Download Performance challenges and policy responses

MPUMALANGA ECONOMY – PERFORMANCE,
CHALLENGES AND POLICY RESPONSE
SELECT COMMITTEE ON FINANCE
17 JUNE 2015
CAPE TOWN
1
PURPOSE OF PRESENTATION
• The purpose of this short presentation is to inform the Committee
about the Mpumalanga economy in terms of its performance,
challenges and policy response – see also annexure for more detail
• Provides an essential reference to policy makers for the formulation,
implementation and evaluation of public policies & programmes
aimed at improving the quality of life of our 4.2 million Mpumalanga
citizens
• Should inform our radical economic transformation agenda and also
assist with the implementation of the National Development Plan
(NDP), Provincial Vision 2030 and the Mpumalanga Economic
Growth & Development Path (MEGDP)
• Presentation based on especially the 2014/15 PERO (Provincial
Economic Review and Outlook) report of Mpumalanga Provincial
Treasury – see published PERO
• Primary source of information Statistics South Africa – also other
credible sources such as IHS Global Insight’s ReX (Regional
Explorer)
2
SOCIO-ECONOMIC CHALLENGES
OF MPUMALANGA
High HIV
prevalence
Inflation
Unequal
economic
distribution
Sectoral
dependency
MEGDP & NDP
central
challenges
Educational
challenges
High
unemployment
1. Reduce
unemployment
Socioeconomic
challenges
Low HDI
2. Reduce
poverty
High
inequality
Low
economic
growth
Household
services
challenges
High poverty
3. Reduce
inequality
3
KEY ECONOMIC STATS
•
In 2014, Mpumalanga’s percentage share of the national population of 54.0 million was
7.8%, or 4.2 million.
•
Mpumalanga’s contribution to the national economy was the fifth largest with a share of
7.6% in 2013.
•
Provincial GDP growth of 1.7% for 2013 was lower than national growth of 2.2%.
•
Provincial GDP growth of 2.2% forecasted for 2013-2018 is lower than the expected
national growth rate of 2.6%.
•
In 2013, the three largest contributors (constant prices) to the provincial economy were
mining (25.4%), community services (16.4%) and trade (15.0%).
•
In total over the last year (Q1 2014 to Q1 2015), Mpumalanga recorded 27 478 more jobs.
•
According to Statistics South Africa, Mpumalanga recorded the joint fourth highest strict
unemployment rate in the first quarter of 2015 among the nine provinces, at 28.4%. The
expanded unemployment rate was at 40.7% in the same quarter.
•
The male unemployment rate was 25.9%, the female unemployment 31.7% and the youth
(15-34 years – StatsSA definition) unemployment rate 38.8%.
•
The poorest 40% of households in Mpumalanga earned 7.5% of income in 2013, which was
higher (better) than the national figure of 6.7% for 2013.
•
In 2013, 36.2% (declining trend) or 1.5 million of the Mpumalanga population lived below
the so-called lower bound poverty line (of Statistics South Africa).
4
KEY ECONOMIC INDICATORS
Indicator
EC
Free
State
GP
KZN
LP
MP
North
West
Economic growth (2013)
1.1%
1.7%
2.6%
2.1%
2.4%
1.7%
2.5%
Economic growth forecast
(2013-2018)
2.7%
1.9%
2.8%
2.8%
2.1%
2.2%
Unemployment rate (strict
definition) (Q1 2015)
29.6%
30.4%
28.4%
23.6%
20.1%
Unemployment rate
(expanded) (Q1 2015)
43.2%
38.4%
32.8%
38.2%
Annual income per capita
(2013)
R30 357
R39 168
R67 451
Average annual
household income (2013)
R114 594 R125 692 R207 436
NC
WC
SOUTH
AFRICA
2.1%
2.3%
2.2%
2.0%
2.5%
2.9%
2.6%
28.4%
28.4%
34.1%
21.0%
26.4%
40.8%
40.7%
43.2%
42.6%
23.3%
36.1%
R35 012
R26 643
R37 805
R39 004
R40 393
R64 284
R45 443
R137 694
R100 734
R136 186
R129 557 R142 723 R224 775 R158 942
Population below lowerbound poverty line (2013)
43.3%
34.0%
24.2%
42.1%
44.1%
36.2%
33.8%
28.9%
21.1%
34.1%
Share of income by
poorest 40% (2013)
8.3%
8.1%
5.4%
7.3%
9.3%
7.5%
7.9%
8.4%
6.6%
6.7%
Sources:
Statistics South Africa – GDP Q3, 2014
Statistics South Africa – QLFS, 2015
IHS Global Insight – ReX, January 2015
5
