The Portfolio Committee convened a virtual meeting to be briefed by the National Planning Commission (NPC) on the lessons it had learnt over the past ten years that could be implemented to assist in achieving the National Development Plan's (NDP's) goals by 2030.
The NPC said that in its ten-year review, it had been found that unemployment was on the rise, inequality challenges were increasing, economic growth was stagnant and service delivery had worsened. Contributing factors to governance challenges included the lack of trust in the police and inaccessibility of police stations, the social element having poor sequencing of programme interventions, and the economic element experiencing a rise in criminal syndicates, particularly in the mining and construction sectors. For the NDP to reach its goals, the economic, social and environmental fundamentals must be in place, with an approach rooted in governance, economic transformation, social cohesion, a just transition to a more sustainable development pathway, as well as a bias in favour of the poorest of the poor.
The Committee welcomed the briefing, describing it as honest and evidence-driven. During the engagement, some Members said they had found the findings discouraging, while others believed government’s inability to achieve the targets was due to the legacy of colonialism, which required renewed efforts to overcome.
Deputy Minister's opening remarks
Ms Pinky Kekana, Deputy Minister in the Presidency, said that the National Planning Commission's (NPC's) 10-year review referred to the events from 2012 to 2022, with particular emphasis on the period from 2018 to 2022.
The objective of the National Development Plan (NDP) was to bring about transformation and redress certain challenges across different spectrums of society. The NPC embarked on a review to look at how far the government had gone and the challenges related to the non-achievement of some targets. The unprecedented issues that confronted the world at large and those that were specific to the country had brought unintended consequences to government and the private sector, which had been unable to reach their targets. An engagement with the Appropriation Committee had raised concerns about more than R1 trillion across the spheres of government, as the issues of poverty, unemployment and inequality had not been addressed accordingly.
She noted that in as much as the Department of Planning, Monitoring and Evaluation (DPME) held the state accountable, there were certain things that the objectives of the NDP wanted to achieve that had to be done through the medium term strategic framework (MTSF) and the annual performance plans (APPs). This had not been done, and it resulted in the development of the National Development Planning and Coordination Framework Bill. This was so that they could have the capacity to engage with National Treasury to stop some of the money from going to programmes that did not speak to their intended objectives.
When the President announced the District Development Model (DDM) in 2019, the DPME was able to see the three spheres of government and the small, medium and micro enterprises (SMMEs) gradually coming into play, and had looked at how they could comprehensively deal with some of the challenges to the objectives of the NDP. With this being the first generation of the DDM, it had its own teething problems, but now everyone was coming to the party.
NPC review of NDP
Dr Boitumelo Ramatsetse, Commissioner: Research & Innovation, NPC, said that the NPC aimed to obtain quality healthcare for all, improve the quality of education, reform the public service, reverse the spatial effects of apartheid, and develop an economy that would create more jobs by 2030. In the 2020 review, it was found that unemployment was on the rise, inequality challenges were increasing, economic growth was stagnant and service delivery had worsened. Contributing factors to governance included the lack of trust in the police and inaccessibility of police stations, the social element having poor sequencing of programme interventions, and the economic element, including the rise in criminal syndicates, particularly in the mining and construction sectors.
In 2022, the NDP had over-performed against the targets that they had set for the labour force participation rate by 2.8%, but unemployment had increased to 32.9%, resulting in a decline in this area. The NDP proposed that:
- The current fiscal and monetary policies should be maintained until expansion is possible.
- Logistic issues be addressed, and bottlenecks to be loosened to unlock mining industry’s potential.
- Red tape be reduced, and financing for small businesses be increased.
- Decisive action be taken against economic crimes like theft, infrastructure vandalism, construction sector extortion, and illegal mining.
- Strong public/private partnerships (PPPs) should be established and trust strengthened to meet public sector goals and build an inclusive economy.
- The government should consider its governance limitations before enacting the National Health Insurance (NHI) Bill.
- Comprehensive early childhood development (ECD) services should be provided for.
- Appointments to the public sector and state-owned entity (SOE) boards must be based solely on merit, rather than political considerations.
- The integrated planning framework should be finalised to guide developmental planning and the corresponding institutional structure.
- The framework for the professionalisation of public services should be implemented.
