Despite the international recognition and praise that South Africa received in 1994 for organizing its first free and fair, multiracial presidential elections, the country continues to exhibit increasing signs of state fragility on a number of different fronts that could be traced back to the economic, social and political legacies of Apartheid. Primarily, this paper analyses some immediate social and economic challenges facing the country in its transitional period. With the collapse of Apartheid, the country has largely achieved racial peace, but not social harmony. Although some progress has been made with regard to spurring economic growth and instituting painful macroeconomic stabilization policies, the plight of its black majority remains bleak as it had been under white rule. Unless social and economic reforms are sped up, South Africa's achievements over the past 13 years will be undermined by the brewing dissatisfaction and frustration with the government's handling of the economy and its attempts in addressing the social ills of Apartheid that still haunt it.