable value chains and global markets. Through improved entrepreneurial capacity and the use of modern technology, the private sector will be able to improve resource efficiency (e.g., water use), reduce costs and create jobs.
- Establishing favourable economic framework conditions SECO supports a sound business-enabling and investment-friendly environment with transparent, predictable and simple procedures. This will incentivise innovation, unlock the potential of small, medium and micro enterprises and improve the competitiveness of the economy.
From 2021 to 2024, a total of some CHF 55 million is foreseen for SECO’s economic development cooperation with South Africa.