Impact of government interventions per the Economic Reconstruction and Recovery Plan objectives; Repositioning of Brand SA; with Minister and Deputy Minister

Meeting report

Minister's opening remarks

Ms Maropene Ramokgopa, Minister in the Presidency responsible for Planning, Monitoring and Evaluation, said that this Economic Reconstruction and Recovery Plan (ERRP) was introduced in October 2020 to address the economic recovery following the global economic slowdown caused by the Covid-19 pandemic. They had been able to track progress, make key observations on the targets that were set, and make recommendations on areas that needed improvement. They had presented the results of the evaluation to different streams in the form of committees of Cabinet, and all other clusters that deal with development. She believed that the interventions discussed in the meeting would bring improvement to the recovery plan so that South Africa could be a better country to live in.

Impact of ERRP objectives

Mr Robert Nkuna, Director-General (DG), Department of Planning, Monitoring and Evaluation (DPME), said that when the ERRP was introduced, it was not to stop other interventions that were set to be implemented, but was supposed to be a fast track intervention and an identification of those key issues that were catalytic. They had advised departments to take into consideration those interdependencies that were always going to slow down the implementation of the ERRP. The DPME had worked with clusters in this area, considering that they wanted to create their own internal mechanism for monitoring and evaluation, so there was a two-layer approach, and the DPME had initially agreed to this. They had then relented, because it seemed like the cluster was going to be able to manage monitoring and evaluation on their own, but along the way, it became evident that the cluster was not in the position to do what they had said they would do, resulting in the Department taking over as the overall assurance provider in the implementation of the ERRP.

Mr Godfrey Mashamba, Deputy Director-General (DDG): Evaluation, Evidence and Knowledge Systems, DPME, said that the evaluation of the ERRP had been commissioned by the economic sectors, investment, employment and infrastructure development (ESIEID) cluster in response to a resolution of the Cabinet Lekgotla of 5/6 September 2022. The objectives of the evaluation included quantifying the envisaged outcomes of the ERRP and clarifying its execution, and identifying possible bottlenecks, quick wins and gaps in the plan, and informing the review of the plan. The evaluation process consisted of the following steps:

• Desktop review and rapid evidence synthesis;
• Key informant interviews;
• Development of a monitoring and evaluation (M&E) framework;
• Economic sectors, investment, employment and infrastructure development (ESIEID) cluster validation workshop on the draft evaluation report;
• Adoption of the final evaluation report; and
• Development and implementation of the improvement plan.

Phase One of the progress assessment had been achieved, the second phase was partially completed, and the third phase was on the way to being achieved.

Some important ERRP implementation milestones have been achieved. The gross domestic product (GDP) was showing recovery to pre-2020 levels, and as energy shortages and inefficiencies within transport logistics had escalated, the focus was on building resilience. The DPME aimed to guide the ESIEID cluster in the development of an improvement plan, support it in commissioning an expenditure review on the ERRP, develop the ERRP performance information dashboard, and facilitate further integration of the ERRP Phase 2 & 3 interventions in the planning and budgeting system.

The Department recommends that:

• There should be immediate enhancements to the ERRP design and implementation;
• There should be enhanced monitoring, evaluation, and learning;
• Specific in-depth evaluation should be prioritised;
• Economic recovery interventions must be integrated into government’s next planning cycle.

See attached for full presentation

Repositioning of Brand SA

Ms Nomasonto Motaung, Deputy Minister in the Presidency with oversight over Brand SA, said that building a sustainable nation brand was possible and achievable, but like any project it succeeds only when it involves various parts of the country, from the state to the citizens. In an era of global challenges, it remained imperative for countries to constantly review their strategies to be effective. This meant that they must identify their competitive advantages to attract capital investments to support the sustainable socio-economic development of the nation brand, considering the challenges of the country. Interventions should be communicated to areas that were taking away from positioning the SA nation brand from being globally competitive. She expressed her confidence in the team to position the country as a preferred investment destination.

Ms Sithembile Ntombela, Acting Chief Executive Officer (CEO), Brand SA, said the top risks facing the country included a failed state, an economic collapse, political instability, and collapse of social security systems, to name a few. There had been interventions to deal with the key issues affecting the country which included introducing special tax incentives to help small businesses to install solar systems, the formation of an anti-corruption agency, signing gender-based violence (GBV) bills into legislation, driving the Presidential investment drive and the South African Investment Conference (SAIC) announcements leading to job creation, and the establishment of inspectorate operations under Operation Siyasebenta.

The challenges facing SA in 2023 were as follows:

• Inflation was expected to average 5.4% this year, but with a downside scenario risk of up to 6%;
• The unemployment rate was on an upward trajectory, as structural constraints limited economic growth;
• Total employment increased by 1.2 million in January-September 2022 on the back of stronger than expected GDP growth. The South African Reserve Bank (SARB) monetary policy committee had lifted the repo rate by another 25bps in January;
• Load-shedding on 208 days had reduced real GDP by up to 5% in 2022.

