Out of alignment

6th May 2016 By: Terence Creamer - Creamer Media Editor

Out of alignment

NPC deputy chairperson Professor Malegapuru Makgoba

A preliminary analysis conducted by South Africa’s second National Planning Commission (NPC) of the current alignment between the country’s Budget and the National Development Plan (NDP) reportedly shows there to be only a 47% correlation.

This is not all that surprising, given the overwhelming public percep- tion that the plan is not being implemented. Indeed, there has been much scepticism over the NDP, which observers say is competing not only with other departmental imperatives and agendas, but also other plans, such as the New Growth Path. The most commonly cited example of misalignment relates to the Department of Energy’s decision to press ahead with the procurement of new nuclear capacity, despite the NDP’s call for “more in-depth investigations” into the costs and benefits of adding new nuclear capacity. However, numerous other examples of misalignment have also emerged in a range of other sectors.

Nevertheless, the NPC analysis raises questions about whether departments are even implementing the five-year Medium-Term Strategic Framework (MTSF), which is meant to be the method through which the ‘2030 Vision’ finds practical effect within government.

Minister in the Presidency Jeff Radebe, who is NPC chairperson, insisted recently that the plan, adopted in late 2012, remains the country’s long-term ‘blue print’ and is being integrated into the work of departments.

Speaking at the first media engagement since the appointment of the new, 26-member NPC in September, Radebe said the 14 goals outlined in the plan have been embedded into the five-year MTSF and that there will be ongoing monitoring and evaluation.

NPC deputy chairperson Professor Malegapuru Makgoba, a medi- cal doctor and former University of KwaZulu-Natal vice-chancellor, stresses, however, that the plan will only be implemented if backed by the necessary fiscal resources. For this reason, soon after the new NPC’s first plenary meeting, a study had been undertaken to assess whether the 14 NDP goals are indeed being reflected in the Budget. The outcome suggests overall alignment to be 47%.

However, Makgoba also stresses that government alone is unable to deliver on the NDP vision, which includes: an economy growing at an average rate of 5% a year to achieve an unemployment rate of 6.5% by 2030; the elimination of poverty, by reducing the proportion of households with a monthly income of below R419 from 39% to zero; and lowering inequality, as measured by a fall in the Gini coefficient from 0.69 to 0.6.

The South African economy is performing well below such levels of growth and is expected to expand by below 1% in 2016.

In response, the NPC has assembled a specific work stream focusing on the creation of an “expanded, inclusive, efficient and fairer economy” and has identified 27 interventions that, it believes, to be fundamental to improving prospects for “sustainable growth”.

This intervention notwithstanding, it is quite possible that departmental budgets are simply more alive to the reality of falling tax collections and slowing growth than is the case with the NDP. Therefore, it may well be inappropriate for the Budget to be fully aligned with the plan.

If that is indeed the case, there is a strong argument for the plan itself to be updated in line with the persistent argument that it should be a “living document”. A failure to do so could well result in the NDP becoming less relevant and not simply a mirror of government’s shortcomings in dealing with poverty, unemployment and inequality.