See attached for full presentation
Mr M Manyi (EFF) appreciated the presentation, and quoted President Thabo Mbeki as saying that the NDP should not be referred to as a ‘plan,’ because there were no milestones or action plans set in place. He commented that if the NDP was a well-coordinated missionary, there would not be improved bachelor passes coming from schools, as there was a serious problem with absorption at higher education institutions, and there was an increased lifespan that would have people living longer in poverty. He asked what was required for a state to be called a ‘failed state,’ because, from his perspective, South Africa was run by a failed government. He questioned the effectiveness and existence of the NPC, as it seemed like a duplication of roles from already existing entities.
Ms T Tobias (ANC) noted that the NPC had been established as an advisory committee to Cabinet, not to draft a strategic plan for government and to introduce new ideas. She said that for any programme to be implemented, there should be enough resources in line with the size of the economy, and how it could be activated for growth. Had the NPC paid attention to how one could change the downward trend of the country’s economy? The Commission should find ways to cushion the South African economy beyond international factors, and focus on priority goals like inequality and capitalism. The time had come for the Commission to move from being just an advisory body to being able to hold certain institutions, including the private sector, to account. She commented that the impacts of capitalism and colonialism could not be ignored, as they are still in effect today.
Mr J McGluwa (DA) said that he was not in a good space after listening to the presentation, because the findings in the report affected the government, but Cabinet had not expressed its views on them. With seven years left to reach the goals of the NDP, it was too late to be calling on government to comply with certain policies, and with the past reports of corruption within the government, trust in the state had been lost. He asked which of their targets the Commission would fail to achieve by 2030. Have there been any engagements with the private sector to seek partnerships? Was the government willing to account on the findings that the economy was not structured to serve the interests of South Africa? He noted that the issues discussed in the report were not political, but were to be raised to the government, and that government should have expressed its views before the report was presented in the meeting. He asked if the 24 volunteers in the NPC were still with the Commission, or if some had resigned along the way.
Mr B Yabo (ANC) noted that a Gini coefficient rises to its limits because of systems put in place to run people's lives. In South Africa, the system has resulted in poverty, unemployment, and inequality. For these factors to change, systems needed to change, and that process would not happen overnight. The current democratic order struggled to reverse the tide of the outcomes of these systems, because the systems were subjected to natural boom and bust cycles. He asked the NPC if they had done a proper system analysis, including the country's economic and governance system. with the view to implementing changes that would result in achieving their goals by 2030.
Had the NPC conducted a comparative analysis on the amount of time it took from a period of liberation struggle to a democratic dispensation to achieving a thriving economy, and what would the contribution factors toward that average time be? Had the Commission looked at the structure of the state -- its economic structure, policy framework and the causes of the increase in capital flight -- in conducting its work? With the decline of public sector investments to 4.1% in 2021, relative to 6.1% in 2013, would the Commission argue that austerity measures as an intervention were a measure that worked in trying to stimulate the economy, and that public sector spending cuts contributed to the growth of the economy?
Deputy Minister Kekana thanked the Members for their inputs, and said that a lot had been achieved, considering the liberation of the country and the democratic government that had been introduced. Although they did not condone underperformance, the global economic crisis, Covid-19, and the July unrest resulted in the development of the economic recovery plan (ERP) to ensure that all government departments implemented their policies. They had worked towards having the SOEs, especially the development finance Institutions (DFIs), contributing towards development and creating stability in entities like Transnet. The capacity of municipalities to deliver services was a big challenge, and most investors wanted to be assured of services and other related issues. The Department of Cooperative Governance (DCOG) was now working together with Treasury to increase capacity for municipalities so that they could improve their service delivery and thereby increase investor confidence.
Dr Pulane Molokwane, Commissioner: Governance, NPC, said that before the 10-year review, they had provided 12 years’ worth of detailed reviews that suggested solutions to the problems that had existed during those years. She emphasised that the NPC was not an implementation commission but an advisory body, and they had adopted the vision of the Commission as a plan until another proposed plan emerged.
The MTSF was meant to break down the NDP into five-year intervals, and the NPC had highlighted coordination as a problem. They had not investigated who attended or convened the independent panel meetings. The idea of the review was not to point fingers, but to assist government to better South Africa, and they continued to provide advice to Cabinet as part-time commissioners. Cabinet had engaged with the review, and because mismanagement and mistakes were made, it would be unfair to expect the country to blossom in a global recession.