Brand SA focused on the country's values, personality, functional and emotional benefits to outline its competitive advantages to be outstanding in areas it had the upper hand on. These advantages included sports, health skills, an active stock exchange and the people of South Africa. Brand SA would target foreign chambers and foreign trade missions to ensure that relevant information was shared with their members, and they would work closely with missions to promote South Africa as a strategic partner and investment destination.

See attached for full presentation

Discussion

Mr K Pillay (ANC) asked if the Public Employment Programme (PEP) formed part of the ERRP and if so, what progress they could share about it. He asked what measures existed for monitoring and evaluating private sector investment, as per the ERRP, how industry indicators were monitored to assess the impact of the various interventions of the ERRP and, from the evaluation findings on the limitations caused by a concentrated economy, what interventions were required to advance structural intervention as part of the recovery plan. Was there a plan to support small businesses with alternative sources of energy so that they could reduce downtime in production? What was government’s plan to deal with the construction mafias causing delays in projects that could have been completed a long time ago? He applauded Brand SA for a job well done and appealed to the entity to fill vacant positions and the critical CEO position to create stability.

He asked what had been done to promote ambassadors, and expressed satisfaction with the collaboration with the tourism industry, home affairs, and the Department of International Relations and Cooperation (DIRCO). He pleaded that the relationships be strengthened, especially with the challenges involved in obtaining visas. He recommended that the provincial tourism boards and Members of Executive Councils (MECs) responsible for tourism collaborate to promote one brand and one message. How did the entity leverage partnerships with South African embassies and what was the state of the collaboration? How did they leverage citizens via the use of social media with a global reach? What was the impact of the SA media, and what was the entity doing to mitigate negative publicity? He recommended that the entity develop a lobbying capacity for various competitions and social and economic opportunities for citizens, develop strategies for ordinary citizens, and change the negative social media conduct.

Mr J McGluwa (DA) described the R500 billion that had been lost, which was supposed to have been used to fight Covid-19 damage, as an economic crime and an enormous abuse of public power for private benefit, and asked how it impacted society. How would this be addressed? How would data collection be improved, and at what stage would they receive explanations of the recovery of such losses? Emphasis should be put on the availability of advanced technology, providing opportunities for the DPME to deal with criminal activity across the departments. He said that Brand SA always left him in the dark as to the future of the entity, and that repositioning it would address several in-house matters that would influence how the institution responded or repositioned itself in branding Mzansi. It was difficult for him to locate where SA lay when it came to ranking the top countries for foreign investment, and asked for clarity on that.

With more than half of the countries that invested in SA being on top of the list of foreign investments and with the good tourism reputation SA had, what did Brand SA have to offer? He asked about methods that would be put in place to strengthen the country’s position as an attractive investment destination, if there would be incentives, if Brand SA set goals, and what the long to short-term investments would be. If the plan was for SA to be an attractive investment destination, were there any tariffs planned to be reduced, or exemptions planned to be made from certain taxes, or grants and subsidies to support investments in particular industries, so that the country could be in the top position in Africa?

Mr M Manyi (EFF) asked what timelines were attached to the implementation of the recommendations presented so that they could track them from an annual performance plan (APP) point of view. He asked what measures the Minister had to enhance coordination and collaboration to ensure the effective implementation of the ERRP.

Ms C Phiri (ANC) recommended that the Department take note of the strategies for the reconcentration of the economy's focus on increasing the share of small and medium size businesses in the economic sector, as they were very critical. They should also note the financial sector transformation to increase access to finance for small and medium enterprise (SME) development, and the economic reform of state-owned entities (SOEs) should have long-term planning with state participation. The fiscal and monetary policy coordination to support the ERRP was critical for the financing interventions in the public and private sectors. Private investment should be measured and evaluated to identify areas of market inefficiencies. The enhancement of monitoring and evaluation (M&E) learning should include the private sector, and state participation in areas of new target opportunities were vital for crowding in private investment. She finally noted that SOE reviews should consider establishing entities and repurposing others to create opportunities and target new growth opportunities.

Adv M Mothapo (ANC) commended Brand SA for portraying an inspiring picture of South Africa. She recommended that they intensify the communication around the perceptions and narratives that were going around about the country, as they would turn into the country’s reality if they were left as is. She stressed the need for the involvement of the tourism sector.

The Chair asked Brand SA what its central idea for the country was.

DPME's response

Mr Nkuna said that the Presidential Employment Stimulus (PES) had been implemented successfully across different areas, and some of the things that had been introduced with the project would continue, as it was not a once-off intervention. Various mechanisms were set up to ensure that the private sector also reported on the ERRP through the National Economic Development and Labour Council (NEDLAC) mechanism, but so far, this mechanism has not been strong in influencing reporting by the private sector. The DPME, however, had recommended that social compacting should be disaggregated into specific key sectors of the economy so that reporting could be enhanced. There was work being done with Business Unity South Africa (BUSA) to focus on energy logistics and crime prevention, and allow reporting by everyone, as it was a case study on how best to have a social compact and create collaboration between industry and government.

