South Africa

FY 2001 Program Description and Activity Data Sheets

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FY 2001 Program The USAID program will continue to support South Africa's efforts to strengthen and consolidate democracy, with special emphasis on strengthening the criminal justice system, democratic and effective local governance, and civil society-government partnerships. USAID's education program will address unemployment through programs in workforce development and higher and further education. The program also will continue a strong basic education program, emphasizing district and school-level implementation of system reforms. The USAID program will improve the capacity of historically disadvantaged persons in key government and nongovernment organizations to develop, evaluate and implement economic policies. Enhanced economic policy-making capacity will benefit all South Africans through improved economic policy development and implementation, which will increase economic growth and employment and distribute economic opportunities more equitably. The lack of adequate shelter and services for the previously disadvantaged majority population continues to be a challenge for the South African government. USAID will develop new strategic approaches to address emerging technical complexities of housing development, including the upgrading of existing settlements, energy and environmental concerns, and the capacity of local authorities to deliver services in these areas. The health program will continue to focus on primary health care delivery, with an increased focus on capacity building and implementation of Eastern Cape program innovations in other provinces. Given the magnitude of the HIV/AIDS epidemic, implementing appropriate HIV/AIDS prevention and mitigation programs with the RSA and NGOs will be a top priority. USAID's strategy includes prevention and management of sexually transmitted infections, development of home-based care models, and research into cultural, religious, behavioral and gender issues relevant to HIV/AIDS prevention activities. USAID will increase market-driven employment by supporting the growth of existing small and medium-scale enterprises in urban and peri-urban areas and promoting the growth of small-scale agribusinesses in rural areas. Some microenterprises with job creation potential also will participate in the program. [an error occurred while processing this directive] ACTIVITY DATA SHEET PROGRAM: South Africa TITLE AND NUMBER: Democratic Institutions Strengthened Through Civil Society Participation, 674-001 PLANNED FY 2000 OBLIGATION AND ACCOUNT: $10,252,000 (DA), $100,000 (CSD) PROPOSED FY 2001 OBLIGATION AND ACCOUNT: $100,000 (CSD), $11,604,000 (DFA) STATUS: Continuing INITIAL OBLIGATION: FY 1996 ESTIMATED COMPLETION DATE: FY 2005 Summary: Despite two free, fair, and increasingly peaceful general elections, as well as a strong constitutional, statutory, and institutional framework for an enduring democracy, the consolidation of South Africa's emerging democracy is constrained by an alarming crime rate, weak local governance, and ineffective civil society-state relations. These ills threaten a basic social contract where government protects the rights of and delivers services to citizens, and citizens meet their obligations to government. South Africa's ability to engage the United States as a partner on issues of U.S. national interest depends upon the successful transformation of South Africa to a representative, non-racial democracy where democratic norms are observed, human rights respected, and good governance practiced. USAID's democracy and governance program supports the efforts of South Africans to strengthen linkages between citizens and government institutions, with special emphasis on rule of law and criminal justice, democratic and effective local governance, and the sustainability of civil society. USAID rule of law assistance reflects South Africa's priority of strengthening the criminal justice system and expanding access to justice. USAID's local governance assistance promotes effective and democratic engagement between citizens and municipal governments, the sphere of government closest to the people and which has a high level of responsibility for the delivery of basic services. USAID assistance to civil society is aimed primarily at helping South African civil society organizations become institutionally and financially more sustainable, through better service delivery and policy development partnerships with government. 