/ 28 September 2023

Cabinet yet to discuss damning National Development Plan findings

President Cyril Ramaphosa

The cabinet has yet to discuss the 10-year review of the National Development Plan (NDP), which shows that the government has veered badly off course in its stated effort to reduce inequality and unemployment by 2030.

The review was released on Tuesday. But the scheduled event to present its findings was summarily cancelled an hour after it was set to begin. The reason given for the cancellation was that the review — which lays bare the extent to which South Africa’s economy has regressed since the NDP was adopted a decade ago — had yet to be presented to cabinet.

Despite meeting on Wednesday, the cabinet did not have time to peruse the findings of the National Planning Commission, the custodian of the NDP. The 10-year review will, however, be discussed during a special cabinet meeting, Minister in the Presidency Khumbudzo Ntshavheni told a post-cabinet media briefing on Thursday morning.

“The fact of the matter is that the report of the National Planning Commission was not served in cabinet,” she said. “The planning commission is set up for the purpose of assisting the government in Vision 2030, on which the medium-term strategic framework is based.

“And that medium-term strategic framework is the responsibility of cabinet. No one can release reports that affect government … without briefing cabinet.”

She declined to comment on the findings, noting that the executive will only express its view on the report after it has convened its special cabinet meeting.

The 10-year review provides a damning assessment of the ANC-led government’s ability to fulfil its economic promises. Its release comes as the governing party, led by President Cyril Ramaphosa, prepares for what looks to be a gruelling election battle in 2024

Ramaphosa served as the deputy chairperson of the first National­ ­Planning Commission, under which the NDP was initially devised.

When the NDP was conceived, it forecast that the economy would need to grow by 5.4% a year to achieve the overarching goal of eradicating poverty and reducing inequality and unemployment by 2030.

“These goals were based on the all-inclusive approach of achieving positive investor sentiment, better-located and maintained infrastructure, improved educational outcomes, a healthier population, a sound social safety net, much of which would be enabled by a capable state and good governance approaches,” the review notes.

“Given that much of this was not realised, the economy has not performed as expected during the period under review.”

According to the review, South Africa’s growth has averaged 0.99% in the past decade, with GDP per capita growth negative in five of those years.

“South Africans are becoming poorer. Unemployment has increased to 32.9%, with little improvement in overall employment.”

The NDP’s goal was to reduce unemployment from 25.4% of the labour force in 2012 to 6% in 2030. It also aimed to reduce income inequality, but the country’s Gini income measure remains unchanged compared with 2012.

To achieve average annual GDP growth of 5.4%, the NDP set the target of 30% investment as a percentage of GDP by 2030. But, from 2012 to 2019, gross fixed capital formation as a percentage of GDP averaged 19.6% “largely as a result of a decline in private investment, a slowdown in general government spending and reduced capital spending from SOEs [state-owned entities]”.

Worse still, investment fell even further from 2018 to 2021, averaging only 14.7% of GDP. Public sector investment fell from 6.8% of GDP in 2012 to only 4.1% in 2021. The 2030 target is 10%.

The review highlighted several risks to South Africa’s constitutional democracy, including a weakened government, the blurred line between political and administrative functions, corruption and “severe and limiting fiscal constraints”.