The Department of Trade, Industry and Competition (DTIC) had set up Investment South Africa (ISA) from which the DMPE gets data to ensure private sector involvement. All sectors of the economy were characterised by one form or another in terms of concentration barriers to entry for small businesses. There was a comprehensive mechanism developed by the Department of Small Business Development (DSBD) which had created two interventions -- the work of the Competition Commission and the DSBD to facilitate and interact with industry to reduce barriers to entry for small, medium and micro enterprises (SMMEs). Money had been put together to support small businesses comprehensively with alternative energy sources, and the construction mafias were being dealt with according to the law by conducting arrests where necessary.

Most corruption cases were known, because of what the state did through the Auditor-General (AG) and within the Presidency, and mechanisms were in place to deal with the implementation of Special Investigating Unit (SIU) recommendations. One would see that a lot of money was being returned because of the interventions of the SIU and the enforcement of its recommendations by DPME staff members. They had been concerned at the slow functioning of clusters, and had compiled a report and submitted it to the Forum of South African Directors-General (FOSAD) for redress. Delegated ministers chaired the clusters, and the question that remained was if the ministers should step down and let the Presidency take over and coordinate the clusters to ensure they were fully functional. He welcomed the recommendations put forward by Ms Phiri.

Dr Annette Griessel, DDG: Planning Coordination, DPME, said that the effective implementation of the ERRP required its integration across the entire planning and budgeting system. It was found that its implementation had, in many instances, been taking place in the local space, and they needed to focus more on local economic development and optimising local economic development opportunities. The ministerial circulars issued to guide the development of APPs had always included the issue of the ERRP, and the DPME had found that 75% of the APPs were aligned with it, showing that the ERRP was being taken seriously. There were small issues with the use of results-based indicators and targets within the APPs, and they were dealing with this, together with the Auditor General. The DPME produced the annual budget prioritisation framework so that government's policy priorities were reflected in the budgeting system. The government had started the process of the medium-term development plan for 2024-2029, starting with the methodology, and had presented the plan to the FOSAD workshop in July, resulting in its acceptance.

Mr Godfrey Mashamba, DDG: Evaluation, Evidence and Knowledge Systems, DPME, added that the recommendations made by Ms Phiri would be shared with the economic cluster (EC) for consideration. The improvement plan was designed in a manner that required that specific activities be identified, clear responsibilities be assigned to relevant parties, and that timeframes be stated. The EC was responsible for ensuring all the goals set to integrate the ERRP into planning and budgeting systems were achieved.

Minister Ramokgopa added that the DPME should have at least five key measurable priorities the next time they met the Committee. The ERRP spoke to the coordination of all the master plans and policies put in place to address the economy of the country, and the measurable targets would be able to track the progress of the ERRP. The South African Police Service (SAPS) and Defence Force were working together to deal with construction mafias and zama-zamas (illegal miners), and they would present their progress in detail in the upcoming meetings. She assured the Committee they would continue to analyse and assess the ERRP to ensure its effectiveness.

Brand SA's response

Ms Ntombela acknowledged the engagement from the Committee and noted its recommendations. She said that they were working on a reputation strategy, where they were going to lean on influential voices in the political space, business, and ordinary citizens to try and disseminate the strategy they had put in place. There were 55 people representing the one body at Brand SA, and that did not mean that external parties were not needed to rally behind the brand. She agreed with the suggestion to expand to the provincial and local spheres, but in the absence of that, they would still communicate with provincial representatives through Tourism SA. Many indices measured the different dynamics and as shown, South Africa had a good reputation profile -- it was visible, and the country just needed to deal with the few challenges it had.

She said that Brand SA should frequently enhance the state of collaborations, and they were working on that. They collaborated with “Play your Part” ambassadors, who were responsible for contributing towards a positive social change in their communities and the country at large. They were engaged on a quarterly basis, and shared the activities they were involved in through social media.

The central idea for the country was still in the works. The entity was yet to consolidate the Government Communication and Information System (GCIS) findings from consulting with all government departments in the next two weeks. and they would give insight at the next meeting.

Ms Thoko Modise, Acting Chief Marketing Officer, Brand SA, agreed that communication should be intensified, and said many opinion editorials were done to turn the negative comments about the country around. The rapid response team looked at issues in the environment and used voices outside of Brand SA, such as influential people and thought leaders, who could drive a positive narrative in the media. They had engaged with media owners directly to play a role in pushing a positive narrative about the country. South Africans living abroad were key for the entity. As a result, there was a Global South African website dedicated to those living abroad so they could share the current affairs of the country, and allow them to share their experiences in different countries.

Deputy Minister Motaung thanked the Committee for its inputs, and said that Brand SA had started with the process of filling vacant board member positions and other vacancies, and had also started with the process of registering the board with the Master of the High Court.

Committee minutes

The minutes of the meeting held on 3 November were adopted without any amendments.

The meeting was adjourned.