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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).

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SOUTH AFRICA

	FY 1997	FY 1998	FY 1999
	Actual	Estimate	Request
Child Survival and Disease..........	$26,500,000	$17,100,000	$12,400,000
Development Assistance..............	$39,108,700	$53,500,000	$38,131,000

Introduction

South Africa remains a towering symbol to the world on the possibility of resolving severe political, racial and ethnic differences through negotiation and compromise. This is underscored by the role that South Africa plays in the political stability of southern Africa, and the importance of South Africa's economy to the entire sub-Saharan region. U.S. private sector investment is large and growing. In recognition of this, the United States increased development assistance to South Africa following the historic 1994 national election of Nelson Mandela as President. Subsequently, in March 1995, Presidents Clinton and Mandela agreed to establish the U.S. - South Africa Binational Commission, co-chaired by Vice President Gore and Deputy Executive President Mbeki.

Given South Africa's strategic and economic importance in Africa, it is in USAID's interest to help ensure that South Africa achieves its fullest potential. The United States is contributing both through USAID's economic assistance program and through the U.S. - South Africa Binational Commission. South Africa is a solid investment for U.S. foreign economic assistance. USAID assistance supports a government that has demonstrated a strong commitment to human rights, to participatory democracy, and to meeting the needs of its citizens. It also supports a civil society engaged with government in achieving the nation's potential. Moreover, U.S. economic assistance to South Africa is structured so as to assure solid medium-term returns which will support the phase out of U.S. assistance by the end of 2005. The benefits from continued U.S. assistance, in conjunction with that of other major international donors and South Africans themselves, include: (a) South Africa as a broader, more diverse economic base within the region; (b) a stable democracy with broad civil society participation and pluralism; (c) more equitable social service delivery systems and capacity; and (d) more equitable access to domestic and international markets.

The Development Challenge

The principal development challenge facing South Africa is to overcome the vestiges of apartheid which, for decades, denied its majority population access to quality education, health, housing and economic advancement opportunities, and also denied participation in policy and development decisions affecting their lives. Failure to address these needs in a sustained manner could jeopardize the considerable progress already made in deepening democratic values, and in keeping South Africa on its chosen path of pragmatic economic development.

Reducing poverty in South Africa is the critical challenge, and it requires continued economic growth, balanced with pragmatic interventions that support more equitable development. About 50% of South African households lack adequate housing while 45% lack safe water and sanitation. Over one third of the adult work force is unemployed, while 33% is functionally illiterate. Generally, poor access to basic health care services, especially in the rural areas, and the increased incidence of HIV/AIDS threaten the country's economic and development goals. Despite some advances, too many South Africans remain unable to afford more than shacks in apartheid township shanty-towns, lacking electricity, running water and basic sanitation services. Most South Africans continue to have limited access to capital for productive investment. Sound macroeconomic management is a priority and requires strong policy and a solid base of technically skilled individuals and viable economic institutions.

The Government of South Africa has made striking progress during its first three years in establishing policies to address these needs and a host of other critical problems. The fact that such policies were developed with broad-based consultation is equally impressive. However, the historic changes occurring in South Africa continue to challenge the public sector at the national, provincial and local levels implementing these policies. Similarly, while progress has been made in increasing the representation of the majority population in both government agencies and private sector enterprises, much remains to be done in this arena.

Other Donors

The United States is one of the largest bilateral donor in the Republic of South Africa. Other major donors are: (1) the European Union (total 1996 program $139 million) which assists Parliament in programs for staff training and administrative management and in labor sector programs on economic issues; (2) the United Kingdom (total 1997 program $147 million) which assists in the development of public administration placement programs to prepare middle management for positions in national and provincial governments; and (3) Germany (total 1996 program $16 million) which assists German organizations working in voter education, human rights awareness, political party training and business skills training. Japan and the United Nations Development Program are also donors with large programs and are providing assistance in urban development, policy formulation and health. Donors with smaller programs include Canada, Australia, the Netherlands, Sweden, Norway and Denmark.

FY 1999 Program

The FY 1999 program will support South Africa's efforts to strengthen and consolidate democracy in four main areas: access to justice (including knowledge of rights and access to legal aid); public policy participation (including public management); election support; and local governance (including conflict resolution).

