Note: This document may not always reflect the actual appropriations determined by Congress. Final budget allocations for USAID's programs are not determined until after passage of an appropriations bill and preparation of the Operating Year Budget (OYB).
SOUTH AFRICA
FY 1998 Development Fund for Africa . . . . . . . . . . . . . . . . . $70,000,000 Introduction
South Africa is important to the United States for three reasons. First, South Africa is a symbol and model to the world of the possibility of resolving serious political, racial, and ethnic differences through negotiation and compromise. Second, it is key to regional stability in Southern Africa. Third, South Africa is an important market for the United States. South Africa is richly endowed with human and natural resources and is one keystone of development within the entire Southern Africa region. It has the most developed and diversified economy in sub-Saharan Africa and the continent's most modern and efficient road, rail, and telecommunications networks. The 1995 gross domestic product (GDP) was $133.6 billion, larger than any of the other countries in the Southern Africa region. The GDP growth rate for 1994-95 was 2.96%, slightly positive in per capita terms. South Africa is the United States' largest trading partner in Africa. U.S. private sector investment in the country exceeds $1 billion. The total foreign debt in 1995 was $22.3 billion. Given the strategic and economic importance of a stable and prosperous South Africa, it is in the national interest of the United States to ensure that all of South Africa's citizens are permitted to achieve the economic benefits of their new-found political freedoms. South Africa's new-found political and economic influence within the region, combined with its considerable resource base, represents a potential catalyst for a more stable and prosperous Africa. In recognition of South Africa's importance, Presidents Clinton and Mandela in March 1995 agreed on the establishment of the U.S.- South Africa Binational Commission, managed by Vice President Gore and Deputy President Mbeki, to facilitate bilateral cooperation on issues of mutual concern.Poverty in South Africa is predominantly, but not exclusively, a rural problem. Roughly 40% of the total population resides in rural areas. However, the high rate of growth in the urban areas (almost 3% per year) could shift the population such that 80% of the population might live in urban areas by 2010. The small, poorly-constructed, over-crowded housing of the urban poor generally lacks public utilities. Housing has been ranked by historically disadvantaged South Africans as one of their highest priorities, along with education and health. A shortage of 1.5 million units in urban areas alone needs to be addressed.
Foreign assistance is playing an important, yet short-term, complementary role in helping South Africa to achieve its potential. South Africa is a sound investment for foreign assistance. The new government is pursuing prudent social and economic policies. Its strong commitment to the full implementation of participatory democracy, its strong human and infrastructure resource base, and its pivotal role in the region help to assure solid returns to USAID investments and will lead to graduation from external assistance. Pay-offs to continued assistance are significant and include: (a) the realization of South Africa as an even greater economic powerhouse within the region; (b) a stable democracy with strong civil society participation and pluralism sustained by (c) more equitable social service delivery systems and (d) more equitable access to domestic and international markets. These pay-offs represent the foundation for dramatic increases in trade and investment between our countries.
The Development Challenge.
Yet, South Africa faces serious challenges. The majority of the population has been largely denied political participation and access to health, education and economic advancement opportunities for decades. Only by addressing those needs can the full transformation of the country be accomplished. A rise in crime and political violence underscores the need to show progress quickly. Otherwise, popular rejection of the current pragmatic approaches to growth and development arising from unfulfilled expectations among the majority population will become increasingly difficult to avoid. Such a rejection could lead to the type of populist and statist policies that have brought ruin to many sub-Saharan African countries. With national elections approaching in 1999, the Government of theRepublic of South Africa (RSA) may face a crisis of expectations in the long-term, if it cannot produce tangible gains for the disadvantaged population. The RSA's ability to produce significant social and economic gains for the disadvantaged population will depend mainly on South Africa's successes/actions in spurring economic growth. South Africa faces four major long-term developmental challenges:-- Consolidating democracy and improving the quality of governance;
-- Making sufficient progress in improving services to the disadvantaged population in education, health, housing and other areas so that popular expectations are not fundamentally disappointed;
-- Making appropriate economic policy and regulatory changes, driven by trained South African economists, to achieve higher, sustained economic growth; and
-- Expanding participation of the disadvantaged majority in the private sector and ownership of businesses, houses, and other assets so that the benefits of growth are spread more equitably within the South African society.
Over two years into South Africa's transition to democracy, "dualism" (i.e., two worlds in one country) is a term that still best reflects South Africa. Its financial, industrial, and agricultural sectors exhibit many of the characteristics of first or second world economies. However, much of the economy and the majority of the population exist in conditions similar to those in most third world countries.
Growth, investment and economic assistance are needed to reduce the alarming poverty in South Africa. At present, approximately 48% of all South African households lack adequate housing. An estimated 34% lack safe drinking water and 45% lack inside sanitation. More than one third of the adult work force is jobless, while 50% of the work force is functionally illiterate.
The vestiges of the apartheid system that remain are especially formidable:
only 1 of 100 black South Africans entering first grade finishes high school;
only 12% of black households have electricity; and
a black child is nearly 10 times more likely to die during the first year of life than a white child. The following demonstrates the progress which South Africans are making in their transition to a pluralistic democracy: (1) a new constitution and bill of rights have been adopted; (2) local elections have been held successfully and local and provincial governments are being organized; (3) non-governmental organizations (NGOs) continue to be active in policy debate and advocacy; (4) the judiciary is being reformed; (5) human rights are being promoted; and (6) freedom of expression is a reality. More modest progress has been made on reform of the civil service and development of policies on decentralization.
