National Context relevant to UN/UNDP development dynamics
Since the end of apartheid in 1994, the Republic of South Africa has experienced remarkable social and political transformation that has ushered in participatory democracy, refinement of democratic institutions and improvement in inclusive social services. It is one of the few African countries experiencing smooth, less rancorous and less-violent political transition in recent times.
The country's policy landscape is characterized by: (i) a strong human rights based Constitution; (ii) commitment to multilateral agreements and regional initiatives; (iii) a robust development framework which includes a number of programmes such as: Reconstruction and Development Program (RDP); Integrated Sustainable Rural Development Program (ISRDP); Growth, Employment and Redistribution (GEAR), Urban Renewal Program (URP), Expanded Public Work Program (EPWP), and Accelerated and Shared Growth Initiative for South Africa (Asgi-SA). 
Since the commencement of participatory democracy, South Africa has also enjoyed robust and stable macroeconomic environment until the emergence of current global economic crisis. As the 20th largest economy in the world which contributes 38 percent of Sub-Saharan Africa's GDP, it has succeeded in transiting from an economy driven by the government to the one propelled by the private sector, and creating conducive investment climate and robust stock exchange. All these have contributed to:
- A steady growth of GDP which rose from an average of 3% during 1994-2003 to 5% during 2004-2007.
- Between 1999 and the first quarter of 2008, the real sector of the economy experienced uninterrupted expansion.
- Between 2002 and 2005, the Rand was rated the world's most actively traded emerging market currency (a la the Bloomberg's Currency Scorecard).
- Prudent macroeconomic policies and strong fiscal discipline (from a deficit of about 7% in 1993/94 to surplus about two years ago) has lead to low inflation (but currently being affected by global increase in food prices and recent weakness in Rand) and increasing investor confidence.
This performance rekindles Africa's hope of becoming a significant player in the globalization process. The award of the 2010 FIFA World Cup to the country is an indication of this recognition. Since 2003, South Africa's current account deficit has grown steadily; reaching 9% of GDP in the first quarter of 2008 - a trend that looks unsustainable and could be disruptive in the face of cut down in inflow of foreign capital. In spite of this, however, the country faces some challenges. The key development challenges are:
- spatial poverty and accelerating inequality;
- high unemployment with growth in labour force outstripping the growth of the economy;
- high HIV/AIDS which has assumed a serious development challenge to the country;
- capacity constraints both at sub-national government level (which is affecting service delivery) and increasing low skill content of the educational system (which reduces the employability of youth);
- the emerging trend of xenophobia and the increasing wave of refugees and asylum seekers from neighbouring countries with its humanitarian implications; and
- a polarized economy between first and second economies with limited strategies
AWP 2011-2012