Transcript Overview of MTSF 2014-2019

Outline
 Background to the Medium Term Strategic Framework 2014-2019
MTSF 2009-2014
The National Development Plan
An overview of the 2014-2019 MTSF
Two overarching themes:
1. Radical economic transformation
2. Improving service delivery
Selective review of the priority outcomes
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Background
According to a 2003 DPSA report on the ‘Machinery of Government’ the MTSF: “would inform
the business plans of Departments, as required by the National Treasury in terms of the
requirements of the MTEF”
The draft MTSF itself would emerge from an internal government process: “short, medium and
long- term priorities are drafted by departments, refined by clusters and FOSAD [Forum of South
African Directors-General], and finalized by Cabinet at the January Lekgotla”
Annual reviews:
Relevant MTSF would be reviewed at mid-year Cabinet lekgotla
This would inform the MTEF and government’s annual Programme of Action
MTSF 2004-2009 and MTSF 2009-2014
Relatively high-level, informed by broad electoral commitments and scenario planning as well as the
internal planning process referred to above
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National Strategic Planning and the NDP
Green Paper on National Strategic Planning (2009) lays out the rationale for more extensive
planning:
mobilisation of society around a commonly agreed set of long-term goals
Greater coherence in government’s work
Longer term planning is good for South Africa... will encourage a longer term view from all key
institutions, allowing them to invest with greater confidence
The Green Paper notes a change in the MTSF, becoming more detailed with the outcomes and
targets being inputs into the Presidency’s performance management work
On the role of Parliament: “[will] need to develop mechanisms to oversee the planning process
and to contribute to ensuring successful implementation of a national plan”
Green Paper process culminated in the National Development Plan 2030: Our future, make it
work
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Outcome 11: Creating a Better South Africa and Contributing To a Better and Safer Africa in a Better World
Strengthen regional political
cohesion and accelerate
regional economic
integration
Enhanced implementation of
the African Agenda and
sustainable development
Strengthen South-South
cooperation
Deepen relations with
strategic formations of the
North
Reform of Global
Governance
Strengthen bilateral political
and economic relations
Outcome 7: Comprehensive Rural
Development
Enhance institutional
capacity and coordinating
mechanisms to manage
international relations
Outcome 4: Decent Employment
through Inclusive Growth
-Housing, water,
electricity and
sanitation
Outcome 8: Sustainable human
settlements and improved quality of
household life
Outcome 6: An efficient, Competitive
and Responsive Economic
Infrastructure Network
- Safety and security
Outcome 9: Responsive,
accountable, effective and efficient
developmental local government
system
-Quality health care,
-Adequate nutrition
- Social protection
A decent standard
of living for all
South Africans
through the
elimination of
poverty and
reduction of
inequality
Outcome 10: Protect and Enhance
Our Environmental Assets and Natural
Resources
-Safe and reliable
public transport
-Employment and
-Clean environment
Outcome 2: A Long and Healthy
Life For All South Africans
Outcome 1: Quality Basic Education
Outcome 3: All People In South
Africa are and Feel Safe
-Quality education and
skills development
-Recreation and leisure
Outcome 13: An inclusive and
responsive social protection
system
Outcome 5: Skilled and capable workforce to
support an inclusive growth path
Outcome 14: Transforming Society
and Uniting The Country
Outcome 12: An efficient, effective and development oriented public service
A stable politicaladministrative interface
A public service that is a
career of choice
Sufficient technical and
specialist professional skills
Efficient and effective
management and
operations systems
Procurement systems that
deliver value for money
Strengthened
accountability to citizens
Improved interdepartmental
coordination
Reduced corruption in
the public service
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From NDP to the MTSF
In the presence of the NDP as an overarching, long-term plan the MTSF process has been
reoriented toward conversion of the NDP into medium-term 5 year plans
Cabinet decided in 2013 that the 2014-2019 MTSF should form the first five-year implementation phase
of the NDP
MTSF has been aligned to the national governing party’s [2014] election manifesto
As with previous MTSFs the intention is that MTSF 2014-2019 will directly inform departments’
planning and oversight of plans and performance
Performance agreements between the President and each Minister will reflect the relevant actions,
indicators and targets set out in the MTSF
National and provincial departments will submit strategic plans for the period 2015-2020 to Parliament and
provincial legislatures by February 2015 incorporating relevant actions and targets in the MTSF
It appears that the process by which MTSF is developed has also remained the same:
intergovernmental process across spheres of government
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Initial responses to the MTSF
The MTSF 2014-2019 was released by the Presidency on the 8th of August 2014 but there has
been relatively little response to date
A recent report by one private economic consultancy suggests that few in the private sector
are aware of the MTSF and there is significant scepticism among those who are
Some concerns have been expressed that the aim of reducing unemployment to 14% by 2019
(from 25.5% at present) may be unrealistic
Broader issue is the relationship between the NDP and MTSF
NDP was based on wide consultation, though the final report was still subject to significant contestation
The MTSF is an internal governmental process that does not involve further external consultation with
stakeholders and citizens
Remains to be seen whether the process from NDP to MTSF has addressed some stakeholder concerns
or/and introduced new ones
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Structure of MTSF 2014-2019
Two overarching themes: radical economic transformation and improving service delivery
14 priority outcomes, building on previous MTSF and the NDP. Within each priority outcome there are:
Broad objectives and themes
A set of specific sub-outcomes specifying: actions required, Minister responsible, the relevant indicator with current baseline
and the MTSF target
A set of core ‘impact indicators’ – drawn from the sub-outcomes – that will be used to monitor and evaluate
performance in the relevant area
Two perspectives particularly relevant to the Standing Committee on Finance:
1.
