South Africa isSouth Africa: Current Issues, Economy, and July 30, 2020 U.S. Relations Nicolas Cook South Africa, a majority black, multiracial country of nearly 5860 million people. It, has cordial Specialist in African Affairs relations with the United States, notwithstanding some occasionalperiodic strains, and is the largest U.S. trade partner in Africa. South African President Cyril Ramaphosa is spearheading efforts to address years of weak economic growth and multipletook office in 2018, after a series of corruption scandals under the administration of his predecessor, Jacob Zuma. Zuma, elected in 2009, resigned under intense pressure in early 2018, shortly after then-Vice President Ramaphosa was elected to replace Zuma as leader of the African National Congress (ANC), South Africa’s dominant party. The ANC has held a parliamentary majority since the his predecessor, Jacob Zuma. These issues helped spur Zuma's resignation in early 2018 and led to the election of Ramaphosa, who succeeded Zuma as African National Congress (ANC) party leader in late 2017. The ANC is the dominant party in South Africa; it has held a parliamentary majority since the country's first universal suffrage elections in 1994, which marked the end of apartheid, a codified system of codified state racial bias favoring whites, but is facing headwinds. In the lastof racial bias. In the most recent general elections, in May 2019, the ANC again won a National Assembly majority, but it did so with it earned 57.5% of the vote, —its lowest margin ever. After the elections, the Assembly reelected Ramaphosa as national president.

Corruption South Africa has Africa’s largest Coronavirus Disease 2019 (COVID-19) caseload and a rapidly accelerating outbreak, which has devastated the economy and sharply intensified prior challenges facing the government. Notable among these are years of anemic economic growth and corruption linked to Zuma and a network of business and political associates tied to him. Such graft was was reportedly so systematic that it was dubbed "“state capture."” Multiple efforts to address this problem remainare underway, including a high-profile commission of judicial inquiry into state capture. Zuma is also . Zuma also is being tried on charges linked to a 1990s-era arms procurement scandal. Broader challenges include high levels of poverty, social inequality, and unemployment, and unequal access to public services. Such problems disproportionately affect the generally poor black majority, the main victims of apartheid. Unequal access to land is a particularly sensitive issue. State land redistribution efforts have soughtpurchasing scandal. South Africa has the most diversified and industrialized economy in Africa, but has suffered several years of low growth attributable to such factors as low prices for commodity exports, weak investor confidence, policy uncertainty, and rigid local labor markets. The impacts of COVID-19 may further contribute to this low growth pattern. Key socioeconomic challenges include high rates of poverty, social inequality, unemployment, and public service access disparities—problems that disproportionately affect blacks. Unequal access to land is a notably sensitive issue. State land redistribution efforts have aimed to ensure greater access to land by blacks and other historically disadvantaged groups, but progress has been slow. In 2018, pressure to speed this process prompted the government to launch an ongoing effort to amend the constitution to permit uncompensated land expropriation. South Africa also struggles withOther key challenges include violent crime, periodic xenophobic anti-immigrant violence, labor unrest, and protests over public service delivery and corruption. delivery and corruption.

South Africa has the most diversified and industrialized economy in Africa, but has suffered years of anemic growth attributable to a range of international and domestic factors. The Ramaphosa administration has made economic growth a priority, and is pursuing a range of efforts to reduce unemployment, poverty, and socioeconomic inequality; improve education and healthcarepublic service delivery; and unite a socioeconomically, geographically, and racially divided society. It is alsoalso is seeking to attract $100 billion in new investment over five years, and has elicited more than $55 billion in pledges to date. The government also is pursuing an ongoing but controversial effort to amend the constitution to permit uncompensated land expropriation. and has elicited at least $55 billion to date.

Congress played a leading international role in efforts to end apartheid, although some South African decisionmakers appear to harbor abiding resentments toward the United States as a result of the Reagan Administration's approach to achieving this goal and its posture toward the ANC. Contemporary U.S.-South African ties are cordial, based on shared democratic values and often-concordant views on regional development goals. The two countries maintain a bilateral strategic dialogue, and the United States provides substantial aid to South Africa, primarily to combat the country'’s HIV/AIDS epidemic. U.S.-South African views nevertheless regularly diverge, however, on international policy matters (e.g.,, such as Palestinian statehood, and responses tostances on Iran and Venezuela). There have also been periodic trade frictions. In 2015 and 2016, the two countries had a poultry and meat trade dispute, and in 2018 the Trump Administration imposed tariffs on U.S. imports of steel and aluminum, including from South Africa. South Africa was later exempted from many of these tariffs, but prospective U.S. tariffs on autos and some auto parts could spur renewed strains. The Trump Administration has not otherwise pursued any . Some South African officials also appear to harbor abiding resentments toward the United States, likely attributable to the Reagan Administration’s hostility toward the ANC, which that Administration designated a terrorist group. There also has been periodic friction on a variety of trade issues, including South African eligibility for U.S. duty-free benefits and Trump Administration trade restrictions affecting certain South African exports. The Trump Administration has not pursued any other major changes in the bilateral relationship. An August, and is providing South Africa with COVID-19 assistance. A 2018 tweet by President Trump alleging that South Africa'’s government was seizing white-owned farmland and that large numbers of farmers were being killed, however, drew criticism from the South African government, among other actors.

killed drew criticism; it was questioned on factual and other grounds by a range of commentators and South Africa’s government. In recent years, bilateral congressional activity has mainly focused on U.S. healthcare assistance, trade issues, and consultations during periodic congressional travel to the country. U.S.-South African relations arguably have the potential to deepen, particularly given President Ramaphosa's prioritization of efforts to reassert the rule of law and turndeepen, although such an outcome might require dedicated efforts by the two sides. If President Ramaphosa demonstrates concrete progress in reasserting the rule of law and turning around the ailing economy, following substantial deterioration in these areas under former President Zuma. Congressional Research Service link to page 4 link to page 4 link to page 7 link to page 10 link to page 15 link to page 16 link to page 19 link to page 20 link to page 22 link to page 26 link to page 29 link to page 32 link to page 32 link to page 33 link to page 34 link to page 35 link to page 8 link to page 12 link to page 8 link to page 24 link to page 24 link to page 36 South Africa: Current Issues, Economy, and U.S. Relations Contents Introduction ..................................................................................................................................... 1 U.S. Relations .................................................................................................................................. 1 Non-COVID-19 U.S. Assistance ............................................................................................... 4 Country Overview ........................................................................................................................... 7 Politics and Governance ................................................................................................................ 12 Ramaphosa Administration ..................................................................................................... 13 Land Issue ......................................................................................................................... 16 COVID-19 in South Africa ............................................................................................................ 17 The Economy ................................................................................................................................ 19 COVID-19: Economic Impacts and Responses ...................................................................... 23 U.S. Trade and Investment ............................................................................................................ 26 South Africa and the Rest of the World ......................................................................................... 29 Africa ...................................................................................................................................... 29 China and the BRICS ........................................................................................................ 30 Middle East Issues ............................................................................................................ 31 Outlook .......................................................................................................................................... 32 Figures Figure 1. South Africa: State Department/USAID Aid Trends, FY2012-FY2021 .......................... 5 Figure 2. South Africa at a Glance .................................................................................................. 9 Tables Table 1. South Africa: State Department/USAID Aid by Account, FY2017-FY2021 .................... 5 Table 2. South Africa: GDP and Other Key Economic Indicators, 2015-2020 ............................. 21 Table 3. South Africa: Key Trade Indicators, 2014-2018 .............................................................. 21 Contacts Author Information ........................................................................................................................ 33 Congressional Research Service South Africa: Current Issues, Economy, and U.S. Relations Introduction South Africa, a majority black, multiracial country of nearly 60 million people, has the most diversified and industrialized economy in Africa, but has suffered years of low growth and is burdened by deeply embedded socioeconomic inequalities. President is Cyril Ramaphosa (rah-mah-POH-sah), of the majority African National Congress (ANC) party, is leading a reform agenda aimed at improving the economy and public service delivery, and addressing corruption. Coronavirus Disease 2019 (COVID-19) has sharply intensified the already formidable economic and health challenges facing South Africa, which include a high HIV/AIDS prevalence rate. The National Assembly elected then-Vice President Ramaphosa as president in early 2018, following the resignation of his predecessor, Jacob Zuma. Zuma stepped down in the face of a economy, following substantial deterioration in these areas under former President Zuma, the country may become more attractive as a U.S. partner. Greater cooperation and collaboration can be envisioned regarding trade and investment, responses to political-military and development challenges in Africa and other global regions, educational and cultural exchange, and technical cooperation in multiple areas. In recent years, South Africa-related congressional activity has mainly focused on U.S. healthcare assistance, trade issues, and consultations during periodic congressional travel to the country. Given South Africa's economic and political influence within Africa and on African and developing country positions in multilateral contexts—which do not always dovetail with those of the United States—some Members of Congress may see a need to expand the scope and broaden the focus of congressional and other U.S. engagement with South Africa.

