2030 National Development Plan (NDP) 10-Year Review

Meeting report

The Chair acknowledged the delegation from the Department of Monitoring, Planning, and Evaluation (DPME) and the Commissioners from the National Planning Commission (NPC).

2030 National Development Plan (NDP) 10-Year Review
Dr Boitumelo Ramatsetse, NPC Commissioner, gave a brief background on the history behind the establishment of the National Planning Commission. The Commission was an independent expert body mandated to look at long-term planning using cross-cutting research, as well as have an independent approach to the country’s development agenda. The first NPC was established in 2010 with a mandate to create the NDP. In 2011 that commission conducted a study that came up with a diagnostic report that led to the drafting of the NDP which was handed over and adopted by Cabinet in 2012. In 2014 the NPC launched the Medium-Term Strategic Framework (2014-2019) as an integrated monitoring framework. This was to ensure that the NDP was implemented in five-year intervals.

Dr Ramatsetse touched on the formation of the second NPC whose mandate was to provide guidance and support for the measurement and implementation of the NDP. This NPC conducted research studies that came up with various proposals. They included position papers on energy policy, township and rural economies, and infrastructure delivery, as well as SOE performance. Most of these studies were in the NPC database.

The third and current Commission was formed in 2021 and its mandate was to look into addressing some of the challenges highlighted in the NDP review. The third NPC was busy with Tracker 2 which was in the development stage.

2030 NDP Targets: assessment
Dr Ramatsetse mentioned the NDP2030 targets, which included focus and improvement on the quality of education, training, and innovation; improvement of the health system – including the implementation of the National Health Insurance (NHI); unemployment reduction; reverse the spatial effects of apartheid; reform the public service; build an economy creating more jobs; transition to a low-carbon economy; build an inclusive and integrated rural economy, as well as build safer communities.

Dr Ramatsetse reported on the 10-year review findings on the economic, social, and governance issues, as well as contributing factors to the findings in each category. He reported that the economy remained in a low-growth trap. Growth has averaged 1.1 % for the period with per capita GDP growth negative. Unemployment has increased to 32.9% - 8.0 million unemployed and 3.6 million discouraged. Income poverty had been rising since 2015 with 19.4 million in poverty in 2020. Poverty differs substantially by race. A lack of energy security with an unreliable electricity supply was a major obstacle to growth becoming an increasing concern.

Private investment has declined – gross fixed capital formation (GCFC) as a percentage of GDP averaged 19.6% between 2012 and 2019. Investment as a percentage of GDP averaged 14.1%.

Dr Ramatsetse presented contributing factors to challenges in the economy as the lack of employment creation, transformation, innovation, and competitiveness. The low GCFC is largely due to a decline in private investment, a slowdown in government spending as well as reduced capital spending from SOEs.

Dr Ramatsetse advised that the review findings on social issues noted that the implementation of NHI may have unintended outcomes especially on governance such as the status of medical aid schemes, and the potential for corruption. Schooling has improved. Bachelor passes have surpassed the NDP target. Contributing factors to social findings included the effect of the COVID-19 pandemic.

The findings on governance noted the National Framework Towards Professionalisation of the Public Sector approved by Cabinet in October 2022. Progress was made on key pieces of public service legislation to strengthen state capacity. The designation of the Director-General in the Presidency as Head of Public Administration, the DG in the Office of the Premier and the extension of tenure are additional positive measures. Despite progress made on key pieces of public service legislation to strengthen state capacity, the unevenness in state capacity remained a challenge. Despite government measures, crime remained a problem.

The contributing factors to governance findings included the lack of trust in the police and the inaccessibility of police stations. That included the rise in criminal syndicates, particularly in the mining and construction sectors. The rise of these syndicates had hampered growth prospects.
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Dr Ramatsetse said that the pandemic was a cross-cutting finding which had a high impact on South Africa, resulting in poverty, inequality and unemployment. Approximately 2.2 million South Africans lost their jobs. Gender crimes remained an challenge. The implementation of the NDP required a gender focus if the social and economic objectives of reducing poverty and inequality were to be achieved. Youth continue to face disadvantages in the labour market with unemployment higher than the national average. Very few state institutions have factored youth development into their planning. Transforming society and uniting the country remained a challenge and government’s initiatives were piecemeal, under-resourced, and without demonstrable impact.

