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13 October 2015

The Department of Planning Monitoring and Evaluation. 13 October 2015. EDD PROGRESS REPORT ON THE IMPLEMENTATION OF THE MEDIUM-TERM STRATEGIC FRAMEWORK (MTSF ) 2014-2019. INTRODUCTION.

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13 October 2015

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  1. The Department of Planning Monitoring and Evaluation 13 October 2015 EDD PROGRESS REPORT ON THE IMPLEMENTATION OF THE MEDIUM-TERM STRATEGIC FRAMEWORK (MTSF) 2014-2019

  2. INTRODUCTION • The MTSF is government’s first five year implementation plan of the NDP, covering the financial years 2014/15 to 2018/2019 • This report reviews overall progress against the targets in the MTSF for the 14 outcomes over the financial period 2014/15 • The 14 outcomes are aligned with the National Development Plan:

  3. INTRODUCTION (2) • The MTSF outcomes seek to address the triple challenges of unemployment, inequality and poverty espoused in the National Development Plan • The report does not cover every target in the MTSF – for each outcome the report covers a selection of targets, strategic issues requiring change and provides pointers to critical future focal areas • By focusing on a limited set of key indicators, the methodology enables evidence-based assessment of progress against the NDP • The methodology helps us to focus on outcomes and impacts rather than just activities

  4. INTRODUCTION (3) • Refinement of some indicators in MTSF chapters for alignment with SONA, the Nine Point Plan, and other recent developments • Proposed refinement timely as mid-2015 represents the end of the first year of the fifth Administration • Using the NDP as the blueprint, DPME and STATSSA are working with departments to ensure that indicators are refined so they are always measurable, accurate, reliable and time-bound. • Areas of under-targeting and over-targeting are being looked into and addressed, and consensus is sought across all contributing governments and spheres. The quality of the data used in the Nine Point Plan will also form part of this ongoing process to ensure credibility.

  5. APPROACH OF THE PRESENTATION • The focus is on the monitoring and evaluation of the Medium Term Strategic Framework (MTSF) as government’s first five year implementation plan of the NDP, covering the financial years 2014/15 to 2018/2019 • The presentation is informed by the radical socio-economic transformation agenda. • Using the performance rating system, the presentation highlights progress in key targets, key challenges and what is being done to address these challenges. Where appropriate, links are drawn to the Nine Point Plan • We look at Management Performance using the MPAT assessments

  6. RADICAL SOCIO-ECONOMIC TRANSFORMATION MTSF focus on achieving radical socio-economic transformation • Ensuring a stable macroeconomic and financial framework to support employment-creating growth • Crowding in productive investment through infrastructure build programme • Enhancing competitiveness in the productive sectors of the economy • Addressing spatial imbalances in economic opportunities • Elimination of unnecessary regulatory burdens • Improving workers’ education and skills development • Reducing workplace conflict and improving cooperation between government, business and labour • Enhancing opportunities for small businesses and historically excluded and vulnerable groups • Expanding public employment schemes • Improving service delivery

  7. CLASSIFICATION OF PERFORMANCE FOR THIS REPORT

  8. Sub-outcome 1: Productive Investment is effectively crowded in through the infrastructure build programme

  9. Sub-outcome 1: Productive Investment is effectively crowded in through the infrastructure build programme

  10. Sub-outcome 2: The productive sectors account for a growing share of production and employment

  11. Sub-outcome 2: The productive sectors account for a growing share of production and employment CONT…

  12. Sub-outcome 2: The productive sectors account for a growing share of production and employment

  13. Sub-outcome 2: The productive sectors account for a growing share of production and employment CONT…

  14. Sub-outcome 5: Spatial imbalances in economic opportunities are addressed through expanded employment in agriculture, the build programme and densification in the metros

  15. Sub-outcome 6: Macro-economic conditions support employment-creating growth

  16. Sub-outcome 8: Economic opportunities for historically excluded and vulnerable groups are expanded and the number of sustainable small businesses and cooperatives is improved markedly

  17. Key Achievements • Government agencies invested just over R1 trillion in infrastructure between 2009 and 2013 in energy, road, rail, bulk water, higher education infrastructure, SKA and Meerkat, 37 000km of fibre optic cables for broadband and other infrastructure programmes identified and implemented through the PICC and SIPs • Significant investments, both foreign and local in key manufacturing sectors: auto, agro-processing and electronics. Examples include Mercedes Benz (R5 bn), Ford (R3.6bn), Unilever (R4bn in 4 plants over the past for years and SAMSUNG (R228 million) • Strong turnaround in manufacturing, exports, e.g. auto exports in 2014, amounting to R115 billion (12.7% of total exports)