However, the full democratic transition in South Africa will take several years. There is still a complex set of political, institutional, and legal changes to make participatory democracy and human rights protection a firm reality. For example, there is a widespread need for training among new government officials; new government structures have been formed in the provinces; the relationship between national, provincial and local government is still evolving and is potentially contentious; although there has been some decline, political violence continues to be a problem, particularly in KwaZulu-Natal Province; and Government and NGOs are still forging new working relationships.
Other Donors
In FY 1995, the United States accounted for about 28% of total official development assistance and was the largest bilateral donor. Other major donors are the European Union, the Netherlands, the United Kingdom, Germany and Japan.
FY 1998 Program
USAID/South Africa's program assists South Africans through the difficult, post-apartheid, transition years and will leave in place improved human capacity and institutions, and greater access to capital for the majority of South Africans. This will promote the consolidation of democracy and effective, equitable use of national resources. The areas of focus include: (1) democracy and governance, (2) educational reform, (3) health system reform, (4) economic policy development capacity, (5) private sector development, and (6) housing and urban development. USAID assistance is couched within a well-defined "exit" or graduation strategy. This is in recognition of the considerable potential for South Africa to meet its development challenges independent of international aid. Our aim is to help South Africa build a solid foundation for sustainable development by assisting with policy reform, democratic participation, and strengthened institutional structures and capacity. Both global peace and U.S. national interests are served by supporting the establishment of South Africa as an effective model of non-racial, pluralistic democracy. Key to this goal is the continued access of people to decision-making processes and government structures that are transparent, accountable, and efficient. Since NGOs and PVOs often play an important role in an open and participatory society, USAID/South Africa programs are implemented by these entities to help promote civic participation, not only in the political area but other social and economic development areas.Agency Goal: Building Democracy
Consolidation of democracy is the most apparent political challenge in the new South Africa. Essentially, this means making democratic principles and promises real, tangible, and permanent. South Africa made impressive progress in building a sense of unity and reconciliation under the new democratic government -- particularly in securing the support of the privileged minority population. The Republic of South Africa (RSA) is succeeding in getting the main political forces to work effectively together. The reconciliation process, through the Truth and Reconciliation Commission, is moving forward to address past transgressions by government and other officials during the apartheid era.The weakest link in democratic participation in South Africa today is that between formal government structures and people at the grassroots level. The effectiveness of public advocacy/participation has been hampered by the majority population's lack of experience in political participation, poverty, and lack of education. New methods for involving the majority population in government decisions are being developed.
Governance is a serious weakness at all levels. In part, this is due to the inherited, entrenched bureaucracy and the shortage of adequately trained personnel to fill key executive and management positions. Officials are establishing a new public service culture that is more innovative and less hierarchical, more product- and service-oriented and less procedure-driven, and more responsive to the people. Improvements in democratic governance is a major long-term challenge in South Africa and critical to broader economic development.
USAID's democracy and governance program supports South African efforts to strengthen and consolidate democracy and participatory governance in five areas: human rights and administration of justice, conflict resolution, public and civil society participation in policy development, and effective partnership among government, NGOs, and the private sector. Short-term results target the development of effective models for partnerships between Government and civil society, as well as improving governance capacity at national and provincial levels. Support for South African NGOs in human rights promotion and conflict resolution continues, with a special focus of the latter on the KwaZulu-Natal Province. Through an agreement with the Ministry of Justice, the program supports increased nationwide access to legal services by the majority population. Public and civil society participation in policy development are being promoted by assistance to NGOs and legislatures. USAID is helping South Africans develop models of effective partnership among government, NGOs, and the private sector at the provincial level. Through technical assistance and training, USAID programs arealso supporting efforts to rationalize and improve the effectiveness of the RSA public service.
Strategic Objective 1: Selected Areas of Democratic Governance Deepened and Consolidated. Agency Goal: Encouraging Broad-based Economic Growth
Economic growth in South Africa can only achieve its full potential through economic empowerment of all South Africans. Four of USAID/South Africa's six strategic objectives actively contribute to this goal through an improved human resource base, economic growth and equity, and educational training.The Government and NGOs are building analytical skills for examining economic issues. As a key element of the Binational Commission, in 1996 USAID selected and sent to the U.S. the first "Mandela Economic Scholarship" recipients to study economics at the Masters and PhD levels. This program will train 68 such candidates over the next 10 years, deepening South Africa's human resource base in economic policy analysis. Complementing this, a forum has been created which will combine dialog and technical assistance to strengthen economic policy formulation in the government and NGO sectors.
To correct the stultifying effects of apartheid, the South African Government is devoting more than a fifth of its budget ($10 billion = 20.8% in the last fiscal year) to education. In education, USAID supports broad sectoral reform under the RSA's National Qualifications Framework (NQF). The NQF stresses lifelong learning through broad access to education at all levels. USAID will provide assistance at the national and provincial levels to establish and implement education reform policies. Support is also being provided for several priority efforts such as President Mandela's request for assistance to his Teacher Training Initiative which will address long-standing teacher shortages rooted in the apartheid educational system. USAID will also continue, as a component of the Binational Commission, to address youth issues through the National Youth Commission which will formulate national policies targeting majority youth. Regarding historically disadvantaged universities, USAID will provide assistance in the areas of research skills development, student academic/social development, curriculum/program development skills, management/administrative skills development (including financial management skills), and staff development. Short-term results target strengthening competencies to manage educational systems in select provinces.
