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Commission study shows only 47% alignment between Budget and NDP

NPC deputy chairperson professor Malegapuru Makgoba on the need to align the Budget withthe NDP goals. Camera Work & Editing: Nicholas Boyd. Recorded: 22.4.2016

22nd April 2016

By: Terence Creamer

Creamer Media Editor

  

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A preliminary analysis conducted by South Africa’s second National Planning Commission (NPC) of the current alignment between the country’s Budget and the National Development Plan (NDP) shows there to be only a 47% correlation.

Nevertheless, Minister in the Presidency Jeff Radebe, who is NPC chairperson, insisted at the weekend that the plan, which was adopted in late 2012, remained the country’s long-term ‘blue print’ and was being integrated into the work of departments.

Speaking at the first media engagement since the appointment of the new, 26-member NPC in September, Radebe said the 14 goals outlined in the plan had been embedded into the five-year Medium-Term Strategic Framework and that there would be ongoing monitoring and evaluation of implementation by departments.

There was, nevertheless, ongoing scepticism over the implementation of the NDP, which observers had noted was competing not only with other departmental imperatives and agendas, but also other plans, such as the New Growth Path.

The most commonly cited example of misalignment relates to the Department of Energy’s decision to press ahead with the procurement of new nuclear capacity, despite the NDP’s call for “more in-depth investigations” into the costs and benefits of adding new nuclear capacity.

However, numerous other examples of misalignment had also emerged in a range of other sectors, including the minerals sector where the NDP anticipated as many as 300 000 jobs could be created. However, that was premised on greater regulatory certainty, which had not yet materialised and was shaken again recently, when Mineral Resources Minister Mosebenzi Zwane released a draft Mining Charter for public comment without consulting the industry.

NPC deputy chairperson Professor Malegapuru Makgoba, a medical doctor and former University of KwaZulu-Natal vice-chancellor, acknowledged that the plan could only be implemented if it was backed by the necessary fiscal resources.

For this reason, a subcommittee had been established soon after the NPC’s first plenary meeting to study whether the 14 NDP goals were indeed being reflected in the Budget. The outcome showed a mixed picture, with that overall alignment calculated to be only 47%.

“We can talk about the plan, but if we don’t align the Budget of our nation with the goals of the plan, we are not going to realise it. There are too many documents in our country that are lying in drawers . . . but the resources to actually deliver those recommendations, or decisions are not there,” Makgoba said.

However, he also stressed that the plan could not be delivered by government alone, which was why the NPC was planning to increase its visibility and engagement with civil society, whose buy-in was also critical to the realisation of the 2030 vision.

The NDP proposes that the economy grow by 5% a year to achieve an unemployment rate of 6.5% by 2030, which would be a major change from the current jobless rate of above 25%. In fact, it would involve increasing employment from around 13-million in 2010 to 24-million over the period. It also envisages the elimination of poverty, by reducing the proportion of households with a monthly income of below R419 from 39% to zero. The plan also aims to reduce inequality, as measured by a fall in the Gini coefficient from 0.69 to 0.6.

The South African economy was, however, well below such levels of growth, with the economy expected to expand by below 1% in 2016, having only just breached that level in 2015. The absence of growth, which is impacting employment, tax collections, the ability of consumers to spend and the appetite among firms to invest, was also a key concern for the rating agencies, which would decide in June whether or not to downgrade South Africa’s sovereign rating to junk.

The NPC had assembled a specific work stream focusing on the creation of an “expanded, inclusive, efficient and fairer economy” and had already identified 27 interventions that, it believed, would be fundamental to improving prospects for “sustainable growth”.

Commissioner Elias Masilela said he could not yet elaborate on the precise nature of the 27 interventions, but indicated that they were designed to deal with a range of problem areas, from the delivery and governance of infrastructure projects, to improving the prospects for small business and exports.

Radebe promised specific progress in the areas of mining and energy, noting that government, business and labour were working collaboratively under the aegis of Operation Phakisa to improve the investment climate in the mining sector.

In the area of nuclear energy he reiterated Finance Minister Pravin Gordhan’s Budget statement that affordability would determine the pace and scale of South Africa’s nuclear investment. “The process of the request for proposals will help determine whether we will be able to afford [nuclear] and, if so, what the pace will be.”

Edited by Creamer Media Reporter

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