President Jacob Zuma says the ANC's mid-term review of government performance had indicated steady progress in various services.
Delivering his state of the nation address in parliament on Thursday night, Zuma said these included areas of health, education, the fight against crime, human settlements and energy and water provision.
However, he said the triple challenge of unemployment, poverty and inequality persists despite the progress made.
Zuma said Africans, women and the youth continue to suffer most from this challenge.
Looking back on government peformance in 2011, Zuma said there were two main things that government got right with respect to job creation.
"Firstly, we mainstreamed job creation in every government entity, including state owned enterprises. Secondly, we strengthened social dialogue and cooperation between government, business and the community sector.
President Zuma also said that government remains committed to the creation of a favourable and globally competitive mining sector.
He says government also remains committed to promoting the mining industry to attract investments and achieve both industrial growth and much needed transformation.
Zuma said the achievements of last year indicates that if government continues to grow along that path it is possible to write a new story about South Africa, one of how working together South Africans can drive back economic inequality and poverty.
He also announced massive capital investment by Transnet of R300bn.
"I am pleased to announce the Market Demand Strategy of Transnet, which entails an investment, over the next seven years, of three hundred billion rand in capital projects."
"Of this amount, 200 billion rand is allocated to rail projects and the majority of the balance, to projects in the ports."
"Amongst the list of planned projects, is the expansion of the Iron Ore Export channel from 60 million tons per annum to 82 million tons per annum," Zuma said.
"It also includes various improvements to the Durban-Gauteng Rail corridor and the phased development of a new 16 million tons per annum manganese export channel through the Port of Ngqura in Nelson Mandela Bay."
The Eastern Cape is also expected to get a massibe boost from government this year.
President Zuma said government would develop a major new South Eastern node that will improve the industrial and agricultural development and export capacity of the Eastern Cape.
He said this will also expand the Eastern Cape's economic and logistics linkages with the Northern Cape and KwaZulu-Natal.
"In the former Transkei part of the Eastern Cape, we are committed to building a dam using the Umzimvubu River as the source, in order to expand agricultural production.
In addition, the implementation of the Mthatha revitalization project, which is a Presidential special project, is proceeding very well," he said.
"Work is at an advanced stage to improve water, sanitation, electricity, roads, human settlements, airport development and institutional and governance issues," president Zuma said.
The Eastern Cape motor manufacturing industry is also expected to benefit from an announcement on the reduction of port charges for importers and exporters.
President Zuma said the issue of high port charges was one of the issues raised sharply by the Eastern Cape's motor industry during his performance monitoring visit to the province last year.
"The port regulator and Transnet have agreed to an arrangement which would result in exporters of manufactured goods receiving a significant decrease in port charges during the coming year equal to about R1bn in total," Zuma said.
