[{"bbox": [72, 122, 302, 154], "category": "Section-header", "text": "## 2. RATIONALE"}, {"bbox": [86, 186, 220, 212], "category": "Section-header", "text": "### 2.1. Context"}, {"bbox": [83, 228, 1145, 361], "category": "Text", "text": "The EU and South Africa enjoy good political and economic relations with one another as distilled in the only Strategic Partnership the EU has with a country in Africa. South Africa is the economic hub in Southern Africa with a diversified portfolio of industries which has positioned the country as a key actor, partner and ally for the EU's strategic, political, economic and security interests at regional, continental and global levels. The EU remains SA's largest trade and investment partner, accounting for 22 % of total trade in 2020."}, {"bbox": [83, 387, 1145, 548], "category": "Text", "text": "South Africa is a middle-income country which has achieved many successes, notably its largely peaceful transition to democracy in 1994. However, complex political and economic challenges have limited the country's socio-economic development potential. The triple burden of unemployment, inequality and poverty brought on by a deep legacy of segregationist policies and systems have ultimately culminated in the creation of one of the most unequal societies in the world. Despite strong and ambitious policies to address these legacies, implementation gaps and weakened governance practices have also contributed to widening inequality."}, {"bbox": [83, 574, 1145, 760], "category": "Text", "text": "The Covid-19 pandemic has exacerbated many of these pre-existing challenges, and while President Ramaphosa's response package is the most notable in the region (10 % of gross domestic product (GDP)), it's impact is limited by the country's already sluggish economy and growing budget deficit which is predicted to expand to 12 % of GDP in the 2020/2021 financial year. The country's youth, women and historically disadvantaged population are the most affected by these challenges and recent unrest in KwaZulu Natal and Gauteng provinces have exacerbated some of South Africa's economic fragilities. The dire socio-economic needs resulting from the Covid-19 pandemic adds pressure on the government to divert from a low-carbon and resource efficient path."}, {"bbox": [83, 785, 1145, 1052], "category": "Text", "text": "South Africa's GDP growth was expected to rebound by 3.8 % in 2021 and 2.5 % in 2022, below the global GDP average by emerging economies (4.6% in 2021), before being hit by social unrest, mass looting and destruction of property in KwaZulu-Natal and Gauteng which, President Cyril Ramaphosa admitted, has been fuelled by anger over weakening socio-economic conditions. Growth was expected to be driven by an increase in domestic consumption and exports as the country opens up to its commercial activities again. However, South Africa was already widely not seen getting back to pre-pandemic levels of output before 2023. On the back of contractions in manufacturing and services and consumption, as well as lowered confidence and rising uncertainty, the unrest is expected to set the desperately needed economic growth back even further. The 2021-2027 MIP is built on this assessment, and provides substantial resources under three priority areas: a) a sustainable, resilient, transformative and inclusive growth, b) reducing inequalities, and c) partnerships."}, {"bbox": [83, 1077, 1145, 1210], "category": "Text", "text": "The NDICI TCF, thanks to its broad coverage and areas of engagement, will provide an impactful EU contribution to South African development and socio-economic recovery, in line with the EU strategic interests and the South Africa National Development Plan (NDP) 2030. The Facility will lay the ground for future actions, ensure that cross-cutting priorities are effectively mainstreamed in interventions and enable the Delegation to reinforce public and economic diplomacy work and increase the visibility of the EU and Member States in South Africa."}, {"bbox": [83, 1236, 1145, 1316], "category": "Text", "text": "The NDICI TCF will support the collaboration with the Government, civil society and the private sector to achieve the objectives outlined in the NDP in general and, in particular, the EU-South Africa MIP 2021-2027 and other financial instruments implemented by the EU Delegation in South Africa."}, {"bbox": [83, 1342, 1145, 1422], "category": "Text", "text": "The NDICI TCF will also play a crucial role in raising awareness of the EU's partnership with South Africa. This will contribute towards the promotion of democracy and human rights, EU values and culture, social inclusion, human and economic development, gender equality and the strengthening of institutions."}, {"bbox": [72, 1590, 1035, 1616], "category": "Footnote", "text": "2 https://ec.europa.eu/international-partnerships/system/files/swd-2021-human-right-based-approach_en.pdf."}, {"bbox": [72, 1614, 398, 1637], "category": "Footnote", "text": "3 COM(2020)152 of 5.03.2020."}, {"bbox": [72, 1637, 395, 1661], "category": "Footnote", "text": "4 JOIN(2020)17 of 25.11.2020."}, {"bbox": [1051, 1663, 1157, 1687], "category": "Page-footer", "text": "Page 5 of 19"}]