Progress of NDP ‘to be assessed’
The government’s national advisory body plans a consultative process to assess progress in implementing targets set in a 2012 blueprint to halve unemployment and boost economic growth with the possible aim of reviewing it.
Minister in the presidency and chair of the national planning commission (NPC) Mondli Gungubele said considering there is widespread consensus that key targets of the national development plan (NDP), such as the creation of 11-million net jobs by 2030 and the reduction of unemployment, the NPC will embark on a monitoring and evaluation exercise of the plan.
“The NPC is in the process of analysing and evaluating it and they will come with a critical overview [of the plan],” Gungubele told Business Day. “I don’t want to pre-empt the proposal or recommendations that they will make ... If there is a need to revise the document, then we will do so,” he added, saying there is no proposed time frame for the process to be concluded.
Since the NDP was approved by the government as the guiding framework to change SA’s socioeconomic trajectory, the country has experienced a spike in unemployment with state capture and corruption eroding the state’s capacity to deliver on its development goals.
“Between now and 2024 we are unlocking the service delivery commitments that we [the government] have made ... Our attitude is to catch up on the gap,” Gungubele said.
More recently, the Covid-19 pandemic and the cost-of-living crisis associated with the Russia-Ukraine war add to reasons why there is a need to revise the baseline for macro projections in the NDP to reflect these economic realities, Momentum Investments economist Sanisha Packirisamy said.
To deal with the recent external shocks, the economic recovery and reconstruction plan (ERRP) was devised in 2020 and aims to raise growth to an annual average of about 3% over the coming decade. However, Gungubele denied the ERRP makes the NDP redundant and does not reflect the government shifting goalposts. Rather, he said, the ERRP seeks to “advance the targets of the NDP”.
The NDP sets out ambitious targets to halve unemployment and lift growth to pre-2008 levels of about 5% by 2030. However, with the worsening global and domestic economic outlook spurred on by rising inflation, global supply chain disruption and the lingering effects of the pandemic, SA’s chances of achieving this are unlikely, said Financial and Fiscal Commission chair Patience Mbava.
“Given these challenges, in the short term, the Covid-19 recovery plan, the economic recovery and reconstruction plan, remains a far more credible and feasible plan,” Mbava said, adding that the NDP however remains a credible blueprint but should be revised based on credible scenario planning and evidence-based economic growth rate forecasts.
In October the Treasury revised SA’s growth outlook to 1.9% in 2022, compared with an estimate of 2.1% in February. The revision reflects, among other things, a weak trade balance, protracted power outages and higher inflation.
“Credible NDP implementation should, in the short term, align with the economic recovery and reconstruction plan and, in the long term, towards 2030, and lay the groundwork for the seventh administration’s medium-term strategic framework 2024-2029 through credible measurement tools and institutional co-ordination,” Mbava said.
This sentiment is echoed by Cosatu parliamentary co-ordinator Matthew Parks who said the NPC needs to be reviewed on an honest assessment of where we are, what resources we have and what can be done.