Transforming South Africa: Policy Priorities and Implementing the National Development Plan
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Africa Programme Transcript Transforming South Africa: Policy Priorities and Implementing the National Development Plan Speaker: Hon Jeffrey Radebe Minister in the Presidency, Republic of South Africa Speaker: Hon Dr Rob Davies Minister of Trade and Industry, Republic of South Africa Speaker: Hon Nhlanhla Nene Minister of Finance, Republic of South Africa Chair: Alex Vines OBE Director, Area Studies and International Law; Head, Africa Programme, Chatham House 28 October 2014 The views expressed in this document are the sole responsibility of the speaker(s) and participants do not necessarily reflect the view of Chatham House, its staff, associates or Council. Chatham House is independent and owes no allegiance to any government or to any political body. It does not take institutional positions on policy issues. This document is issued on the understanding that if any extract is used, the author(s)/ speaker(s) and Chatham House should be credited, preferably with the date of the publication or details of the event. Where this document refers to or reports statements made by speakers at an event every effort has been made to provide a fair representation of their views and opinions. The published text of speeches and presentations may differ from delivery. 10 St James’s Square, London SW1Y 4LE T +44 (0)20 7957 5700 F +44 (0)20 7957 5710 www.chathamhouse.org Patron: Her Majesty The Queen Chairman: Stuart Popham QC Director: Dr Robin Niblett Charity Registration Number: 208223 2 Transforming South Africa: Policy Priorities and Implementing the National Development Plan Introduction This document is a transcript of the presentations given at a meeting held at Chatham House on 28 October 2014, which examined the South African government’s key economic policy priorities. South Africa boasts Africa’s most advanced economy, and its second largest, but the 2008 financial crisis took a heavy toll – particularly on its critical mining and manufacturing sectors. In response, the government has recently implemented an expansive National Development Plan (NDP), which aims to coordinate all aspects of government policy for the next two decades. At this meeting, Hon Jeffrey Radebe, Hon Dr Rob Davies and Hon Nhlanhla Nene discussed why the NDP is necessary, how it will be realized, and how it will impact on South Africa’s future. The meeting was held on the record. For more information, including recordings, transcripts, summaries, and further resources on this and other related topics, please visit www.chathamhouse.org/research/africa. Hon Jeffrey Radebe I am grateful for the opportunity to talk to you this afternoon. In one of his recent speeches, President Zuma referred to the National Development Plan (NDP) as ‘our roadmap for the next 20 years.’ He went on to say that ‘all the work we do in government is now part of the comprehensive National Development Plan, including all operational plans – be they social, economic or political’. The NDP is our programme for the radical socio-economic transformation for the next 20 years. It builds on the progress we have made in the past 20 years of democracy. Twenty years ago, when President Nelson Mandela was inaugurated, South Africa was a different country to what it is today. It is radically and almost unrecognizably better off today, for all its citizens. On average, the economy has grown at 3.2 per cent a year from 1994 to 2012, despite the global setback of the 2008 recession. In constant 2005 prices, gross national income per capita increased from R28,536 in 1994 to R37,423 in 2013. Employment grew by approximately 5.6 million between 1994 and 2013, or by 60 percent. The 2008 crisis was a setback, with the loss of approximately 1 million jobs between the end of 2008 and the end of 2010. Another important achievement in the past 20 years has been the modernization of the telecommunications sector, with huge investment in cellular infrastructure and greatly increased access to telephony, television, postal services and, more recently, data communications. The government has prioritized funding for the social sector, which, coupled with pro-poor policies, has resulted in a reduction in poverty and a range of advances towards racially integrated and equitable provision of services. The number of social assistance beneficiaries increased from 2.7 million people in 1994 to more than 16 million people by 2013. Over 8 million learners are now benefiting from no-fee policies, and this has contributed to an increase in secondary school enrolment from 51 per cent in 1994 to around 80 per cent currently. There are many more achievements we have made, but challenges remain. South Africa today is a stable democracy with a firmly entrenched human rights culture. Our constitution is recognized as the most progressive in the world and our bill of rights has been embraced by the vast majority of our people, from all races and backgrounds. To guide us over the next 20 years, we have adopted the National Development Plan. The NDP is complemented by a National Infrastructure Plan 3 Transforming South Africa: Policy Priorities and Implementing the National Development Plan with 18 Strategic Integrated Projects. Each of the projects contains specific infrastructure components and programmes, covering social and economic infrastructure across all nine provinces in South Africa. The NDP aims to unlock the institutional, human and structural impediments to higher growth in the country. The main economic target is to create 11 million more jobs by 2030. It offers a framework for faster growth and socio-economic progress; it promotes enhanced competitiveness, expanded infrastructure, greater spatial efficiency in growing cities and accelerated rural development. It prioritizes measures to build a capable, effective state that delivers services to citizens while encouraging business investment and growth. The document itself has 12 focus areas, each with individual actions, but at its most distilled the plan aims to reduce poverty and inequality. The NDP offers us a number of proposals aimed at addressing poverty and inequality. They include: an improved business environment to boost investment and growth – this is the most important factor in reducing unemployment; enhancing service delivery to alleviate the burden of poverty now, as well as to help individuals to escape the poverty trap with effective schooling and reduced pressure from poverty; and a lower cost of living for South Africans, in particular by reducing the effect of apartheid-style spatial planning. Three broad themes inform the government’s approach to tackling these priorities: partnership between the state and private sector to achieve desired outcomes; planning to improve certainty, facilitate partnership and increase accountability; and strategic sequencing of reforms so that those actions that can unlock implementation in other areas are considered first, as well as those where resources match the ambitions and those where we have the capacity to improve. The NDP provides a coherent, comprehensive and pragmatic plan to transform our economy. The main distinction of the NDP compared with other plans is that it focuses squarely on implementation rather than on diagnostics. It identifies specific actions that must be taken in each sector. The NDP is being actively integrated into the government’s budgets and programmes. The budget framework also seeks to transform the quality of public expenditure by shifting resources to implement the NDP priorities, improving infrastructure allocations and stepping up efforts to combat waste, inefficiency and corruption. Over the course of last year, government officials worked hard to ensure that the NDP and departmental spending priorities were fully aligned. This is no small task, considering the existing competing pressures, but we have achieved it. We recently published the Medium Term Strategic Framework (MTSF) for the next five years. The MTSF details explicit actions and departmental responsibilities associated with the NDP. The plans are budgeted for within our existing fiscal framework. The entire MTSF is built around an outcomes-based approach. We invite you all to take an active role in monitoring South Africa’s progress in achieving the NDP. Our open fiscal policy and transparency are to invite debate and foster constructive proposals on how to make things better, and to hold us accountable. The government is already implementing the NDP. We have a number of infrastructure projects under way aimed at unlocking the infrastructure constraints on growth. Their delivery is overseen by the Presidential Infrastructure Coordination Commission. We have established the National Education Collaboration Trust (NECT) – a collaborative effort which brings together government, business and labour in the education sector into a partnership aimed at improving educational outcomes. The NECT is a platform for the private sector to contribute meaningfully to the implementation of the NDP and integrate the various education efforts by the private sector. It also provides a good setting for trying innovative ideas in education and, once proven to work, these would be taken into the department for further implementation. We have initiated Operation Phakisa to unlock the economic potential of our ocean. This is an adaptation of the Malaysian Government’s methodology called Big Fast Results. Its strength is to bring different 4 Transforming South Africa: Policy Priorities and Implementing the National Development Plan