Dr Ramatsetse also reported on the NPC proposals stemming from the Ten Year Review to look at how government was to improve. The Framework on Professionalization of Public Service should be implemented. The Integrated Planning Framework Bill to guide developmental planning and the corresponding institutional structure should be finalized. In addition, government should provide comprehensive Early Childhood Development services (including health). There should be an assurance that the appointments to the public sector and SOE boards are based solely on merit, rather than political considerations. SOE reforms for improving Eskom, Transnet, and SANRAL were needed.

Discussion
Mr M Rayi (ANC, Eastern Cape) welcomed the NPC presentation. He proposed that its acronym NPC be amended to NPMC so that there was an element of consistent monitoring of the NDP implementation as the presentation reported on NDP targets that were not met. He suggested that monitoring could be quarterly like the Office of the Auditor General was doing to audit departments and entities on implementation and non-implementation of its audit findings. This would bring meeting the set targets to the attention of the relevant departments. He asked what government should do to encourage the private sector to invest in South Africa's economy as the presentation cited low investment by the private sector.

Mr T Brauteseth (DA KZN) sympathized with colleagues at DPME as they seemed to be watching things falling apart. Moreover, it was not within their mandate to instruct departments on how to perform better to achieve the targets. He was of the view that it should be its mandate. He raised concern about the GDP growth target for 2030 which was 5.4% while in the last quarter of 2022 it was 1.1%. It was the same in the Gini index measures. The 2030 target for unemployment was 6%, yet by the end of 2022 unemployment was 32%. The 2030 target for employment was 24 million but by the end of 2022, employment was below 16.1 million.

Mr Brauteseth had previously asked DPME what percentage of the NDP goals were achieved, to which it could not respond. He imagined that perhaps that percentage would be incredibly low. He questioned the purpose of DPME if their job was merely monitoring. They could not advise the departments on what they should do to achieve the outcomes by 2030. NPC should be pleading with government and Parliament to take the NDP seriously. He was concerned that other than pleading, they had no power to tell the departments what they should do to achieve the 2030 NDP targets.

He sought clarity from the Commission on the studies it conducted, if it was only looking at the country as a whole or per province. He was interested in seeing the comparisons between the provinces on the indicators for the NDP targets. He asked if those statistics were available and were analyzed per province. He believed that there were provinces that were performing better on some of these matrices.

Ms M Mashodi (ANC, Free State) welcomed the NPC presentation. She sought clarity on the stakeholder campaign. Was the Commission satisfied with the participation of the stakeholders thus far? She sought clarity on the 12 million jobs that were due to be created. Was there a strategy in place to ensure that?

The Chair asked about the assessment pinpointing the importance of the NPC Commission. He referred to the Committee's previous meeting with DPME where the Committee registered its concern around 29 of its posts reported to have been lost during budget reprioritization and Covid-19. He asked if DPME managed to recoup the loss of this budget as those 29 posts would be important to improve its capacity.

On the economy, particularly infrastructure investment, assessment, the Chair pointed to both freight and commuter rail having declined over the years. The decline was attributed to the unavailability of trains which compelled commuters to use alternative transport.

The Chair asked if DPME expresses itself on the targets set in the department APPs and five-year strategic plans and if departments are committed enough to ensure these plans addressed the NDP targets. He referred to the Department of Transport 10% target for the transfer of freight from road to rail. This was a concern given the devastating impact freight has on South Africa's roads.

He also raised concern in the report about an estimated 15 to 17 kilometers of overhead copper cables were stolen from the railway network weekly, which has an impact on the cargo that the country exports and on the revenue that the country generates. He also asked if the Department looked at the indicators, it puts in place to monitor the impact of the ban imposed on the export of copper. Hence, that area has led to the devastating impact in some of the mines, he indicated that Section 198 was under proceeding, particularly if one looked at Anglo-American and Kumba… (inaudible). There was an impact arising from the constraints in terms of the country’s freight and logistics.

