South Africa wakes from its long sleep

Hugh Pope reports from Johannesburg on the new mood of optimism prevailing on what will be a long and arduous road

It's official: South Africa's economy has turned the corner. A long uphill slog is in prospect, but some businesses are already racing ahead.

Hotels and airline seats are booking up fast as tourist interest grows in the new South Africa. Crowds are flocking to cinemas and cafs. Consumers are girding up their credit cards for what one national newspaper dubbed "the big spend".

"It's party time," said Eric, proprietor of a Thai restaurant in a crowded, up-market Johannesburg mall. "Anybody who knows how to run a restaurant is making a pile."

When growth in the last three months of 1993 reached an annualised 6.5 per cent, the Chamber of Commerce in Johannesburg, telephoned its members to see if the figure could be true.

Marius de Jager, the chamber's chief executive, says: "Without exception there is a strong optimism about 1995 and 1996. Manufacturers say business is booming, especially construction. There is growing confidence. I'm convinced it is real."

Service industries have led the way as businesses see new markets at home and in neighbouring African states. Foreign investors have also started arriving in force. Barely a week goes by without another multi- national announcing its return following the first fully democratic elections 10 months ago.

"We've gone bananas. We're reaching capacity breakdown points," said Peter Scott-Wilson, a director of Markinor, a market research company.

Daunting problems remain. Unemployment in the population of 40 million remains at a stubborn 50 per cent, especially among rural blacks. South African Chamber of Business economist Keith Lockwood said growth for the whole of 1995 would probably settle down to about 3.5 per cent, well short of the 6-7 per cent needed to really start creating jobs.

"I wouldn't like to underplay the problems," said Mr Lockwood. "But it's better than 2.4 per cent growth in 1994, 1 per cent in 1993 and contraction for years before that. We are on the way to getting a sustainable growth rate above the rate of population growth."

Many countries are trying to jump aboard the bandwagon. Britain, already the biggest investor, plans to spend half of its export promotion budget for the entire world on helping trade with South Africa.

A 27 per cent rise in imports in 1994 was mainly for plant and machinery. Other products are bound to follow after last week's budget scrapped, from October, a 40 per cent surcharge on luxury imports and 15 per cent surcharge on white goods such as kettles and fridges.

Banks have joined in by opening up the money taps. Dr Chris Stals, governor of the Reserve Bank, raised interest rates and asked the banks to keep credit expansion in line with inflation, still well under control at 9.9 per cent last year. But it did little to spoil the party.

"The rate change had virtually no impact on us," said a busy bank manager in an up-market Johannesburg mall. "We're still lending hand over fist."

President Nelson Mandela's first full budget has also been well received, with businessmen applauding the importance it placed on fiscal stability. Even the implacable Confederation of South African Trade Unions granted that the budget was "vastly improved". Only faint complaints came from the white rich, who will pay slightly more.

Chris Liebenberg, Finance Minister, said: "This is but the beginning of a long and arduous road and we cannot afford the luxury of complacency. People out there are rooting for us to succeed. Internationally, they look to us as an example - we owe it to Africa and specifically our region. We cannot afford to fail them."

Mr Liebenberg was able to announce that the 1994-95 deficit was slightly less in relation to South Africa's total gross domestic product than expected at about 6.4 per cent. In 1995/96 he planned to reduce that to 5.8 per cent, helped by the sale of strategic oil reserves.

Once-prohibitive taxes on imported cars are being slowly reduced in line with international trade agreements. But local assemblers of cars under licence have had one of their best first quarters, spurred on by car rental agencies snapping up fleets for a boom in visitors that is catching the long-isolated tourism industry on the hop.

The 30,000 extra visitors expected for the Rugby World Cup in May to June has blocked hotel bookings and most domestic airline seats months ahead. Even first-class business travellers are having to make flight reservations well in advance.

Immigration officials can barely cope, forcing arrivals to wait up to 90 minutes after their flights just to enter the country. Airport arrivals were up 49 per cent on the year before by November last year, and hotel occupancy rates were 80 per cent ahead by December.

Foreign investors are moving in faster than expected, as proven by the steady performance of the rand during its first week floating free in world markets. The strength of the rand and the dismantling of customs barriers are already posing many long-term challenges to manufacturing industry as it emerges into the international market. Relatively unproductive labour is another, as one manufacturer of pots and pans lamented.

"We sell one pot for about $20 wholesale," he said. "Now we find the same pot, made in South-east Asia, selling locally for $7. There is no way we can compete. So we are having to rethink our strategy."