South Africa, a majority black, multiracial country of nearly 59 million people, last held general elections May 2019. The African National Congress (ANC) retained the parliamentary majority that it has enjoyed since the country's first universal suffrage elections in 1994, but it did so with its lowest share of votes since taking power. After the election, the National Assembly reelected President Cyril Ramaphosa (rah-mah-POH-sah). He was first elected in early 2018, after his predecessor, Jacob Zuma, resigned under the threat of a parliamentary no confidence vote after defying a decision by ANC leaders to recall him as the party's national presidential nominee. Zuma had faced intense pressure to step down after years of weak economic growth and multiple corruption scandals under his tenure. The ANC replaced Zuma with then-Vice President Ramaphosa, who had won the party presidency in late 2017. Ramaphosa is leading a reform agenda to address economic malaise and corruption. Local and international expectations of him are high, but he faces diverse fiscal, structural, and political challenges.

’s national presidential nominee—in large part as a result of multiple corruption scandals. Discontent with Zuma had helped cement Ramaphosa’s victory in a bruising late 2017 ANC election to lead the party, which has suffered a gradual loss of electoral support in recent years. While the ANC was able to retain a parliamentary majority in the last general elections, held in May 2019—a majority it has held since the country’s first universal suffrage polls in 1994—it earned 57.5% of votes, its lowest share to date. After the election, the parliament, under the country’s indirect presidential election system, voted to re-elect Ramaphosa as president. U.S. Relations U.S. Relations

U.S.-South Africa ties are cordial, based in part on shared democratic values and broad bilateral accord on African development goals, and the State Department describes South Africa as a strategic U.S partner.¹ High. There is a large U.S. diplomatic presence in South Africa, which has periodically hosted high-level U.S. leadership visits, including two presidential visits by former President Barack Obama. While South Africa is a U.S. strategic partner—as reflected in a bilateral U.S.-South African Strategic Partnership launched in 2010 during the Obama Administration—high-level bilateral engagement is not as frequent or as multifaceted as it is with some other U.S. strategic partners, however, and South Africa has attracted very limited legislative attention in recent years. South Africa-related congressional activity.1 South Africa-related congressional activity, which has been limited in recent years, has centered mostly on U.S. healthcare assistance, notably regarding HIV/AIDS, and trade issues, including during periodic Membercongressional travel to the country. Given South Africa'’s economic and political influence in Africa and diplomatic sway among developing countries in multilateral institutions, some Members of Congress may see a scope for increased U.S. engagement with South Africa, a top African recipient of U.S. assistance for years.2 The United States and South African differ on a range of foreign policy issues, and South Africa periodically criticizes U.S. positions on such matters, but these differences have historically played a limited role in bilateral relations. South Africa is critical of Israel’s policies toward the Palestinians and maintains cordial relations with U.S. adversary Iran, and there has been divergence on other issues, such as responses to Venezuela’s crisis and sanctions on Zimbabwean officials. South Africa also strongly opposed the Trump Administration’s withdrawal from the 1 The last full biennial Strategic Partnership dialogue was held in 2015. Subsidiary “bilateral forums” were held in 2016 and 2017 to review cooperation, which has centered on such areas as health, education, food security, law enforcement, trade, investment, and energy, among other issues. State Department, “Joint Statement: 8th South African-United States Annual Bilateral Forum, 8 June 2017,” June 13, 2017, and “U.S. Relations with South Africa,” January 14, 2020. 2 Senators and Foreign Relations Committee (SFRC), “Bipartisan Foreign Relations Committee Senators’ Statement on Election Results in South Africa,” May 14, 2019, and “Chairman Risch and South Africa’s Foreign Minister Meet to Discuss Strategic Partnership,” August 21, 2019. Congressional Research Service 1 link to page 29 link to page 19 South Africa: Current Issues, Economy, and U.S. Relations U.N. Framework Convention on Climate Change. South Africa’s U.N. General Assembly votes often differ from U.S. ones—though the two countries’ U.N. Security Council (UNSC) votes during South Africa’s current UNSC tenure have been congruent.3 Some South African officials also have periodically made remarks suggesting that they hold anti-U.S. biases.4 Such views may be influenced by historic grievances among some South Africans over Reagan Administration policy toward the ANC during the apartheid era.5 Apartheid was a codified, state-enforced system of racial segregation and socioeconomic and legal discrimination favoring the white minority. It ended with South Africa’s transition to universal suffrage in the early 1990s. South Africa also is a key regional export and investment destination for U.S. firms—hundreds operate in the country, often via local subsidiaries—and has been the largest U.S. trade partner in Africa since 2014. The United States, which enjoys a services trade surplus with South Africa but has long had a trade deficit in goods with the country, also is South Africa’s largest overall source of foreign investment.6 While U.S.-South African economic ties are generally U.S. engagement with South Africa.

There is a large U.S. diplomatic presence in South Africa, which has periodically hosted high-level U.S. leadership visits, including two presidential visits by former President Barack Obama. South Africa has been a top African recipient of U.S. assistance for years. For over a decade, such assistance has centered primarily on healthcare, notably HIV/AIDS-related programs implemented under the U.S. President's Emergency Plan for AIDS Relief (PEPFAR), announced by President George W. Bush in 2003. The United States has also supported South African-implemented development and crisis response activities in other African countries. In 2010, the Obama Administration and the South African government initiated a U.S.-South African Strategic Partnership. While it remains in effect, the last full biennial dialogue was held in 2015. Subsidiary
"bilateral forums" were held in 2016 and 2017 to review cooperation in multiple areas.²

Since 2014, South Africa has been the largest U.S. trade partner in Africa. South Africa is also a key regional export and investment destination for U.S. firms; more than 600 operate in the country, often via local subsidiaries. The United States is South Africa's largest source of all types of foreign investment.³ South Africa has long enjoyed a significant trade surplus in goods with the United States, but there is a substantial U.S. surplus in trade in services. In general, while U.S.-South African economic ties are positive, trade has been a source of occasional friction—notably during the Trump Administration. It has imposed or signaled a willingness to potentially levy tariffs applicable to selected South African metal and manufactured exports, as well as to review South Africa’s eligibility for trade preferences (see “U.S. Trade and Investment”). Apart from trade matters, there has been limited new or top-level bilateral engagement under the Trump Administration. In 2017, President Trump and then-President Zuma spoke by telephone on “ways to expand” trade and advance bilateral cooperation on trade and in other areas, including counter-terrorism and multilateral and African peace and stability issues.7 In an April 2020 phone conversation, Presidents Trump and Ramaphosa also discussed South Africa’s efforts to combat COVID-19, for which the United States is providing assistance. There has been some bilateral friction over social media statements made by President Trump. In early 2018, the South African government summoned the U.S. chargé d’affaires to explain President Trump’s alleged use of an obscenity to refer to several African countries.8 In August 2018, President Trump sparked controversy by posting a tweet on land expropriation and reform in South Africa, drawing South African government criticism (see “Land Issue” below). Despite differences on land issues, in October 2019, the Trump Administration signaled support for the 3 In 2019, South African votes in the U.N. General Assembly coincided with those of the United States 22% of the time, but the two countries’ votes have aligned 91% of the time within the Security Council during South Africa current non-permanent UNSC membership, which ends in 2021. State Department, Voting Practices in the United Nations 2019, May 21, 2020. 4 J. Brooks Spector, “Analysis: Mantashe’s Conspiracy Theories,” Daily Maverick, February 23, 2016; and J. Peter Pham, “South Africa’s Bizarro-World Foreign Policy,” Atlantic Council blog, August 24, 2015, among others. 5 During the anti-apartheid struggle, the Reagan Administration categorized the ANC as a terrorist organization. The Reagan Administration, in contrast to many in Congress, sought to promote change within the apartheid regime, with which it shared anti-communist goals, by pursuing a so-called “constructive engagement” with that regime. 6 As of late 2018 (latest data), the United States was the country’s largest source of portfolio investment and the fourth largest source of foreign direct investment. South African Reserve Bank, Quarterly Bulletin. No. 295, March 2020; and U.S. Bureau of Economic Analysis (BEA), South Africa - International Trade and Investment Country Facts. 7 White House, “Readout of the President’s Call with President Jacob Zuma of South Africa,” February 15, 2017; and Government of South Africa (GOSA) “President Zuma had Telephonic Discussions with President Trump of the USA,” February 13, 2017. 8 Kutullo Madisha, “Explanations wanted for ‘shithole’ remarks,” New Age, January 15, 2018; Krista Mahr, “South Africa summons US diplomat to explain Trump comment,” AP, January 15, 2018; Peter Fabricius, “US, SA agree not to step in the by-product of Trump’s racist statement,” Daily Maverick, January 16, 2018; and GOSA, “Meeting with United Sates Embassy and United States Chargé d'Affaires,” January 15, 2018. Congressional Research Service 2 South Africa: Current Issues, Economy, and U.S. Relations Ramaphosa administration’s efforts to seek accountability for the embedded pattern of public corruption under the Zuma administration by sanctioning actors alleged to have been involved in such activity.9 Administration officials also have expressed optimism over prospects for bilateral trade and investment expansion and support for South African engagement in fostering peace and stability in Africa.10 Recently, South African views of racial inequality and violence in the United States also have featured in bilateral relations. In June 2020, the South African government condemned violence during mass U.S. protests triggered by the killing of George Floyd and other African Americans by local U.S. police. The government did so despite recently having faced its own protests about South African national police use of violence during the COVID-19 pandemic.11 Administration officials identified South Africa as a prominent backer of a U.S.-opposed draft resolution in the U.N. Human Rights Council (UNHRC) aimed at addressing U.S. racial issues. It was proposed by the UNHRC Africa Group and debated and amended at a June 17/18 UNHRC meeting.12 Luxury handbag designer Lana Marks has been U.S. ambassador to South Africa since late 2019, when she filled a post that had been vacant since 2016. She reportedly has proactively sought to foster renewed bilateral engagement and cooperation, notably regarding trade and efforts to counter HIV/AIDS. She also has emphasized efforts to address gender-based violence and women’s socioeconomic empowerment. Marks has said that she aspires to make South Africa a U.S. top-twenty trade partner—a tall order, given that South Africa was the 40th-largest U.S. trade partner in 2019. She reportedly suggested to President Ramaphosa that he and President Trump co-host a U.S.-Africa investment summit in Washington, DC featuring leaders from across Africa.13 Marks has drawn some congressional concern over “management and ethics practices” relating to her leadership of the embassy14 and for not self-isolating after potentially being exposed to COVID-19 during a presidential dinner in the United States. 15 9 U.S. Treasury, “Treasury Sanctions Members of a Significant Corruption Network in South Africa,” October 10, 2019. 10 State Department, “The Enduring Partnership Between the United States and South Africa,” June 21, 2019; and U.S. Export-Import Bank, “Statement by EXIM Chairman Kimberly Reed upon the Inauguration of South African President Cyril Ramaphosa,” May 25, 2019. 11 The South African government also called for “practical action to address” U.S. policy “inadequacies” relating to racial inequity in the observation of human rights in the United States and called on U.S. security forces “to exercise maximum restraint in responding to the anger and frustration felt” by the protesters. GOSA, “South Africa’s Statement regarding protests in America following the death of Mr. George Floyd,” June 2, 2020. 12 The United States did not participate in the debate, as the Trump Administration had withdrawn from the UNHRC in 2018. As first proposed, the resolution would have established an international commission of inquiry on systemic racism in U.S. law enforcement, but it was amended to require a report on law enforcement racism and human rights violations targeting Africans and people of African descent, in the United States and elsewhere. Stephanie Nebehay, “Exclusive: African nations seek U.N. inquiry into U.S. racism, ‘police brutality’-text,” Reuters, June 16, 2020; Agence France Presse (AFP), “UN Racism Probe Would Be ‘Ridiculous,’ US Official Says,” June 16, 2020; and CRS Report RL33608, The United Nations Human Rights Council: Background and Policy Issues, by Luisa Blanchfield and Michael A. Weber; and text of resolution. 13 Peter Fabricius, “US Ambassador’s Ambition: Lift SA Into Top 20 of US Trade Partners,” Business Maverick, January 31, 2020 and “It’s All About Trade and Investment-Trump’s Ambassador to South Africa, Lana Marks, Daily Maverick, November 14, 2019; Lana Marks, “Count US In: Helping Young South African Women Reach Their Dreams,” Mail & Guardian, December 11, 2019 and “Lana Marks: The US and South Africa are Stronger Together,” News24, November 13, 2019; and U.S. International Trade Commission (USITC), Trade Data Web. 14 Robbie Gramer, “At Embassies Abroad, Trump Envoys Are Quietly Pushing Out Career Diplomats,” February 5, 2020, and “State Stonewalls Congress on Embassy Oversight,” February 7, 2020, both in Foreignpolicy.com; and Sarah Smit, “Trump’s Ambassador to SA Under Fire for Nepotism Allegations,” Mail & Guardian, February 10, 2020. 15 Anne Gearan and Carol Morello, “U.S. Envoy to S. Africa at Trump Dinner with Infected Brazilians,” Washington Congressional Research Service 3 link to page 8 link to page 8 South Africa: Current Issues, Economy, and U.S. Relations Congressional Role. been a source of occasional friction. Differences over foreign policy issues also periodically roil ties. South African officials are critical of Israel's policies toward the Palestinians, for instance, and South Africa maintains cordial relations with Iran, a key U.S. adversary. There have also been divergences on other issues, as illustrated by a lack of congruence between South African and U.S. votes in the United Nations, and regarding responses to the crisis in Venezuela and targeted sanctions on Zimbabwean officials.⁴ South Africa opposed the Trump Administration's decision to withdraw the United States from the U.N. Framework Convention on Climate Change, a shift from the general bilateral policy congruence on this issue during the Obama Administration.

