By Mark Ashurst BBC World Service business reporter

Trevor Manuel: SA finance minister since 1996

Better move slowly but surely, he reasons, than surprise the markets with anything unexpected.

"And we will continue day by day, and year by year, to translate the resources at our disposal and the opportunities before us into people-centred development, human fulfilment, and freedom," he told the country's parliament as he unveiled his spending plans for 2004/05 on Wednesday.

South Africa's public finances have been transformed since it became a democracy 10 years ago.

Nothing is enough to turn the tide of rising unemployment Trevor Manuel

In the coming year, Mr Manuel will spend a little more, letting the government deficit slip by half a percentage point.

But even then the debt burden will be less than most European economies'.

Empowerment progress

One of Mr Manuel's budget priorities is to step up efforts to give black people a bigger stake in the economy.

This will be achieved partly through a new 6bn rand ($1bn) "empowerment" fund, which will provide financial guarantees to cash-strapped but ambitious black capitalists.

"(The fund) would support, through guarantees and wholesale financing, access to finance in circumstances where there are deserving cases for black economic empowerment," Mr Manuel told the BBC's World Business Report.

Pretoria's policy of empowerment - which aims to reduce the economic dominance of the white minority by transferring control over some companies to black people - has had a patchy record.

It has unnerved some investors, and has drawn criticism for emphasising transfer of ownership at the expense of the government's other priorities, which include skills development and participation in management.

Has South Africa made progress towards an effective model of empowerment?

"I think we're going to have to carve our own path," Mr Manuel says.

Empowerment has worked best in the mining sector

"There are a number of transactions in the mining sector which are doing exceedingly well, although that's partly occasioned by the fact that the mining industry is dependent on the government for licensing."

However, recent developments in South Africa's financial services sector suggest that privately-owned businesses are also starting to play their part.

"What we've seen in the financial sector is business coming together to develop a financial sector charter focused on a whole myriad of issues, from resource development to availing capital for empowerment transactions," says Mr Manuel.

"That's exceedingly encouraging because this will allow for much broader ownership of the ideas and the programmes in the financial services sector.

"We have a basis for collaboration going forward."

Poverty challenge

Since being appointed finance minister in 1996, Mr Manuel has often walked a fine line, trying to encourage a more open and dynamic economy in Africa's economic powerhouse, while tackling the iniquities of the past.

New housing has helped alleviate poverty

But for many in the ranks in the governing African National Congress, Mr Manuel has been too liberal.

He is lauded by financiers and big business, but foreign investment has fallen far short of his ambitions.

For the poor, including at least a third of the population out of work, life is getting harder.

What then did his budget - the last before elections in April, and perhaps his last as finance minister - offer South Africa's poor?

"On the one hand, increases in the social security system. Out of a population of roughly 45 million we have 7.4 million beneficiaries of social security," he says.

"The second area would be further education and training, upgrading skills.

"And the third is a large chunk of money to support an expanded public works programme to create work opportunities within construction and infrastructure maintenance."

Uphill struggle

The new public works programme, worth some 20bn rand, aims to create a million jobs in the next five years.

But Mr Manuel candidly admits that in today's tough economic climate, the struggle to create jobs can seem like a losing battle.

"Nothing is enough to turn the tide of rising unemployment," he says.

President Thabo Mbeki faces the electorate on 14 April

"Most governments are facing some big challenges - more rapid technological changes, and greater competition with countries which were previously off the world economic radar.

"This is creating all manner of pushes and pulls, and I think that notions that used to resonate, like full employment, no longer find a place.

"It's a big challenge, but I don't think it's unique to South Africa."

However, Mr Manuel insists that his government has responded well to South Africa's economic problems.

Election day

"In those areas where government has sole responsibility we've done remarkably well - we've built houses, we've built clinics, we've upgraded hospitals, employed teachers.

"We've done less well in areas where we're dependent on other agencies, like the private sector, to create employment."

He adds that the government's main task in the battle against unemployment is to forge "an approach that includes different segments of South African society working together towards a common objective".

But for now, the ruling ANC's more immediate concern is the next election, pencilled in for 14 April.

Mr Manuel, in his eighth year as finance minister, says he would "certainly" stay in the role as part of a re-elected ANC government if asked to do so by President Thabo Mbeki.