USAID programs in education and workforce development will prepare black South Africans for leadership roles that are needed by the country to successfully compete in the global economy. USAID is improving curriculum and teacher training for basic education, expanding continuing education, and strengthening support of higher education institutions. These programs accelerate the pace at which black South Africans move into leadership positions in an economy where gross inequalities of opportunity threaten social stability.

Effective economic policy will be essential for South Africa to assume an increased role in the global economy. USAID works with the government, universities, and the private sector to improve South Africa's capacity to develop, analyze, and implement economic policy options in areas ranging from trade and labor polices, to agriculture and employment. USAID will provide scholarships in advanced economics training for key individuals who will be the leaders and policy makers in the South Africa economy in years to come. USAID also supports additional private sector investments through the Southern African Enterprise Development Fund.

USAID supports the development of an integrated primary health care system rather than the delivery of specific health interventions, such as family planning. Recently, USAID developed an HIV/AIDS strategy aimed at improving the health care system through focusing on priorities at the national level.

USAID aims to improve access to shelter and urban services for the historically disadvantaged population. Technical assistance will help develop and implement policies that make housing and urban services more available to those in need. Grants, technical assistance, and training will increase access to credit for shelter and urban services. Capital is being made available to provide housing to those with limited access to funds. USAID will assist in developing the capacity to apply sustainable, participatory environmental management principles to local level urban development. In addition, USAID will contribute to the program to combat Global Climate Change through activities in South Africa.

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SOUTH AFRICA
FY 1999 PROGRAM SUMMARY
(in Thousands of Dollars)

USAID Strategic Objectives	Economic Growth & Agriculture	Population & Health	Environment	Democracy	Human Capacity Development	Humanitarian Assistance	TOTAL
S.O. 1 Democratic institutions strength'nd through civil society participatio - DA	2,600	---	---	14,200	----	----	16,800
S.O. 2 Transform education based on equity of access and quality -CSD -DA	--- 2,919	--- ---	--- ---	--- ---	5,300 -----	--- ---	5,300 2,919
S.O. 3 A more equitable, unified and sustainable system delivering integrated primary health care services - CSD - DA	--- 300	7,100 3,000	--- ---	--- ---	--- ---	--- ---	7,100 3,300
S.O. 4. Improved capacity of key govt and non-govt entities to formulate, evaluate and implement economic policies -DA	4,812	---	---	---	---	---	4,812
S.O. 5 Increased access to financial markets -DA	300	---	---	---	---	---	300
USAID Strategic Objectives	Economic Growth & Agriculture	Population & Health	Environment	Democracy	Human Capacity Development	Humanitarian Assistance	TOTAL
S.O. 6 Improved access to environ mentally- sustainable shelter and urban services - DA	500	---	9,000	---	---	---	9,500
Totals -CSD -DA	--- 11,931	7,100 3,000	--- 9,000	--- 14,200	5,300 ---	--- ---	12,400 38,131

USAID Mission Director, Aaron S. Williams

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ACTIVITY DATA SHEET

PROGRAM: SOUTH AFRICA
TITLE AND NUMBER: Selected Areas of Democratic Governance Deepened and Consolidated, 674-SO01
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999: $16,800,000 DA
INITIAL OBLIGATION: FY 1996; ESTIMATED COMPLETION DATE: FY 2005

Purpose: To strengthen democratic institutions through civil society participation by: (1) increasing access to an improved justice system; (2) strengthening local governance; and (3) supporting participatory and effective policy development and implementation. USAID investments in these areas contribute to long-term democratic consolidation in South Africa.

USAID Role and Achievements to Date: In 1994, South Africans elected a democratic government, ending the long apartheid era. Since then, a new constitution has been ratified, provincial and local governments formed, and South Africans have forged ahead with the business of strengthening and consolidating this nascent democracy. USAID's democracy and governance program seeks to strengthen representative linkages between citizens and state institutions at national and local levels of government. Key accomplishments of the program in FY 1997 include: (1) continued support to South Africa's historic Truth and Reconciliation Commission whose work in addressing human rights violations committed during apartheid contributed to South Africa's democratic transition; (2) nationwide civic education efforts which have increased rights awareness throughout the country; (3) continued decline in political violence in KwaZulu-Natal; and (4) a high degree of civil society participation in key pieces of legislation, including the Local Government and Welfare Bills.