The Chair sought clarity on the NPC assertion that before the implementation of the NHI Bill, government should consider its limitations and unintended consequences on governance. He pointed out that the Bill was already passed and awaiting assent by the President.

NPC response 
Dr Ramatsetse agreed with the proposal of the change from NPC to NPMC with an emphasis on monitoring. There were several comments about whether the NPC was responsible for implementation. The body was referred to as the National Planning Commission, which is responsible for long-term planning. Monitoring and review is part of the Commission’s mandate. Hence, the Commission is currently working on the implementation Tracker 2. NPC was collaborating with the CSRI and DPME to develop a tool that would be able to track the different indicators for the NDP. The Commission was therefore able to track how well government was doing in the different phases of the NDP.

The studies conducted were done per province. Sometimes, the analysis would go deeper, including districts and municipalities. There was data readily available that was integrated into a dashboard. The current meeting was to share the findings but in future, the NPC presentation will speak about the dashboard which showed how far government was and what some of the gaps were in achieving some targets.

Dr Ramatsetse replied that the Commission did have some stakeholder engagements. Also, the Commission was grouped into work streams that focused on the economy, social, and governance. NPC had engaged stakeholders on the economy who were responsible for assisting in unlocking some of the factors that were preventing target achievement. The Commission had also engaged the Development Bank of Southern Africa (DBSA) and the Independent Development Corporation (IDC).

The Commission had engaged other stakeholders on some of the social indicators, more especially education. It engaged the Department of Basic Education (DBE), the Department of Higher Education, Training & Innovation and other stakeholders. The Commission did get full participation from its stakeholders and this was still an ongoing task. NPC was still engaging stakeholders on other advisories that would be published soon.

NPC was embarking on several initiatives to assist in planning better. The Commission was embarking on scenario planning as well as a future-thinking planning approach in developing various scenarios that were possible towards 2030. In doing so, the Commission has come up with interventions that would assist in ensuring that government is on track.

Dr Ramatsetse mentioned that one of the task teams on the economy was responsible for reducing red tape, especially to unlock the growth of the SMMEs. He mentioned the potential of agriculture to create jobs. The NDP review has highlighted the jobs that should be created. The Commission believed that agriculture and agro-processing were not explored sufficiently. Hence the focus was on ensuring that such potential was harnessed.

Dr Tshepo Feela, NPC Commissioner, highlighted issues around the economy and what government should do to encourage investment in the country. From the studies conducted, two issues were a hindrance– infrastructure and the financial system.

Big international businesses were reluctant to invest in the country due to infrastructure challenges including transport, electricity and water. Companies relying on rail were reluctant to invest. That has an opportunity cost due to the rail system. There was a national Infrastructure plan in place, called National Infrastructure Plan (NIP) 2050, with infrastructure projects to bring the country up to par. However, its implementation has been too slow. If that were done right, there could be an upsurge in investment from different countries.

Dr Feela said that the confidence in the financial system goes back to trust in the financial markets in the country. South Africa's FATF grey-listing had not been a coincidence. It meant that the governance structures and financial systems in the country were not up to par. The There was a lack of confidence that investment in the country would yield what it needed in return. Those two issues needed to be fixed.
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Employment was affected by several cross-cutting issues from education to an SMME-supportive environment, to investment in the country, which meant many levers needed to be pushed and adjusted to create employment. He referred to the huge supply of unemployed graduates. Therefore, schooling cannot be seen as a guarantee of employment. He expressed the view that there was a need to create the demand side of employment.

Dr Pulane Molekwane, NPC Commissioner, touched on governance. She referred to concern mentioned by the Chair about the Department of Transport APP. Even if the APPs were aligned to what the NDP stated, the fact of the matter was that what was on the ground was not what the country needed. There was a need for the Commission to ensure that was in the plans.

She appreciated the opportunity the Commission had to engage with Parliament. They did not get a similar engagement with the rest of the state. She emphasized the need for the findings to be addressed. She applauded the availability and input of the general public in the stakeholder engagements with the Commission. There was a lack of coordination between the different spheres of government, where a department at the national level was planning its Medium Term Strategic Framework (MTSF) and at the same time, a local municipality would be planning its Integrated Development Plan (IDP).

