National Development Plan to grow jobs

The National Development Plan aims to create more jobs, especially for the youth.
(Image: Media Club South Africa)

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South African finance minister, Pravin Gordhan, focused on the 2030 National Development Plan (NDP) in his mid-term Budget Policy Statement, delivered this week, stressing that it would be used to boost economic growth and create much-needed jobs.

Gordhan soberly pointed out that times are tough, for the country and internationally.

“We are living through turbulent global economic circumstances. Taking the National Development Plan as point of departure, Cabinet has agreed to a budget framework which protects our fiscal position and supports policies and programmes that support inclusive, sustainable growth.”

He said the ambitious NDP would be implemented in several ways:

• Expanding electricity, transport and communications capacity;

• Promoting industrial competitiveness and job creation;

• Addressing challenges in mining and community development;

• Supporting growth of our cities and special economic zones;

• Broadening rural development and expanding agricultural opportunities; and

• Strengthening public service delivery while combatting waste and corruption.

Government is now implementing the NDP, with provinces and municipalities aligning their actions to the plan.

Gordhan highlighted some of the projects in progress and fulfilling the NDP programme.

• Construction of the Medupi and Kusile power stations, which is well under way.

• Rail capacity is being expanded to support manganese and coal exports.

• Over the next 12 years, government would replace more than 300 trains for the 2-million people who use Metrorail every day.

• Tax incentives for industrial development projects amounting to R10-billion have been approved over the past three years, which will support investment amounting to R35-billion.

• The manufacturing competitiveness enhancement programme has approved 387 applications since mid-2012, to the value of R2,6 billion.

• The expanded public works programme created 970 000 work opportunities last year. The Jobs Fund has approved allocations of R3,4-billion to more than 60 projects, which will generate 90 000 permanent jobs and about 100 000 training opportunities over the period ahead.

Furthermore, in support of regional infrastructure development, the Development Bank of Southern Africa has provided almost R1,5-billion for road projects in Angola this year and committed R3-billion in funding to energy projects in Tanzania and the Democratic Republic of Congo.

Private/public partnerships

The minister stressed the importance of private/public partnerships, like The Bridge City project, which aims to create a new urban centre linking Phoenix, Inanda, Ntuzuma and KwaMashu, north of Durban, Kwa-Zulu Natal province.

Another private/public partnership is the Renewable Energy Independent Power Producer Programme. In the programme 47 projects have been approved, to be completed between 2014 and 2016. The first 75-megawatt solar plant in the Northern Cape was connected to power-supplier Eskom’s transmission grid last month, three months ahead of schedule. Two wind farms in the Eastern Cape will be connected by May next year.

“These are just some ways in which implementation of the National Development Plan is proceeding. In many cases, it builds on initiatives that were already under way. In other areas, new programmes or reform proposals are being introduced,” announced Gordhan.

He emphasised that the government needed to keep debt on a sustainable long-term path; to direct public spending “to ignite inclusive growth and complement increased private-sector investment”; to support job creation and skills training, particularly for the unemployed youth; to cut waste and extravagance in government; and to support black entrepreneurs as investors and partners in industrialising and broadening economic participation.

Also important is managing the risks emerging from current and future global economic turbulence. And perhaps most important, ensuring inclusive growth.

Job creation

To encourage job creation in special economic zones and particularly for young job seekers, the revised Employment Tax Incentive Bill is to be introduced in Parliament this week.

“This forms part of the multi-pronged approach to expanding work opportunities, especially for young people, envisaged in the National Youth Accord,” explained Gordhan.

“The evidence on this is very clear: if young people find work within a reasonable timeframe after leaving school, this greatly improves their lifetime career prospects.”

He added: “These are steps towards faster, more inclusive growth – and these are all areas in which private sector and civil society involvement is no less important than the role played by government.”

Gordhan stressed how the country’s economic growth was tied to the euro area, South Africa’s main trading partner. The International Monetary Fund has revised the 2013 growth outlook for developing countries from 5% to 5.4%.

South Africans can expect growth projection of around 2.1% this year, rising to 3.5% by 2016.

Consumer price inflation is expected to average 5.9% this year, while jobs growth shows around 275 000 new jobs created this year to July.

“We have a duty to broaden opportunities for those who do not have secure incomes, formal jobs, solid homes, electricity, water or access to health care. We have to share the benefits of growth, so that those of our people who are most vulnerable and disadvantaged can say ‘This economy works for me’,” said Gordhan.