National Development Plan 2.0: Ramaphosa implored to focus on fewer socio-economic issues
DAILY MAVERICK / 12 AUGUST 2019 - 00.25 / RAY MAHLAKA
On Thursday 15 August 2019, it will be seven years since the National Development Plan was adopted in Parliament. The plan intended to provide South Africa with a policy roadmap for, among other things, reindustrialising the economy, improving access to quality education and eliminating poverty by 2030. But there has been little progress in its implementation since its adoption in 2012.
The National Development Plan (NDP) hasn’t lived up to expectations and has gathered dust, like many other ambitious public policies. As a result, the National Planning Commission (NPC) will advise President Cyril Ramaphosa to prioritise fewer socio-economic issues in a new version of the NDP.
The NPC, the policy think-tank that was established within the government in 2010 and led the crafting of the NDP, is embarking on a review of the NDP’s implementation failures since it was adopted by Parliament on 15 August 2012. At the time, the NPC was led by former finance minister Trevor Manuel and Ramaphosa, the then deputy president.
The NPC, which will report the findings of its review to Ramaphosa in October 2019, has already suggested that the revival of the NDP under a new version should focus on seven socio-economic issues to fix instead of the 1,500-odd issues targeted in the original plan.
Professor Malegapuru Makgoba, the NPC’s deputy chairperson, said the new NDP will likely feature seven key priorities to fast-track South Africa’s path to prosperity that Ramaphosa has already unveiled in his State of the Nation address on 20 June 2019 after his election victory.
The seven priorities are: economic transformation and job creation; education, skills and health; consolidating the social wage through reliable and quality basic services; spatial integration, human settlements and local government; social cohesion and safe communities; a capable, ethical and developmental state; and the promotion of a better Africa and the world.
Makgoba said the early lessons from the NPC’s review of the NDP is that the policy has “too many priorities.”
“If you look at countries such as Botswana, Namibia and Rwanda, they have about three to five priorities. China has about five to 10 priorities, but they have been doing developmental plans for over 30 years. We learnt that we must have fewer priorities and focus on measuring them,” Makgoba told Business Maverick.
The original NDP had wide-ranging targets to be realised by 2030. An ambitious target was to grow the economy by at least 5% through, among others, reducing the cost of regulatory compliance, increasing support to small businesses and ramping up government’s investments in public infrastructure to boost exports in mining, manufacturing, agriculture and agro-processing.
The latter aspect of the NDP mirrored the infrastructure-build plan embarked on by former US president Franklin Roosevelt to help lift his nation out of the Great Depression in the 1930s. Roosevelt’s plan dubbed the New Deal, allocated more than $7-billion to infrastructure investments, resulting in the unemployed returning to work.
The Asian Tigers — Hong Kong, Singapore, South Korea and Taiwan — have also followed the infrastructure-investment model that has seen them become highly developed and industrialised economies.
Other NDP targets include increasing employment from 13 million in 2010 to 24 million by 2030; increasing the quality of education so that children have at least two years of preschool education and all children in grade three can read and write; increasing access to clean running water; making high-speed broadband internet universally accessible, providing affordable access to quality health care; and South Africa producing sufficient energy to support industries at competitive prices.
Failure to launch
Since the NDP’s adoption, unemployment and inequality have worsened, corruption in the private and public sector has festered, ownership patterns of the economy and access to opportunity still disproportionately benefits white people, the state has lost the credibility to govern which has blighted its ambition to become a capable state and the economy is limping.
Makgoba said the government alone cannot be blamed for the NDP not delivering its intended goals.
“What most South Africans seem to forget is that the plan was for everybody to do something to realise the plan. It was not only a government plan or a party-political plan. Although the government has an important and bigger role to play, the NDP was a policy of the country such that labour, the private sector and the government had a role to play in its implementation.”
Then how do we square the implementation challenges of the NDP with other growth and redistribution policies that came before it over the past 25 years, such as the Growth, Employment, and Redistribution (GEAR) and Accelerated and Shared Growth Initiative for South Africa (AsgiSA)?
Makgoba cited the Fifa World Cup, which was hosted in South Africa in 2010.
“Why was the Fifa World Cup successful? Because Fifa came to South Africa and took over the country for that particular month (from 11 June to 11 July 2010) of the World Cup. As South Africans, we don’t seem to be capable to act or implement. We have many brilliant ideas, but when we have to do something, it doesn’t seem to come right. It’s a South African phenomenon of producing brilliant documents that are hanging on our shelves, not being implemented or acted upon. And then we start blaming each other.”
Funding the new NDP
One of the main reasons that the NDP has been reduced to seven targets is that public finances are deteriorating — undermining the ability of the government to fund aspects of the policy.
When the NDP was adopted in 2012, the government had fiscal room to fund its implementation, even though the Jacob Zuma presidency was on a spending spree. Consider South Africa in 2012. The country still had an investment-grade rating from all three credit rating agencies, the economy pencilled in growth of 2.5% (but began its downward spiral), the South African Revenue Service was still meeting its tax revenue targets and debt as a percentage of GDP was 51% (today, its closer to 60%).
In the following years, the fiscus was decimated by bailouts to state-owned enterprises, mainly Eskom; the State Capture project and corruption, which National Director of Public Prosecutions Shamila Batohi said has cost the country R1.4-trillion over the past nine years.
Makgoba said the NPC has not yet conducted an analysis of how much the new NDP will cost to implement.
Whatever the cost, Azar Jammine, the chief economist at Econometrix, said a big portion of the budget should be allocated to improving education for “the masses to be employable”.
Jammine said the focus should be on quality education that focuses on coding, analytics and is fit for the fourth industrial revolution, which isn’t mentioned in the original NDP document.
“It should be the kind of education that gets people productive and teaches them to express themselves cognitively, sell their thoughts and ideas. That will make more people employable.”
For the new NDP to work, ethics in the private and public sector must be restored, said economist Iraj Abedian. This means appointing people who are competent to help South Africa to become a capable state.
“At the moment, we don’t have the political morality to create a capable state. Ethical levels in the private and public sector have degenerated to a point that putting together a capable infrastructure for the public sector has become highly challenging, if not impossible.”
Abedian said the first chapter of the new NDP should commit the nation to a set of ethical standards.
“We need to sustain a social compact that is based on a set of ethics that will say: ‘We will not tolerate the abuse of resources both in the public and private sector’.
“If there is, then there will be instant accountability, not a protracted and lifelong legal procrastination.”