Dr Molekwane explained the Commission's position on the governance of the NHI and their support of the NHI. There was a need to look at how its governance was going to work. She alerted the Committee to the risk which may be a result of centralizing that huge budget in one department. That may create a super ministry and the Commission was of the view that there should be a way to segregate powers. Other countries such as the United Kingdom and Canada that had a similar NHI system, were referenced.

Follow-up questions
Mr Rayi sought clarity on the NPC concern about the lack of coordination between government departments in the three spheres of government. He asked if there was engagement between the spheres of government to achieve the set targets. On the NPC fears about the implementation of the NHI, did they engage the Department of Health to raise those concerns?

Mr M Dangor (ANC Gauteng) asked the NPC to unpack the phasing-in of the NHI, how long it should be and what it should entail.

On governance, the Chair asked about the Integrated Planning Framework Bill which aims to institutionalise planning in the country. What was the key challenge that the Bill sought to correct.

On the logistics constraints, had the NPC had sight of the Economic Regulation of Transport Bill that had been recently passed by Parliament and sent to the President for assent? The Bill sought to address these issues.

He asked about the NPC assertion that the National Framework towards the Professionalisation of the Public Service had to be implemented.

He raised a concern about the indicators identified about coordination within the Department of Public Service and Administration.

Mr Rayi raised a concern about the NPC not being aware of the DPME APP.

NPC response
Dr Ramatsetse replied that indeed the Commission was engaging with other spheres of government. There was a strong emphasis on the convening power to ensure that informed decisions were made on where the country should go in achieving the NDP targets. Currently, there are engagements with some provincial legislatures. The process started with the Eastern Cape and would engage with other provinces to identify some similarities in the reports. The Commission had also engaged with some municipalities such as Waterberg and eThekwini Metro to ensure that there is a coherent approach on how these elements fit within the NDP.

Dr Molokwane indicated that she was not familiar with the contents of the Department of Transport APP. The monitoring role was done by DPME which could speak to the contents of that APP. The Commission receives data from the DPME. On receiving that data, the Commission would be able to know if the department had achieved or not achieved the targets.

The Commission had engaged the Department of Health (DOH) on the NHI Bill and had held some stakeholder engagements. It had made a submission to the Department of Health before the draft Bill was sent to Cabinet. Most of the concerns raised by the Commission were not considered in the final draft of the NHI Bill. This was even raised with the President. NPC would appreciate it if there was an explanation why their submission was not considered in the final draft of the NHI Bill. Another issue is that the NHI Bill does not give citizens even the option of dual cover. Technically one cannot opt out of the NHI. Hence there was a need to devise a creative way of implementing the NHI.

Dr Molokwane replied that the Integrated Planning Framework Bill is one Bill that could assist in putting the responsibility where it belonged legally. The NPC was not defined by any law. The role of the Commission and the departments were not defined by any law. The Commission welcomed the Professionalisation of the Public Service Framework and that NPC would monitor its implementation.

Ms Sue Bannister, NPC Commissioner, replied about the important need for coordination and collaboration between the spheres of government, especially in transport. Even if the Department of Transport could develop an incredible infrastructure and amazing facilities if there is no cooperation between all spheres of government, it would not work. She gave the example of Durban Port. She emphasised the importance of alignment and cooperation among the spheres of government. The District Development Model (DDM) was another initiative that tried to enable the coordination between the spheres of government. She emphasized the lack of coordination between the spheres of government in both national and provincial spheres. The Economic Regulation of Transport Bill was another good governance initiative. The lack of follow-up on what the different spheres of government were doing had to be overcome.

Dr Ramatsetse concluded that the NPC wanted to bring the NDP to all stakeholders as it believes with a multi-sectoral approach, all the initiatives would be successful.

The Chair expressed the Committee’s appreciation for the NPC presentation, particularly on the the body of research and studies.

The minutes of the 28 February 204 were adopted.

The meeting adjourned.