Congress has long played an active role in U.S.-South African relations. This was particularly true during the struggle against apartheid, from the late 1960s until the first universal franchise vote in 1994. Starting in the 1960s, Congress sought to inducehelp spur a democratic changetransition by repeatedly imposing conditions and restrictions on U.S. relations with the apartheid regime. These efforts culminated in Congress's enactment—in votes overriding President Reagan's veto—’s enactment of the Comprehensive Anti-Apartheid Act of 1986 (P.L. 99-440)), passed over a veto by then-President Reagan. Congressional attention toward South Africa remained strong during its continuing transition over the following decade. the decade after its post-1994 transition. In recent years, congressional engagement with South Africa has mainly focused on oversight of foreign aid programs, notably health programs funded under the U.S. President’s Emergency Plan for AIDS Relief (PEPFAR) initiative.16 Trade and investment relations also have aid program—particularly South Africa's relative progress in building its capacity to address its HIV/AIDS crisis and gradually assuming greater responsibility for HIV program financing and implementation, key goals under PEPFAR.⁹

Efforts to bolster trade and investment ties with South Africa, as with Africa generally, have also drawn attention in recent congresses.17 In 2015 and 2016, congressional action, including Congress'sCongress helped to resolve a meat-related trade dispute, including by mandating of a special review of South Africa'’s eligibility for U.S. trade benefits, helped to resolve a poultry and meat-related trade dispute. Several Members also. More recently, several Members sought to reverse the Trump Administration'’s 2018 application of steel and aluminum tariffs to South Africa. Renewed trade discord could arise, and potentially draw congressional attention, as a result of South Africa’s recent imposition of new poultry import tariffs and the eventual outcome of an ongoing U.S. Trade Representative (USTR) assessment of the country’s eligibility for U.S. trade benefits (see below). Non-COVID-19 U.S. Assistance18 Since 1994, South Africa has been a top African recipient of U.S. aid programs, most focused on health programs and funded by State Department and USAID-administered appropriations. These agencies often collaborate with and transfer funds to other specialized U.S. agencies, notably the U.S. Centers for Disease Control and Prevention (CDC), which plays a key technical role in PEPFAR implementation. Following PEPFAR’s authorization in 2003 (in P.L. 108-25), U.S. funding for South Africa rose from $29 million in FY2003 to nearly $580 million in FY2010. Aid levels then declined before rising again to a peak of almost $735 million in FY2019. Cumulative PEPFAR funding for South Africa, which is drawn primarily from the Global Health Programs (GHP)-State and GHP-USAID accounts, has totaled $7.25 billion to date. State Department and USAID-administered assistance totaled $482.5 million in FY2020 (see Table 1). The Trump Administration requested $242 million for FY2021. While Congress’s response to the request has yet to be determined, in recent years, Congress and the Administration have jointly allocated bilateral aid in excess of levels requested by the Administration (see Figure 1, below).19 Post, March 22, 2020; and Arshad Mohammed, “U.S. Envoy to South Africa Draws Fire after Possible Virus Exposure,” Reuters, March 20, 2020, inter alia. 16 A key focus of interest has been South Africa’s relative progress in controlling its HIV/AIDS epidemic and assuming responsibility for such efforts, which are key PEPFAR goals. The Consolidated Appropriations Act of 2014 (P.L. 113-76) required a report to Congress on projected levels and types of U.S. assistance to be provided under PEPFAR. The report was subsequently submitted to Congress. 17 Senate Foreign Relations Committee, “Chairman Risch and South Africa’s Foreign Minister Meet to Discuss Strategic Partnership,” August 21, 2019; Voice of America (VOA), “Senators Seek to Reaffirm Value of US-Africa Relations,” April 12, 2018; and City Press, “US Senators Eye Local Investment,” April 8, 2018, among others. 18 This section does not address COVID-19 assistance, which is discussed later in this report. 19 State Department, Congressional Budget Justification Foreign Operations (CBJ), various years, and State Department response to CRS query May 7, 2020. Congressional Research Service 4 South Africa: Current Issues, Economy, and U.S. Relations Figure 1. South Africa: State Department/USAID Aid Trends, FY2012-FY2021 Note & Sources: Amounts rounded to nearest $ mil ion. State Department congressional budget justifications. FY2020 “actual” amount reflects initial estimated al ocation. Table 1. South Africa: State Department/USAID Aid by Account, FY2017-FY2021 (Current $ in millions, actual or requested. Numbers may not sum due to rounding) FY2017 FY2018 FY2019 FY2020 FY2021 Account Actual Actual Actual Est. Request Total 471.0 586.6 735.0 482.5 241.7 Development Assistance (DA) 6.5 5 3.0 3.0 - Economic Support and Development Fund (ESDF) - - - - 2.0 Global Health Programs–State (GHP-State) 450.1 560.1 668.3 414.4 225.0 Global Health Programs–USAID (GHP-USAID) 13.0 20.8 63.0 65 14.0 International Military Education & Training (IMET) 0.9 0.7 0.7 0.7 0.7 International Narcotics Control & Law Enforcement (INCLE) 0.2 - - - - Nonproliferation, Antiterrorism, Demining & 0.3 - - - - Related Programs (NADR) Source: State Department annual foreign aid budget justifications and FY2020 initial allocation report. In recent years, the South Africa PEPFAR program has been the object of criticism by top Washington, DC-based officials with the Office of the U.S. Global AIDS Coordinator and Health Diplomacy (S/GAC), which manages PEPFAR. In a FY2019 PEPFAR South Africa program guidance memo, Dr. Deborah Birx, head of S/GAC, commended a number of program successes and improvements in U.S.-South African PEPFAR partnership efforts, but said that there were several basic problems with its core treatment programs. Despite significant U.S. funding infusions, she stated, HIV testing, treatment, and treatment retention progress had been “grossly sub-optimal and insufficient to reach epidemic control” over the prior year. She said that a net decline in the number of patients on treatment under the program “demonstrated extremely poor Congressional Research Service 5 South Africa: Current Issues, Economy, and U.S. Relations performance.” She also cited program overspending and poor performance,” which she attributed to program management shortcomings that she called an “unacceptable… serious, continued problem.” 20 In an analogous FY2020 memo, Birx cited evidence of a range of corrective actions and progress, but noted some continuing challenges. These included underperformance across the program’s clinical functions and in its HIV/AIDS prevention portfolio, which she said might prevent South Africa and PEPFAR from achieving a key shared HIV/AIDS epidemic control of attaining and maintaining 6.1 million or more people on treatment by 2021.21 Economic growth is another focus of U.S. assistance in South Africa. In FY2021, $2 million in assistance would seek to “strengthen regional market systems, expand competitiveness and open new markets to improve trading systems in South Africa.” It also would promote South Africa’s use of U.S. trade preferences, and promote employment, job training, and small- and medium-sized firm activity.22 Other recent U.S. development aid for South Africa has supported programs focused on basic education, public service delivery, public-private development cooperation, civil society capacity-building and accountable governanceof steel and aluminum tariffs to South Africa, which had raised concerns in the country. No South Africa-centered bills have been introduced in the 116^th Congress.¹⁰ Members periodically travel to South Africa to foster such aims as improved bilateral and U.S.-Africa ties and enhanced trade and investment relations.¹¹