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. Key Results: The key results of this program are: (1) a more effective, efficient and accessible South African criminal justice system; (2) more effective and democratic local governance; and (3) strengthened civil society-government partnerships for improved policy development and service delivery. USAID investments in these areas contribute to democratic consolidation in South Africa. Performance and Prospects: In FY 1999, USAID contributed to the following major accomplishments of South African government and civil society counterparts: (1) second national and provincial democratic elections carried out freely, fairly, and without any major incidence of violence; (2) drafting of the Equity Bill, South Africa's principal piece of civil rights legislation; (3) continued diversification of South Africa's legal profession so that it increasingly reflects the ethnic and racial make-up of the country; (4) over 50% of South Africans are aware of their human rights; and (5) promulgation of the Municipal Structures Act and drafting of other key pieces of legislation required for effective and democratic local governance, including the Municipal Systems and Property Tax bills. A bilateral agreement with the Ministry of Justice continues to support the transformation of the justice system to better serve all South Africans, particularly the historically disadvantaged population. Because fighting crime is a top priority of the South African government and citizens, an amendment to this agreement, to focus the program on strengthening the criminal justice system, is anticipated in FY 2000. USAID will continue its local governance support through technical assistance to the national government to improve the local government finance framework, and through direct assistance to 22 municipalities to help them plan, raise revenue and operate in accordance with the new policy framework for democratic local governance. To broaden the impact of the program, lessons from these municipalities will be systematically shared with other municipalities, thereby contributing to the overall strength of the country's new local government system. Assistance also is anticipated to support the country's first local government elections to be held under the transformed local government policy framework. Design of USAID's civil society sustainability program is near completion and the program is expected to commence in FY 2000. It is anticipated that the program will focus on strengthening partnerships between civil society organizations and the government to enhance input into policymaking and to improve delivery of essential social services. Possible Adjustments to Plans: None. Other Donor Programs: The United States is among the top three democracy and governance donors in South Africa. At the national level, the European Union, the Netherlands, the United Kingdom, Canada, the United Nations, Australia, and Germany are providing democracy and governance-related assistance. Many of the same donors are working at the provincial level to strengthen the capacity of government and community support organizations. In relation to USAID's rule of law, local governance, and civil society strengthening programs, the South African Government is providing significant resources to carry out its plans in these areas and is actively coordinating assistance from donors (including USAID) with complementary objectives. Throughout the process of developing and implementing this portfolio, USAID has carried out extensive consultations with government representatives, local nongovernmental organizations (NGOs), U.S. private voluntary organizations (PVOs), and other donors. Principal Contractors, Grantees or Agencies: The democracy and governance program is implemented by South African government institutions, a wide range of South African NGOs, and U.S. PVOs. Government partners include the Ministries of Justice and Provincial Affairs and Local Government. Other South African partners include the Institute for Multiparty Democracy; the National Institute for Public Interest Law and Human Rights; Lawyers for Human Rights; the Center for Human Rights; the Black Lawyers Association; the Center for Social and Legal Studies; and the African Center for the Cooperative Resolution of Disputes. Principal U.S. partners include the Department of Justice; the International Republican Institute; the National Democratic Institute for International Affairs; the American Center for International Labor Solidarity; the Joint Center for Political and Economic Studies; Creative Associates International, Inc.; and the U.S. PVO PACT. Selected Performance Measures: Baseline (1997) Actual (1998) Target (1999) Target (2000) Target (2001) Percent of a nationally representative sample of South Africans indicating trust in local government 16 (1995) 31 31 31 31 Percent of bills passed by parliament with civil society input 13 52 52 55 55 Reduction in average case-processing time in selected justice cluster * * * * * * This is a new indicator; baseline and targets are under development. U.S. Finance Table (Microsoft Excel file) ACTIVITY DATA SHEET PROGRAM: South Africa TITLE AND NUMBER: Increased Access to Quality Education and Training, 674-002 PLANNED FY 2000 OBLIGATION AND ACCOUNT: $5,780,000 (DA), $4,988,000 (CSD) PROPOSED FY 2001 OBLIGATION AND ACCOUNT: $4,550,000 (CSD), $5,500,000 (DFA) STATUS: Continuing INITIAL OBLIGATION: FY 1996 ESTIMATED COMPLETION DATE: FY 2005 Summary: Education is at the heart of South Africa's transition to a sustainable, non-racial democracy. Yet