In the areas of private sector development and housing, USAID is supporting the leveraging of capital through the Small Business Loan Portfolio Guaranty Program, and the Housing Guaranty Program. Capital is being made available to those with limited access to capital for business or shelter purposes. Through its micro and small enterprise loan portfolio guaranty program, USAID has successfully leveraged significant amounts of private sector capital. Working through seven financial institutions, a USAID-financed subsidy of approximately $500,000 is leveraging up to $25 million in loans in support of small business development in disadvantaged communities -- a factor of 50:1. Through the Housing Guaranty (HG) program, authorizations totalling $169 million will leverage over $441.8 million in investments for shelter from the private sector. Over 59,000 mortgages and housing loans have been provided under this program through 1996. In late 1996, another guaranty program added $36 million to this effort. These programs are complemented with policy reform and technical assistance to assure that solutions are environmentally sustainable (see below). The 1997 program will provide additional resources for municipal finance. Greater access to equity or long-term risk capital will be supported by the Southern African Enterprise Development Fund (SAEDF) and bilaterally-funded technical assistance. Short-term results target further increases in loans to the disadvantaged population for business development and housing.
South Africa is proposed as a key participant in the Agency's newly-announced Economic Growth Initiative (EGI). South Africa's participation would focus on combining improved urban planning and access to financing mechanisms to help create a well-functioning municipal infrastructure finance market in South Africa and thus ensure that coverage of services such as water, waste and solid wastedisposal is expanded. Specifically, EGI resources would complement other USAID resources to provide technical assistance to local governments and communities in capacity building. There are nearly 600 local governments in South Africa and the demand for information, debt, equity, and management assistance to increase the level of municipal environmental infrastructure is enormous. This program would also create an outreach program to local governments and U.S. provider of goods and services in the environmental infrastructure sector. Under the outreach program training, study tours, and selected technical assistance to local authorities which are seeking private equity partners in expanding or improving their delivery of water, waste water, and solid waste services would be provided. Secondly, the program would develop linkages with U.S. private providers of urban environmental services and make them aware of potential opportunities with local governments. Other comparative models have supported booked deals in excess of $10 million and total investments of over $3 billion.
Strategic Objective 1:Selected Areas of Democratic Governance Deepened and Consolidated.
Strategic Objective 2:Improved Policies, Systems, and Capacities, Contributing to a Transformed Education System.
Strategic Objective 4: Improved Capacity of Key Government and Non-government Entities to Formulate, Evaluate and Implement Economic Policies to Promote Economic Growth and Equity.
Strategic Objective 5:Increased Access to Financial Markets for the Historically Disadvantaged Population.
Strategic Objective 6: Improved Access to Environmentally-sustainable Shelter and Urban Services for the Historically Disadvantaged Population. Agency Goal: Stabilizing World Population and Protecting Human Health
One of South Africa's major health care challenges is to achieve equity in the distribution of basic health care. The impact of past inequities and the urgent need for an integrated health system can be illustrated through just a few indicators. First, the infant mortality rate among black children is nearly 10 times higher than that of white children. Second, at least a third of women in rural areas give birth at home without trained assistance which often results in the mother's death. Third, the HIV/AIDS epidemic is soaring, with the rate of rate of infection doubling every 13-15 months.USAID supports the development of an integrated primary health care system rather than the delivery of specific health interventions, such as family planning or HIV/AIDS. The RSA has identified this as the cornerstone of its new health system. Following a year-long design process, a bilateral agreement to implement this strategy was signed in September 1995. Pre-implementation or "bridging" activities, funded by USAID/Washington, include: (1) implementation of a nationwide demographic and health survey (DHS); (2) development of an in-service training program in integrated primary health care principally for rural nurse clinicians; and (3) development of an in-service management training program for health managers at the provincial level and below. These activities will continue until mid-1997. Full-scale implementation will begin in 1997. In addition, USAID has continued its work with NGOs involved with HIV/AIDS prevention work which will be part of the strengthened primary health care service delivery program.
Strategic Objective 3: A More Equitable, Unified and Sustainable System Delivering Integrated Primary Health Care Services to all South Africans. Agency Goal: Protecting the Environment
USAID/South Africa's limited environmental activities are largely urban and thus are integrated into the housing and urban development programs. The small, poorly-constructed, over-crowded housing of the urban poor generally lacks access to sanitation, clean water, and electricity. An estimated 48% of all households do not have access to flush toilets or ventilated, improved, pit latrines, and 34% lacksafe water, and 16% have no access to any form of sanitation system. Poor sanitation among low-income households can lead to diarrhea and, in many cases, infant deaths. Currently, only two out of five low-income households are serviced by electricity. In the absence of electricity, coal and wood burning stoves are utilized for heat and food preparation, resulting in serious air pollution and respiratory problems. These conditions, combined with overcrowding, are leading to an urban environmental crisis that will be further aggravated by increased migration to urban centers.USAID continues to support policies which protect the urban environment consistent with the United Nations-based Local Agenda 21 Program. USAID-funded studies have increased the pool of information available to policy-makers. As a result, urban planning and community development now incorporate environmentally sound interventions and housing solutions are becoming more environmentally sound and sustainable.
Strategic Objective 6: Improved Access to Environmentally-sustainable Shelter and Urban Services for the Historically Disadvantaged population.