2.
The role of SCoF in conducting oversight over the activities and performance of National Treasury, its agencies and SARS
The role of SCoF in conducting oversight over alignment of the Budget, fiscal framework, revenue collection and various
money bills with policy priorities
Remainder of the presentation discusses two core MTSF themes and provides a selective overview of the
priority outcomes with emphasis on issues particularly relevant to the Standing Committee
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Theme 1: Radical economic transformation
placing the economy on a qualitatively different path that ensures more rapid, sustainable
growth, higher investment, increased employment, reduced inequality and deracialisation of the
economy (MTSF 2014-2019)
Emerged from 2014 election manifesto
No technical definition of this notion: contested because ideas of ‘radical’ interventions vary
depending on perspective
Broad agreement on the fact that radical change requires multiple, mutually reinforcing
interventions
E.g. Changing the urban spatial distribution requires initiatives relating to: urban planning, local
economic development, transport infrastructure and services, housing, etc.
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Public
employment
schemes
Expanded
opportunities
(historically excluded
and vulnerable
groups, small
businesses and
cooperatives)
Productive
investment
crowded in
through
infrastructure
Competitiveness
enhancement in
productive sectors
Workers’ education
and skills
development
Radical
economic
transformation
(MTSF)
Workplace conflict
reduction and
improved
cooperation
Elimination of
unnecessary
regulatory burdens
Macroeconomic and
financial framework
to support
employment-creating
growth
Addressing spatial
imbalances in
economic
opportunities
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Theme 2: Improving service delivery
Improving the capacity of the public service is one of the core issues addressed by the NDP, but
it is an issue that relates to all other specific functions. MTSF notes that:
backlogs remain and the quality of services is uneven
challenge is therefore to improve the quality and consistency of services, which requires improvements
in the performance of the public service, municipalities and service providers
Measures to improve the capacity and developmental commitment of the state will therefore receive
high priority over this MTSF period
Local level:
national and provincial departments of local government will focus on improving the quality of targeted
oversight and support available to municipalities
focus on ensuring that municipalities provide and properly maintain an adequate core set of basic services
including water, sanitation, electricity, municipal roads, refuse removal and traffic lights
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Theme 2: Improving service delivery
Provincial level: particular attention will be given to the management of service delivery, human
resource management and financial management
National level: bring greater predictability and stability to the management of the politicaladministrative interface by establishing the role of administrative head of the public service
 Corruption: Prevent public servants doing business with the state; ensure transparency in public
expenditure and contractual relations with the private sector; improve capacity to investigate and
prosecute corruption cases; strengthen anti-corruption legislation
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Priority outcomes
1.
Quality basic education
2.
A long and healthy life for all South Africans
3.
All people in South Africa are and feel safe
4.
Decent employment through inclusive growth
5.
A skilled and capable workforce to support an
inclusive growth path
6.
7.
8.
9.
