Transcript New economies - Parliamentary Monitoring Group

PRESENTATION TO THE SELECT
COMMITTEE
Tuesday, 29 July 2014
1
New Growth Path
• The New Growth Path (NGP) was developed to address the legacy of
inequality with regard to access to resources, skills, investment
economic growth and development that still reflect in our economy
• The NGP outlines how to respond to these challenges and create the
much needed jobs
• The NGP further articulates the need for us to achieve a common
vision as a society so that all of us – the public sector, the private
sector/ business, labour unions and civil society work together to
achieve our goal of creating 5 million jobs by 2020.
• The NGP is essentially a comprehensive response to the structural
crises of poverty, unemployment and inequality in South Africa
Jobs Drivers
Infrastructure
Energy, transport,
communications,
water,
housing.
Main economic sectors:
Agriculture &
agroprocessing
Mining and beneficiation
Manufacturing (IPAP2)
Tourism/other services
Look for employment opportunities in
“jobs drivers” and implement policies
to take advantage of them
New economies:
Green economy
Knowledge economy
Social capital:
The social economy
The public sector
Spatial
opportunities:
Rural development
African regional
development
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II. National developments
• Outlook is improving
– Employment losses in the first quarter 2014,
– Share of investment in GDP has grown somewhat
• Mostly due to the public sector investment
– Increased trade with Africa, especially manufactures, in past 2-3 years
– Substantial increase in industrial financing through the IDC
• But concerns:
– External balance remains poor due to
• Reduction in mineral prices compared to 2011
• Very volatile capital flows associated with depreciation
• Continued over-reliance on imports of consumer goods and exports of commodities
– Workplace conflict apparently linked to persistent inequalities and poor
supervisory management as well as inadequate bargaining structures
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I: International developments
• The uneven recovery from the 2008/9 downturn continues
– Mixed signals from the global economy regarding economic growth
outlook
– Growth forecasts for the US and the Eurozone have been revised
downwards. The contraction of the US economy in the first quarter
is the reason for the downward revision in the US forecast.
– Weak industrial output in Germany in May, and slowing growth in
France and Italy is one of the reasons for the downward revision in
the forecasts for Europe
– The Chinese economy is expected to grow just under 7,5 per cent
in 2014
• Continued stagnation in commodity prices would affect South
Africa’s largest exports
• The fragility of EU economy affects SA’s exports
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GDP Growth in Percentages
16.0%
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
-2.0%
-4.0%
South Africa
China
Brazil
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Upper Middle Income countries
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Investment
Public and Private Investment as percentage of GDP
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
Private Investment
Public Investment
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Employment by youth and gender
•
Youth employment (15 to 34 years) increased by 322 000 from the quarter before the
inception of the NGP (3rd Quarter 2010) to the end of the first quarter of 2014
•
Of the new jobs created from the quarter before the inception of the NGP (3rd
Quarter 2010) 794 000 were taken up by women whilst 613 000 were taken up by
men. In this period, more employment was taken up by women than men.
•
Because most new jobs were in services, women benefited most from job
growth.
–
–
–
–
–
Between Q1: 2013 and Q1: 2014 women have gained 300 000 (4,5%) jobs.
Most of the jobs gained were from the formal sector (288 000), whilst employment in the
agricultural sector decreased by 47 000 during the period under observation.
The biggest employment industries were government services (130 000), trade (115 000)
and finance (73 000).
The labour absorption rate among women has increased by 1,1 percentage points, having
moved from 36,1% in the 1st quarter of 2013 to 37,2% in the 1st quarter of 2014.
Women gained almost 794 000 jobs from the third quarter of 2010 to the 1st quarter of 2014.
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Social Pacts for the New Growth Path
An important part of EDDs work has been fostering social dialogue with social
partners:
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National Skills Accord (13 July 2011) sets targets for government, SOEs
and the private sector to expand training and internships and to support
SETAs and the FET sector.
Basic Education Accord (13 July 2011) provides for stakeholders to
support individual schools in poor communities in line with agreed
guidelines.
Local Procurement Accord (31 October 2011) commits government,
state-owned enterprises and the private sector to expanding procurement of
locally produced goods and services so as to maximise employment
creation and deepen industrial capacity, with a target of 75% local
procurement.
