Sequel to Long Walk to Freedom - Revision 3 - Chapter 9 Page 3

Prior to 1994, South Africa's economic growth rates were in decline. In the 1985 — 1990 period, the South Africa economy's annual average growth rate was 1,0%, falling to 0,2% in the 1990- 1994 period. In contrast, during the period 1994 — 2000 South Africa recorded an annual average economic growth rate of 3,0%. Although not yet sufficient to absorb new entrants into the job market, significant structural reforms have been introduced, creating solid foundations that should help ensure future sustainable growth. The government had to grapple with a large budget deficit. It had to come up with a new economic policy mix aimed at stabilising the macro-economic fundamentals and build foreign investor confidence. The opening up of the South African economy from 1994 (as measured by SA merchandise imports plus exports relative to GDP) has had many positive effects, not least among them the development of a significant export market. The importance of external demand for South Africa's products is reflected in the five consecutive quarterly current account surpluses on the Balance of Payments that we have recorded as at June 2001. The government deficit has been reduced to 2,0% of GDP in 2000, markedly lower than the 7,2% in fiscal year 1992/93. This is far below the deficit level of most developed economies. 17