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The African Development Bank has approved a string of measures aimed at supporting South Africa’s economic development ambitions as an upper Middle-Income Country.
This support package is contained in the Bank’s Country Strategy Paper (CSP) 2018-2022 for South Africa, which will guide the Bank’s operations in the country during the next five years. The new plan builds on the previous CSP 2013 – 2017 and will advance hard regional infrastructure investments and soft mechanisms that deepen trade and regional integration, urban-rural connectivity and inclusion.
Articulated around two main strategic pillars, namely, promoting industrialization and deepening regional integration, the country support plan will help accelerate South Africa’s economic transformation and re-industrialization agenda for inclusive growth, job creation and social equity.
As part of the plan, the African Development Bank will support programs and initiatives with cross-cutting themes that include gender equality, climate change, green growth and assist South African authorities in strengthening governance in public institutions. The Bank will leverage its knowledge and institutional resources to provide policy advisory to the government and attract investments to the country’s private sector. Additionally, it will support reform efforts aimed at repositioning State Owned Enterprises (SOEs) as efficient vehicles for industrialization and economic transformation.
The support package comes at an interesting time for South Africa. Sequel to the political changes that resulted in the swearing in of a new president in February 2018, government’s measures to address public sector governance issues have boosted investor confidence in the economy. Economic growth is also projected to increase to 1.7 per cent in 2018, up from 1.3 per cent in 2017 and a low of 0.6 per cent in 2016. This positive trajectory of the macroeconomic environment however continues to exist alongside poverty, youth unemployment, social and economic inequality. A prolonged period of de-industrialization further compounded this situation.
The Bank’s latest South Africa support plan will give a much-needed boost to ongoing efforts to rebalance the national economy and follows government’s recent adoption of its first Medium-Term Strategic Framework (MTSF) 2014-19 to implement a National Development Plan ‘Vision 2030”. The MTSF attaches top priority to economic transformation, rapid economic growth and job creation, and includes key measures such as crowding in productive investments through infrastructure development, enhancing competitiveness in the productive sectors of the economy, addressing spatial imbalances in economic opportunities, and eliminating unnecessary regulatory burdens, among others.
The Bank’s active portfolio in South Africa covered 24 operations amounting to US$4.9 billion at the end of March 2018.