Green Economy Accord (17 November 2011) promotes the greening of
the economy, including increased production of renewable energy, the
installation of solar water heaters on a mass scale and energy efficiency,
through appropriate regulations, investments and collective action by the
stakeholders.
October 2012 Social Accord focuses on strengthening confidence in
labour market institutions; addressing income inequalities and building
social cohesion; taking action to combat violence during industrial disputes;
supporting the infrastructure build programme
Youth Employment Accord - In February 2013 Cabinet approved the
youth employment accord after all parties in NEDLAC reached consensus
on a common approach to address the spiralling challenges of youth
unemployment in South Africa
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Employment by province since the adoption of the NGP
Employed, in 000s
•
•
Nationally, employment has
increased by 10,3% since the
adoption of the NGP in the 3rd
quarter of 2010. Employment
has
declined
by
0,9
percentage
points
in
comparison to the previous
quarter.
Gauteng, WC, Limpopo and
KZN saw the largest gains in
numbers quarter on quarter.
Jul-Sep
2010
Region
South Africa
Jan- March
2014
Change
in 000s % change
13 648
15055
1407
10.3%
1 990
2237
247
12.4%
1 280
1332
52
4.1%
286
308
22
7.8%
762
724
-38
-5.0%
2 296
2527
231
10.1%
806
870
64
7.9%
4 320
4794
474
11.0%
971
1127
156
16.0%
936
1136
200
21.4%
Western Cape
Eastern Cape
Northern Cape
Free State
•
In percentage terms, the
largest gainers were Limpopo
and Mpumalanga
KwaZulu Natal
North West
•
The Free State is the only
province that has lost jobs
during this period.
Gauteng
Mpumalanga
Limpopo
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Performance Progress on Jobs
Drivers in last year
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III: Jobs Drivers: Progress & challenges
• 1.41 million more employed people since the
inception of the NGP (3rd Quarter 2010 to 1st
Quarter 2014)
– Improved employment intensity of growth
– BUT the number of people who want work and can’t find it is now 7,4
million, up from 6,7 million
• Inequality has come down although still very
high by international standards
• Growth recovered from 2008/9 downturn
• New challenges from
– Worsening global environment
– Rising electricity and other user costs
– Workplace and community conflicts
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Infrastructure
•
Not a standard statistical category, so
report on construction employment and
value add (which includes private
residential construction also) as well as
total public investment:
– The construction industry reported an
annual increase of 116 000 ( or 9.7%)
employees in March 2014 compared with
March 2013.
– Most jobs were gained in Gauteng (43
000), KZN ( 38 000), and Limpopo (18
000).
– Employment increased were observed in
eight provinces, Eastern cape is the only
province that shed jobs (- 4 000).
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Key Achievements
• Government increased investment in public infrastructure from R610
billion to R1,1 trillion
• Projects included in the National Infrastructure Plan sustained 200
000 jobs
• Public investment equalled 7,7% of GDP in the first quarter of 2014,
compared to 6,9% at end 2010
• Impact increased through local procurement
• Infrastructure Development Act was tabled and approved by
Parliament
• In the next five years, government plans spend R1.5 trillion in public
infrastructure to provide a strong platform for inclusive growth and
job creation
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Agricultural value chain and rural development
•
During the period Q1:2013 and
Q1:2014 employment in agriculture fell
by 55 000. Agricultural output shrank
down to -7.8% year on year. Some
contributing factors could be high input
costs ( as a result of increased
agricultural commodity prices) and
weather
uncertainty,
ultimately
hampering the production process.
•
In terms of year on year, growth in
agricultural employment was only
reported in Western Cape (20 000),
Gauteng (14 000) and North West (5
000).
•
Free State (-31 000), Mpumalanga (-22
000), Eastern Cape (-21 000) and
Limpopo (-19 000) were provinces that
shed the most jobs. No changes were
reported in KZN.
•
This is cause of concern as this
undermines efforts made towards
employment
creation
and
rural
development.
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Key Achievements
•
The Fetsa Tlala programme, launched on 24 October 2013, includes land
preparations for 230 000 hectares are underway in Limpopo, Eastern Cape, Free
State, Northern Cape, North West and KwaZulu Natal, with half the land allocated to
smallholders.