U.S. Assistance¹²

Combined State Department and U.S. Agency for International Development (USAID) aid for South Africa totaled $586.6 million in FY2018. The Trump Administration requested $510.5 million for South Africa for FY2019 and $172.1 million for FY2020. The latter would represent a 71% decrease relative to actual FY2018 levels and a 66% decrease relative to the FY2019 request, and center solely on health assistance.¹⁴ On aid level trends, see Figure 1 and Table 1.

• basic education;
• civil society capacity-building aimed at fostering accountable and responsive governance and public service delivery advocacy, and support for the office of the Public Protector [(a public ombudsman; see below];
• business-government cooperation in support of development; and
• support for). It also has provided support for survivors of sexual assault and gender-based-violence victims.

. The USAID-led Power Africa initiative also supports energy projects in South Africa and USAID provides indirect credit for small enterprise activity. Through its Africa Private Capital Group, USAID also facilitates development-focusedhas facilitated development financing, including though efforts to tapto foster local municipal bond and pension fund investment in public goods and services. USAID also has provided support for development-centered policymaking and administers the Trilateral Assistance Program (see below) USAID also administers the Trilateral Assistance Program (TAP), launched in 2005, under which the United States supports South African foreign aid efforts in Africa. TAP seeks to promote U.S. regional goals by leveraging South Africa’s “democratic systems, regulatory practices, and innovative scientific research” to tackle development, natural disaster, and security challenges in Africa. It provides training, exchange programs, and funding to support South Africa’s provision of technical development assistance to other African countries.23 South Africa has served as a “South Africa has served as a "Strategic Partner"” under the Feed the Future, a U.S. global food security/agricultural development initiativeinitiative, by providing agricultural technical aid to other African countries. South Africa also participatesAfricans participate in the joint State Department/USAID Young African Leaders Initiative (YALI), which helps develop the leadership skills of young business, civic, and public sector professionals, and South Africa hosts a YALI Regional Leadership Center. In addition to bilateral aid, South Africa periodically benefits from U.S. regional programs focused on such issues as environmental management and trade capacity-building, and U.S. agencies other than the State Department and USAID periodically fund targeted, generally small programs. U.S. trade and export promotion agencies are active in South Africa anda YALI Regional Leadership Center.

Figure 1. South Africa: State Department/USAID Aid Trends

Source: State Department annual congressional budget justifications.

Most U.S. development assistance programs in South Africa are administered by the State Department and USAID. These agencies sometimes collaborate with and transfer funds to other, technically specialized U.S. agencies, notably the U.S. Centers for Disease Control and Prevention (CDC), which plays a key technical role in PEPFAR implementation. Other U.S. agencies periodically fund generally small, functionally-specific programs. U.S. export promotion agencies periodically provide loans, credit guarantees, or other financial services to U.S. or local firms aimed at boosting U.S. exports and fostering/or development and economic growth outcomes in South Africa. A longstanding Peace Corps program has been suspended due to COVID-19, as have all such programs globally. 20 State Department, “FY 2019 PEPFAR Planned Allocation and Strategic Direction,” Information Memo For Chargé Lapenn, South Africa from Ambassador Deborah L. Birx, MD, January 16, 2019. 21 State Department, “FY 2020 PEPFAR Planned Country Allocation and Strategic Direction,” Information Memo for Ambassador Lana Marks, South Africa, January 14, 2020. 22 State Department, Congressional Budget Justification Foreign Operations (CBJ), Appendix 2, FY2021. 23 TAP projects have addressed such issues as constitution drafting in South Sudan, food security in Mozambique, gender-based violence in Malawi and Angola, and climate change responses and water conservation in southern Africa. Quotes from USAID, Country Development Cooperation Strategy South Africa, FY 2013-2019. See also USAID, “Trilateral Assistance,” October 15, 2019, and Fact Sheet: Trilateral Assistance Program, June 2013. Congressional Research Service 6 South Africa: Current Issues, Economy, and U.S. Relations Security cooperation efforts have been limited in recent years, apart from a longstanding International Military Education and Training (IMET) program. Past U.S. assistance supported the South African military in responding to regional crises and participating in peacekeeping, and included technical support and training on U.S.-sourcedand economic growth. There is a Peace Corps program in South Africa and the U.S. African Development Agency (USADF) provides a few grants in the country. Some project-centered grant aid is also provided to civil society entities, and South Africa periodically benefits from U.S. regional programs focused on such issues as environmental management and trade capacity-building. U.S. trade and export promotion agencies are also active in South Africa.

Security cooperation efforts are diverse but have been funded at far lower levels than development programs. In FY2017 and prior years, International Narcotics Control and Law Enforcement (INCLE) funds were used for law enforcement and criminal justice technical support. Except in FY2018, Nonproliferation, Antiterrorism, Demining and Related Programs (NADR)-Export Control and Related Border Security (EXBS) funds have supported technical training relating to trade and border control, with a focus on controlling trade in military and dual-use technologies. The International Military Education and Training (IMET) program is long-standing, and in the mid-2010s, Foreign Military Financing (FMF) aid supported the South African military's capacity to respond to regional crises and participate in peacekeeping. Such aid included technical support and training for U.S.-sourced South African military C-130 aircraft. Since 2005, South Africa has received peacekeeping training under the U.S.State Department’s Africa Contingency Operations Training and Assistance program (ACOTA), a component of the Department’s Global Peace Operations Initiative (GPOI, a multi-country State Department training program) andInitiative. South African troops also have benefitted from other U.S. military professionalization programs. South African troops alsoprograms, and regularly join their U.S counterparts in military training exercises. There is a South Africa-New York National Guard State Partnership Program, and the. The U.S. Department of Defense also(DOD) regularly supports South Africa'’s biennial African Aerospace Defense Exhibition, and a long-standing U.S.-South Africa Defense Committee meets annually.24 In the 2010s, South Africa also benefitted from International Narcotics Control and Law Enforcement (INCLE)-funded law enforcement and criminal justice capacity building as well as Nonproliferation, Antiterrorism, Demining ands biennial African Aerospace Defense Exhibition.

Related Programs (NADR)-funded training to improve trade and border controls, notably of military and dual-use technologies. Country Overview Country Overview

South Africa is influential on the African continent due to its investment and political engagement in many African countries and its active role and leadership withintrade relations and political engagement in the region, notably through its active role in the inter-governmental African Union (AU). It also has one of the largest, most diverse, and developed economies, in Africa and has made substantial progress in spurring post-apartheid socioeconomic transformation, transformation—though many negative socioeconomic effects of apartheid persist and the country has experienced a multi-year period of low economic growth. (For summary data on the country, see Figure 2.)