SOUTH AFRICA
FY 1998 PROGRAM SUMMARY
Encouraging Broad-based Economic Growth
Stabilizing Population Growth & Protecting Human Health Protecting the Environment
Building Democracy
Providing Humanitarian Assistance
TOTALS
USAID Strategic Objectives
1. Selected Areas of Democratic Governance Deepened and Consolidated - Dev. Fund for Africa
3,050,000
---
---
14,500,000
---
17,550,000
2. Improved Policies, Systems, and Capacities, Contributing to a Trans- formed Education System - Dev. Fund for Africa
14,750,000
---
---
---
---
14,750,000
3. A More Equitable, Unified and Sustainable System Delivering Integrated Primary Health Care Services to all South Africans - Dev. Fund for Africa
300,000
12,000,000
---
---
---
12,300,000
4. Improved Capacity of Key Government and Non-Government Entities to Formulate, evaluate and Implement Economic Policies to Promote Economic Growth and Equity
-Dev. Fund for Africa
4,300,000
---
---
---
---
4,300,000
5. Increased Access to Financial Markets for the Historically Disadvantaged Population -Dev. Fund for Africa
16,300,000
---
---
---
---
16,300,000
6. Improved Access to Environmentally- Sustainable Shelter and Urban Services for the Historically Disadvantaged - Dev. Fund for Africa
1,300,000
---
3,500,000
---
---
4,800,000
Totals - Dev. Fund for Africa
40,000,000
12,000,000
3,500,000
14,500,000
---
70,000,000
USAID Mission Director: Aaron S. Williams
ACTIVITY DATA SHEET
PROGRAM: SOUTH AFRICA
TITLE AND NUMBER: Selected Areas of Democratic Governance Deepened and Consolidated, 674-S001
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $17,550,000 DFA
INITIAL OBLIGATION: FY 1996; ESTIMATED COMPLETION DATE: 2005
Purpose: To deepen and consolidate selected areas of democratic governance through increased human rights protection and access to the justice system; promotion of public and civil society participation in policy development; conflict resolution efforts; partnerships for development among provincial governments, non-government organizations (NGOs), and the private sector; and improved public management.
Background: Democratic governance is pursued as an end in itself and to support USAID/South Africa's other strategic objectives. Progress in the political arena must continue in order to provide the stability and overall framework for sustainable development in South Africa.
USAID Role and Achievements to Date: In 1994, South Africa elected a democratic government, ending the long apartheid era. USAID's democracy and governance program supports South African efforts to strengthen and consolidate democracy and participatory governance in five areas. Support for South African NGOs in human rights promotion and conflict resolution continues, with a special focus of the latter on the KwaZulu-Natal Province. A bilateral agreement with the Ministry of Justice supports increased access to legal services by the majority population. Public and civil society participation in policy development are being promoted by assistance to NGOs and legislatures. USAID is helping South Africans develop models of effective partnership among government, NGOs, and the private sector at the provincial level. USAID is also supporting efforts to rationalize and improve the effectiveness of the public service. Key accomplishments of the recent past are: (1) previously high violence in KwaZulu-Natal declined substantially in 1996; USAID support for local conflict resolution efforts made a significant contribution; (2) USAID helped justice officials develop the legislation that established the Truth and Reconciliation Commission (chaired by former Archbishop Tutu) by exposing commission members to the experiences of Chile and other countries with similar commissions; (3) USAID supported a major cooperative effort of Government, NGOs, and business to develop new transport policies for the Western Cape -- seen as a model of such cooperation; and (4) with USAID funding, the National Democratic Institute helped Parliament develop a code of ethics that now applies to all members.
Description: USAID will continue to channel most of its assistance in democracy and governance through South African NGOs and U.S. private voluntary organizations (PVOs). In 1996, all major NGO grants were awarded through a formal competitive process that involved Requests for Applications linked to specific results targeted in USAID's strategy. These grants require regular reports on results achieved which will be used in Mission results reporting to Congress.
Host Country and Other Donors: At the national level, the European Union, Sweden, the Netherlands, the United Kingdom, Canada, the United Nations, Australia, and Germany are providing assistance in the development of the new constitution, human rights, land tenure, conflict mediation, election systems, administration of justice, public administration, and support for the Reconstruction and Development Program. The same group of donors is working at the provincial level to strengthen the capacity of government and local community support organizations. As part of USAID's bilateral agreement with the Ministry of Justice, the Government is providing significant resources to expansion of legal access and also coordinating assistance from other donors to serve complementary objectives. Throughout the process of developing this strategic objective, USAID has carried out extensive consultations with local NGOs, U.S. PVOs, government representatives, and other donors.
Beneficiaries: The ultimate beneficiaries of improved governance and democratic processes are the entire population of South Africa, in particular, members of the disadvantaged majority population. Intermediate beneficiaries include national and provincial governments, parliamentarians, and NGOs.
Principal Contractors, Grantees, or Agencies: USAID implements activities through a large number of South African NGOs (e.g., the Institute for a Democratic South Africa, the Institute for Multiparty Democracy, and South African Institute for Race Relations, the National Institute for Public Interest Law and Human Rights, Lawyers for Human Rights, the African Center for the Cooperative Resolution of Disputes, the Foundation for Contemporary Research, Institute for African Alternatives; a small number of U.S. PVOs (e.g., the National Democratic Institute, the International Republican Institute, the Joint Center for Political and Economic Studies, Private Agencies Collaborating Together, and the African American Labor Center); and the South African Ministry of Justice.