South Africa faces a unique human resource development challenge due to decades of destructive apartheid policies that deliberately and systematically limited the majority of the people from realizing their potential. Across the educational system--from pre-school to university--the quality of education received by the majority of black South Africans still is far inferior to that received by white South Africans. The poor quality of education has resulted in a skills shortage that acts as a drag on economic growth and manifests itself in a persistent, debilitating unemployment crisis and the despair of people trapped in poverty amid the conspicuous wealth of a small, well educated white minority. USAID's investments in this sector are intended to expand access to high quality education and training needed to increase productivity and lead to market-driven increases in wage levels, economic growth, exports, and living standards. Key Results: To increase the majority's access to high quality primary education, USAID uses basic education funds from the Child Survival and Diseases (CSD) account for activities in the four poorest provinces to: (1) improve teaching and learning in schools; (2) improve district management and support to schools; (3) strengthen education management information systems; (4) implement a more equitable school funding system; and (5) expand HIV/AIDS and life skills education (using LIFE Initiative funds). USAID's program is designed to increase the percentage of pupils who successfully complete primary education in the four poorest provinces. Using Development Assistance (DA) funds, USAID supports South Africa's efforts to build a further education system to provide out-of-school youth with opportunities to obtain skills and deal with issues such as the HIV/AIDS pandemic and youth unemployment. This will create new educational opportunities for young adults who did not receive an adequate education due to the inequities of apartheid. To directly target human resource constraints to economic growth and employment, USAID supports training programs in adult basic education and workforce development. The adult basic education activity develops and delivers new learning programs in basic business skills and agriculture to predominantly rural communities. In higher education, USAID supports institutional strengthening of 17 historically disadvantaged universities (HDIs) through grants to U.S. universities to establish linkages with southern African institutions and to provide training and technical assistance. This program contributes to an increase in the number of students who graduate from HDIs. Performance and Prospects: During 1999, the emphasis in the education sector shifted from policy development to service delivery. USAID's work, primarily targeted at the institutional level--whether in a primary school or a university--welcomed and encouraged the renewed sense of urgency and attention to improving learning in the classroom. At the primary level, USAID awarded six large grants to nongovernmental organizations (NGOs) to work intensively in the country's poorest school districts, and launched new initiatives to address HIV/AIDS, build school water systems, establish mobile libraries, and connect provincial and district offices and some schools to the internet. In further education and training, a clear implementation strategy was formally agreed to and activities are scheduled to begin in early 2000. In workforce development, USAID negotiated a program of support with the U.S. Department of Labor to implement an innovative skills development strategy for industry-based training. In higher education, seven new linkages were established between U.S. and South African institutions, and technical assistance was redirected to target critical management shortcomings at some institutions. Finally, the adult basic education and training program completed development of learning materials for small enterprise development and agriculture courses, and a grant was awarded to an NGO to assist the provinces to deliver the programs beginning in January 2000. Possible Adjustments to Plans: Creating training opportunities for millions of unemployed youth and making education and training more relevant to the demands of the economy are perhaps the most urgent human resource development issues facing South Africa. USAID plans to incorporate support for South Africa's skills development strategy to overcome the human resource constraints to job creation and employment equity. Other Donor Programs: South Africa allocated 28% of its national budget to education in 1998-99. In addition to the United States, major donors in the sector include the United Kingdom, Denmark, the European Union (E.U.) and Canada in basic education; the Ford Foundation, E.U. and Australia in tertiary education; the Netherlands in youth activities; and the E.U., Sweden, and Germany in adult basic education. Principal Contractors, Grantees, or Agencies: USAID implements activities through the national Department of Education; provincial Departments of