ECONOMIC PERFORMANCE
ECONOMIC GROWTH RESULTS & FORECAST
• Economic growth target set at minimum average annual GDP growth of 5%
(structural challenges – energy constraints, skills etc)
• Average annual economic growth rate for Mpumalanga 2.7% over the period
1995 to 2013 - mining industry’s growth only 0.8% per annum for the same
period
• Provincial growth lower than national growth with the exception of 1995-1999
• Before the recession the end of 2008, the provincial growth rate was more
than 4% per annum between 2005 & 2007
• Between 2009 & 2013, Mpumalanga’s GDP growth was only 2.2% per annum
• Growth nationally in 2014 not good – eventually 1.5% for full year –
approximately 1.3% growth for Mpumalanga
• National growth in the first quarter of 2015 very low at 1.3% - negative growth
in agriculture and manufacturing
• Forecasted average annual GDP growth for Mpumalanga between 2013 &
2018 just more than 2% per annum – global economic environment fragile &
uneven – forecast for this year more or less 2% for South Africa and 1.9% for
the province
6
ECONOMIC INDICATORS
Indicator
EC
Contribution to national
GDP – current prices
(2013)
7.7%
Provincial GDP – current
R272.7
prices (2013 R billion)
Free
State
GP
5.1%
33.8%
R179.8
KZN
LP
MP
16.0%
7.3%
7.6%
6.8%
R1 194.1
R565.2
R256.9
R269.9
North NC
West
WC
SA
2.0%
13.7%
100.0%
R239
R71.1
R485.5 R3 534.3
Real GDP growth rate
(2013)
1.1%
1.7%
2.6%
2.1%
2.4%
1.7%
2.5%
2.1%
2.3%
2.2%
Real average annual
GDP growth (2003–13)
3.3%
2.9%
4.2%
4.0%
2.7%
2.9%
2.3%
2.4%
4.2%
3.7%
R54 053
R46 556
R65 374
R66 439
GDP per capita – current
R41 195 R65 297 R93 817
prices (2013)
R61 176 R80 697 R66 708
Real GDP per capita
growth (2013)
0.6%
1.5%
0.4%
1.0%
1.2%
0.4%
1.0%
1.2%
0.4%
0.8%
Real average annual
GDP per capita growth
(2003–2013)
2.5%
2.5%
1.6%
2.5%
1.3%
1.2%
0.7%
1.3%
1.7%
1.9%
Sources: Statistics SA – GDP Q3, 2014
Statistics SA – GHS, 2013
Statistics SA – Mid-year estimates, 2014
7
JOB CREATION & UNEMPLOYMENT
OBJECTIVE: TO CREATE EMPLOYMENT & REDUCE
UNEMPLOYMENT
• Total employment number must rise from more than
1.1 million to approximately 1.6 million in 2020 & to
2.4 million by 2030
• On average more than 81 000 new & sustainable
jobs must be created annually up to 2030 –
employment growth of 4.9% per annum
• The unemployment rate must decrease to 15% by
2020 (MEGDP) & 6% by 2030 (NDP & Provincial
Vision 2030)
8
JOB CREATION
TOTAL EMPLOYMENT CREATION & BY INDUSTRY
• Net job creation 160 302 between Q1 2008 & Q1 2015 (7 year period)
– average of 22 900 jobs pa – achieving approximately 29% of our
annual job creation target!
• Job losses over this 7 year period in agriculture, mining, construction
& trade – high job creation in especially community services (almost
100 000 jobs) & finance
• Net job gains of 16 010 jobs in the first quarter of 2015 & 27 478 on
an annual basis
• Employment growth of 2.4% on an annual basis (national average
2.7%)
• Community services (37 171), construction (17 235) & transport
(13 643) created the largest number of net jobs between Q1 2014 &
Q1 2015
• Mining (-42 204), private households (-11 114) and agriculture
(-4 516) shed the largest number of jobs on an annual basis
9
UNEMPLOYMENT
• The unemployment rate increased from 23.6% at the end of Q1 2008
to 28.4% at the end of Q1 2015 – increased in the 1st quarter of 2015
• Mpumalanga’s unemployment rate was 5th highest among the 9
provinces at the end of Q1 2008 & joint 4th highest at the end of Q1
2015
• Specific unemployment rates at the end of Q1 2015:
– Male = 25.9%
– Female = 31.7%
– Youth unemployment rate = 38.8% (according to the definition of
StatsSA of 15-34 yr)
• 66.0% of the unemployed in Mpumalanga indicated that they have
been unemployed in excess of 12 months
• The number of unemployed increased from 306 418 in Q1 2008 to
457 754 in Q1 2015 – 151 336 and almost 50% increase !