Major Results Indicators: Baseline Targets Long-term results: Improved Human Development Index (HDI) for the historically Disadvantaged Population .500 (1992) .700 (2002) Improved political participation at all levels race-based (1994) non-racial(2004) Short- to medium-term results (illustrative): Conditions for democracy strengthened weak conditions stronger conditions (South African Democracy Index) Government capacity for managing 0 provinces 3-5 provinces participatory development strengthened Effective models of government/civil society partnerships and community participation demonstrated and disseminated in focus provinces 0 provinces 3-5 provinces
ACTIVITY DATA SHEET
PROGRAM: SOUTH AFRICA
TITLE AND NUMBER: Transformed Education System Based on Equity of Access and Quality, 674-S002
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $14,750,000 DFA
INITIAL OBLIGATION: FY 1996; ESTIMATED COMPLETION DATE: 2005
Purpose: Contributing to a transformed education system through policy reform, establishment of systems to execute and implement policies, and capacity building.
Background: Without improvements in the majority population's educational level, other USAID assistance will be diminished and short-lived. Particularly critical in the immediate future is assistance in basic, further, and tertiary education.
USAID Role and Achievements to Date: USAID will support the implementation of the National Qualifications Framework (NQF) which defines qualifications required for students to progress at all educational levels and provides access for all learners. USAID will focus assistance in the areas of education policy, systems, and the capacity of the Government of the Republic of South Africa (RSA) to manage new education policies and systems. Given USAID's extensive experience with the NGO community, USAID will utilize this expertise to implement reforms and build capacity in areas such as assessment, education management information systems, and teacher training. In earlier years, USAID worked with NGOs to develop exemplary models which can now be replicated by the provincial structures. During the past year, USAID solidified its relationship with the national government. Technical assistance has been provided in strategic planning in four provincial Departments of Education. In 1996, President Clinton pledged $19 million in support of President Mandela's Teacher Training initiative. The framework for this program is now being developed. Support to the National Commission on Higher Education resulted in a national policy framework for the restructuring, governance and financing of higher education. Assistance is now being provided to the National Task Team on Further Education to develop a similar comprehensive policy framework. Another key intervention has targeted the equitable reallocation of education resources, upon which the entire transformation process is dependent. USAID is providing support to the national Department of Education through the Education Foundation, a South African NGO, for technical assistance. This initiative also includes assistance to four provincial Departments of Education in the development and use of management information systems in order to inform the development and implementation of provincial education policies.
Description: USAID's overall support will focus on assisting the RSA in the implementation of the NQF. This effort will include assistance at the national and provincial levels to establish and implement education reform policies. USAID will also provide support to the various commissions and task teams established to restructure education. For example, USAID is providing support to the National Youth Commission to formulate education policies with regard to majority youth (aged 16-30). This is a component of the Binational Commission. In terms of support to historically disadvantaged universities, USAID will provide assistance in the areas of research skills development, student academic/social development, curriculum/program development skills, management/administrative skills development (including financial management skills), and staff development.
Host Country and Other Donors: USAID has signed three Bilateral Agreements with the Ministry of Education and one with the Office of the Deputy President. In all cases, the government is providing counterpart support. (The total RSA education budget for their 1995/96 fiscal year was 32.21 billion Rands = appx. $US10 billion.) Major donors in this sector include the United Kingdom, Denmark, European Union and Canada in basic education, Japan in technical education, the Ford Foundation and Australia in tertiary education, the Netherlands in youth activities, and Norway and Sweden in NGO strengthening.
Beneficiaries: The beneficiaries of improved educational systems are the South African students, who will receive a better education, and teachers and administrators, who will receive relevant training. All students and teachers will benefit through improved materials and policies. Employers will benefit through a better educated work force. National and provincial governments will receive improved technical development of their work force and clients.
Principal Contractors, Grantees, or Agencies: USAID implements activities through South African and U.S. NGOs, the RSA and U.S. and South African contractors.
Major Results Indicators: Baseline Targets Long-term results: Improved Human Development Index for the historically Disadvantaged Population(HDI) .500(1992) .700(2002) Improved educational status: --increased access to tertiary ed. for the majority population 6 (1992) 18(2002) per 1,000 per 1,000 --improved literacy index .766 (1991) .995 (2001) Short to medium-term results (illustrative): Select competencies in 4 provinces 0 (1996) 4 (1999) (Education Management Information System, budgeting, and strategic planning)
ACTIVITY DATA SHEET
PROGRAM: SOUTH AFRICA
TITLE AND NUMBER: A More Equitable, Unified and Sustainable System Delivering Integrated Primary Health Care Services to all South Africans, 674-S003
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $12,300,000 DFA
INITIAL OBLIGATION: FY 1995; ESTIMATED COMPLETION DATE: FY 2002
Purpose: To assist the Government of the Republic of South Africa (RSA) to provide a more equitable, unified and sustainable health care system which delivers integrated primary health care services to all South Africans by increasing access to an integrated package of primary health care (PHC) services (including HIV/AIDS and STD interventions), and improving the institutional sustainability of critical PHC management and service delivery systems.
Background: The major health care challenge for South Africa is to provide equity in basic health care delivery to all South Africans, and rectify the underlying inequities in the provision of health services. This has led the RSA to focus on restructuring and shifting of health care resources. USAID is complementing the Government's efforts through a single, comprehensive project emphasizing the focused nature of USAID assistance in accomplishing the most critical objective in the health sector which is to provide health care services equitably to all South Africans.
USAID Role and Achievements to Date: The rationale for supporting the development of an integrated primary health care system rather than the delivery of specific health interventions, such as family planning or HIV/AIDS, is based on the fact that the RSA has identified this system as the cornerstone of its new health system. Following a year-long design process, a bilateral agreement to implement this strategy was signed in September 1995. Bridging activities, funded with USAID/Washington funds specifically allocated for this purpose, were carried out concurrently with the design process in an attempt to bridge the gap between project design and full implementation. These bridging activities include: (1) implementation of a nationwide demographic and health survey (DHS); (2) development of an in-service training program in integrated primary health care principally for rural nurse clinicians; and (3) development of an in-service management training program for health managers at the provincial level and below. These bridging activities will continue until approximately June 1997, by which time there will be sufficient overlap with the EQUITY Project long-term technical assistance team. In addition, USAID has continued its work with NGOs involved with HIV/AIDS prevention work which will be part of the strengthened PHC service delivery program.