Description: A bilateral agreement with the Ministry of Justice supports increased access to legal services by the majority population. USAID funds competitively-awarded grants to South African non-governmental organizations (NGOs) and U.S. private voluntary organizations which carry out a range of democracy and governance activities in three programmatic areas described above. Support for South African NGO programs in human rights promotion and conflict resolution continues, with a special focus on the latter in the KwaZulu-Natal Province and through efforts to strengthen local governments' capacity to mediate and resolve conflict. Public and civil society participation in policy development is being promoted by assistance to legislatures and NGOs while training is being provided to senior government officials in effective policy implementation. Beginning in 1999, it is anticipated there will be greater program emphasis on strengthening participatory local governance.

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 democracy and governance assistance. Many of the same donors are working at the provincial level to strengthen the capacity of government and local community support organizations. Through USAID's bilateral agreement with the Ministry of Justice, the South African Government is providing significant resources to expand legal access and also to coordinate assistance from other donors to achieve complementary objectives. Throughout the process of developing this strategic objective, USAID has carried out extensive consultations with government representatives, local NGOs, U.S. private voluntary organizations (PVOs) and Other Donors

Beneficiaries: The ultimate beneficiaries of improved governance and democratic processes are South African citizens, in particular members of the historically disadvantaged majority population. Intermediate beneficiaries are national, provincial and local governments, parliamentarians, and civil society organizations.

Principal Contractors, Grantees or Agencies: USAID funds activity implementation through a wide range of South African NGOs and U.S. PVOs. South African partners include the Institute for a

Democratic South Africa; the Institute for Multiparty Democracy; the South African Institute for Race Relations; the National Institute for Public Interest Law and Human Rights; Lawyers for Human Rights; the Center for Human Rights; the Black Lawyers Association; the African Center for the Cooperative Resolution of Disputes. Principal U.S. agencies include the International Republican Institute; the National Democratic Institute; the American Center for International Labor Solidarity; the Joint Center for Political and Economic Studies; and PACT. USAID's assistance to local NGOs will be supported by a grants management contract awarded in FY 1997 to the U.S. firm, Creative Associates.

Major Results Indicators:  		 		 		 		
						Baseline			Target	
% of nationally representative sample of 
citizens who say that democracy is always
best. 						47	(1996)			55	(2002)

% of bill passed by parliament with civil society
input						13	(1996)			37	(2002)

No. of politically related deaths in Kwa-Zulu
Natal 						2087	(1994)			400	(2002)

%  of human rights cases received by 
Human Rights Commission which are 
processed					2093	(1997)			4487	(2005)

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ACTIVITY DATA SHEET

PROGRAM: SOUTH AFRICA
TITLE AND NUMBER: Transformed Education System Based on Equity of Access and Quality, 674-SO02
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999: $2,919,000 DA; $5,300,000 CSD
INITIAL OBLIGATION: FY 1996; ESTIMATED COMPLETION DATE: FY 2005

Purpose: To assist South Africa to transform its education system so that it provides quality education to all South Africans.

USAID Role and Achievements to Date: Since 1994, USAID's investments have co-financed education policy development with the South African Government. USAID's support for education management information systems provides decision-makers with the ability to target resources to the neediest schools, directly addressing the quality and performance gap. USAID-financed materials and teacher training programs emphasizing critical thinking and problem solving skills have reached over 21,000 teachers who, in turn, taught approximately 350,000 other teachers.

In 1997, national policy frameworks and work plans for Adult Basic Education and Further Education and Training were completed by the South African Government with USAID assistance. These will be used to formulate investment plans that target under-educated youth and adults. In higher education, USAID scholarship programs have trained over 5,000 black South Africans since 1985, a significant percent of all black degree-holders. USAID assistance to the Ministry of Education in support of policy development led to a new Higher Education Act in 1997 and strengthened 15 historically disadvantaged universities and technical training schools through staff training, linkage grants to U.S. universities, and institution-specific capacity building activities.