Education; South African and U.S. universities; NGOs; and contractors. Principal U.S. implementers are Abt Associates; Research Triangle Institute; the College Fund (formerly the United Negro College Fund); the Academy for Educational Development; International Foundation for Education and Self Help; Institute for International Education; Howard University; DevTech Systems; and the Children's Television Workshop. Selected Performance Measures: Baseline (1996) Actual (1998) Target (1999) Target (2000) Target (2001) Improved learner performance on grade three assessment (% passing at required level of competence or above) 40% 40% 40% 44% 49% Increased graduation rate at historically disadvantaged institutions 14% 15% 17% 19% 24% Number of adult education centers utilizing new curricula 0 0 0 50 75 U.S. Finance Table (Microsoft Excel file) 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, 674-004 PLANNED FY 2000 OBLIGATION AND ACCOUNT: $5,470,000 (DA), $900,000 (CSD) PROPOSED FY 2001 OBLIGATION AND ACCOUNT: $500,000 (CSD), $5,214,000 (DFA) STATUS: Continuing INITIAL OBLIGATION: FY 1996 ESTIMATED COMPLETION DATE: FY 2005 Summary: During the apartheid era there were few opportunities for black South Africans to acquire advanced skills in economics, let alone participate in policy formulation. As a result, there is a dearth of historically disadvantaged individuals and institutions able to effectively participate in economic policy making. This USAID program improves the capacity of historically disadvantaged persons in key government and nongovernment organizations to develop, evaluate and implement economic policies. As a result, the current market-oriented macroeconomic policies will continue to be supported by broader participation. The direct beneficiaries of USAID activities are mid- and senior-level technicians in government, nongovernmental organizations (NGOs) and universities who work on economic policy issues. The direct beneficiaries of the Mandela Economic Scholars Program and the university strengthening programs are the historically disadvantaged students in those programs. Ultimately, enhanced economic policy-making capacity will benefit all South Africans through improved economic policy development and implementation, which will increase economic growth, employment, and distribute economic opportunities more equitably. Key Results: Specific areas of USAID involvement are: (1) human resource development in economics and policy analysis for key government entities through the Mandela Economics Scholars Program, which finances 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 the provision of technical assistance, training, and research support; and (3) improved effectiveness of centers of economics training, primarily through support to the historically disadvantaged University of the Western Cape (UWC). To date, the focus has been at the national government level, but success in assisting the government of the Republic of South Africa (RSA) to devolve budgetary decision-making authority from the central government to provincial and local authorities has elicited a concomitant demand for economic capacity building at those levels. Performance and Prospects: The Mandela Economic Scholars Program sends 16-25 historically disadvantaged South Africans to the United States each year for graduate degrees in economics. Forty-three are in the United States now; 15 have returned to South Africa to take up positions as economists, mainly in government; and 25 more will begin school in 2000. USAID assists the RSA to tailor its macroeconomic policies to be more supportive of job creation in a market liberalized environment by working with the government on revising the tax code, improving tax collections, strengthening fiscal federalism, outsourcing government services, developing an effective anti-monopoly policy, and better understanding the impact of government programs on the environment. With funding from the Child Survival and Diseases account, USAID will support research on the macroeconomic implications of South Africa's HIV/AIDS epidemic and will work with the national Department of Finance and provincial treasuries to increase the availability and effectiveness of financing for primary health care. The HIV/AIDS research will enable the RSA to develop appropriate policies and plans to mitigate the impact of the disease. USAID is strengthening NGOs and universities to do independent analysis of economic policy. Assistance to the UWC's Department of Economics is strengthening training and research in economics and outreach to the community, provincial governments, and other historically disadvantaged universities. This work complements broader U.S. government dialogue on economic policy. Possible Adjustments to Plans: None. Other Donor Programs: USAID is the leading donor in the macroeconomic policy capacity area, but coordinates work on tax and tax implementation with the United Kingdom (U.K.). France, Canada, Germany, and the U.K. also support similar NGOs and university think tanks. The European Union provides