Description: USAID will implement its interventions for this strategic objective through the Equity in Integrated Primary Health Project which is funded through a bilateral agreement with the RSA. The six major intermediate results of this project include: (1) increased access to integrated PHC services for the underserved population; (2) establishment of an effective health care referral system to ensure that clients initially seek care at the appropriate level and are referred to another level when appropriate; (3) enhanced management skills of PHC managers at the provincial level and below through improvement of training and management systems; (4) increased efficiency and effectiveness of PHC service delivery through greater integration of PHC services, better resource reallocation between curative and preventive services, improvement in management systems, and greater cost-effectiveness; (5) strengthened and sustainable PHC training programs at the provincial level through the implementation of training action plans; and (6) effective use of information systems at the provincial level and below, for program development, management and monitoring.
Host Country and Other Donors: Key donors in this sector include: the European Union (EU), the British Overseas Development Administration (ODA), the World Bank, UNFPA and UNICEF. The RSA has also demonstrated its strong support for the EQUITY Project by providing counterpart support of 34% - far in excess of the required 25% - host country contributions.
Beneficiaries: The ultimate beneficiaries of improved health systems are those individuals previously denied adequate health care, particularly mothers and children in the rural areas. As described in the six intermediate results above, intermediate beneficiaries will be health care professionals, provincial and local government health departments, and health training institutions.
Principal Contractors, Grantees, or Agencies: USAID's primary partner in this area to date is the South African National Ministry of Health and the Eastern Cape Department of Health and Welfare. HIV/AIDS activities have been carried out by various South African NGOs. The competitive selection of the EQUITY Project institutional contractor will be completed in late 1996.
Major Results Indicators: Baseline(Year) Targets(Year) Long-term results: Improved Human Development Index (HDI) 0.500(1991) 0.700(2002) for the historically Disadvantaged Population Improved health status: --reduced infant mortality rate 43/1000(1994) 30.1(2002) for the black population --reduced under 5 mortality rate 29/1000(1992) 20.3(2002) --reduced fertility rate 4.6(1995) 4.1(2002) (Eastern Cape Province)
ACTIVITY DATA SHEET
PROGRAM: SOUTH AFRICA
TITLE AND NUMBER: Improved Capacity of Key Government and Non-Government Entities to Formulate, Evaluate and Implement Economic Policies to Promote Economic Growth and Equity, 674-S004.
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $4,300,000 DFA
INITIAL OBLIGATION: FY 1996; ESTIMATED COMPLETION DATE: FY 2005
Purpose: To improve the capacity of key government and non-government entities to formulate, evaluate and implement economic policies to promote economic growth and equity through improving human resource development in economics and policy analysis for key government entities, strengthening the capacity of government departments to effectively manage economic policy matters, enhancing the ability of "think tanks" to formulate and evaluate economic policy options, and to improve the effectiveness of economic training centers.
Background: A long-term challenge for South Africa is to achieve a sustainable increase in the rate of economic growth, including increased employment and a more equitable distribution of national income. This is especially important because the unemployment rate exceeds 35%, and the labor force continues to grow rapidly. To meet this challenge, it is critical to enhance the economic opportunity of the majority of South Africans by improving their technical ability to participate in the labor market. To help South Africa reach this objective, USAID is relying on both government and non-governmental organizations.
USAID Role and Achievements to Date: This is a new strategic area for USAID/South Africa. The approach, which focuses on developing analytical capacity, within and outside of government, complements broader U.S. Mission dialog on economic policy. USAID provides scholarships and technical assistance and participates in a consultative process with steering committees, composed of key government, NGO, and USAID/South Africa representatives to guide USAID investments in this area.
Description: Associated with this strategic objective are the following areas of activity which, cumulatively, will strengthen the capacity of South Africans to formulate, evaluate and implement policies that promote economic growth: 1) human resource development in economics and policy analysis for key government entities through the Mandela Economics Scholars program which will finance post-graduate economics training to improve the capacity of individuals to productively serve in government; 2) strengthened capacity of government departments and "think tanks" to formulate economic policy reforms through technical assistance, training, and research support; and 3) improved effectiveness of centers of economics training, especially within the historically disadvantaged institutions, through the activities under the USAID Tertiary Education Linkages Project (TELP), which has as one of its objectives the establishment of a limited number of "Centers of Excellence" in selected disciplines within South Africa's system of historically disadvantaged universities.
Host Country and Other Donors: Other donor support in the field of economics and economic policy include: Australia in building "think tank" resources, economic policy, economic information generation and dissemination and labor union strengthening; Canada in increasing governmental economic capacity, economic policy, and economic information generation and dissemination; the European Union and the Netherlands in labor union strengthening; the United Kingdom in economics training, increasing governmental economics capacity and economics research; and the World Bank in economics training, increasing governmental economics capacity, economics research and economic information generation and dissemination.
Beneficiaries: Economists who work in South African Government departments involved in economicspolicy formulation and evaluation, and NGOs and university economic "think tanks" and others who employ and use the services of trained economists.
