National Development Plan: Utopian dream, practical blueprint

Cyril Ramaphosa
Cyril Ramaphosa, a former activist, businessman and now South Africa’s deputy president, has been given “overall oversight of the implementation and enforcement of the NDP across government”. (Image: GCIS)


• Simon Barber
US country manager
Brand South Africa
+1 202-276-5084
simon@sgbarber.com


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Simon Barber

President Jacob Zuma and the governing African National Congress (ANC) have made three things clear. Restored economic growth is their first priority. To achieve it, they have committed to a practical, market-friendly, long-term strategy, the National Development Plan (NDP). The people they deploy to implement the plan must deliver, or else.

The NDP, as one of South Africa’s sharpest financial journalists, Stuart Theobald, wrote last year, is “the first major initiative in South African policy making driven by evidence. It was developed through research: a first ‘diagnostic’ stage, identifying what is wrong in South Africa today and why; then a comprehensive plan to fix those things based on our best theories of what will work.”

Both the diagnosis and the plan were products of a commission of 26 experts, most from outside the government, named by Zuma near the start of his first term in 2010. The businessman Cyril Ramaphosa co-chaired the body with Trevor Manuel, previously a globally respected finance minister.

In a searingly honest piece of national self-appraisal, the commission identified nine “primary challenges”. These were that too few South Africans work, public education is in a shambles, public services were often poor, and infrastructure is inadequate, misplaced and crumbling. Further, the residues of apartheid-era urban planning are an obstacle to employment growth, the economy is too resource intensive, the public health system is dysfunctional, corruption levels are high and South Africa remains a divided society.

Having identified what needed fixing, the commissioners set about drafting a wide-ranging set of to-do’s to eliminate poverty, reduce unemployment from today’s 25% to 6% by 2030 and accelerate annual growth to a level – 5.4% on average – calculated to meet their ambitious goals. After broad consultation, the plan and its 119 action items were launched in August 2012 and embraced as a policy blueprint by the ANC.

Ramaphosa is now Zuma’s deputy. Zuma and the ANC have now, as party spokesman Zizi Kodwa and the Treasury put it in separate but identically worded statements recently, given Ramaphosa “overall oversight of the implementation and enforcement of the NDP across government”. The statements were in response to the Standard & Poor’s decision to join a competitor, Fitch, in notching down their ratings of South Africa’s still investment-grade sovereign debt.

The government’s message to markets was plain: South Africa’s economy is in safe, effective hands, not only at the macroeconomic level, where Reserve Bank governor Gill Marcus and Finance Minister Nhlanhla Nene can be trusted to keep things on an even monetary and fiscal keel, but, with Ramaphosa at the controls, in the microeconomic engine room as well.

A social compact

To work, the NDP still needs broad buy-in from across society. Only in Utopia could a plan of this scope achieve instant, unqualified assent from all quarters. Unsurprisingly, proponents of an alternative, hard-left road map, the so-called national democratic revolution, look upon the NDP with deep suspicion. The plan lists as “critical action” number one not wholesale nationalisation and expropriation but “a social compact to reduce poverty and inequality, and raise employment and investment”. The trick will be to ensure that no one exercises a derailing veto.

If anyone in South African politics has the proven chops to pull that off, it is Ramaphosa – forge a compact is what he is being sent to do. Zuma, in his recent state of the nation address, said his deputy would “convene the social partners dialogue within the ambit of Nedlac (National Economic Development and Labour Council)”.

Ramaphosa’s arrival is likely to breathe new life into a body whose effectiveness was starting to be questioned. His mandate is to fix what Zuma called “the untenable labour relations environment”, which, the government and ratings agencies agree, has been holding the economy well back from its potential. In parallel, Zuma will take charge of seeing that the October 2012 framework agreement for a sustainable mining industry is implemented.

That accord was brokered by Ramaphosa’s predecessor, Kgalema Motlanthe, following the death at police hands of 34 strikers at Lonmin’s Marikana platinum mine two months earlier. It addresses the systemic conditions underlying both the tragedy and the subsequent strikes that have sent South Africa’s economy to the edge of recession.

Business likes the NDP and is key to its success. “We are determined to work with the private sector to remove obstacles to investment,” Zuma said in his address. Boosting private investment is another “critical action” called for in the plan, particularly in labour-intensive industries and in sectors vital to South Africa’s competitiveness.

Enforcing performance

The ANC and Treasury responses to Standard & Poor’s had Ramaphosa not simply overseeing the NDP’s implementation but “enforcing” it. This is tough language, reflecting the impatience of the ruling party’s national executive with the status quo. The ratings agencies thought the NDP was wonderful, Ramaphosa told a recent business breakfast, but they questioned whether words would translate into action.

So ministers were being required to sign performance agreements with Zuma setting out how they proposed to implement their aspects of the plan. “This time around, the president is deadly serious to see to it that there is clear performance from the men and women he has appointed as his Cabinet. Watch this space.”

Also worth watching will be how the government cracks down on fraud, waste, abuse and cronyism at both the national and local levels. In line with the NDP, Zuma said a single Treasury office would now be responsible for signing off on government procurement and public officials would be barred from doing business with the state.

Earlier, top ANC officials, including Zuma and Ramaphosa, were reported to have met provincial leaders and told them to clean up their act.

The appointment of politically connected but unqualified ANC cadres to important municipal posts has been identified as a source of nondelivery and rising discontent in many communities.

Closing a high-level ANC policy conclave after May’s elections, Ramaphosa said: “It was again agreed that appointments to key positions in the municipalities must be based on competence, and the tendency to interfere in the appointment processes by political structures in some areas should be eliminated.” So begins what the ANC is calling the “fifth administration”.

It begins with a sense of urgency.

Closely examined, the May 7 general election results, as decisive as they look, are telling the party it needs to do better. Likewise, the economy’s anaemic growth, the labour woes contributing to it and the possibility of further debt downgrades.

So too the recalibrating of Nigeria’s gross domestic product, a warning that South Africa cannot always count on being the continent’s vanguard economy.

These are challenges to which the ANC and South Africa can rise. In the words of the US poet Wendell Berry, the impeded stream is the one that sings.

Simon Barber is Brand South Africa’s US country manager in Washington, DC.