Responsive, accountable, effective and efficient
local government
10. Protect and enhance our environmental assets and
natural resources
11. Create a better South Africa and contribute to a
better Africa and a better world
12. An efficient, effective and development-oriented
public service
An efficient, competitive and responsive economic
infrastructure network
13. A comprehensive, responsive and sustainable
social protection system
Vibrant, equitable, sustainable rural communities
contributing towards food security for all
14. A diverse, socially cohesive society with a common
national identity
Sustainable human settlements and improved
quality of household life
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Outcome 4: the economy
Twenty pages detailing ten sub-outcomes, which align to the elements of radical economic
transformation already outlined above. Informed by the NDP vision to accelerate economic
growth to reduce unemployment and inequality and create an inclusive society (decent
employment through inclusive growth)
Locates existing plans (Industrial Policy Action Plan (IPAP), New Growth Path (NGP), Agricultural
Policy Action Plan (APAP), Minerals Beneficiation Action Plan (MBAP), National Infrastructure
Plan, etc) within a broader framework
Aims to find a balance between creating a stable and supportive environment for growth and
investment while at the same time addressing structural challenges in the economy and society
 Recognises that inequality is an obstacle to growth and investment so growth-oriented policies
must address the distribution of ownership and income
Provides a set of high-level impact/outcome indicators:
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Impact indicator
Minister responsible for
reporting on the
indicator
Finance
2009 Baseline
Latest Baseline of the
indicator
2019 target
NDP 2030
GDP shrank by 1.5% in
2009
2.5% in 2012
5% growth in 2019
4.5% annual growth
Finance
22% in 2009
20.5% of GDP in 2012
25% of GDP
30% of GDP
Finance
8.3% in 2009
7.8% of GDP in 2012
10% of GDP
10% of GDP
Economic Development
6.1% in 2009
5.6% in 2011/12
10%
10%
1. GDP growth
(annualised and
quarterly)
2. Investment rate (% of
GDP)
3. Public sector
investment (% of GDP)
4. Share in household
income of the poorest
60% of households
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Impact indicator
Minister responsible for
reporting on the
indicator
2009 Baseline
Economic Development
1 million jobs lost in
downturn from 2008 to
mid-2010
Economic Development
24% in 2009
Economic Development
20% of the labour force
20% in fourth quarter
2012
30%
40%
Science and Technology
0.87% in 2009/10
0.76% in 2011/12
1.5% by 2019
No target specified but
commitment made to
increasing investment in
R&D
5. Employment creation
Latest Baseline of the
indicator
2019 target
NDP 2030
200 000 in year to March
Annual employment
11 million more jobs, with
2013 but over 300 000 in growth to increase by 350 annual targets set on a
2011
000 a year in 2014-15 and
rising scale
thereafter the rate of
employment growth to
increase, with targets set
annually.
25% in 1st Quarter 2013
14% in 2020
6%
6. Official unemployment
rate
7. Percentage of adults
working in rural areas
8. Investment in Research
and Development as % of
GDP
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Outcome 6: Infrastructure
NDP identifies the need to invest in economic infrastructure to support the country’s economic and
social objectives
to deliver electricity, water and sanitation, telecommunications and public transport
to diversify the country’s industrial base, raise exports and compete internationally
Challenges: expand provision and coverage; maintain existing infrastructure; coordinate investment
between government and private sector; create appropriate institutional, policy and regulatory
environment
Issues of possible interest to the Committee:
Sustainable financing of infrastructure plans given large demands in many sectors, including choice of
appropriate financing options (e.g. user pays versus financing from general tax revenues)
Need for pricing to incentivise investment without hurting growth
The role of Regulatory Impact Assessments for infrastructure projects
Aims for public investment to constitute 10% of GDP by 2019 (6.8% now)
Five sub-outcomes:
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Regulation of
infrastructure
improved
Expansion,
modernisation
,access and
affordability of our
information and
communications
infrastructure
Maintenance and
supply availability
of our bulk water
resources
infrastructure
Impact indicators
[Energy Ministry]
Reliable
generation,
transmission and
distribution of
energy ensured
Infrastructure
sub-outcomes
Maintenance,
strategic
expansion,
operational
efficiency, capacity
and
competitiveness of
transport
infrastructure
 Adequate generating
capacity commissioned
 Electricity generation
reserve margin increased
 Additional SA coal and
gas enabled for energy
production
18
Outcome 7: Rural areas
Vision is to have rural areas which are, spatially, socially and economically well integrated
Economic growth, food security, jobs and improved access to basic services, quality education and
health
Aim that by 2030 agriculture will create 1million new jobs
Need for leadership on: land reform, communal tenure security, financial and technical support
to farmers, and the provision of social and physical infrastructure for successful implementation
Priorities:
Sustainable land reform
Small famer development and support (financially and other wise)
Growth of sustainable rural enterprises and industries – resulting in rural job creation
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Outcome 8: Human settlements
strive to achieve measurable progress towards breaking apartheid spatial patterns with
significant advances made towards retrofitting existing settlements offering the majority of
South Africans access to adequate housing, affordable services in better living environments,
within a more equitable and functional residential property market
Three sub-outcomes toward the above goal:
Adequate housing and improved living environment
Develop a functional and equitable residential property market
Improve institutional capacity and coordination for better spatial targeting (government)
One area that may be pertinent to SCoF is the role of development finance institutions (DFIs) in
providing finance for developmental housing initiatives and projects
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Outcome 9: Local government
Given its role at the `front line’ of service delivery, local government has a critical role to play in the
NDP’s vision but faces a number of key constraints. Some are addressed in general initiatives to
improve the public service (see 12 below) but others require specific local government attention.