•
DAFF has established two commodity based cooperatives:
– Itsha-Lima Secondary cooperative in Piet Retief (Mpumalanga province)
participating in the school nutrition programme and supplying schools in the
Mkhondo local municipality with fresh vegetables.
– eDumbe Marketing Agricultural cooperative in Paul pietersburg (KwaZulu- Natal)
established to supply Spar with cabbages, with an option of adding other
vegetables.
•
EDD assisted Noble Resources (Soybean Crashing Plant) to acquire land from the
Lekwa/ Standerton Municipality to create a parking space for trucks
•
A draft Agricultural Policy Action Plan (APAP) has been developed that focuses on
five strategic value chains: red meat and poultry, which include maize; wheat;
forestry; aquaculture and small-scale fisheries; and biofuels. The implementation of
APAP will be take place in the current administration
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Key Achievements ….2
• The Russelstone Soya Crushing Plan, the first dedicated oil cake
focussed commercial-scale soya crushing facility in South Africa,
was launched in the Bronkhorstspruit Industrial Area.
• Organic food sector: The dti and DAFF have consulted with industry
and organic farmers that will participate in the retail supplier
programme. 130 Farmers were organically trained in preparation for
listing with formal retailers (Pick ‘n Pay)
• Small-scale milling industry: Agreement with the Foundation for
African Business and Consumer Services (FABCOS) to establish a
number of Small Scale mills in four provinces for 24 small scale
milling projects. An amount of R260 million was ring-fenced
• Aquaculture: A total of 9 projects were approved under the
Aquaculture Development & Enhancement Programme (ADEP) with
total investment projected between R55 mill and R71 mill.
• Forestry Cluster Development: Action plans have been developed
for the establishment of clusters in KZN and Eastern Cape
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Mining Sector
Employment: Mining and Quarrying industry
540
534
530
520
510
505
500
490
486
480
470
460
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Mining
• Employment in mining decreased by approximately 19
000 between Sept 2010 and March 2014
• Quarter on Quarter the employment losses were 13 000
• The mining industry has been hard hit with on going
industrial action in the platinum mining and engineering
sector
• There is some probability of platinum producers closing or
downsizing shop which will result in further employment
decreases.
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Key Achievements
•
Agreement with major stakeholders in the mining industry on moves to
strengthen bargaining structures and end violence. The agreement includes
commitments to address longer-term issues such as unfair lending to miners,
housing in mine areas, inequalities in the workplace, and the lack of career
pathing.
•
Work has been undertaken by dti, DMR and EDD to develop beneficiation plan
with a stronger focus on fabrication (stage 4).
•
Amendments to the MPRDA, now in Parliament, aim to provide security of
minerals supply for local industrialisation. The dti will indicate to the DMR
anticipated requirements for iron-ore, manganese, chromium and nickel.
•
Work is under way to finalise pre-feasibility reports for Special Economic Zones
(SEZs) for the platinum belt in Rustenburg and Tubatse; the Dube TradePort in
KZN; a solar corridor in Upington; and to include Atlantis in the Saldanha Bay
SEZ
•
The purpose of SEZs is to promote the creation of a regionally diversified
industrial economy by establishing new industrial hubs in underdeveloped
regions of the country
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Manufacturing
Manufacturing Sector
Northern Cape
Free State
North West
Limpopo
Mpumalanga
Eastern Cape
Western Cape
KwaZulu-Natal
Gauteng
South Africa
0
200
400
600
800
1000
Q3:2010
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1200
1400
1600
1800
2000
Q1:2014
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Manufacturing
• The manufacturing sector experienced slight increase in
employment since the adoption of the NGP
• The Provinces that contributed positively are Western Cape,
Gauteng, Mpumalanga and Limpopo
• The manufacturing industry reported an annual decrease of
52 000 employees (-2,9%) in March 2014 compared with
March 2013.
• According to Stats SA this was mainly due to decreases in
employment in the manufacture of furniture; manufacture of
other chemical products; manufacture of dairy products; and
manufacture of plastic products.
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Key Achievements
•
Manufacturing Competitiveness Enhancement Programme (MCEP): A total of R509,5
mill was approved in grants to 82 companies with an expected investment of R2,1
billion and an estimated 17 721 jobs to be created over a two year period.