Voices
The Sumatran tiger, endemic to the Indonesian island of Sumatra, is an endangered species
voicesJonathon Porritt: The wild tiger population is thought to have dropped by 97 per cent since 1900
News
news
Arts and Entertainment
Story line: Susanoo slays the Yamata no Orochi serpent in the Japanese version of a myth dating back 40,000 years
arts + entsApplying the theory of evolution to the world's many mythologies
Life and Style
Popular plonk: Lambrusco is selling strong
Food + drinkNaff Seventies corner-shop staple is this year's Aperol Spritz
PROMOTED VIDEO
News
Gardai wait for the naked man, who had gone for a skinny dip in Belfast Lough
newsTwo skinny dippers threatened with inclusion on sex offenders’ register as naturists criminalised
News
Shake down: Michelle and Barack Obama bump knuckles before an election night rally in Minnesota in 2008, the 'Washington Post' called it 'the fist bump heard round the world'
newsThe pound, a.k.a. the dap, greatly improves hygiene
Arts and Entertainment
La Roux
music
Arts and Entertainment
Graham Fellows as John Shuttleworth
comedySean O'Grady joins Graham Fellows down his local Spar
News
people
News
Ross Burden pictured in 2002
people
News
Elisabeth Murdoch: The 44-year-old said she felt a responsibility to 'stand up and be counted’'
media... says Rupert Murdoch
Arts and Entertainment
tv
Extras
indybest
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)

£350 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...

Java Developer - Banking - London - Up to £560/day

£500 - £560 per day: Orgtel: Java Developer FX - Banking - London - Up to £560...

HR Business Analyst, Bristol, £350-400pd

£350 - £400 per day + competitive: Orgtel: My client, a leading bank, is curre...

Account Manager - (Product & Account Management, Marketing)

£26000 - £30000 per annum + Benefits: Ashdown Group: Account Manager - (Produc...

Day In a Page

A new Russian revolution: Cracks start to appear in Putin’s Kremlin power bloc

A new Russian revolution

Cracks start to appear in Putin’s Kremlin power bloc
Eugene de Kock: Apartheid’s sadistic killer that his country cannot forgive

Apartheid’s sadistic killer that his country cannot forgive

The debate rages in South Africa over whether Eugene de Kock should ever be released from jail
Standing my ground: If sitting is bad for your health, what happens when you stay on your feet for a whole month?

Standing my ground

If sitting is bad for your health, what happens when you stay on your feet for a whole month?
Commonwealth Games 2014: Dai Greene prays for chance to rebuild after injury agony

Greene prays for chance to rebuild after injury agony

Welsh hurdler was World, European and Commonwealth champion, but then the injuries crept in
Israel-Gaza conflict: Secret report helps Israelis to hide facts

Patrick Cockburn: Secret report helps Israel to hide facts

The slickness of Israel's spokesmen is rooted in directions set down by pollster Frank Luntz
The man who dared to go on holiday

The man who dared to go on holiday

New York's mayor has taken a vacation - in a nation that has still to enforce paid leave, it caused quite a stir, reports Rupert Cornwell
Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

Best comedians: How the professionals go about their funny business

For all those wanting to know how stand-ups keep standing, here are some of the best moments
The Guest List 2014: Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks

The Guest List 2014

Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks
Jokes on Hollywood: 'With comedy film audiences shrinking, it’s time to move on'

Jokes on Hollywood

With comedy film audiences shrinking, it’s time to move on
It's the best of British art... but not all is on display

It's the best of British art... but not all is on display

Voted for by the British public, the artworks on Art Everywhere posters may be the only place where they can be seen
Critic claims 'I was the inspiration for Blanche DuBois'

Critic claims 'I was the inspiration for Blanche DuBois'

Blanche Marvin reveals how Tennessee Williams used her name and an off-the-cuff remark to create an iconic character
Sometimes it's hard to be a literary novelist

Sometimes it's hard to be a literary novelist

Websites offering your ebooks for nothing is only the latest disrespect the modern writer is subjected to, says DJ Taylor
Edinburgh Fringe 2014: The comedy highlights, from Bridget Christie to Jack Dee

Edinburgh Fringe 2014

The comedy highlights, from Bridget Christie to Jack Dee
Dame Jenny Abramsky: 'We have to rethink. If not, museums and parks will close'

Dame Jenny Abramsky: 'We have to rethink. If not, museums and parks will close'

The woman stepping down as chair of the Heritage Lottery Fund is worried