– The unemployed youth (15-34 yr) was 70% of the total
unemployed people at the end of Q1 2015!
10
POVERTY & INEQUALITY
OBJECTIVE TO REDUCE POVERTY & INCOME
INEQUALITY
•
The poverty rate is targeted to be at least 25% by 2020
(MEGDP) & at least 5% by 2030 (Vision 2030)
•
Reduce the Gini-coefficient in Mpumalanga to at least
0.60 by 2030 (NDP & Vision 2030)
•
The proportion of income earned by the bottom 40% in
Mpumalanga should rise to 10% by 2030 (NDP & Vision
2030)
11
POVERTY
•
•
•
•
POVERTY RATE REDUCTION
The share of population in Mpumalanga below the socalled lower-bound poverty line (of StatsSA)
declined/improved to 36.2% in 2013
2013 lower-bound poverty line = R513 per capita per
month
In 2013, Mpumalanga’s share of population below the
lower-bound poverty line was the 4th highest
(unfavourable) among the provinces and slightly higher
than the SA rate
The number of people below the lower bound poverty
line declined from 1.998 million in 2009 to 1.52 million
in 2013 – a decline/improvement of 480 892 people
12
INEQUALITY
REDUCTION IN INCOME INEQUALITY
•
•
•
•
•
The Gini-coefficient in Mpumalanga was unchanged between
2009 and 2013 at 0.62
Income in Mpumalanga was therefore as unequally distributed in
2013 than in 2009
In 2013, Mpumalanga’s Gini-coefficient was the 3rd highest
(unfavourable) among the provinces, however, lower/better than
SA’s Gini-coefficient of 0.64
The proportion of income earned by the bottom 40% in
Mpumalanga remained unchanged at 7.5% between 2009 & 2013
Mpumalanga’s Palma ratio declined/improved slightly from 6.63 in
2009 to 6.53 in 2013
•
The Palma ratio reveals that for every R1 of total income that the
poorest 40% earned, the richest 10% earned approximately R6.53
13
•
•
•
•
•
•
•
•
CHALLENGES & CRITICAL
QUESTIONS
Growth challenge – negative impact of international & national economy and
structural challenges, provincial economic drivers not performing well,
importance of the development of other industries such as agriculture and
tourism with a high labour absorption, important role of MTPA
Importance of investment to stimulate growth – clear provincial investment
strategy and also on district and municipal level? Role of MEGA especially to
attract FDI!
Importance of cooperation/collaboration and partnerships with the private sector
– importance and relevance of LED/RED to increase growth, economic
interventions from DEDT – looking at different funding models for development
projects
Job creation challenge – focus on the youth and also employability challenges,
questions about the sustainability of CRDP & EPWP jobs, importance of job
tracking, SMME development
HIV challenge – importance of impact of interventions from DoH
Good progress with basic education but still some challenges with ANA,
Mathematics, throughput rate, quality of grade 12 certificate etc - questions
about skills and more specifically relevant skills for the labour market
(employability)
Back to the basics with basic service delivery! Important for investment!
Importance of evidence-based research & decision making in Government!
