South Africa is home to some of the world’s oldest human fossils, and during the modern era the region was settled by Khoisan and Bantu peoples. Dutch traders landed at the southern tip of modern day South Africa in 1652 and established a stopover point on the spice route between the Netherlands and the Far East, founding the city of Cape Town. After the British seized the Cape of Good Hope area in 1806, many of the Dutch settlers (Afrikaners, called "Boers" (farmers) by the British) trekked north to found their own republics, Transvaal and Orange Free State. The discovery of diamonds (1867) and gold (1886) spurred wealth and immigration and intensified the subjugation of the native inhabitants. The Afrikaners resisted British encroachments but were defeated in the Second South African War (1899-1902); however, the British and the Afrikaners, ruled together beginning in 1910 under the Union of South Africa, which became a republic in 1961 after a whites-only referendum. In 1948, the Afrikaner-dominated National Party was voted into power and instituted a policy of apartheid - the separate development of the races - which favored the white minority at the expense of the black majority. The African National Congress (ANC) led the opposition to apartheid and many top ANC leaders, such as Nelson MANDELA, spent decades in South Africa's prisons. Internal protests and insurgency, as well as boycotts by some Western nations and institutions, led to the regime's eventual willingness to negotiate a peaceful transition to majority rule.
The first multi-racial elections in 1994 following the end of apartheid ushered in majority rule under an ANC-led government. South Africa has since struggled to address apartheid-era imbalances in decent housing, education, and health care. Jacob ZUMA became president in 2009 and was reelected in 2014, but was forced to resign in February 2018 after numerous corruption scandals and gains by opposition parties in municipal elections in 2016. His successor, Cyril RAMAPHOSA, has pledged to crack down on corruption and shore up state-owned enterprises, and is the ANC’s likely candidate for May 2019 national elections.
Economic growth is set to strengthen in 2018-19, driven by increased business and consumer confidence. A favourable outlook in trading partners will benefit exports. Private consumption will expand, albeit at a slightly lower rate than in 2017 due to tax increases. Employment trends remain a concern.
Inflation is projected to remain in the target range, reflecting an assumed stable strong exchange rate, which lessens the effect of higher international oil prices and thus the upward pressure from the VAT hike. Monetary policy is projected to be moderately expansionary, which is appropriate to support growth. The government budget for 2018-19 remains tight, but tax reforms will create some fiscal room for much needed investment in higher education and social benefits. Once the fiscal situation improves, government debt reduction needs to be advanced. Network regulation reforms aimed to broaden competition can further support growth.
Source: OECD - Economic Forecast
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Air Services agreement
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