By Minister in the Presidency, Jeff Radebe
Many developing countries have had to evaluate their programmes aimed at stimulating and sustaining economic growth and development. South Africa, despite being the most developed and diversified economy on the continent, is no different. To this end, President Zuma appointed the National Planning Commission in 2010, who through a process of rigorous consultation, put forward what is today known as South Africa’s National Development Plan (NDP) or Vision 2030.
The NDP, which stands on six pillars, aims to transform systemic and underlying conditions which impact negatively on national growth and development. These pillars are: the mobilisation of all South Africans, active engagement of citizens in their own development, expansion of the economy and making growth inclusive, building of key capabilities - human, physical and institutional; building a capable and developmental state and fostering strong leadership throughout society.
It is important to emphasise that the NDP is closely aligned to all other programmes of government and it cannot be achieved without the collaboration of organised business and civil society. In this regard, government’s Medium Term Strategic Framework which consists of 14 outcomes directly contribute to the successful implementation of the NDP. The same can be said of, amongst others, the 9-point plan for economic growth, the Industrial Policy Action Plan and the National Youth Policy.
Having been adopted in 2012, the NDP is already yielding results.
Revitalisation of the agriculture and agro-processing value chain
A competitive agricultural sector is important to ensure effective use of the country’s land resources but more importantly because of its contribution to food security in the country. The agricultural sector also has great potential to contribute to the country’s job creation targets. To achieve these goals, Agri-Parks have been introduced in in 44 districts throughout the country. The 9-Point Plan also identifies a number of interventions to support land reform, producer support programmes as well as increasing local poultry production.
More effective implementation of a higher impact Industrial Policy Action Plan (IPAP)
Industrialisation is important to facilitate diversification beyond South Africa’s current reliance on traditional commodities and non-tradeable services. It is also critical to ensuring South Africa is able to move into the knowledge economy, which is one of the key priorities of the NDP. International best practice shows us that a successful industrialisation programme is most successful when the necessary and complementary policies are in place. This must include a stable and supportive macro-economic and regulatory environment; appropriate skills development and education systems which are increasingly integrated with the needs of the industrial economy; sufficient, reliable and competitively priced traditional and modern infrastructure; as well as adequate support for various forms of technological effort within the economy.
In this regard, major initiatives to support the implementation of IPAP include, revising industrial financing to strengthen and ensure a positive impact on employment and growth, the introduction of the Black Industrialist policy and programme to transform the manufacturing sector and unlock the potential of black entrepreneurs, as well as the promotion of localisation through designation.
South Africa has, in addition, prioritised the following areas to support its industrialisation programme: new growth sectors such as oil and gas, metal engineering and capital equipment and agro-processing will be targeted for intensive government support; recalibration of industrial finance which aims to strengthen the package of government and business support for the productive sectors; as well as to grow the oceans economy with a focus on marine transport and manufacturing, remains a central component of South Africa’s industrial imperatives.
Advancing beneficiation - adding value to our mineral wealth
It is important to dispel the myth that all mined products are exported from South Africa in raw form with very little downstream beneficiation taking place locally. In fact R300 billion in economic activity and 200 000 jobs are created in beneficiation industries further downstream.
To ensure greater focus on beneficiation as a way to contribute to economic growth, development and job creation, the following six value chains have been identified to support beneficiation programmes with specific interventions for each: iron-ore and steel; polymers; titanium; platinum group metals; upstream mining inputs (capital goods, machinery and equipment) and the energy value chain.
Unlocking the potential of SMMEs, cooperatives, township & rural enterprises
SMME development and other local growth initiatives have been shown the world over to contribute significantly to national growth and development. These sectors are also an important driver of job creation while contributing to improving the quality of lives for citizens in these communities. Therefore priority interventions to unlock the potential of SMME, cooperative and township and rural enterprises include: working towards the implementation of 30% set-aside policy through public procurement process, supporting supplier development programmes to increase market access, promoting greater access to financing and infrastructure programmes which can support the growth of township and rural enterprises and a concerted effort to bureaucracy for the establishment of SMMEs which includes the reviewing of existing Small Business legislation.
Growing the oceans economy
One of the most exciting programmes identified for South Africa’s growth and development is Oceans Economy Phakisa which has been an important catalyst for growing our Blue Economy. Specific programmes for implementation include growing our aquaculture sector as well as improving legislation to promote growth in the sector; developing adequate marine protection services and governance measures for the ocean; supporting skills and capacity building and promoting our tourism sector.
Our analysis suggests that the economic potential of our oceans resources would amount to between R129 and R177 billion by 2033, with between 800 000 to 1 million jobs created. It would therefore be prudent to invest in and build this sector now.
Operation Phakisa
South Africa has adopted Operation Phakisa which is an approach to implementation that has been adapted from the Malaysian methodology called Big Fast Results. Success will be achieved when government, business and civil society work together to identify challenges and unlock business opportunities. Operation Phakisa has been implemented in the oceans economy, health and basic education sectors while Operation Phakisa in the mining sector is underway. This will contribute to our efforts to add more value to our mineral resources through beneficiation by focusing on five value chains i.e. platinum group metals, iron and steel, titanium, polypropelene and capital equipment for the mining sector.
Resolving the energy challenge
It would be impossible to move the country towards economic growth and development without energy security. We are pleased with the progress made in 2015 during which a multi-dimensional approach has been adopted. This included the completion of Medupi Unit 6. We have also finalised the renewal of Short Term Power Purchase Programme (STPPP) contracts for 720 MW and concluded four bidding windows for Renewable Energy Independent Power Producers Programme (REIPPP) resulting in 92 projects with a total capacity of 6 330 MW.
Scaling up private sector participation
We are committed to building an investor friendly country and to this end, we have, amongst others, finalised the new Protection of Investment Bill, which aims to balance the rights and obligations of investors and government while also preserving the right of government to regulate in the public interest. We have also established the One Stop Inter-Departmental Clearing House which will provide efficient support to investors to ensure that South Africa offers an investment friendly environment.
We are, in addition, implementing incentives and support services for investors through our Special Economic Zones (SEZs) programme. As part of the suite of SEZs, the six Industrial Development Zones (IDZs) established between 2002 - 2014, have attracted a total of 59 investors on site with an investment value of more than R10.7 billion.
We are cognisant that innovation is a critical feature of successful, sustainable and competitive economies. I am confident that the interventions we have collectively formulated, and are implementing, will ensure an innovative, responsive, adaptable and modern economy. This is key to guaranteeing our ability to deliver on the hopes and aspirations of the people of our country for a better life. It is equally the best way to ensure that South Africa continues to contribute to the global community of nations as a good international citizen. The NDP will guide us on this journey.