complementary assistance to the Department of Trade and Industry, especially in the area of research. The World Bank assists with small amounts of economics training, economics research and economic information generation and dissemination. Principal Contractors, Grantees or Agencies: The principal implementer of this program is a consortium led by the U.S. firm Nathan Associates. The U.S. Treasury Department assists with devolving policy implementation to the provinces and analyzing tax policy; the U.S. Department of Labor assists with training health and safety inspectors, improving labor statistics and sharing U.S. experience with affirmative action programs; the U.S. Department of Justice and the Federal Trade Commission help develop the capacity of the Competition Commission (the body that regulates corporate mergers and acquisitions and promotes competitive business practices); and the U.S. Department of Agriculture provides assistance in improving agricultural statistics. Selected Performance Measures: Baseline (1996) Actual (1998) Target (1999) Target (2000) Target (2001) Cumulative number of Mandela Economic Scholars returned and placed in government as economists 0 3 7 16 26 Cumulative number of quality policy studies completed for government 0 10 20 28 23 Annual number of quality studies written by think tanks for government policy makers 3 10 13 15 21 Annual enrollment of full time students at UWC's Department of Economics 350 404 476 500 520 U.S. Finance Table (Microsoft Excel file) ACTIVITY DATA SHEET PROGRAM: South Africa TITLE AND NUMBER: Increased Access to Environmentally Sustainable Housing and Urban Services for the Historically Disadvantaged Population, 674-006 PLANNED FY 2000 OBLIGATION AND ACCOUNT: $5,248,000 (DA), $200,000 (CSD) PROPOSED FY 2001 OBLIGATION AND ACCOUNT: $500,000 (CSD), $8,414,000 (DFA) STATUS: Continuing INITIAL OBLIGATION: FY 1996 ESTIMATED COMPLETION DATE: FY 2005 Summary: The lack of adequate shelter and services for the previously disadvantaged majority population is a highly visible and politically critical problem. The apartheid legacy left South Africa with two separate and distinct pools of housing stock and levels of municipal environmental services: first-world quality for the small elite, and slums of substandard housing and makeshift shacks for the majority. An estimated 2.5 to 3.5 million households require shelter; approximately four million households have no access to water in their homes; and nearly 45% of the population is still awaiting individual electrical hookups. The problem is compounded by high levels of urbanization: nearly 60% of South Africa's population currently resides in urban areas. Urban growth rates are nearly five times that of the general population. A recent nationwide survey ranked housing among the top three concerns of the general population (following jobs and crime). USAID is committed to working with the government of the Republic of South Africa (RSA), the private financial sector and nongovernmental organizations (NGOs) to develop and implement policies and programs that will effectively tackle this problem. Key Results: The key result sought is greater access to housing and urban services for the historically disadvantaged majority population. This will be achieved by working with public, private, and nongovernmental partners in four areas: 1) improving public sector policies that support and regulate the housing and urban environmental sector; 2) utilizing credit programs (such as the Urban Environmental Credit and Development Credit Authority) to increase private investment in housing and services such as water, sewerage, solid waste disposal and electricity; 3) supporting NGOs to implement programs that benefit the poorest of the poor and demonstrate improved housing and service delivery mechanisms; and 4) increasing the capacity of local government officials through training programs to plan and manage environmentally sustainable development in their communities. An additional and complementary activity is support to South Africa's climate change program, including increased energy efficiency in urban services and housing. Performance and Prospects: In 1999, USAID assisted the Departments of Housing and Constitutional Development to take giant steps in the area of home builder registration (to ensure quality control in the construction industry); in bank disclosure legislation to increase fair lending; and in the creation of public-private partnerships to bring private investment for improved urban service delivery. The Urban Environmental Credit program (formerly the Housing Guaranty Program) neared completion. Over the life of the program, $12.5 million in USAID funds was used to provide nearly $175 million in guaranties from U.S. lending institutions to South African financial institutions, which in turn leveraged $465 million for investment in housing and urban services. Over 500,000 disadvantaged households and over two million individuals benefited from new or improved housing and urban services. Two new programs were approved in FY 1999 