14
MEGDP: COMPONENTS
IMPLEMENTATION FORUM
Human Capital
Development
Rural
Development
Infrastructure
INFRASTRUCTURE &
WATER MASTER PLANS
CRDP STRATEGY
HRDS
Beneficiation
/Production
INDUSTRIAL PLAN +
TRADE & INVESTMENT
PLAN
Agriculture & Forestry
Mining
Manufacturing
Tourism
Energy &Green Economy
ICT
P
O
A
Youth, PDI’s
SMME’s
Co-ops
Large Industry
Youth, PDI’s
SMME’s
Co-ops
JOBS
Youth, PDI’s
SMME’s
Co-ops
Large Industry
P
O
A
Youth, PDI’s
SMME’s
Co-ops
Large Industry
SPATIAL FRAMEWORK + ENVIRONMENTAL MANAGEMENT FRAMEWORK & BDCP
MEGDP FRAMEWORK
15
15
RADICAL SOCIO-ECONOMIC
AGENDA
• Investing in strategic infrastructure development
to unlock growth & job creation
• Growing strategic economic sectors to create
jobs
• Strengthening partnerships with the private
sector
• Investing in the development of township and
rural economies – including the provision of
infrastructure and support for industrial
development
• Supporting the development of SMMEs and
Cooperatives
16
SOME KEY PRIORITIES IN 2015/16
•
•
•
•
•
•
•
•
•
•
Development and implementation of industrial development plan as well
as trade & investment plan
Economic interventions and LED on municipal level to stimulate
economic growth and development within Municipalities
Developing a job tracking system for the Province
Developing a township and informal business strategy and finalise the
SMME strategy
Implementing the BBBEE & PPPF Acts
Establishment of the International Fresh Produce Market and Agri-hubs
Development and implementation of the SEZ project within Nkomazi
Establishing an ICC in Mbombela
Investment opportunities (through MEGA) for the construction of key
projects such as the Cultural Hub, High Altitude Training Centre, Blyde
Development Cluster, Moloto Rail Corridor, Innovation Hub and Green
Energy Plant
Creating export markets for local products and foreign investment in
key sectors and infrastructure development
17
Thank you
18
ANNEXURE
19
SOCIO-ECONOMIC RESEARCH
Socio-economic
research
• Demographics
• Labour
• Education & health
• Basic service
delivery/infrastructure
• Development & income
• Poverty & inequality
• Economic
industries/sectors &
performance
Planning and
Budget
Inform
planning
& budget
processes
Economic
impact
Priorities,
strategies
&
spending
• Service delivery
• Economic growth &
development
• Unemployment
• Poverty
• Inequality
Socio-economic
framework
• MTSF & Outcomes
• National priorities
• National budget
• SONA
• National Department
Policies & NDP
• PGDS & IDP/LED
• SOPA & MEGDP
• Vision 2030
20
BUDGET AS TOOL FOR GROWTH &
DEVELOPMENT
National & Local
Governments’
budgets
Education
Health
MPG budget
Private sector &
Other institutions’
budgets
Expenditure
Impact on
development
priorities
Economy &
Employment
Poverty &
Inequality
To improve
the lives of
4.2 million
citizens in
Mpumalanga
Inclusive
Rural
Development
Integrated
Human
Settlements
21
Population
2001
3.4
million
Population
2014
9 out of 10 people were black African
4.2
million
0-34 yrs =
69.9%
Between 2001 &
2014 the population
of Mpumalanga grew
by 863 700
50.9%
49.1%
22
DEMOGRAPHICS
Mpumalanga annual average population growth 2001-11 = 1.8%
By 2030, the share of large
4 unchanged at 47.5%,
whilst share of fast 4 will
increase from 24.6% to
33.4%
Bubble size = share of
Mpumalanga population
in 2011
23
ECONOMIC PERFORMANCE
INDUSTRY GROWTH & CONTRIBUTION
• No provincial industry/sector with an average annual economic growth in
excess of the targeted 5% between 2009 & 2013
• Community services (2.6%) and mining (2.3%) achieved the highest