Mr Ravindra Naidoo, Commissioner: Economic Development, NPC, welcomed the engagements and said that given the amount of work done by the NPC for the past 12 years, it would be good for the Committee to get further reviews and presentations on some of the work done. The 2012 NDP stated that to achieve all the goals, GDP growth had to be at 5.4%, and that this would be achieved by a growing economy created by increased employment and investments. He noted that Transnet, other network infrastructures, and Eskom probably cost the country 3% of its gross domestic product (GDP) because of their non-performance. There were, however, positive impacts to the GPD from the tourism sector, investments like the BMW X3 manufacturing plant and non-banking finance, so saying that South Africa was a failed state was not appropriate. In the 2012 NDP review, it was highlighted that the main driver of implementation was the state, and the commissioners had engaged with key sectors like agriculture, mining, the Development Bank of Southern Africa (DBSA), the Industrial Development Corporation (IDC) and DFIs to understand how the numbers backed them up.
The NPC proposed that the key sectors switch to a more partnership-led economic model in the next seven to eight years, for the state to support its engagements with businesses and facilitate the sector master plans, to create a lot of jobs within each sector. There were a lot of investment opportunities to rebuild infrastructure through partnerships. The digital structure was developed through an infrastructure build programme that would position the youth spatially, and it was global. They had focused on the need to target youth employment initiatives to prepare them for the future by promoting them to work in the private sector, even though there was a need to rebuild the public sector by bringing more skills through volunteer programmes etc. He emphasised that the NPC existed to work with the government, support the five-year medium-term strategic framework of departments, and influence the medium-term expenditure framework (MTEF) of Treasury.
Mr Manyi said he was disappointed with the response to the question about the existence of the Commission. He asked if the NPC had brought forward any clear proposals, and if the advice they had given had been implemented or rejected by those they engaged with. The failure to achieve the NDP had been a constant occurrence for years, and there were no signs of consequence management by the Commission for this.
Mr Yabo stressed that the NPC was advisory, and executive authority rested upon those who were elected, so he endorsed the work done by the Commission so far. He said that there should be a consideration of the redistribution of income to respond to the Gini coefficient that was on a rampant spiral, and that there should be models proposed to address the responses needed from the government to stem the tide of the growing gap between the haves and have nots. When the state of hunger among the poor was exacerbated to a point where they were left with no options, they would ‘eat’ the rich, and the rise in the crime rate was a testament to that. The NPC should address the reindustrialisation of the economy. They should be informed by empirical data and a comparative analysis of other developmental states across the globe. They should state what the SA government should do to eliminate the threat of a growing Gini coefficient.
Ms Tobias asked what strategies had been put in place to ensure growth, now that the projections from the outer years of the economic growth had not been achieved.
Prof Hope Magidimisha, Commissioner: Town & Regional Planning, NPC, said the NDP was a master plan -- it did not have many details about implementation, but sets out what should be seen in years to come. Each department had a role to play in assisting the Commission in achieving the NDP goals, and the role of the NPC was also to monitor how far the projects developed by departments would give rise to the achievement of the NDP.
Mr Naidoo said the NDP had stated that a GDP growth of 5.4% should be achieved annually, and there had been a failure to achieve that goal for the past ten years. Everything that must be done from a planning commission point of view must be rational and evidence-based, and the NPC advise that any economic intervention by government has to be measured against how positive its impact would be. In the next three years, a 5% GDP growth would not be achieved, and they foresaw a 2% growth being achievable because, as mentioned, Eskom and Transnet had been big contributors to the decline. Active engagements were looking at how to reduce the frictional points holding the economy back, like the SMEs that were being held back by regulations and red tape. The partnership agreements at different stages in key sectors would make a big difference, and they needed to be accelerated where government could sign off and support them to help sectors to grow.
Dr Ramatsetse said that he was responsible for the strategy within the Commission, and when he was first appointed, there had been a lekgotla where they had brainstormed on some of the things they could influence in the long term. They had adopted a theory of change approach, where they had looked at the ultimate outcomes they wanted to achieve in alignment with the NDP and established things they had to do within the short to medium term. They were enhancing the way they functioned, and believed that these interventions would go a long way towards changing the living conditions and well being of South Africans.
The Chairperson said that the role of the NPC was critical, and suggested that the matters ventilated in the meeting needed to be considered. The focus of the Committee was to engage the DPME about finding practical grounding within government that the Department itself would coordinate. They would track if the proposals made were implemented across the state, so that the next review was influenced by the oversight conducted.
The meeting was adjourned.
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