Transition from Apartheid to Universal Suffrage Apartheid ended after a tumultuous negotiated transition, between 1990 and 1994, when South Africa introduced a system of universal suffrage and multi-party democracy—after fol owing a decades-long struggle by the ANC and other anti-apartheid groups. After the release of long-imprisoned ANC leader Nelson Mandela and the ANC's ’s legalization in 1990, political dialogue led to an interim constitution in 1993 and elections in 1994, in which Mandela was elected president. Further post-voteelection negotiations led to the adoption in 1996 of a new constitution and the creation of the Truth and Reconciliation Commission (TRC, in operation until 2002). The TRC documented crimes and human rights abuses by the apartheid regime and anti-apartheid forces betweenfrom 1960 anduntil 1994, and oversaw processes of restorative justice, accountability, and assistance for victims. It has since served as a model for similar efforts around the world, though observers have repeatedly criticized the government's ’s arguably lackluster efforts to prosecute apartheid-era human rights offenders and provide TRC-recommended reparations.¹⁶endorsed reparations.25 Mandela died in 2013.¹⁷

26 The ANC, which currently holds 230 of 40057.5% of National Assembly seats, has held a parliamentary majority and controlled the executive branch—as the National Assembly elects the president— since the first post-apartheid elections in 1994majority since the first post-apartheid elections in 1994—and, since the National Assembly elects the president, also controlled the executive branch. Successive ANC-led governments have sought to redress the effects of apartheid, notably through efforts to improve the social welfare of the black majority and public goods and services, and by promoting a pan-racial, multiethnic national 24 DOD, “Readout of the Annual Defense Committee Meeting With the Republic of South Africa,” November 7, 2019. 25 Christopher Clark, “South Africa’s ‘Moral Compromise’: Why More Than 300 Apartheid-Era Atrocities Remain Unsolved,” Washington Post, August 7, 2019. 26 Then-President Obama attended Mandela’s funeral. U.S. House and Senate resolutions commemorated his death, and several House resolutions have since honored Mandela’s lifetime of work to advance social justice. Congressional Research Service 7 South Africa: Current Issues, Economy, and U.S. Relations by promoting a pan-racial, multiethnic national identity. While racial relations have improved, divisions remain; references to race in politics and social media sometimes spur heated debate, and racially motivated criminal acts periodically occur.

Despite diverse investments and policies aimed at overcoming the negative effects of apartheid, many of its most damaging socioeconomic effects endure, posing persistent, profound challenges for development and governance.¹⁸ Among these are high levels of poverty, social inequality, and unemployment, as well as unequal access to education, municipal services, and other resources Post-apartheid socioeconomic transformation efforts pursued by the ANC-led state have been substantial, but have fallen short of public expectations for more rapid change.27 These unmet expectations likely have contributed to falling electoral support for the ANC and arguably are a major factor motivating frequent, sometimes violent demonstrations known as service protests. These demonstrations, which also address other issues, such as local government corruption and cronyism, are politically sensitive.28 In 2018, President Ramaphosa cut short an overseas trip to address a spate of unrest featuring service delivery protests, attacks on foreigners, anger over alleged corruption, and clashes between local rival ANC members.29 In the mid-2010s, there also was a wave of mass student protests, some violent, over tuition costs and alleged institutional racism in higher education. Smaller protests have periodically occurred since.30 Labor strikes and unrest, notably in the mining and government sectors, also are common. The abiding socioeconomic effects of apartheid play a role in a range of enduring development and governance challenges. Despite often-large investments and concerted policy efforts to improve housing, public services, infrastructure, and state technical capacities, delivery of public goods and services remains inadequate and unequally distributed. Such problems disproportionately affect the black population. Racial, which also suffers from particularly high rates of unemployment and low educational attainment. While racial disparities have gradually declined, but most black South Africans live in poverty and their average per capita incomes are roughly one-sixth sixth as large as those of the historically privileged white minority.

31 Income and consumption distribution are notably unequal. Recent measures suggest the wealthiest top 10% and top 20% in South Africa enjoy the highest share of income of any country. South Africa'South Africa’s GINI coefficient—a measure of income or consumption inequality—is consistently among the highest globally, and is oftenhighest or among the highest globally. There are also significant regional, rural-urban, and intra-racial socioeconomic disparities.¹⁹ and infrastructure disparities.32 Large segments of the poor majority lack access to decent housing and adequate infrastructure services (e.g., electricity and water), especially in rural areas and in the vast, high-density informal settlements surrounding most cities. Known as townships, such settlements are populated mostlythey are mostly populated by poor black and mixed race “coloured” inhabitants.33 Many residents in these areas live in informal housing and often lack legal property ownership, and local governments periodically evict recently settled squatters and destroy their homes. 27 Ronelle Burger, et al., “The Capability Threshold: Re-examining the Definition of the Middle Class in an Unequal Developing Country,” Journal of Human Development and Capabilities (18:1), 2017; and Palmer, Ian, et al., Building a Capable State: Service Delivery In Post-Apartheid South Africa, Zed, 2017, among others. 28 Judith February, “Local Government in South Africa-Mostly Corrupt, Largely Dysfunctional,” Daily Maverick, April 26, 2018; and Al Jazeera, “Thousands March Against Corruption in South Africa,” September 27, 2017. 29 See, for instance, ISS, “Public Protest and Violence Map,” Crimehub database; and Selam Gebrekidan, “Big Protests in South Africa Force Ramaphosa to End London Visit,” New York Times, April 19, 2018. 30 The current government is implementing a pledge, made at the end of the Zuma administration, to fund free higher education for the poor and freeze certain education fees. Mfuneko Toyana, “South Africa Ready to Fund Free University Education: Finance Minister,” Reuters, January 16, 2018; and GOSA, “Remarks by President Cyril Ramaphosa at the NYDA Youth Dialogue, Cape Town International Convention Centre,” February 12, 2020, inter alia. 31 Statistics South Africa (StatsSA), Living Conditions of Households in South Africa, P0310, 2017, and Inequality Trends in South Africa: A multidimensional diagnostic of inequality, Report No. 03-10-19, 2019, and GOSA/World Bank, An Incomplete Transition Overcoming the Legacy of Exclusion in South Africa, 2018. 32 World Bank/GOSA, Overcoming Poverty and Inequality in South Africa: An Assessment of Drivers, Constraints and Opportunities, March 2018; and StatsSA), Inequality Trends…, op cit., inter alia. 33 “Coloureds” are a multi-racial group of varying black, white, Khoisan, Malagasy, and other ancestry. Congressional Research Service 8 South Africa: Current Issues, Economy, and U.S. Relations Figure 2. South Africa at a Glance Population (Total/Growth): 59.6 mil ion/1.4% (2020) Youth Population (ages 0-24): 45% (2020) Religions: Christian, 86%; traditional and related Under-5 Mortality Rate: 34 per 1,000 live births black and mixed race "coloured" inhabitants.²⁰ Lack of legal property ownership sometimes subjects township dwellers to municipal squatter eviction and slum clearance operations.

Figure 2. South Africa at a Glance (2019 data unless otherwise noted)

South Africa faces a range of other socioeconomic challenges. Labor strikes and unrest are common, particularly in the mining sector. Rates1: 2020 (P0211), June 23, 2020, and Inequality Trends in South Africa: A multidimensional diagnostic of inequality in 2017, 2019; and U.S. Census Bureau, International Data Base (2020). Congressional Research Service 9 link to page 19 South Africa: Current Issues, Economy, and U.S. Relations There also are extreme racial disparities in access to land, despite the continuous implementation of land redistribution and restitution initiatives since 1994. Under such programs, the state has purchased large amounts of land intended to be transferred to populations that had limited or no ability to own land under the apartheid system—primarily those of black, “coloured” or Indian descent. While black ownership and other access to land has risen markedly in some provinces since 1994, redistribution and restitution processes have been slow and have resulted in less extensive transfers than initially projected. As a result, the small minority white population continues to own over 70% of land nationally. 34 This has spurred growing demands for uncompensated state expropriation of private land and pushed the ANC to pursue an ongoing effort to amend the constitution to permit such expropriation (see “Land Issue” below). South Africa also faces challenges with regard to its criminal justice system capacity. While the country has a relatively well-resourced national police force, there are periodic incidents of vigilante mob justice, and police sometimes use heavy-handed, abusive tactics to quell crime and public unrest.35 Several police leaders also have been implicated in misconduct inquiries or corruption. Police performance is a sensitive political issue because rates of violent crime—notably murder, rape, and gun crime—are high.²¹ The causes are diverse and but are often viewed by analysts as being rooted in36 The causes of these high crime rates are diverse; in addition to criminal motivations, analysts have identified grievances and fractures arising from socioeconomic inequality and marginalization, social biases and, in some instances, criminal activity.²² Extremely violent, drug as well as social bias, as contributing factors.37 Brutal, drug-dealing street gangs exertalso wield extensive power in many large informal settlements. In July 2019townships, notably in several near the city of Cape Town. In one such township, the military was deployed to help police counter a spate of murders in one such settlement in the city of Cape Town.²³

