(2001) South Africa

General discussion of South Africa

• Profile of South Africa
• Table 1: Key development indicators for South Africa and the World, 1997
• Table 2. Income per capita and growth in consumption
• Figure 1. GDP and household disposable income per capita (1995 constant Rands)

The last decade has witnessed an unprecedented transformation in South Africa in almost all spheres of life. The 1990 unbanning of the African National Congress, and the negotiations that led to the end of apartheid and the country's first democratic elections in 1994, were events almost unthinkable only a few years before. That this political and social transformation was accomplished with so little violence, after so many decades of oppression and violence under apartheid, makes it all the more impressive. In the last six years, virtually every major national policy has been reviewed and replaced by one based on the new government's values of democracy, development and empowerment. The 1994 Reconstruction and Development Programme (ANC 1994) laid out important economic, social and environmental goals - with a special emphasis on poverty alleviation, service provision and redistribution. National policy reviews in all key areas followed this, with White Papers and new legislation across all sectors. The 'Growth, Employment and Redistribution' (GEAR) strategy that followed in 1996 laid out a new fiscal policy to reduce the deficit, thereby creating conditions for lower inflation and interest rates. This in turn is expected to increase rates of investment, economic growth and job creation.

While, in some cases, it will take many years for these broad policy statements to transform all of the local regulatory, economic and social environment, dramatic change is already happening - and the energy sector is no exception. The shift in priorities for the energy sector in South Africa has been almost 180 degrees - moving from the apartheid era single-minded emphasis on energy security to a broader concern about access to affordable energy, economic efficiency, and environmental sustainability. Transforming an energy economy based on vast, inexpensive supplies of coal, large public investments in synthetic liquid fuels and nuclear power, and highly inequitable access to clean household fuels, however, presents a major challenge, and sets the context for this discussion of energy sustainability.

South Africa lies at the Southern tip of Africa and covers a wide range of climates - from Mediterranean coastal areas to arid interior deserts to tropical and Afro-montane forest. With roughly 42 million people on 1.2 million square kilometres, South Africa is a third the size of India with only one twentieth of the population. South Africa is blessed with large supplies of minerals, precious metals, precious stones, making it the largest producer of gold and platinum group metals, the number five producer of diamonds, the number four producer of hard coal, and the second largest exporter of hard coal in the world (DME 2001b) . Importantly for sustainability in the energy sector, it also has one of the highest solar insolation rates in the world. Annual global solar radiation average is about 5.5 kWh/m²/dayfor South Africa, compared to about 3.6 kWh/m²/day for parts of the United States and about 2.5 kWh/m²/day for Europe and the UK (DME 2001a).

On many development indicators, South Africa compares well to 'upper middle income' countries, and is far better off than her neighbours in sub-Saharan Africa. As shown in Table 1, income, literacy, and education levels in South Africa are well above those of other African countries and on a par with middle-income Latin American countries. Life expectancy, however, is still well below world averages, which is why South Africa's Human Development Index is not higher. The literacy rate and school enrolment rates are all the more impressive if we consider the systematic denial of adequate services to the poor, black majority under apartheid until 1994 (UNDP 1999).

The new government has faced enormous challenges in dealing with the poverty and inequality that is the legacy of apartheid. In 1993, for example, the Gini coefficient index for South Africa - a measure of income inequality - was the fourth worst of 105 countries in a World Bank survey . Only Brazil, Sierra Leone and the Central African Republic had greater disparities between the rich and poor. Moreover, in 1994, more than 10% of South Africans lived on less than $1 per day, while 35% lived on less than $2 per day . As Table 2 shows, although South Africa per capita GDP is in the 'upper middle income' category, private consumption per capita has fallen significantly over the last 20 years, in contrast to the growth in other upper middle income countries.
 

In fact, in real terms GDP per capita and household disposable income per capita are still below their 1990 levels (see Figure 1). What this also conceals is the enormous disparities in income between racial and ethnic groups. For example, the 1996 census showed that 65% of white men earned more than R3500 per month ($810 at 1996 exchange rates), while 48% of African women earned less than R500 per month ($115) (SSA 1996) . Only 6% of African men and 5% of African women earned more than R3500 per month.