(8,353 words)
The bruising competition between President Thabo Mbeki and former Deputy President Jacob Zuma continued to dominate the political scene, culminating in December in a resounding victory for Zuma in the elections for the ANC presidency. This left the ruling ANC with two centres of power, with Mbeki as head of state and Zuma as president of the ANC and determined to become president of South Africa. The economy remained on a sound footing, but the shortage of skilled labour and the inability of the electricity company Eskom to keep up with rising demand signalled the limitations on a future growth path. According to provisional figures, GNP grew by 4.5%, but inflation is on the rise at around 6%.
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(8,353 words)