using Development Credit Authority (DCA) to enhance private investment in water, wastewater and other municipal services. The first was a partial guarantee to the Greater Johannesburg Metropolitan Council to enable the city to obtain long term financing for urban infrastructure and services. The second was to NEWCO, a new organization that is rehabilitating lower grade municipal debt used for infrastructure investment, to decrease the cost to municipalities and enable further investment. Since 1996, USAID has supported nearly 50 NGOs to help the poorest of the poor set up savings programs, obtain consumer protection information, gain access to government housing subsidies, develop energy-efficient pilot houses, and undertake self-help construction programs that generate jobs and improve the size and quality of their houses. These NGOs were largely responsible for a major RSA policy shift in favor of self-help and savings-based lending programs. A drop in funding available to NGOs generally, and from USAID specifically, constrains the NGOs' ability to continue their innovations in providing housing to the poorest South Africans. USAID anticipates a modest NGO-led effort to investigate the impact of HIV/AIDS on the housing sector and pilot approaches to dealing with the issues that are identified. This initiative will use Child Survival and Diseases account funding. USAID has trained over 400 local officials to improve administrative capacity and local environmental management, with an emphasis on the role of community participation in development planning, private investment and decentralization. Closely linked to the training is ongoing technical assistance to the Municipal Infrastructure Investment Unit, which works with local authorities to design and finance environmentally sound infrastructure projects and to establish a legal and regulatory framework for public-private partnerships providing urban environmental services, such as water distribution networks, recycling centers and landfills and improved electrical power plants. Funding at the requested level is crucial to continue the innovative efforts in public-private partnerships. Such partnerships are the only avenue for investment in urban environmental infrastructure on the scale that South Africa needs to make a difference in the lives of its citizens. Finally, USAID supports local environmental management initiatives involving three metropolitan areas. In cooperation with the Department of Environmental Affairs and Tourism (DEAT), USAID will support similar initiatives nationwide. USAID also works with the DEAT to implement activities to combat global climate change, although progress has been slow, as climate change is not among the RSA's top priorities. Possible Adjustments to Plans: Because the credit programs have achieved such significant impact, USAID is exploring further opportunities to utilize credit in the areas of housing and infrastructure development. It is anticipated that these programs will support nontraditional, or niche lenders, who are better able to serve the target population than established banks. Other Donor Programs: USAID continues to be a leading donor in this sector. Other donors include Germany and the Netherlands, which undertake discrete housing projects, and the United Kingdom, which works with local governments. Although the World Bank has not undertaken any major loan programs, it provides limited technical assistance for studies and analyses. USAID works closely with the World Bank and the South African government on the policy development aspects of its program. Principal Contractors, Grantees, or Agencies: USAID's major partners are the RSA Departments of Housing; Provincial and Local Government; Water Affairs and Forestry; and Environmental Affairs and Tourism. USAID also works with a host of private South African financial institutions. NGOs also are major USAID partners. U.S.-based organizations include the Cooperative Housing Foundation and International City/County Managers Association. Local NGOs include the Urban Sector Network (a coalition of ten shelter NGOs), People's Housing Partnership Trust, and Kwa-Zulu Natal Project Preparation Trust. U.S. contractors include Planning and Development Collaborative (PADCO) and the Research Triangle Institute. Selected Performance Measures: Baseline (1992) Actual (1998) Target (1999) Target (2000) Target (2001) Credit obtained by historically disadvantaged populations for shelter and urban environmental services ($ millions) 0 297 393 410 426 Households assisted with shelter and other urban environmental services (thousands) 0 357 450 560 700 U.S. Finance Table (Microsoft Excel file) ACTIVITY DATA SHEET PROGRAM: South Africa TITLE AND NUMBER: Increased Use of Essential Primary Health Care and HIV/AIDS Services and Prevention and Mitigation Practices, 674-008 PLANNED FY 2000 OBLIGATION AND ACCOUNT: $1,200,000 (DA), $7,000,000 (CSD) PROPOSED FY 2001 OBLIGATION AND ACCOUNT: $9,750,000 (CSD), $1,500,000 (DFA) STATUS: Continuing INITIAL OBLIGATION: FY 1995 ESTIMATED COMPLETION DATE: FY 