Principal Contractors, Grantees, or Agencies: USAID will implement activities through a variety of South African and U.S. NGOs, the Government of the Republic of South Africa, U.S. and South African contractors and universities, and the U.S. Departments of Treasury and Labor. A long-term management contract will be competitively awarded in FY 1997.
Major Results Indicators: Baseline Targets Long-term results: Improved Human Development Index (HDI)for the historically disadvantaged population .500 (1992) .700 (2002) Improved economic growth and equity: --3 year average real GDP growth rate .4% (1991-94) 4.0% (2000-03) --ratio of median household incomes of the historically disadvantaged in relation to those of whites 18.2% (1992) 21.0% (2003) Short-term results (illustrative): Centers of Excellence in Economics 0 1 established Mandela Economics Scholars Program 0 1 (68 students) established Economic Policy Units established 0 6 or strengthened Economic Policy Think Tanks with plans for sustainability 0 2
ACTIVITY DATA SHEET PROGRAM: SOUTH AFRICA
TITLE AND NUMBER: Increased Access to Financial Markets for the Historically Disadvantaged Population, 674-S005
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $16,300,000 DFA
INITIAL OBLIGATION: FY 1996; ESTIMATED COMPLETION DATE: FY 2000
Purpose: To increase access to financial markets for the historically disadvantaged population through an improved policy environment, improved capacity of the financial sector to serve the disadvantaged population, and improved capacity of historically disadvantaged enterprises to respond to financial market requirements.
Background: Access to capital has repeatedly been cited as the primary binding constraint to ownership and private sector economic empowerment by the historically disadvantaged population. This is an area in which USAID has been involved since 1987 through its work with South African microenterprise finance organizations, and one in which USAID's worldwide comparative advantage in capital markets development can be brought to bear. Given the finite resources of USAID and capital resource availability in South Africa, USAID's focus will be on increasing access to South African private sector capital resources. Innovative financial engineering techniques will be used and USAID funds will be leveraged to the greatest extent possible.
USAID Role and Achievements to Date: Recognizing the transformational nature of USAID assistance to South Africa, private sector programs will capitalize on U.S. comparative advantages using the following techniques to maximize the impact of our assistance: funding for models to be broadly replicated and implemented; risk-sharing or the leveraging of USAID resource with other local and international resources to enhance sustainability; increasing access to the best of U.S. and local expertise; and identifying and disseminating lessons learned to our South African partners.
The interventions to be pursued are divided between results focused on informal and microenterprises where our partners are NGOs and the Government, and results focused on small, medium and large enterprises where our development partners are from the private sector and Government.
Recent examples of the impact of our assistance include the BLUE (Business Linkages for Under-Utilized Enterprises) project, created to structure commercially-viable, long term relationships between corporations and small and medium historically disadvantaged supply firms. Since the activity's inception in 1995, 4.4 million South African Rands in contracts have been awarded to small suppliers that BLUE has assisted. In addition, 10 training courses involving 280 participants have been conducted on such topics as obtaining tender business, purchasing, and negotiating skills. USAID has successfully leveraged significant amount of private sector capital through its micro and small enterprise loan portfolio guaranty program. Working through seven financial institutions, a subsidy of approximately $500,000 is leveraging up to $25 million in loans to small business -- a factor of 50:1.
Description: This strategic objective is being implemented through the following activities: (1) a grant to the Department of Trade and Industry to restructure government entities supporting small, medium and micro enterprises (SMMEs) and to address trade and investment policies; (2) a grant to a successful South African NGO, the Get Ahead Foundation, to continue its group lending scheme for microentrepreneurs; (3) two contracts to provide technical assistance to improve access to equity and long-term risk capital; (4) a bilateral grant agreement with the Ministry for Public Enterprises to assist in advancing the restructuring of state-owned assets and privatization of parastatals; (5) a contract to assist both the public and private sector in the restructuring and divestiture of assets to benefit the majority population; (6) a cooperative agreement with the National Industrial Chamber to promote affirmative procurement between large corporations and potential small and medium sized supplierfirms; (7) a cooperative agreement to provide bankers training in financial management/strategy and international banking practices; (8) two contracts with NGOs which are working to design and implement a cost-effective and replicable solution to the problem of access to finance for microentrepreneurs. These activities are augmented by the $50 million planned allocation for South Africa through the Southern Africa Enterprise Development Fund and the Small and Medium Enterprise Loan Portfolio Guaranty Program.
Host Country and Other Donors: USAID is the largest bilateral grant donor in the area of private sector development. Germany focuses its assistance on poverty alleviation, training for SMMEs through NGOs; and support to the Ntsika Enterprise Promotion Agency in policy formulation and human resources development. The United Kingdom concentrates on assistance to business skills training and counseling to SMMEs, poverty alleviation among youth, women, in rural areas, small growth businesses and technical assistance to the Department of Trade and Industry (DTI) in developing the concept of local service centers. The Commonwealth Development Corporation (CDC), with Investec and Fedsure Mortgages, capitalized the 100 million Rand Enterprise Capital Fund (approximately $22 million) to make equity and quasi-equity investments in medium-sized enterprises owned/managed by disadvantaged South Africans. The European Union provides assistance to micro-lending activities. Japan also is establishing a $100 million equity fund to help fund joint ventures and provide intermittent participant training in Japan. Finally, the World Bank recently negotiated a rand-denominated loan to South Africa to promote small business development.
Beneficiaries: The direct beneficiaries of this strategic objectives are the SMMEs of South Africa.
Principal Contractors, Grantees, or Agencies: USAID will implement activities through a variety of South African and U.S. NGOs, the Government of the Republic of South Africa (RSA) and U.S. and South African contractors.