Grants to education non-governmental organizations (NGOs) working closely with the Ministry of Education strengthened civil society participation and underwrote many of the ideas, materials, and methodologies that are now being brought to full implementation in a profound transformation of the education system. USAID's investments focus support to the Ministry of Education to redress past inequalities by improving quality and efficiency at the lower levels; expanding access for uneducated youth and adults who were denied opportunities to learn by the apartheid government; and increasing both quality and access to tertiary education. These efforts are designed to produce the qualified leadership required by the country to manage its transition, grow its economy, and become globally competitive.

Description: USAID assistance in basic education will continue to target the country's four neediest provinces. Support to provincial Departments of Education (DOEs) will include use of management information systems as a tool to effectively inform and improve decision-making processes and teacher training in outcomes-based education, math, science and technology. As part of President Mandela's Education Initiative, to which President Clinton pledged $19 million in 1996, USAID will support the introduction of a new curriculum being developed by the National Department of Education. This new curriculum is intended to replace the rote learning that was emphasized in the past, with a curriculum that encourages concrete learning outcomes. A USAID grant to the Children's Television Workshop, in partnership with the national DOE, will produce a South African version of Sesame Street that will provide millions of South African pre-schoolers a head start in their formal education. In the area of further education and youth, USAID will assist the national DOE and the National Youth Commission to identify service delivery options. The conversion of redundant teacher training colleges, primarily in the former homelands, into community colleges is one cost-effective option being explored by the South Africa Government.

To increase access to quality higher education, USAID will award three to seven linkage grants to United States universities over the next year. These grants will strengthen South Africa's historically disadvantaged institutions (HDIs) in the areas of curriculum development, management and administration, student affairs, and staff development. USAID also will assist these institutions to develop programs that strengthen the math and language skills of the large numbers of underprepared students who are admitted but are unable to cope with university-level work. Two other areas that will receive considerable support over the next three years are the revision of curriculum and the development of research capacity. A restructuring of curriculum at all of the HDIs is necessary to ensure conformity to the recently-developed national qualifications framework that provides students with greater flexibility in constructing their degree programs, and emphasizes minimum learning outcomes.

Host Country and Other Donors: Education is clearly a priority for South Africa which currently allocates more than 21% of its national budget to education. USAID in the largest bilateral donor in this sector. Other donors include the United Kingdom, Denmark, European Union and Canada in basic education; the Ford Foundation and Australia in tertiary education; the Netherlands, and Norway and Sweden in NGO strengthening.

Beneficiaries: The ultimate beneficiaries of improved education policies, programs and materials are the more than six million students who will be better prepared to live and compete in a diverse and changing society. Employers will benefit through a better-educated work force. National and provincial governments will have greater capacity to plan and manage public resources.

Principal Contractors, Grantees, or Agencies: USAID implements activities through South African and U.S. universities, NGOs, and contractors. Principal U.S. contractors/grantees are: Abt Associates, Research Triangle Institute, Academy for Educational Development, Institute for International Education, Howard University, DevTech Systems, and the Children's Television Workshop.

Major Results Indicators:			Baseline		Target
% of schools implementing
new curriculum 2005				0 	(1997)	 	80% 	(2003)
% of Higher Education Graduates 	
that are black Africans			 7.5%	(1996)		29% 	(2003)
% of Black African students completing
Primary Education				43%	(1996)		65%	(2003)
% of centers utilizing the integrated
Adult Literacy program in focus provinces	0	(1996)		60%	(2000)
% of teachers trained in Math, Science 
and Technology				45%	(1996)		65%	(2000)
% of black students at HDIs attending
compensatory programs			5%	(1996)		35%	(2000)

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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-SO03
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999: $3,300,000 DA; $7,100,000 CSD
INITIAL OBLIGATION: FY 1995 ; ESTIMATED COMPLETION DATE: FY 2004

Purpose: To support 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 sexually transmitted diseases (STDs) interventions), and improving the institutional sustainability of critical PHC management and service delivery systems.

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 that the Republic of South Africa (RSA) has identified integration as the cornerstone of its new health system. In 1997, activities were carried out concurrently with the development of a new USAID program in an attempt to fill the gap between design and full implementation. Recent achievements include: (1) implementation of a nationwide demographic and health survey; (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. Current USAID-supported health activities aim to strengthen the capacity, first, of the Eastern Cape Department of Health, and later of other provinces through adaptation of lessons learned in the Eastern Cape. USAID investments in this sector are increasing and recent achievements have set the stage for high impact in coming years.