•
Draft National Automotive Value Chain proposal completed
–
–
11 enterprises were approved for funding with the projected value of investment amounting
to R493.4 million and 394 jobs for the 2013/14 financial year
40% of taxis now locally assembled by Toyota and BAW, compared to virtually none in 2012
•
A truck and bus assembly plant worth R600m which is a joint venture between Iveco
SA and Larimar group is under development in Rosslyn and is expected to create
1000 new jobs
•
Automotive Investment Scheme (AIS): A total of 16 Projects were approved with a
grant funding of R243,4million. An estimated 341 jobs will be created with an
investment estimated at R915,8 million.
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Key Achievements…2
• The family planning tender was the second pharmaceutical
tender designated for local procurement, with half of the total
tender value (R 116 million out of the total of R234.5 million)
been awarded to domestic manufacturers: Aspen (R33.14
million) and Fresenius-Kabi (R82.9 million).
• Facilitation of Biovac project (manufacture of vaccines):
Medicine Control Regulator inspections in progress / generally
on schedule. R 150 million loan approved by the IDC
• Monyetla Work Readiness Programme: Skills Programme:
The programme currently has more than 2000 learners in
training. A total of R6,5 mill was approved in grant funding to 5
companies to be paid over 3 years with an expected
investment of R171 mill and 1369 jobs to be created.
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The Green Economy
• Renewable Energy Independent Power Producer
Procurement Programme (REIPPPP) and small scale
programmes: Substantial progress has been made in Bid
Window 1 which is at 86% complete and Bid Window 2 is at
11% complete.
• Window 3 projects have been appointed – in total 3900MW
from wind, solar photovoltaic, concentrating solar, hydro and
biomass has brought over R120bn of FDI into the country
• National Green Fund:To date a total of 21 projects are under
implementation
• Total approved budget of current projects is approximately
R534 million, and current disbursement is R188 million. It is
projected that a total of 12 937 jobs will be created once the
projects are fully implemented, noting that these are multiple
year projects
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Green economy (2)
• Instruction Notes for Power and Telecom Cables and
Solar Water Heaters (SWHs) were published by the
National Treasury
• Launched the Solar PV Localisation Roadmap in
conjunction with the Solar PV Industry Association.
• Biofuels: Accelerated development in the biofuels sector
- Draft Criteria for qualification for a biofuels subsidy has
been developed and undergoing consultation. Process
was delayed by the need to accommodate other crops,
particularly sugarcane, instead of only having sorghum
as a reference crop.
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Other Areas of the NGP
• Local Procurement and Localisation
– The IDC has established an office to support local procurement across
the build programme
– The SABS Local Content Verification Office was launched in July 2013
– In the City of Johannesburg, Mercedes-Benz SA will be providing 134
busses for the phase 1B of JHB’s Rea Vaya BRT system at a cost of
around R400m
– The City of Cape Town has awarded the tender to provide 40 busses for
its extended MyCiti bus routes to Volvo SA at a cost of R180m
– 70% local content has been designated for Solar Water Heaters
• Youth Employment Strategy
– The IDC and sefa have set aside R2,7 billion for youth employment and
entrepreneurship
– A revised Employment Tax Incentive Bill was passed by Parliament in
October 2013
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Future Plans: MTSF 2014 – 2019
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National Development Plan
• The NDP provides a long term vision through to 2030
• We need the New Growth Path (NGP), the Industrial Policy Action
Plan (IPAP) and the National Infrastructure Plan to achieve the
vision of the NDP
• To achieve this with respect to economic development emphasis is
placed on:
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Implementing our infrastructure programme ;
Growing the productive sectors of our economy;
Exports and African regional development;
A correct fiscal and monetary stance;
Improving demand-side planning for skills;
Larger upscale in public employment programmes;
Supporting rural development.