Despite such challenges, and indications of an increased politicization of the state bureaucracy under Zuma, many nationaland xenophobic violence (see below) at which he announced the launch of a national GBV Emergency Action Plan.39 It seeks to strengthen GBV prevention, criminal justice 34 Rural Development and Land Reform Department, Land Audit Report, Phase II: Private Land Ownership by Race, Gender and Nationality, November 2017; AgriSA, Land Audit: A Transactions Approach, November 2017. The audit is critiqued in Institute of Race Relations (IRR), Who Owns the Land? A Critique of the State Land Audit, March 2018 and AgriSA, Submission on Expropriation Without Compensation, May 25, 2018. 35 Norimitsu Onishi, “Police in South Africa Struggle to Gain Trust After Apartheid,” New York Times, August 13, 2016; and Siyabonga Mkhwanazi, “Deaths from Police Brutality on the Rise-Report,” IOL, June 20, 2017, inter alia. 36 Violent crime rates broadly increased in 2018/2019 over the prior year. Murders rose nearly 2%, as they have at an annual average of 2.9% since 2011, when they hit a low after a long-term decline starting in 1995. The country’s per capita murder rate is among the highest globally; it ranked 5th in 2018, when there were 36.4 homicides per 100,000 people, compared to 5 in the United States. Africa Check, “Factsheet: South Africa’s Crime Statistics for 2018/19,” September 12, 2019; Statistics South Africa (StatsSA, a public agency), Victims of crime report 2018/19, October 3, 2019; South African Police Service, Crime Statistics 2018/2019; and U.N. Office on Drugs & Crime, DataUNODC. 37 Chandre Gould, “Comment: Why Is Crime and Violence so High in South Africa?,” Africa Check , September 17, 2014; work by the South African Institute for Security Studies (ISS) and the Centre of Criminology, University of Cape Town (e.g., the South African Crime Quarterly and ISS’s Crimehub web resource), among others. 38 Reuters, “South African Army To Stay Longer In Gang Hotspots – Ramaphosa,” September 16, 2019, among others. 39 He called South Africa among “the most unsafe places in the world to be a woman,” and also cited a high level of violence against girls, including babies. He noted that in 2018, 2,700 women and more than 1,000 children were murdered, that more than 100 cases of rape were reported to police daily, and that many more such cases were not Congressional Research Service 10 South Africa: Current Issues, Economy, and U.S. Relations responses, legal reforms, victim support programs, and women’s economic empowerment programs.40 In late 2019, parliament appropriated 1.6 bil ion Rand ($108 mil ion) to fund the plan, which remains under implementation.41 Broader challenges to social cohesion include widespread de facto residential racial and socioeconomic segregation. While many of the poor live in townships, the wealthy, including many whites, often live in gated, highly secured communities. White farmers are periodically victimized in criminal attacks. While often opportunistic—in part as many such farmers are wealthier than the average citizen—such attacks are sometimes also attributed to racial or socioeconomic resentments. Xenophobic mob violence targeting foreigners, notably foreign shopkeepers, also occur regularly. Some have been large-scale and widespread, as in 2019—following similarly extensive attacks in 2008 and 2015. Smaller-scale incidents also occur, as in early 2020. A wave of attacks in September 2019 spurred tensions with several African countries and a diplomatic rift with Nigeria, as many Nigerian immigrants were victims. Analysts have linked such attacks to local resentment of immigrants’ success in achieving socioeconomic mobility, anti-foreigner rhetoric by politicians, and a lack of preventive state action, among other factors.42 Another key challenge is a high HIV prevalence, though estimates vary. South Africa reports that 18.7% of adults are HIV-positive in 2020, up from 18.6% in 2019 and 18.5% in 2018, while UNAIDS reports a decrease from 19.2% in 2018 and 19% in 2019 (latest data). Both sources, however, report a slow but steady decline in incidence (new cases per population group share in a given period).43 National efforts to counter HIV have received considerable international support, notably under U.S. PEPFAR programs (see above). Notwithstanding inadequacies in state performance, many of South Africa’s state agencies (e.g., the central bank, the statistical agency, the courts, some ministries, and the treasuryTreasury) possess substantialconsiderable institutional independence and technical capacity. They have arguably made substantial progress in many areas, even if unmet needs remain extensive. and technical capacity. South Africa ranked second globally on the International Budget Partnership's 2017’s 2019 Open Budget IndexSurvey, a measure of public budget transparency. While some state-owned enterprises (SOE) are struggling to recover from reported mismanagement and malfeasance under Zuma, these entities manage large, sophisticated nationalhighly complex transport, telecommunication, energy, and other infrastructure systems. The state also administers a large welfare system that supported about 17.6 million grants as of September 2018 and had a 2017/2018 annual budget of about $10.5 billion.³³ It is viewed by many observers as a key anti-poverty tool, albeit a costly one that is expected to grow in size and expense. Despite its role in helping to reduce extreme poverty, reported maladministration of the system has spurred considerable controversy in recent years.

Politics and Governance

reported. GOSA/Presidency, “Address by President Cyril Ramaphosa at the Joint Sitting of Parliament on the crisis of violence in South Africa, National Assembly, Cape Town,” September 18, 2019. 40 A presidential Interim Steering Committee and co-chaired by government entities and civil society groups spearheads plan implementation, and the government finalizing a longer-term National Strategic Plan. Ibid.; GOSA/Presidency, “Minister Pandor leads delegation to UNGA74,” September 12, 2019; and GOSA, “Declaration of the Presidential Summit Against Gender-Based Violence and Femicide,” November 2, 2018, inter alia. 41 In a June 2020 national address, Ramaphosa again highlighted the challenge of GBV in the context of the COVID-19 lockdown. GOSA, “R1.6bn allocated for GBV Emergency Action Plan," November 11, 2019, and “President receives emergency response action plan to combat GBV," April 30, 2020; and Estelle Ellis, “Gender-based violence is South Africa’s second pandemic, says Ramaphosa,” Daily Maverick, June 18, 2020. 42 Nigerian leaders boycotted a South Africa-hosted World Economic Forum annual meeting, and some South African businesses in Nigeria suffered retaliatory attacks. Silindile Mlilo and Jean Pierre Misago, Xenophobic Violence in South Africa: 1994-2018: An Overview, Xenowatch/African Centre for Migration & Society, 2019, and prior annual Xenowatch analyses; Julie Turkewitz, “South African Riots Over ‘Xenophobia’ Prompt Backlash Across Africa,” New York Times, September 5, 2019; and William Shoki, “A Ditch to Climb,” Africasacountry.com, February 19, 2020. 43 StatsSA, Mid-Year Population Estimates 2019, Release P0302, July 29, 2019; and UNAIDS AIDSInfo database http://aidsinfo.unaids.org/. Congressional Research Service 11 South Africa: Current Issues, Economy, and U.S. Relations The state also administers a large welfare system that supported about 17.8 million grants serving 11 million beneficiaries as of March 2019. $12.4 billion was spent in the 2018/2019 budget cycle, and such costs are likely to grow. Despite the welfare system’s role in helping to reduce extreme poverty, reported graft and poor administration of the system has spurred considerable controversy in recent years, including with regard to the provision of newly authorized social welfare grants to combat the economic effects of COVID-19.44 Politics and Governance The ANC, the majority party since the advent of universal suffrage in 1994, is ideologically leftist, but in practice melds pragmatic support for private sector-led growth with state-centric economic planning under what it terms the “developmental state” model. The ANC’s political credibility is largely founded on its leading role in the anti-apartheid struggle and its efforts to end deep-rooted, enduring social inequalities. It has struggled to build on this legacy, however, amid the country’s persistent challenges. The ANC’s gradual loss of electoral support, service protests focusing on alleged ANC policy shortcomings, and other indicators suggest that South Africans are increasingly judging the party on its current performance record, rather than its past antiapartheid role—though it remains the country’s most popular party. The Democratic Alliance (DA) is the second-largest party in parliament, with 84 of 400 National Assembly seats. Its leadership has long beenAssembly seats. The DA has its origins in various historical liberal-leaning party coalitions. For many years, its leaders were predominantly white, but it has built an increasingly stronga growing base among blacks—despite repeated controversies concerning racially insensitive remarks by white party leaders. The DA has regularlyamong blacks. Now led by a charismatic young black leader, Mmusi Maimane, the DA has often confronted the ANC in parliament, at times in league with the Economic Freedom Fighters (EFF), a populist hard-left party centered on black empowerment.