Description: The five major results anticipated through support for integrated primary health care program 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 as needed; (3) improved management of integrated PHC (including HIV/AIDS and Sods) delivery systems at the provincial level; (4) PHC training program strengthened and institutionalized at the provincial level; and (5) increased capacity of the PHC system to deliver appropriate HIV and STD prevention and treatment.

Host Country and Other Donors: Key donors in this sector include: the European Union, the United Kingdom, the World Bank, United Nations Population Fund and United Nations Children's Fund. The RSA has also demonstrated its strong support for the USAID health initiative by providing counterpart support well above required levels.

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 above, intermediate beneficiaries will be health care professionals, provincial and local government health departments, and health training institutions.

Principal Contractors, Grantees, or Agencies: Management Sciences for Health, a U.S. non-profit institution, is the principal institutional contractor.

Major Results Indicators:				Baseline		Target
Improved health status:
--reduced infant mortality rate				43/1000 	(1994)  	30.1/1000 	(2002)
  for the black population
--reduced under five mortality rate			29/1000	(1992)	20.3/1000	(2002)
--reduced fertility rate                			4.6 	(1995)	4.1 		(2002)
  (Eastern Cape Province)

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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, 674-SO04.
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999: $4,812,000 DA
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 which are improving human resource development in economics and policy analysis, 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 improving the effectiveness of economic training centers.

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. Government dialogue on economic policy. USAID provides scholarships and technical assistance and participates in a consultative process with steering committees, composed of key government, non-governmental, and USAID representatives to guide investments in this area. Support has been provided for the development of the Government of South Africa's employment generation strategy, strengthening governmental units responsible for labor market, trade and agricultural policies. Support for the restructuring of the government's budgetary and inter-governmental fiscal relations is also being provided.

Description: Associated with this development priority 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 who 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 support to the University of the Western Cape.

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: Intermediate beneficiaries are senior staff who work in South African Government departments involved in economics policy formulation and evaluation, and non-governmental organizations (NGOs), university economic "think tanks" and others who employ and use the services of trained economists. Ultimately, enhanced economic policy capacity will benefit all South Africans through improved economic policy development.

Principal Contractors, Grantees, or Agencies: The long-term management contract for this activity has been awarded to Nathan Associates who will be responsible for implementing most activities under this program. Specific activities will be implemented through a variety of South African NGOs, the

Government of South Africa, the University of the Western Cape, other South African universities, and the U.S. Departments of Treasury and Labor.

Major Results Indicators:  								
						Baseline			Targets
Centers of excellence in economics 		
established					0	(1996)			1	(2000)
Mandela Economics Scholars completing
training in the United States			0	(1996)			14	(2000)
Economic policy units established 		
or strengthened				0	(1996)			6	(2000)
Economic policy think tanks 
with plans for sustainability			0	(1996)			5	(2000)

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ACTIVITY DATA SHEET
PROGRAM: SOUTH AFRICA
TITLE AND NUMBER: Increased Access to Financial Markets for the Historically Disadvantaged Population, 674-SO05
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $300,000 DA
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. The Southern African Enterprise Development Fund (SAEDF) is a venture capital facility which provides financial support to small and medium-scale enterprises (SMEs), through debt and equity investments.

USAID Role and Achievements to Date: The SAEDF has approved four investments for South African entities, and disbursed financing to one, Rural Housing Financing. In this latter transaction, SAEDF's investment of $550,000 for low income housing leveraged four times USAID's investment. There are other investments currently under consideration, including $500,000 to an intermediate financial institution (IFI) for small and medium enterprise lending. These will provide 2,000 micro loans to indigenous SMEs which are expected to result in the creation of over 1,000 jobs. Other actions include $900,000 to a start up venture for a private medical center, and $1.5 million to an IFI for low income housing loans.