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Implementation of NGP Job Jrivers
• The New Growth Path (NGP) has been identified as an
implemnbation plan of the NDP, which sets target of 5% growth and
11 million jobs by 2030
• Meeting these targets, especially in the current worsening economic
conditions, require more vigorous action to address constraints to
economic growth that fall within the power of the state
• In the current MTSF 2014-2019, EDD will facilitate the establishment
of structures for coordinating and supporting the implementation of
the NGP’s Jobs Drivers
• The structures will include all stakeholders across the state, with
strong secretariat capacity for coordination, monitoring and
unblocking job creation, inclusive growth, industrialisation and
social inclusion
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National Infrastructure Development Plan
• The NGP identifies infrastructure as priority jobs driver
• The National Infrastructure Plan was adopted in February 2012
• The Infrastructure Development Bill was passed by Parliament on
26 March 2014
• The Plan lays down guidelines for integrated infrastructure provision
that will transform the economic landscape
• The National Infrastructure Plan was developed by the Presidential
Infrastructure Coordinating Commission (PICC) for which EDD
provides technical support
• As well as providing improved living standards, the plan aims to
create economic opportunities in underdeveloped areas through
improved roads, rail, ports and broadband as well as water and
energy infrastructure
• 18 Strategic Integrated Projects (SIPs) have been developed which
integrate more than 150 individual infrastructure project clusters into
a coherent package
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Strategic Integrated Projects
18 Strategic Integrated Projects (SIPs) have been have been developed which integrate more than
150 individual infrastructure project clusters into a coherent package
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SIP 1: Unlocking the Northern Mineral Belt with Waterberg as the Catalyst
SIP 2: Durban- Free State– Gauteng Logistics and Industrial Corridor
SIP 3: South Eastern node and corridor development
SIP 4: Unlocking the economic opportunities in North West Province
SIP 5: Saldanha-Northern Cape Development Corridor
SIP 6: Integrated Municipal Infrastructure Project
SIP 7: Integrated Urban Space and Public Transport Programme
SIP 8: Green Energy in support of the South African economy
SIP 9: Electricity Generation to support socio-economic development
SIP 10: Electricity Transmission and Distribution for all
SIP 11: Agri-logistics and rural infrastructure
SIP 12: Revitalisation of public hospitals and other health facilities
SIP 13: National school build programme
SIP 14: Higher Education Infrastructure
SIP 15: Expanding access to communication technology
SIP 16: SKA and Meerkat
SIP 17: Regional Integration for African cooperation and development
SIP 18: Water and sanitation infrastructure
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Infrastructure
• In the next 5 years:
• We will scale up state and private investment in public
infrastructure to provide a strong platform for inclusive growth
and job creation, with planned spending of at least R1,5
trillion.
• Projected spending estimated by cabinet. This is to allow for
infrastructure departmental interaction with Budget process
and partners. This will be broken down after PICC decision is
taken
• Job creation will be a priority: at least 250 000 jobs will be
sustained in PICC-led construction and operations, with at
least 60% of all new workers being youth.
• We will issue guidelines under the Infrastructure Development
Act to ensure the build programme drives economic and
social transformation, turning infrastructure sites into training
spaces and opening the door to real participation by blackand women-owned enterprises and co-ops.
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Jobs Drivers
Infrastructure
Energy, transport,
communications,
water,
housing.
Main economic sectors:
Agriculture &
agroprocessing
Mining and beneficiation
Manufacturing (IPAP2)
Tourism/other services
Look for employment opportunities in
“jobs drivers” and implement policies
to take advantage of them
New economies:
Green economy
Knowledge economy
Social capital:
The social economy
The public sector
Spatial
opportunities:
Rural development
African regional
development
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Coordination of Provincial Economic Development Plans
Current collaboration areas with Provinces:
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•
•
•
EDD is responsible for the coordination of the Economic Development MINMECs – current
key focus areas have been the Integrated SMME and Cooperatives Development Strategy
and the Special Economic Zones (SEZs) programme
Worked with Provinces to determine infrastructure spending and looked at areas of
spending improvement in relation to the implementation of the National Infrastructure Plan
Unblocking of strategic projects that have an economic development impact
Oversight function regarding Economic Development Departments with respect to
performance reporting to Treasury and alignment to National Departments, has just been
initiated
Collaboration areas with Provinces going forward:
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•
•
•
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At strategic the planning level (MTSF)
Prior to implementation we need to collaborate with respect to the strategic economic
infrastructure
With respect to implementation of National initiatives the Province is the strategic link
between the national and local level-where implementation takes place
The social accords/ pacts need to be implemented across the spheres of government and
their respective social partners e.g. Considering potential set asides for youth
We need to collaborate on initiatives with high impact that will address a number of
outcomes (inclusive growth, job creation and sustainable and responsible development)
We need to jointly develop a regular schedule of engagements between EDD and
Provinces
SIYABONGA