Major Results Indicators: Baseline TargetLong-term results Improved Human Development Index (HDI)for the historically Disadvantaged Population .500 (1992) .700 (2002) Improved economic growth and equity: --3 year ave. real GDP growth rate 4% (1991-1994) 4.0% (2000-2003) --ratio of median household incomes of the historically disadvantaged in relation to those of Whites 18.2%(1993) 21% (2003) Short to medium-term results (illustrative): Total Rand value of funds made available for informal and microenterprises and SMME of the historically disadvantaged population 200M Rand (1994) 650M Rand (1998) Total number of small, medium and microenterprise formal loans made to the historically disadvantaged population 13,000 (1994) 50,400 (1998)
ACTIVITY DATA SHEET
PROGRAM: SOUTH AFRICA
TITLE AND NUMBER: Improved Access to Environmentally-Sustainable Shelter and Urban Services for the Historically Disadvantaged Population, 674-S006
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $4,800,000 DFA
INITIAL OBLIGATION: FY 1996; ESTIMATED COMPLETION DATE: FY 2001
Purpose: To improve the shelter conditions of the historically disadvantaged population, the vast majority of whom currently live in substandard shelter conditions, through improved access to environmentally-sustainable shelter and urban services.
Background: The critical prerequisites to shelter access are good policies, the availability of credit, and appropriate shelter planning and delivery services. USAID is well-suited to undertake a multi-pronged approach to address these factors.
USAID Role and Achievements to Date: USAID has played an important role in fostering policy reform, furnishing technical assistance and providing capital for the housing sector. This role will continue through activities described in the section below. Through the Housing Guaranty (HG) program, authorizations totalling $169 million will leverage over $441.8 million in investments for shelter from the private sector. Over 59,000 mortgages and housing loans have been provided under this program through 1996. In late 1996, another guarantee program added $36 million to this effort. These programs are complemented with policy reform and technical assistance to assure that solutions are environmentally sustainable. The 1997 program will provide additional resources for municipal finance. The pace of expenditure continues to accelerate as banks go "down market," lending to lower income levels. In FY 1996, two new bilateral agreements were signed with the Ministry of Constitutional and Provincial Affairs and the Department of Water and Forestry for municipal infrastructure finance and policy. USAID technical assistance was also key in the establishment of the National Housing Finance Corporation to increase the amount of credit available for low income housing finance.
Description: Improved access to shelter and urban services for the historically disadvantaged population will be accomplished through four USAID interventions in the urban sector: 1) technical assistance to help develop and implement policies that facilitate the provision of housing and urban services; 2) grants, technical assistance and training to increase access to credit for shelter and urban services; 3) non-credit mechanisms linked to the provision of shelter for the poorest of the poor; 4) Improved capacity to apply sustainable, participatory environmental management principles to local level urban development.
South Africa is proposed as a key participant in the Agency's newly-announced Economic Growth Initiative (EGI). South Africa's participation would focus on combining improved urban planning and access to financing mechanisms to help create a well-functioning municipal infrastructure finance market in South Africa and thus ensure that coverage of services such as water, waste and solid waste disposal is expanded. Specifically, EGI resources would complement other USAID resources to provide technical assistance to local governments and communities in capacity building. There are nearly 600 local governments in South Africa and the demand for information, debt, equity, and management assistance to increase the level of municipal environmental infrastructure is enormous. This program would also create an outreach program to local governments and U.S. provider of goods and services in the environmental infrastructure sector. Under the outreach program training, study tours, and selected technical assistance to local authorities which are seeking private equity partners in expanding or improving their delivery of water, waste water, and solid waste services would be provided. Secondly, the program would develop linkages with U.S. private providers of urban environmental services and make them aware of potential opportunities with local governments. Other comparative models have supported booked deals in excess of $10 million and total investments of over $.3 billion.
Host Country and Other Donors: Other major donors currently active in the housing and urban development sector are: 1) the World Bank, with studies and project preparation/ assessment and technical assistance; 2) Japan, through bulk infrastructure loans and grants; 3) Germany, through project preparation technical assistance and training program for local officials and a $22 million urban upgrading program in the Eastern Cape; and 4) other donor assistance, through numerous small activities including a $2.2 million policy planning unit in one province. Also, other donors, primarily the Scandinavian countries, are implementing urban sector programs. However, these are essentially small technical assistance programs in urban environment and/or municipal management.
Beneficiaries: Primary beneficiaries, are historically disadvantaged households, communities, developers and builders. A secondary layer of beneficiaries include provincial and local-level officials and Community Support Organizations (CSOs).
Principal Contractors, Grantees, or Agencies: USAID will implement activities through the Urban Services Network, the KwaZulu-Natal Municipal Association, the RSA Department of Housing, Department of Constitutional and Provincial Affairs, and Department of Water and Forestry, and, private South African Banks (NEDCOR Bank and the First National Bank).
Major Results Indicators: Baseline Target Long-term results Improved Human Development Index (HDI) for the historically disadvantaged population .500 (1992) .700 (2000) Improved economic growth and equity: --3 year average real GDP growth rate 4% (1991-94) 4.0% (2000-03) --ratio of median household incomes of the historically disadvantaged in relation to those of whites 18.2% (1993) 21.0% (2003) Short to medium-term results (illustrative): Increased total dollar value of funds made available for environmentally-sustainable shelter and urban services for historically disadvantaged population households $0 $300 M (HG&DFA 1992-99)Increased total number of full or partial shelter units and urban services made available for historically disadvantaged communities by participating partners 0 units 150,000 units
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