economic growth rates between 2009 & 2013 & agriculture the lowest
(-0.7% per annum)
• According to the latest re-based (2010 constant prices) and revised GDP
figures of StatsSA, mining is the largest industry of Mpumalanga with a
contribution of 25% to the provincial economic cake – other large
industries with contributions of more than 12% include community
services (16%), trade (15%), manufacturing (13%) & finance (12%)
• Contribution of Mpumalanga to the SA economy in 2013, 7.6% (size of
provincial economy R270 billion – current prices) & substantial
contributions to the national economy in the following industries/sectors –
mining (21%), utilities (15%) and agriculture (almost 9%) – all in constant
prices
24
ECONOMIC INDICATORS
Indicator
EC
Free
State
GP
KZN
LP
MP
North
West
NC
WC
SA
Contribution to provincial GDP by industry (constant 2010 prices), 2013
Agriculture
1.7%
4.4%
0.4%
4.7%
2.8%
3.0%
2.4%
6.9%
4.1%
2.5%
Mining
0.3%
13.7%
2.8%
2.0%
28.5%
25.4%
32.6%
28.4%
0.3%
8.6%
Manufacturing
14.1%
10.4%
16.6%
18.5%
2.9%
13.3%
6.0%
3.4%
15.8%
14.1%
Utilities
1.3%
3.2%
2.3%
2.5%
2.9%
5.4%
2.3%
3.1%
2.0%
2.5%
Construction
3.8%
2.8%
3.6%
4.5%
3.8%
3.3%
2.9%
2.7%
4.2%
3.7%
Trade
19.8%
17.9%
13.7%
15.7%
15.5%
15.0%
12.1%
12.2%
16.1%
15.1%
Transport
8.6%
8.5%
9.9%
12.2%
4.6%
6.0%
5.9%
9.7%
10.2%
9.2%
Finance
20.1%
15.3%
26.2%
18.1%
15.1%
12.2%
14.1%
13.4%
29.8%
21.5%
Community services
30.3%
23.7%
24.6%
21.9%
24.0%
16.4%
21.7%
20.2%
17.6%
22.7%
100%
100%
100%
100%
100%
TOTAL
100%
100%
100%
100.0%
100%
Source: Statistics South Africa – GDP Q3, 2014
25
ECONOMIC INDICATORS
Indicator
EC
Free
State
Gauteng
KZN
Limpopo
MP
North
West
Mining
5.4%
Mining
3.1%
Mining
3.5%
Construct
8.9%
Commun
services
3.3%
Mining
4.0%
Utilities
-0.1%
Utilities
-2.0%
Utilities
-0.1%
Utilities
-0.6%
Utilities
-0.6%
Mining
3.8%
Trade
3.6%
Trade
3.4%
Agricult
-1.7%
Agricult
0.4%
Utilities
0.8%
Fastest
growing
industry (2013)
Finance
3.2%
Mining
3.3%
Mining
4.3%
Slowest
growing
industry (2013)
Utilities
-4.4%
Utilities
0.1%
Utilities
-0.5%
Utilities
-0.1%
Utilities
-1.2%
Fastest
growing
industry (20092013)
Mining
4.0%
Trade
3.8%
Trade
4.1%
Trade
3.5%
Commun
services
2.9%
Slowest
growing
industry (20092013)
Utilities
-0.5%
Agriculture
-1.7%
Mining
-0.4%
Utilities
0.6%
Agricult
-0.4%
Mining
4.3%
Commun Commun
services services
2.6%
2.9%
Agricul
-0.7%
Mining
-0.4%
NC
WC
SOUTH
AFRICA
Source: Statistics South Africa – GDP Q3, 2014
26
PRIMARY SECTOR
ANNUAL ECONOMIC GROWTH
contributes
5%
AGRICULTURE
contributes
28.4%
4%
to Mpumalanga’s economy
3.0%
Grew by 3.0% in 2013
& by 1.0% between 1995 & 2013
to Mpumalanga’s economy
Grew by 2.1% in 2013
& by 2.9% between 1995 & 2013
1.7%
1.3%
1%
2.0%
2%
2.2%
2.7%
3%
-1.3%
0%
-1%
-2%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
MINING
Contributes 25.4% to Mpumalanga’s economy
Largest contributor to Mpumalanga’s economy
Grew by 3.1% in 2013
& by 0.8% between 1995 & 2013
TERTIARY SECTOR
SECONDARY SECTOR
contributes
1
MANUFACTURING
contributes
contributes
to Mpumalanga’s economy
13.3%
to Mpumalanga’s economy
16.4%
Grew by 0.4% in 2013
& by 2.9% between 1995 & 2013
to Mpumalanga’s economy
Grew by 0.1% in 2013
& by 3.0% between 1995 & 2013
Grew by 1.8% in 2013
& by 3.3% between 1995 & 2013
to Mpumalanga’s economy
Grew by 2.7% in 2013
& by 2.4% between 1995 & 2013
UTILITIES
contributes
CONSTRUCTION
contributes
22.0%
COMMUNITY SERVICES
contributes
49.6%
TRADE
contributes
3
TRANSPORT
contributes
2
FINANCE
contributes
5.4%
3.3%
15.0%
6.0%
12.2%
to Mpumalanga’s economy
Grew by -0.1% in 2013
& by 1.8% between 1995 & 2013