The five sub-outcomes are:
Members of society have sustainable and reliable access to basic services
Intergovernmental and democratic governance arrangements for a functional system of cooperative
governance strengthened
Sound financial and administrative management
Promotion of social and economic development
Local public employment programmes expanded through the Community Work Programme (CWP)
MTSF also contains an updated list of 27 district priority areas based on limited access to basic
services
National Treasury is responsible (with COGTA) for supporting and overseeing sound financial and
administrative management, as per the relevant impact indicator
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Outcome 10: Environment
NDP vision: South Africa’s transition to an environmentally sustainable, climate-change
resilient, low-carbon economy and just society will be well under way by 2030
MTSF refers to three phases:
1.
2.
3.
2014-2019: creation of a framework to implement the (above-mentioned) transition
2019-2024: implementation of sustainable development programmes and targeting greenhouse gas
emissions
2024-2029: final steps in the transition and reductions in poverty and unemployment assisting in
South Africa’s emissions peaking in 2030
Some issues possibly relevant to the Committee
Potential short-run tradeoffs between environmental protection and economic objectives
The possibility of future legislation on carbon taxes
Constraints to economic activity from environmental limitations (e.g. water shortages)
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Bilateral
engagements
“combines market
integration, crossborder infrastructure
development and
policy coordination to
diversify production
and boost intraAfrican trade”
Sustainable
developed and
economically
integrated
Africa
Economically
integrated
Southern Africa
International
(Outcome 11)
Beneficial
relations with
strategic
formations of
the North
Impact indicators
[NDT & DTI]




Increased FDI
Increased tourism arrivals
Increased tourism spend
Increased value-added
exports
Strong,
mutually
beneficial
South-South
cooperation
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Improved
mechanisms to
promote
ethical
behaviour in
the public
service
Identification of areas
where departments/entities
are not coordinating
Improved interdepartmental
coordination
and
institutionalisati
on of long-term
planning
Regulations and guidelines should differentiate
different kinds of procurement
Capacity building and professionalising SCM
Provide real-time operational support
Ensure transparency and effective oversight
Review and simplify regulations and guidelines
where necessary
Procurement
systems that
deliver value
for money
Public service
that is career of
choice
Problem of excessive turnover of
department heads
Stable politicaladministrative
interface
Public Service
(Outcome 12)
Increased
responsiveness
of public
servants and
accountability
to citizens
Sufficient
technical and
specialist
professional
skills
Efficient and
effective
management
and operations
system
NT to issue guidelines for financial
delegations and support
implementation of these
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Outcome 13: Social protection
Follows from NDP vision of providing a minimum standard of living, while also recognising the
developmental and transformative role of social protection
The overarching challenge is to develop a comprehensive system of social protection by 2030 while
ensuring that the nature of the expansion is sustainable
Sub-outcomes:
1.
2.
3.
4.
5.
Strengthening social welfare delivery through legislative, policy reforms; capacity building
Improved quality and access of Early Childhood Development Services for children aged 0-4
Strengthened community development interventions
Deepening social assistance and expanding access to social security
Optimal systems to strengthen coordination, integration, planning, monitoring and evaluation of social
protection services
Relatively few impact indicators for this outcome: halve rate of stunting; access to social assistance
up to 95% for those eligible; double number who can access labour-related social insurance; double
access to Early Childhood Development
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Thank you
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