A key target campaign demographic for all parties is the "Born Free" generation, those born in 1994 or later, who make up roughly 47% of the population and about 14% of the eligible electorate. They share discontent over corruption, public services, and poverty with their older counterparts, and suffer even higher unemployment rates, but they that controls 44 National Assembly seats. The EFF was formed in 2013 by Julius Malema, firebrand former ANC Youth League leader who later became one of the ANC’s harshest critics. Two other notable parties include the Inkatha Freedom Party (IFP), a self-described centrist party that was once a fierce ANC rival during the anti-apartheid period, and the Vryheidsfront (Freedom Front) Plus party—which, among other policy goals, advocates for minority rights and self-determination, notably to protect predominantly white Afrikaners’ interests. Opposition parties have successfully exploited growing voter dissatisfaction with the ANC, notably following a rise in corruption and ANC in-fighting under Zuma. In general elections held in May 2019, the ANC won 57.5% of National Assembly votes and 230 out of 400 seats (down from 249 in the last election, in 2014). This represented the ANC’s worst electoral performance since 1994, and mirrored a similar decline during local elections in 2016. The DA, meanwhile, won 22.7% of the 2019 vote, while the EFF made a large gain, winning 10.8%.45 All political parties’ long-term prospects may depend, in part, on their ability to draw the support of voters among the “Born Free” generation—those born in 1994 or later—who comprise about 47% of the population and about 14% of the eligible electorate. Many in this generation share 44 About 73% of grants supported child/dependent care and 20% support old age recipients in March 2019. Grant costs have generally risen and are slated to rise by 7.65 over the next budget cycle. South African Social Security Agency, Annual Report On Social Assistance 01 April 2018 – 31 March 2019; GOSA/Treasury Department, 2019 Budget Estimates of National Expenditure: Vote 17 Social Development; Corruption Watch, “End of the Road for CPS, Says Corruption Watch,” February 13, 2020; and Paul Vecchiatto, “South African Post Office Takes Over Welfare Payments,” Bloomberg, December 10, 2017. 45 The African Christian Democratic Party won four seats, with 0.8% of the vote. Eight small parties won one or two seats. Election data from South African Electoral Commission. See also Wendell Roelf, “South African Lawmakers Elect Ramaphosa as State President,” Reuters, May 22, 2019. Congressional Research Service 12 South Africa: Current Issues, Economy, and U.S. Relations discontent over corruption, public services, and poverty with their older counterparts—and suffer even higher unemployment rates—but are reportedly less engaged in formal politics and vote at lower rates than older generations.46 At present, National Assembly elections take place under a party-list proportional system, in which voters select a party and each party allocates its share of elected seats based on an internal party nominee lists. As a result, internal ANC politics and leadership selections play a key role in national politics. Rivalry within the ANC at the provincial and local levels—often regarding appointments to local state bodies and the selection of delegates at national party decision-making bodies—is often fierce and has spurred many political assassinations.47 The Congress of South African Trade Unions (COSATU) and the South African Communist Party (SACP) also exert influence within the ANC. They do so under the Tripartite Alliance, a compact under which the two organizations do not independently contest elections but receive selected top ANC and state leadership posts. In recent years, unity among Alliance members has weakened.48 South Africa’s political system may soon change dramatically as a result of a June 2020 Constitutional Court ruling that invalidated a national electoral law banning independent candidates from running in national and provincial legislative races. The court ordered the National Assembly to amend the law within two years to allow for such candidacies. This likely will result in a system of concurrent direct constituency and electorate-wide party list-based elections. While observers see this change as having a range of potential effects, both positive and negative, many see it as likely to foster a more competitive electoral landscape.49 Ramaphosa Administration Ramaphosa—a former anti-apartheid activist and labor leader turned business executive—succeeded Zuma as president in early 2018, shortly after narrowly winning a highly contentious ANC leadership election. His win, based largely on a pledge to fight corruption and heal the economy, was a key defeat for the Zuma-linked wing of the party.50 Ramaphosa’s administration has prioritized efforts to spur economic growth by stimulating public and private investment with the aim of creating jobs and enhancing social services and infrastructure, and to make growth more inclusive. They have pursued inclusivity through “transformation” efforts aimed at expanding and equalizing access to economic opportunities, especially for the poor black majority, using tools such as small business promotion, state procurement preferences, and other actions to boost industrial growth. Other priorities have included mining sector and trade policy reforms, alongside efforts to attract local and international investment, spur digital sector growth, 46 Joseph Mullen, “Is South Africa’s “Born Free” Generation Truly Free?,” Africa Up Close Blog, Wilson Center, September 10, 2019; and Elnari Potgieter and Barend F. Lutz, “South African Youth: Politically Apathetic?,” in Electoral Institute for Sustainable Democracy in Africa, Election Update South Africa 2014, 2014, inter alia. 47 Norimitsu Onishi and Selam Gebrekidan, “Hit Men and Power: South Africa’s Leaders Are Killing One Another,” New York Times, September 30, 2018, inter alia. 48 Zuma was the focus of often-fierce SACP and COSATU criticism and there have been divisions in COSATU related to the emergence of new unions and discontent among its grassroots membership over a variety of issues. Ashley N. Mabasa, “Alliance Partners Must Have a Clear Plan for Reconfiguration,” Daily Maverick, July 17, 2018. 49 Possible hypothesized negative effects include the potential for a diminishment of collective civic action through political party participation, a rise in the influence of individual politicians, and a possible strengthening of identity-based politics. Karabo Mafolo, “ConCourt ruling paves way for independent candidates to contest elections,” Daily Maverick, June 11, 2020; and Mcebisi Ndletyana, “Constitutional Court ruling heralds changes to South Africa’s electoral system,” The Conversation, June 12, 2020, inter alia. 50 His main rival was Nkosazana Dlamini-Zuma, Zuma’s ex-wife, a former African Union Commission chair and longtime cabinet minister. Azad Essa, “Cyril Ramaphosa wins ANC leadership vote,” Al Jazeera, December 18, 2017. Congressional Research Service 13 South Africa: Current Issues, Economy, and U.S. Relations and expand agricultural production.51 The government is twinning such efforts with action to address COVID-19 and its economic effects (see below), with an emphasis on infrastructure investments. In late June, President Ramaphosa hosted a summit to roll out a revised national Infrastructure Investment Plan focusing on such efforts, and in July identified several hundred projects that are to be pursued under the plan, a decade-long, $138 billion line of effort.52 Another priority is to combat corruption and enhance the performance of state agencies and state-owned enterprises (SOEs). Public Enterprises Minister Pravin Gordhan—a two-time finance minister under Zuma who later fiercely clashed with Zuma—is spearheading such efforts, though Ramaphosa has also been directly involved. After assuming office in 2018, he ordered probes into irregularities and mismanagement at two major SOEs: Eskom, the national power utility, and Transnet, a transport and logistics firm. He also replaced these SOEs’ boards, along with that of Denel, an important but ailing defense sector SOE, and fired the head of the tax service, a key Zuma ally and Gordhan foe, and appointed a commission of inquiry into malfeasance at the agency. A separate parliamentary commission also probed systematic irregularities at Eskom. Notwithstanding such efforts, several SOEs with longstanding, severe governance and/or fiscal problems—and now COVID-19-linked pressures—are in dire financial trouble. They include South African Airways, the Land Bank, and Denel. A high-profile judicial commission of inquiry into state capture ordered by former Public Protector Madonsela, commonly known as the Zondo Commission, after its chair, is continuing its investigations (see textbox below). Its work has been interrupted by the COVID-19 lockdown, and its mandate has been extended until 2021. While its proceedings center on developments during the Zuma administration, the matters at issue remain issues of ongoing concern, as some of the key actors at issue remain active in public affairs or hold high state or party posts.53 Commission witnesses have confirmed many of the state capture allegations made in Madonsela’s report and implicated a range of formerly high profile officials in state capture activity.54 In commission testimony in 2019, Zuma denied a range of allegations against him, which he attributed to a campaign of character assassination by unnamed national intelligence services.55 Checks and Balances and State Capture During Zuma’s presidency, opposition parties and non-governmental organizations used the courts to check executive power by regularly suing state officials, including Zuma. These suits, relating to alleged executive branch overreach, agency malfeasance, and il icit actions, were often successful.56 Former Public Protector Thuli 51 See 2020 and past State of the Nation addresses [https://www.gov.za/state-nation-address] and the National Development Plan 2030: Our Future-Make It Work, 2012, which Ramaphosa helped craft as a leading member of the National Planning Commission. The plan underpins a raft of other ministry and sectoral state strategic plans. 52 GOSA, “Presidency hosts Infrastructure Development Symposium to drive growth of SA economy and post COVID-19 recovery plan,” June 19, 2020; and Antony Sguazzin, “South Africa Names First Projects in $138 Billion Drive,” Bloomberg, July 26, 2020, among others. 53 The Commission’s proceedings can be accessed at http://www.sastatecapture.org.za. 54 David Bruce, “Political Bias Within the System Weakens SA Criminal Justice,” ISS, September 21, 2018; Colleen Goko, “Head of South African Graft Unit Suspended After Testimony: ST,” September 2, 2018, Bloomberg; IOL, “How the Guptas, Fireblade and a Sex Tape Sank #MalusiGigaba,” November 13, 2018; and Sarah Evans, “Finance Minister Nhlanhla Nene Resigns, Tito Mboweni Sworn In,” News24, October 9, 2018, among others. 55 James Hamill, “Zuma’s Testimony to South Africa’s Corruption Inquiry Further Divides the ANC,” World Politics Review, August 7, 2019, among others. 56 Nqobile Dludla, “South Africa’s ANC Accuses Judiciary of Pandering to Opposition,” Reuters, May 5, 2017; Michael Cohen, “Courts Emerge as Main Theater for South Africa’s Political Wars,” Bloomberg, November 20, 2016; Congressional Research Service 14 link to page 29 South Africa: Current Issues, Economy, and U.S. Relations Madonsela also acted as a restraint on presidential power. She issued many reports on alleged acts of noncompliance with laws and regulations, corruption, and operational failings by the executive branch and state agencies—and mandated diverse corrective actions. Most notably, in 2016, she issued State of Capture, a highly critical report centering on Zuma, the Gupta family, and a network of Zuma-allied ANC, business, and family associates. The Guptas are an Indian émigré family that accumulated a range of business holdings after arriving in South Africa in the 1990s. The report alleged that these actors had engaged in extensive high-level state-business malfeasance, and mandated the creation of a now-ongoing Zondo commission of inquiry. Zuma fought an unsuccessful legal battle to prevent the report’s release, claiming that Madonsela had violated his due process rights, but established the commission—under court order—shortly before he resigned as president.57 The widespread, deep-seated corruption and influence peddling addressed in Madonsela’s report, dubbed “state capture” by analysts and later law enforcement and other officials, continues to roil politics and draw intense public and policymaker attention. The term refers, in particular, to the activities of the Zuma/Gupta and allied ANC and business network. Its members allegedly engaged in col usion that reportedly influenced and even directly shaped many state agency decisions, contracts, regulatory processes, and fiscal decisions in order to advance network members’ mutual political, business, and personal financial interests. The Guptas, central actors in this network, allegedly influenced the appointments of a finance minister and other cabinet members. Their firms also engaged in questionable energy deals with the state utility, Eskom, were awarded or facilitated large state contracts with the state rail company and other SOEs—some involving kickbacks, and their media companies received significant shares of state advert revenues and service contracts.58 Several western blue chip firms were tarnished by their links with Gupta-owned or linked firms (see textbox under “U.S. Trade and Investment,” below). The Guptas also reportedly sponsored digital media influence campaigns that promoted the political aims of the Zuma-aligned wing of the ANC and their own interests. Involvement in such activity led to the dissolution of the once prominent UK public relations firm Bell Pottinger.59 While “state capture” is primarily linked to the activities of the Zuma-Gupta network, other actors were also party to the phenomenon—which President Ramaphosa asserts cost South Africa about $34 bil ion.60 In October 2019, the U.S. Treasury Department signaled U.S. support for Ramaphosa administration and South African judicial system efforts to seek accountability for state capture activity by imposing sanctions on two of the Gupta brothers and a key associate for engaging in “widespread corruption and bribery, capture government contracts, and misappropriate state assets.” Senate Foreign Relations Committee (SFRC) chairman Jim Risch lauded the action.61 Several separate commissions of inquiry have examined alleged malfeasance at various state agencies—including the alleged extralegal manipulation of state security agencies for political purposes under Zuma.62 In 2019, President Ramaphosa also appointed a special tribunal to fast- and Reuters, “South Africa’s EFF Leader Malema to Lodge Court Application to Discipline Zuma,” March 30, 2017. 57 The report investigated a pattern of “alleged improper and unethical conduct” by Zuma and other officials “relating to alleged improper relationships and involvement of the Gupta family in the removal and appointment of Ministers and Directors” of SOEs “resulting in improper and possibly corrupt award of state contracts and benefits to the Gupta family’s businesses.” Public Protector, State of Capture, 2016. 58 State capture activities were numerous, sprawling, and complex. For background, see State Capacity Research Project, Betrayal of the Promise: How South Africa Is Being Stolen, 2017; Ivor Chipkin, The State, Capture and Revolution in Contemporary South Africa, Public Affairs Research Institute (PARI), 2016; David Pilling and Joseph Cotteril, “Jacob Zuma, the Guptas and the selling of South Africa," Financial Times, November 30, 2017; BBC News, “The Guptas and their links to South Africa’s Jacob Zuma," February 14, 2018; and investigative journalism collections, e.g., amaBhungane Centre for Investigative Journalism, “#GuptaLeaks," https://tinyurl.com/ya68ma7h and http://www.gupta-leaks.com; and Mail & Guardian, “Gupta Family" (https://mg.co.za/tag/gupta-family/), inter alia. 59 David Segal, “How Bell Pottinger, P.R. Firm for Despots and Rogues, Met Its End in South Africa,” New York Times, February 4, 2018. 60 Tom Wilson, “Graft under Jacob Zuma cost South Africa $34bn, says Ramaphosa,” Financial Times, October 14, 2019. 61 U.S. Treasury, “Treasury Sanctions Members of a Significant Corruption Network…,” op cit.; and SFRC, “Risch Applauds Magnitsky Sanctions Against Gupta Family's Grand Corruption Network in South Africa,” October 10, 2019. 62 Zuma administration officials allegedly created ad hoc intelligence networks that worked in parallel to state agencies and employed mass digital surveillance to target perceived foes of the administration. In response to such actions, in late 2019, a court invalidated parts of a key digital surveillance law. GOSA, Report of the High-Level Review Panel on Congressional Research Service 15 South Africa: Current Issues, Economy, and U.S. Relations track the recovery of public assets lost to graft.63 lower rates than older citizens.

