Some members of the public have criticised the African National Congress (ANC) for blaming challenges including natural disasters, the COVID-19 pandemic and the war in Ukraine for failing to implement the National Development Plan (NDP).
The aim of the plan is to eliminate poverty and reduce inequality by 2030.
ANC recently launched a draft economic policy document and in it, the party concedes that it will not be able to reach targets as set out by the National Development Plan.
The party’s head of economic transformation, Mmamoloko Kubayi says the July 2021 riots have also contributed to making the NDP targets unattainable.
“We are saying COVID-19 together with riots, together with disasters exacerbated the problems. The economy was not doing so well. NDP has put a particular amount of 1.5% of the spending we’ve not achieved that and the reason is because within the fiscal environment it was difficult for us to allocated such in research and development. There’s improvement but not to meeting the target itself, So that’s way I am saying that are areas where we can see this acerbate the problem,” says Kubayi.
14 priority outcomes which were meant to be implemented over a five year period were identified.
South Africa’s former Statistician-General, Dr Pali Lehohla says the NDP was never implemented.
Lehohla was speaking to SABC News in January 2021 about the progress made in implementing the NDP 2030.
“The NDP was never implemented; it was left on the shelves. So even the framing of ‘course correction’ is the wrong terminology. So the framing shows the poverty of the NPC to actually confront the reality,” says Lehohla.
He says COVID-19 is the only thing added the NPC’s progress report, which was published in 2020.
Lehohla notes how key targets in developing SA have not been met. These include the NDP’s goals to increase employment and the level of post-matric education have not been met.
Miriam Altman, an economist and Commissioner from the National Development Plan says corruption was one of the reasons the NDP’s targets have not been met.
Altman says significant progress has not been made in implementing the NDP because of the high level of corruption in South Africa.
“Our problem was that we had ten years, at least, of State Capture that undermined capacity right across government,” says Altman.
Altman says State Capture undermined leadership capacity and bureaucracy in SA.
“One of the critical messages that we are trying to get across is that the state sets the drumbeat for many things. The private sector can work around a state that’s not functioning well, but you won’t make those big leaps on a development path without a reasonably functioning state,” says Altman.
SA economic policy | Has the national development plan moved the country forward? Part 1
Altman says it is not correct to say that there has been no progress in the NDP.
“The reality is that overall we’ve gone backwards in relation to the economy. We know that the economy was shrinking even before COVID, but the reality is that there was a plan and there was a lot that was very useful in it and there were concrete targets,” Altman says.
She says “Course correction” means South Africa needs to get on course with reaching full employment and the country needs to continue aspiring for reducing employment.
SA economic policy | Has the national development plan moved the country forward? Part 2
UNEMPLOYMENT
On the NDP’s priority list is ensuring full employment, poverty eradication, and equity in South Africa.
According to the NDP, the government aimed to reduce unemployment in South Africa by 25.4% in 2010 to 20% in 2015, to 14% in 2020 and then to 6.0% in 2030.
“Achieving these goals would have entailed the creation of 2.2 million jobs between 2010 and 2015 at an annual average of 436 000, on the back of an average GDP growth rate of about 4.6% per annum,” notes the NCP in the report titles “Economic Progress Towards the National Development’s Vision 2030 – Recommendations for Course Correction” published in 2020.
SA’s unemployment rate grew from 24% in 2010 to 29% in 2019.
So far, unemployment continues to spike in South Africa.
According to StatsSA, South Africa recorded unemployment rate grew to 30.8% in the third quarter of 2020 – the highest unemployment rate recorded in the Quarterly Labour Force Survey since 2008.
“The results indicate that the number of employed persons increased by 543 000 to 14,7 million in the 3rd quarter of 2020, and the number of unemployed persons increased by 2,2 million to 6,5 million compared to the 2nd quarter of 2020. This resulted in an increase of 2,8 million in the number of people in the labour force,” noted StatsSA.
Poverty eradication
The NDP aims to eradicate poverty in South Africa by 2030. Income poverty in SA remains significantly high as unemployment and the cost of living continue to grow in SA.
“While poverty rates fell substantially over the 2000s, there has been no measured improvement since 2011, and there are signs of regression in some indicators” notes the NDP in their report.
Poverty, according to the NDP has been measured by gauging the food poverty line (FPL) which determines if people can afford “a basic basket of food required to meet the minimum daily energy intake”.
The international poverty line is $1.90 a day. The poverty line determines the level of poverty in society.
In 2018, 19.5% of South Africans lived on the equivalent of $1.90 – an improvement from an equivalent share of 36.6% in 1996.
28.4% of the population in SA lived below the poverty line in 2006. Fewer people were regarded as poor by 2011 when the level of poverty fell to 21.4%. However, this regressed in 2015 when poverty rose to 25.2%
“The persistence of deep poverty is most likely due to slow job creation, rising food prices, and rapid increases in utility costs that have outpaced income growth,” notes the NPC report.
LBPL and LBPL
The NDP also uses the “lower-bound poverty line (LBPL) and the upper-bound poverty line (UBPL)” to measure poverty.
There was a reduction in the proportion of people who lived below the LBPL and the LBPL.
“In 2006, 51.0% and 66.6% of the population fell below the LBPL and UBPL, respectively. By 2011, this fell to 36.4% and 53.2%, respectively,” notes the NPC report.
According to the NPC, about 2.3 million people rose above the LBPL between 2006 and 2015.
According to the NPC, food accounts for 30% of expenditure in the poorest 40% of households.
“ Efforts to eradicate poverty are hampered by food prices that rose by 193% over the period from 2002 and 2019, as compared with overall increases in the price of the consumer basket of 129%. “ says the NCP.
Though millions have risen above the poverty line in SA, the NPC notes how the improvements have not been sufficient.
“There has been no improvement in the proportion of the population falling below the LBPL since the NDP was published,” notes the NCP report.
The NPC says the country needs to adopt multiple strategies in order to eradicate poverty in South Africa by 2030.
It aims to see the entire population in South Africa living above the poverty line by 2030.
Equity
The gap between the rich and the poor in South Africa remains large as the country battles to shed characteristics of the apartheid era.
According to the World Bank and the United Nations Development programme, SA has the highest rate of inequality.
“The NDP does not have targets for wealth inequality,” notes the report.
According to the NCP, the NDP “targeted a growing share of income accruing to the bottom 40%, rising from 6% to 10% between 2010 and 2030, respectively”.
“The top decile of the South African population is estimated to own between 71% and 95% of the nation’s wealth, as compared to a global average of 55% to 65% (Sulla and Zikhali, 2018; Orthofer, 2015).27 Piketty (in Orthofer, 2015) shows that even in rich countries, the wealth share owned by the bottom half is generally 5% of the total.” Notes the NCP report.
SA’s middle class also remain fragile as it owns a small share of the wealth in SA. The NDP notes how this can impact intergenerational class mobility. The inequality in SA could see a continuing trend of the rich getting richer and the poor remaining poor or becoming poorer.
The NDP notes how it needs to implement clear policies and strategies to develop SA’s middle class.
COVID-19 Impact on NDP 2030
The Coronavirus (COVID-19) global pandemic affected economies across the world, including SA.
Due to lockdown regulations across South Africa, many people lost their jobs in 2020 as companies reduced staff or closed down.
“The Covid-19 pandemic has done significant harm to an already bruised economy. Safely returning to work and actively promoting employment must be a top priority for economic policymakers and stakeholders over the coming few years,” notes the NCP report on meeting the 2030 NDP target.
The NCP proposes several interventions in order to meet the NDP targets by 2030.