2004 Summary: The two most serious constraints facing South Africa's health sector are the fragmented and inequitable distribution of health resources arising from apartheid-era policies and programs and the raging HIV/AIDS epidemic, which places South Africa as one of the most seriously affected countries in the world. In 1999 it was estimated that the adult HIV prevalence rate was 15%, and projections indicate that the number could reach 25-35% by 2010. USAID will assist the Republic of South Africa (RSA) in addressing these constraints by increasing the use of essential primary health care services and practices, focusing on the Eastern Cape province but disseminating successful innovations nationwide, and by increasing the use of HIV/AIDS prevention and mitigation services and practices. The primary beneficiaries of USAID assistance are historically disadvantaged populations, especially young children and women of reproductive age. Key Results: The key results are: (1) increased access to integrated primary health care (PHC) services and HIV/AIDS prevention and mitigation services and practices; (2) increased demand for HIV/AIDS, sexually transmitted infections (STI) and tuberculosis (TB) services; (3) improved quality of integrated PHC, HIV/AIDS, STI, and TB services and practices; (4) improved sustainability of district PHC systems by adoption of lessons learned; and (5) improved enabling environment for mitigation strategies for HIV/AIDS, STI, and TB programs and services. Capacity building, particularly in the Eastern Cape Department of Health, is a key element of the program. The program uses Development Assistance (DA) funds to improve family planning client management and contraceptive logistics and Child Survival and Disease (CSD) funds for all other activities. Performance and Prospects: During 1999, key achievements supported by USAID included: (1) expansion of the TB treatment program to remote rural areas of the Eastern Cape, including initiation of two pilot programs for the integration of TB and HIV/AIDS treatment; (2) approval by the three major labor organizations of a common position vis-a-vis HIV/AIDS in the workplace, leading to the adoption of a Code of Good Conduct; (3) agreement to expand the integrated PHC approach to a second province; and (4) completion of the South African Demographic Health Survey--the first of its kind since the end of apartheid and an important step for monitoring and planning in the health sector. At the same time, the need for management training and the adequacy of provincial financial resources to sustain health system transformation has proven to be underestimated. In FY 2001, USAID expects the integrated PHC program to focus on documenting, disseminating and implementing lessons learned to other provinces. A comprehensive HIV/AIDS prevention and mitigation program involving government, business, labor unions and NGOs will be in place. To be effective, this will require close program linkages with USAID's education, democracy/governance, housing and private sector portfolios. Possible Adjustments to Plans: None. Other Donor Programs: The RSA provides over 90% of all funds for the health sector. The United States is the third largest donor, after the European Union and the United Kingdom. Principal Contractors, Grantees, or Agencies: Management Sciences for Health, a U.S. nonprofit institution, is the principal institutional contractor for the primary health care component. USAID also maintains a Participating Agency Services Agreement with the Centers for Disease Control, which will be expanded to include other agencies within the U.S. Department of Health and Human Services. Selected Performance Measures: Baseline (1997) Actual (1998) Target (1999) Target (2000) Target (2001) Immunization coverage, % of children under 24 months receiving measles vaccine (Eastern Cape) 57 65 73 78 82 Percentage of women obtaining prenatal consultation (Eastern Cape) 65 67 58 72 78 Percent of male STI cases receiving treatment 54 56 70 75 80 * Data is collected every five years through the Demographic Health Survey (DHS). The next data will be available in 2003. ** The recently-conducted DHS will provide data for nationwide indicators. U.S. Finance Table (Microsoft Excel file) ACTIVITY DATA SHEET PROGRAM: South Africa TITLE AND NUMBER: Increased Market-Driven Employment Opportunities, 674-009 PLANNED FY 2000 OBLIGATION AND ACCOUNT: $5,540,000 (DA) PROPOSED FY 2001 OBLIGATION AND ACCOUNT: $6,857,000 (DFA) STATUS: Continuing INITIAL OBLIGATION: FY 2001 ESTIMATED COMPLETION DATE: FY 2007 Summary: Unemployment is the major cause of widespread poverty in South Africa and a key factor in the high crime rate. While political participation has greatly improved with the establishment of a democratic government, South Africa's economic transformation clearly has lagged behind. Unemployment stands at 23% and for most of those with jobs, productivity and wages are low. As a result, nearly 50% of South Africans live below the poverty line. The incidence of poverty is highest in the previously disadvantaged