Private and public sectors need to hatch a new plan

The National Development Plan (NDP) is out of kilter with the real economy, the state and society, and should be dramatically revised or replaced.

National long-term development plans should not be changed on a whim — but the assumptions of the NDP do not hold water any more.

The growth assumptions of the NDP are way off. Growth of

5% with the current political, economic and societal log jam is a distant dream. Most of the

NDP-envisaged growth enablers have been undermined by corruption, lack of state capacity and poor policies.

If the state that is leading development — as envisaged under the NDP — is dysfunctional, SA will remain on a lowgrowth trajectory for a considerable period.

Furthermore, the NDP is based on the old South African economy, when mining was a pillar of the economy; when large conglomerates such as Anglo American, Sasol and South African Breweries were local companies; when key SOEs such as Eskom were still world-class, needing little state support and bringing in revenue to the fiscus. The economy is now dominated by the financial sector and services.

So far, capital-intensive industries have been larger recipients of state support. Small and medium-size enterprises aimed at the export market will have to be more strongly supported. There have to be more incentives to boost labour-intensive light manufacturing.

Most of SA’s manufacturing sectors have declined. Manufacturing contributed 30% of GDP in 1994, but less than 15% now. Recent figures from Stats SA show that seven out of 10 major manufacturing sectors have reported negative growth.

A number of fake manufacturing companies positioned as BEE firms to secure state contracts turn around and import cheap foreign goods, crowding out local manufacturing.

Labour-intensive sectors such as the construction industry have collapsed, partly because of state bungling, red tape and corruption, which have sucked up public investment funding.

The core pillar of the NDP, the idea of a capable state, is now a fiction — and planning cannot realistically be built around the current state any more. Parts of the state have collapsed. SOEs are inefficient, unprofitable, need continuous bailouts and have organisational cultures that are so dysfunctional they are anti-developmental.

Red tape, patronage and corruption in the public service have led to factory closures, stillborn businesses and mass job losses. Far from serving as a catalyst to create jobs, the state has generated unemployment in the private sector.

SA’s unemployment rate is now the highest in 11 years at

29.1%. The NDP makes provision for unemployment to decline to 14% next year, and 6% in 2030. And for about 11-million additional jobs to be created by 2030.

None of this, of course, is possible.

The NDP argues that it is crucial to improve the quality of education. But the quality of education has declined because of a lack of political will to bring public education to the same standards as those of our global competitors.

The quality of public education has plummeted to historically low levels — and education is not linked to the skills of industrialisation, manufacturing and technological change. The lowering of the mathematics pass rate to 30% by the department of basic education shows there is little seriousness about linking education to industrialisation.

To reach the development and industrialisation targets of the NDP, we need to improve mass mathematics, science and technical skills, not worsen them.

The NDP calls for the strengthening of economic infrastructure. Yet infrastructure — whether water, energy or transport across the country — is in steep decline.

Power blackouts because of inefficiency, mismanagement and corruption at Eskom have undermined the energy security necessary to reach most of the development targets.

SA has had the longest drought in its history, combined with a lack of maintenance of water infrastructure. The lack of a pipeline of water technical skills is also undermining the NDP targets. Many of the public agencies responsible for water management — water boards, regulators and licence allocation authorities — are either dysfunctional, captured or run by people without the relevant technical skills.

The NDP stresses that lowering corruption is an enabler of growth. Corruption has dramatically increased — and very few people have been held accountable.

The NDP calls for safer communities, better policing and the strengthening of the rule of law to lift growth, boost development and foster job creation. Lack of the rule of law, and violence and impunity, are among the biggest factors behind local and foreign investors staying away or fleeing.

Lack of policy certainty — with different ANC factions speaking at cross-purposes — is also a major deterrent to investment. The NDP is undermined by leftist populism pushed by factions of the ANC and the EFF, and by the ANC faction led by President Cyril Ramaphosa not taking a firmer principled public stand against populist rhetoric.

The “untouchables” of corruption, whether politicians, businessmen, gangsters, taxi bosses or traditional leaders, will have to be publicly taken on, to restore law and order. More capable people across race, gender and colour will have to be appointed to public agencies.

With the state failing, there has to be greater space for the private sector to take the lead in delivering public services.

Any new development plan must be a strong collaborative effort between the state, private sector and civil society.

The state on its own cannot put together a new, relevant development plan — it is not credible enough.

Planning cannot realistically be built around the current state any more