Major challenges

The main challenges for DFID in South Africa are:

Promoting growth and reducing unemployment | Tackling health and HIV/AIDS | Reducing inequality

Promoting growth and reducing unemployment

South Africa accounts for roughly 40% of sub-Saharan Africa’s GDP, and almost 70% of GDP in the SADC region.

South Africa’s growth and economic stability is therefore critical to the development of the region.

South Africa’s Growth Strategy sets targets to accelerate growth (to 6%); halve unemployment (from 30% in 2003 to 15%); and halve poverty numbers by 2014.

The global economic crisis has had a negative impact on growth and jobs and South Africa is currently in recession. The annual growth rate decreased from an average 5% in 2007, to 3% in 2008.]

Formal unemployment is at 24% (2008), with major job losses in manufacturing and mining sectors in 2009.

Government is supporting the economy through substantial infrastructure investment and has announced measures to retrain workers and provide support to struggling businesses, in response to the crisis.

DFID supports growth and job creation through a £18 million contribution towards the Employment Creation Fund.

The European Commission will also contribute €100 million to the fund, formally launched in September 2009.

The fund will be used to assist South Africa in developing policies and programmes to increase growth, job creation, skills and investment.

Other growth and employment initiatives supported by DFID include:

• Support to the government’s expanded public works programme (EPWP) helped create 403,000 jobs to December 2008. DFID supported the setting up of four pilot community works programme sites in 2008, expanding to 50 sites by December 2009. President Zuma has recently announced that the initiative will create an additional 500,000 in 2009 and more than four million jobs by 2014.
• The Employment Promotion Programme (EPP) contributed to a new National Human Resource Development Strategy for South Africa, which is critical to informing skills development initiatives and projects.
• The Making Financial Markets Work for the Poor Programme (FinMark) supported South African banks to implement the Financial Sector Charter, ensuring that over 3.3 million more South Africans now have access to low cost bank accounts.
• The Making Commodity Markets Work for the Poor (ComMark) programme has assisted 9,800 subsistence farmers to produce enough food for their families and to sell excess produce into local formal and informal retail markets thereby moving them above the $1.25 a day poverty line.
• The Regional Standards Programme (RSP) helped small growers in South Africa’s Limpopo Province to be certified as producers by major European retailers resulting in a tenfold increase in orange production to 4,500 tonnes and a £120,000 increase in income. 

DFID is a signatory of the joint European Union country strategy paper (EU CSP) for South Africa for 2007-2012 designed to ensure more effective aid to South Africa, and bigger impact on poverty.

DFID South Africa leads the donors working group on employment creation, growth and skills.

Tackling health and HIV/AIDS

South Africa has the highest burden of AIDS in the world. More than 5.7 million people in South Africa are living with HIV - an estimated 1,000 to 1,500 people are infected with HIV and 800 to 1,000 die from AIDS–related conditions every day.

South Africa is also the fourth highest TB burden country globally and the highest rate of TB in Africa.

Epidemics of drug-resistant strains are increasing. There is a 95% mortality rate among people with XDR (extremely drug-resistant) strains because of the links to HIV (over 50% of people with HIV also have TB).

These challenges place an enormous burden on health systems and staff.

A recent change of government has led to a significant shift in South Africa’s approach to Health and AIDS.

The UK established a new £15 million Rapid Response Health Fund from October 2008 to December 2009 to support the health minister with immediate, flexible support to reorient South Africa’s policy and programmes on Health and AIDS.  This support will be continued under a new 5-year, £25 million programme, starting in January 2010.

Other DFID initiatives supporting Health and AIDS in South Africa include:

• Soul City’s innovative “edutainment” (educational + entertainment) programme using multimedia (radio, print, TV) to raise awareness and change negative behaviour on a range of health and social issues such as HIV, TB, and sexual violence. It reaches 70% of South Africa’s population and has higher brand recognition than Coca Cola.
• The Rapid Response Health Fund has directly contributed to maintaining antiretroviral therapy (ART) services in South Africa's nine provinces. ART was particularly problematic in the Free State province where no new patients could be started due to a lack of drugs. DFID helped gain 25,000 units of the Efavirenz drug to ssutain ART delivery there and supported a successful World AIDS Day campaign in South Africa.