population, in rural areas and among female-headed households. In 1997, 27% of African households earned less than $100 per month. Lack of progress in improving the economic circumstances poses a threat to South Africa's democratic gains. The challenge is to reduce poverty through rapid economic growth that generates productive employment and fosters a more equitable distribution of income. For this reason, USAID is revising its private sector strategic objective from a focus on increasing access to capital markets to an emphasis on market-driven employment for the historically disadvantaged population. Key Results: USAID will increase market-driven employment by supporting the growth of existing small and medium-scale enterprises and agribusinesses, especially those engaged in relatively labor-intensive production and services. Worldwide experience indicates that small and medium-sized enterprises are the most efficient sources of job creation. Growth-oriented micro-enterprises that already employ several people and have linkages to secondary supply and marketing organizations also have the potential to create new jobs. The new program will have a two-pronged approach: promoting growth of non-agricultural small, medium and micro-enterprises (SMMEs) in urban and peri-urban areas, and promoting the growth of small-scale agribusinesses in rural areas. The program will build on USAID's successful business linkage and facilitation activities and refocus other existing activities. The program will incorporate the following elements: 1) identification of markets for SMMEs, primarily through domestic and international linkages; 2) development of SMME capacity to capitalize on market opportunities through improved business and entrepreneurial skills, introduction of value-added technologies, and more efficient use of publicly-owned resources; and 3) identification of potential loan and equity capital sources and facilitation of loans and equity investments. Limited assistance will be provided to the Republic of South Africa (RSA) Departments of Agriculture, Trade and Industry, and Public Enterprises to identify and alleviate specific sectoral and sub-sectoral policy and regulatory constraints to business development. The owners and employees of the SMMEs and agribusinesses participating in the program will be the direct beneficiaries. The program will target previously disadvantaged and women-owned SMMEs and agribusinesses. The majority of agribusinesses will be in the rural areas. Performance and Prospects: USAID's existing private sector portfolio has performed exceedingly well and provides a solid basis for the new program. USAID efforts directly improved the historically disadvantaged population's access to financing for SMMEs. USAID has been instrumental in the provision of $39.3 million in loans and equity financing to over 132 enterprises since 1997. USAID's efforts to link historically disadvantaged small and medium enterprises with larger corporations continued to far exceed expectations. Over a three year period, 299 historically disadvantaged firms successfully tendered for contracts with larger corporations at a value of approximately $21 million (compared with a planned $2 million in contracts with 50 firms). USAID expects its SMME program to leverage a cumulative total of $102 million in private sector financial resources by FY 2001. Through USAID-supported microenterprise programs, 22,956 microenterprises were able to access loans totaling $8.1 million, the vast majority of which consisted of loans of less than $300. In the privatization arena, USAID programs have helped firms leverage over $37 million for the purchase of public enterprises. Possible Adjustments to Plans: None. Other Donor Programs: Principal donors in SMME development in South Africa are Denmark, the European Union, the United Kingdom, Norway, and Sweden, as well as the World Bank and the International Finance Corporation. Principal Contractors, Grantees, or Agencies: The RSA Departments of Agriculture, Trade and Industry, and Public Enterprise are three key government counterparts. All USAID initiatives support the goals and objectives of these South African entities. U.S. contractors and grantees include the Corporate Council on Africa; Deloitte Touche Tohmatsu; Eccles Associates; and Agricultural Cooperative Development International/Volunteers in Overseas Cooperative Assistance. Other South African and U.S. firms, private voluntary organizations, nongovernmental organizations, and U.S. government entities will be determined in the course of the new program. Selected Performance Measures: Baseline (1997) Actual (1998) Target (1999) Target (2000) Target (2001) Cumulative number of employment opportunities created by USAID-supported activities under the new program * * 0 0 5,000 Cumulative dollar value of business transactions for USAID-assisted SMMEs and agribusinesses ($millions) * * 0 20 50 * This is a new program; baseline measurements are for FY 1999. U.S. Finance Table (Microsoft Excel file)

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