Checks and Balances

Ramaphosa Administration

Governance Reform and Accountability

Meanwhile, Zuma is being tried on 16 charges of fraud, corruption, racketeering, and money laundering in a long-running corruption case centering on a 1990s-era state arms deal scandal. Zuma fended off the case for years, allegedly aided by the National Prosecuting Authority (NPA). In 2018, however, the NPA2009, the NPA dismissed the case, but was forced to reinstate the charges in 2018 after an appeals court ruled that its 2009 decision was made under political pressure. The NPA’s alleged improper favoritism toward Zuma in various instances has been the subject of several court cases. In 2018, after the last Zuma-era head NPA director’s appointment was invalidated by a court, Ramaphosa appointedafter an appeals court upheld a 2016 High Court ruling that the NPA's dismissal in 2009 of the case against Zuma had been "irrational" and made under political pressure. The trial is likely to proceed for months. The NPA's alleged improper favoritism toward Zuma drew substantial attention, notably under its former Director, Shaun Abrahams, but also under several of his Zuma-appointed predecessors accused of various irregular actions. In August 2018, a court voided Abrahams's appointment in a case linked to litigation over his predecessors' appointments. In late 2018, Ramaphosa appointed Shamila Batohi, a career prosecutor and former International Criminal Court legal adviser, Shamila Batohi to head the NPA. She has prioritized state capture and public agency malfeasance cases, but stated that success would require a lengthy rebuilding of a "other state malfeasance cases and pledged to reform a “broken and dysfunctional" criminal justice system. Batohi contends that she inherited an NPA plagued by a "deliberate attempt" to stymie high-profile corruption cases. Such action was potentially exemplified by the NPA's withdrawal of a key criminal case against the Guptas hours prior to Batohi's appointment.⁵²

Ramaphosa: Political Prospects

President Ramaphosa took power just over a year prior to the May 2019 elections. This presented him both with challenges and opportunities: time enough to demonstrate a strong will to pursue economic and governance reform and fight corruption, but arguably not enough time to make substantive progress toward those objectives or consolidate his power within the ANC and unify a splintered party. While the ANC emerged from the elections with a weaker mandate, it might have fared far worse had Ramaphosa not pursued a reform agenda.⁵³ One of Ramaphosa's key challenges going forward is to overcome divisions within the top tiers of the ANC. Some Zuma-aligned party elites—several of whom have faced corruption allegations and/or may be at risk of prosecution due to more proactive law enforcement efforts under Ramaphosa—have sought to obstruct his agenda.⁵⁴ More generally, Ramaphosa faces longstanding challenges reflected in public anger over poor public services and continuing economic malaise. While he currently appears to enjoy broad public approval, such positive regard may gradually be waning.⁵⁵

The Economy

South Africa has the most diversified, industrialized economy in Africa. It also has one of the top-five-highest GDPs per capita ($6,331 in 2019) in sub-Saharan Africa, and is one of very few upper-middle-income countries in the region. As earlier noted, however, income distribution is highly unequal.⁵⁹ South Africa is a top producer of mined raw and processed commodities (e.g., platinum, steel, gold, diamonds, and coal). Other major industries include automobile, chemical, textile, and food manufacturing. These sectors, part of an overall industrial base that contributed just under 26% of GDP in 2017, are important sources of jobs. There are also well-developed tourism, financial, energy, legal, communications, and transport sectors, which are part of an overall services sector that contributed nearly 61% of GDP in 2018.⁶⁰ Recent GDP trends are provided in Table 2. South Africa regularly hosts large global development and business events, and South African firms are active across Africa, particularly in the mobile phone, retail, and financial sectors. Some also operate internationally, and the Johannesburg Stock Exchange is among the 20 largest global bourses. South Africa is also a famed wine producer and exports diverse agricultural products, but only about 10% of its land is arable and agriculture makes up less than 2.2% of GDP.

After several years of stagnation, FDI flows into South Africa have jumped in recent years, rising from $2 billion in 2017 to $5.3 billion in 2018, though they remain lower than a peak of $9.2 billion in 2008. Meanwhile, outward flows have declined, dropping from $7.4 billion in 2017 to $4.6 billion in 2018. See Table 3 for summary trade and FDI trends. The auto industry has been an important source of job-intensive FDI; South Africa has long hosted Ford plants, and other automakers (e.g., Toyota, BMW, and Nissan) have announced significant manufacturing capacity investments in recent years. Rail locomotive manufacturing has also attracted FDI.

Energy and Natural Resource Issues

U.S. Trade and Investment Issues

Foreign Policy Issues

South African Efforts in Africa

Migration, Conflict Resolution, and Peacekeeping. South Africa hosts roughly 273,000 refugees, asylum-seekers, stateless persons, and other populations of international humanitarian concern, as well as many economic migrants.⁹⁷ Most of these populations are from Africa. South Africa also sometimes hosts political dissidents from other countries. In 2014, one such dissident, a former Rwandan intelligence chief, was assassinated in South Africa—a killing attributed by analysts to the Rwandan government, which denies involvement in the matter. In September 2019, South African authorities issued arrest warrants for two Rwandans alleged to have carried out the killing.⁹⁸

South Africa's Foreign Aid and U.S. Cooperation. To advance its policy goals across the continent, South Africa is endeavoring to establish a foreign aid agency, the South African Development Partnership Agency (SADPA), but progress has been slow and limited since the plan was announced in 2009. SADPA is intended to coordinate South Africa's foreign aid, with a focus on other African countries regarding democracy and good governance, conflict prevention, development, and other ends. These are all priorities of South Africa's current foreign aid mechanism, the African Renaissance Fund (ARF), which the Department of International Relations and Co-operation administers, along with multilateral agency and initiative funding.¹⁰⁰ SADPA and a SADPA Fund would replace the ARF. Multiple other state agencies also administer foreign aid programs, although reporting on aid levels and program activities is fragmentary.¹⁰¹

China and the BRICS

Middle East Issues

Outlook