  18. Key Achievements (2) • PRASA investment into new rail rolling stock estimated to cost R51 billion and will spend R4 billion on new hybrid locomotives over a ten-year period. • A factory will be established in Nigel, Ekurhuleni for the manufacture and assembly of locomotives and trains. This could result in direct and indirect jobs • The Renewable Energy Independent Power Producer Programme (REIPPP) is the first large scale private sector procurement in the electricity generation industry in South Africa & one of the largest renewable energy programmes in the world • Due to the programme, South Africa is now considered amongst top 10 renewable energy investing country leaders in renewable energy Independent Power Producer (IPP) investments • Four bidding windows have successfully been launched, resulting in the procuring of 92 renewable energy projects (including wind, solar photovoltaic and concentrating solar power technologies). • Window 4, with additional request for bids have been announced and preparation towards the finalisation of Window 5 is in progress

  19. Key Achievements (3) • These REIPP projects translate into approximately R193bn in private sector investment. To date, projects totalling approximately 6 300 MW have already been commissioned under the 4 bid windows and are selling power to the grid, helping to reduce the current supply shortfall • Over the course of the four bidding rounds, the price of electricity from each technology dropped substantially, solar PV decreased by 75% and wind by 50% - while increasing both local content and job creation, partially driven by strong competition in the sector • Unit 6 at Medupi completed with full commercialisation • At the level of supporting regional infrastructure initiatives, President Zuma is the political champion of AU Presidential Infrastructure Championing Initiative which has resulted in a number of regional infrastructure projects

  20. Key Challenges (1) • Investment in the productive sectors has lagged investment in the tertiary industries • Progress on investment other elements of National Infrastructure Plan is steady • Progress towards the 75% local procurement target has also been slow largely due to conflicting views on the implementation of the policy • Electricity supply constraints is a significant impediment to economic growth • High risk of frequent and major load-shedding over coming months could last up to 3 years. Load shedding is a high cost to the economy - costing on average between R9 – R15 kWh compared to running diesel generators (R4-R5 kWh)

  21. Key Challenges (2) • Delays in build of Medupi and Kusile (poor planning, skills shortage due to boom in the building of power stations, poor contractor performance, weaknesses in contract management, strikes) • Large amount of existing generating capacity not available due to breakdowns - average plant availability has dropped from 85% to 68% (causes: insufficient maintenance due to policy of keeping the lights on, possibly weaknesses in maintenance practices and operation of plant) • The use of diesel is costly and unsustainable in the medium term (R10-R12bn annually since last year) but remains a short term necessity • Distribution infrastructure NOT adequately maintained and thus decaying expansion and growth of new connections to the network, but more importantly the quality of supply is causing disinvestment • Resolving the electricity supply constraint requires a mix of energy options including coal, gas, renewables, shale, nuclear as well as oil and gas

  22. Interventions Underway • The focus on the Nine Priority Areas is gaining traction: • Unlocking increased private sector investment will require using the infrastructure programme to crowd in the private sector investment, improving regulatory efficiencies at all levels of government • Expand exports especially outside of Europe and China (and focus especially on Africa) by using new opportunities • Focus on trade promotion measures combined with more efficient regulation and possibly export-import financing, in Africa

  23. Interventions Underway (2) • Implement key initiatives of the Agricultural Policy Action Plan to support growth and employment in agriculture and agro-processing • Increase support for existing smallholder farmers and explore ways to substantially expand the number of agricultural producers • Realise the enormous potential of South Africa’s ocean economy, to contribute to growth, job creating and poverty reduction

  24. Interventions Underway (3) • Implement the Mining Phakisa to double investment • Advance beneficiation to add value to our mineral wealth • Finalise the Minerals and Petroleum Resources Development Amendment Bill • Review Mining Charter to set targets for local manufacturing of capital goods • Continue to implement the New Growth Path to promote growth and employment from new opportunities such as the green economy, exports of goods and services to growing African markets and shale & offshore oil and gas • Strengthen support for cooperatives, particularly in marketing and supply activities to enable small scale producers to enter formal value chains and take advantage of economies of scale

  25. Interventions Underway (4) • Put in place a more focused project-managed initiative to comprehensively eliminate unnecessary regulatory burdens which impede growth and investment, and to make necessary regulations more efficient • The Socio-Economic Impact Assessment System (SEIAS) is being implemented following Government approval in 1 July 2015. • Urgent intervention required to immediately assess the impact of the new immigration regulations on tourism and scarce skills and to provide recommendations to Government on how to address any unintended consequences • Government has appointed an IMC led by Deputy President, to deal with the unintended consequences in the implementation of the immigration regulation • Continued implementation of One Stop Investment centres; the co-location of SMME support agencies by DSBD; and the Strategic Environmental Assessments (SEAs)

  26. Management Performance

  27. Management Performance (2)

  28. Thank You

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