Description: The United States established the SAEDF in order to provide equity capital and other financial services to Southern Africa disadvantaged populations. This $100 million fund -- $50 million for South Africa and $50 million for the other southern African countries -- is designed to provide employment and increased incomes. It carries out these activities as a venture-capital facility that provides financial services to small scale and medium-scale enterprises. The SAEDF operates as an independent, non-profit corporation.

Host Country and Other Donors: Principal donors in SME development in South Africa are the Danish, the European Union, British, Norwegian and Swedish development agencies. The World Bank negotiated its first loan to South Africa to support small enterprise development. The Japanese are investigating bilateral support measures for the Department of Trade and Industry.

Beneficiaries: These consist of small and medium-scale enterprises in Botswana, Zambia, Malawi, Zimbabwe, Angola, Tanzania, Mozambique, Lesotho, Namibia, South Africa and Swaziland.

Principal Contractors, Grantees, or Agencies: The SAEDF.

Major Results Indicators:  				Baseline			Target
Total rand value of funds made 
available for informal and 
microenterprises and SAME of 
the historically disadvantaged 
population  (Rand)					200M 	(1994)	8000M	(2000) 	

Total number of small, medium and	
microenterprise formal loans made to 
the historically disadvantaged
population  						13,000 	(1994)	70,000 	(2000)

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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 1999: $9,500,000 DA
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.

USAID Role and Achievements to Date: USAID is assisting the government in fostering policy reform, furnishing technical assistance and providing capital for the housing and municipal infrastructure sectors in South Africa. In addition, through support provided by the Housing Guaranty (HG) program, more than $350 million in investments will be made in shelter and municipal services by the private sector. In FY 1997, another HG program was authorized with the Infrastructure Finance Corporation (INCA). INCA is the first purely private-pooled municipal bond fund in the developing world and in its first nine months of operation, it has lent over $125 million for municipal infrastructure including water, waste water, solid waste, and electrical distribution systems. The HG program is complemented with policy reforms and technical assistance programs which support the delivery of services to low-income households. These efforts also assure that the policies and infrastructure investments are environmentally sustainable. The 1998 program will provide additional resources for municipal infrastructure by working with local authorities to assist in packaging projects for water, waste water, solid waste, and electrical distribution for private debt and/or equity financing.

The impacts of USAID's programs with the Department of Constitutional and Provincial Affairs (DCPA) and the Department of Housing (DOH) continue to show impressive results. The DOH has announced the creation of a Social Housing Program and its intent to create a secondary mortgage market with technical input from USAID and Fannie Mae. DCPA is also moving forward by creating and implementing the legal and regulatory framework necessary to foster private investment in municipal infrastructure, with USAID assistance.

Description: Improved access to shelter and urban services for the historically disadvantaged population will be accomplished through USAID assistance in four areas in the urban sector. First, technical assistance to help develop and implement policies that facilitate the provision of housing and urban services. For example, USAID supports the creation of a secondary mortgage market and programs to facilitate the flow of private capital for municipal infrastructure. Second, USAID provides grants, technical assistance and training to increase access to credit for shelter and urban services. For example, three USAID-supported project trusts are leveraging high levels of local resources for community-based housing programs. The HG programs are leveraging resources as high as four dollars for every one dollar of HG funds provided. Third, USAID provided non-credit mechanisms linked to the provision of shelter for the lowest income households. This includes capacity building and skills training for community leaders. Finally, USAID provides support to utilize sustainable, participatory, environmental management principles in local-level urban development. For example, USAID is assisting municipal associations in the training of city managers in a host of technical areas, including environmental management. In FY 1999, USAID will initiate activities in South Africa under the Global Climate Change program which focus on urban and industrial emission reduction.

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; and (3) Germany, through project preparation technical assistance, training programs for local officials and a $22 million urban

upgrading program in the Eastern Cape. 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 includes provincial and local-level officials and community support organizations.

Principal Contractors, Grantees, or Agencies: USAID will implement activities through the South African Department of Housing; Department of Constitutional and Provincial Affairs; the Department of Water and Forestry; private South African Banks; the Urban Services Network; and the KwaZulu-Natal Municipal Association.

Major Results Indicators: 
						Baseline		Target
Increased total dollar value
of funds made available for
environmentally-sustainable 			
shelter and urban services for
historically disadvantaged
population households			  	 $0	(1992)		$300M	(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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