to Mpumalanga’s economy
Grew by 2.2% in 2013
& by 4.8% between 1995 & 2013
to Mpumalanga’s
economy
Grew by 1.5% in 2013
& by 3.2% between
1995 & 2013
to Mpumalanga’s
economy
Grew by 1.3% in 2013
& by 5.0% between
1995 & 2013
to Mpumalanga’s
economy
Grew by 1.3% in 2013
& by 3.9% between
1995 & 2013
27
IMPACT OF ECONOMIC
PERFORMANCE
Real GVA growth 2009-2013
Contribution to employment changes
2009-2013
Community services
Medium
growth
industries
81.9%
Mining
Trade
Finance
Manufacturing
Transport
Construction
Utilities
Agriculture
-1%
0%
1%
2%
3%
Annual average growth rate
4%
Low growth
industries
18.1%
28
TOURISM INDICATORS
Value & contribution of total tourism spend per region, 2013
Region
Gert Sibande
Chief Albert Luthuli
Msukaligwa
Mkhondo
Dr Pixley Ka Isaka Seme
Lekwa
Dipaleseng
Govan Mbeki
Nkangala
Victor Khanye
Emalahleni
Steve Tshwete
Emakhazeni
Thembisile Hani
Dr JS Moroka
Ehlanzeni
Thaba Chweu
Mbombela
Umjindi
Nkomazi
Bushbuckridge
Mpumalanga
Total tourism spend (R-million)
3 761
374
365
265
141
179
64
2 373
4 861
438
1 693
1 273
769
361
326
9 363
1 448
4 933
254
1 770
958
17 985
Tourism spend as % of GDP (current
prices)
4.7%
8.2%
3.7%
6.1%
4.4%
1.8%
3.3%
5.1%
4.0%
8.5%
2.9%
3.1%
21.4%
5.5%
6.0%
12.2%
16.8%
10.7%
5.5%
26.9%
9.1%
6.5%
29
INVESTMENT
• Most problematic factors for doing business in SA according
to the Global Competitiveness Report 2014-15 – restrictive
labour regulations, inadequately educated workforce,
inefficient government bureaucracy, corruption, inadequate
supply of infrastructure, policy instability, poor work ethic,
crime & theft and access to financing
• According to the latest report on Doing Business (in South
Africa), the following are some the challenges and obstacles
in starting a business: getting electricity, trading across
borders, registering property, getting credit and enforcing
contracts
• Barriers to investment in Africa, including South Africa,
according to the latest survey of EY Africa – unstable political
environment, corruption, weak security, poor basic
infrastructure and lack of skilled labour
• Importance of political and socio-economic stability for
investors!
30
ANNUAL EMPLOYMENT GROWTH
PRIMARY SECTOR
160 302 = 22 900 pa
contributes
1,200,000
1,154,043
1,126,564
1,011,409
964,338
971,348
1,052,287
900,000
993,740
1,000,000
1,080,146
1,100,000
800,000
Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015
12.6%
AGRICULTURE
contributes
to Mpumalanga’s employment
Declined by
25.9% between Q1 2014 & 2015
& by 1.7% pa between Q1 2008 &
2015
to Mpumalanga’s employment
Declined by 5.5% Q1 2014 - 15
& by 1.3% pa between Q1 2008 &
2015
MINING
contributes 4.8% to Mpumalanga’s
employment
Declined by 43.1% Q1 2014 - 15
& by 2.2% pa between Q1 2008 &
2015
PRIVATE HOUSEHOLDS
contributes 8.5% to Mpumalanga’s
employment
Declined by 10.2% Q1 2014 - 15
& grew by 1.0% pa between Q1
2008 & 15
TERTIARY SECTOR
SECONDARY SECTOR
contributes
22.4%
6.7%
1
MANUFACTURING
contributes
contributes
8.7%
64.9%
COMMUNITY SERVICES
contributes
to Mpumalanga’s employment
Grew by
8.8% between Q1 2014 & 2015
& by 3.3% pa between 2008 &
2015
to Mpumalanga’s employment
Grew by 17.5% Q1 2014 & 15
& by 7.2% pa between Q1 2008 &
2015
to Mpumalanga’s employment
Grew by
14.6% between Q1 2014 & 2015
& by 2.1% pa between Q1 2008 &
2015
to Mpumalanga’s employment
Grew by 4.6% Q1 2014 - 2015
& by 3.2% pa between Q1 2008 &
2015
UTILITIES
contributes
CONSTRUCTION
contributes
TRADE
contributes
2
3.4%
8.4%
21.0%
to Mpumalanga’s employment
to Mpumalanga’s employment
Grew by 27.1% Q1 2014 - 2015
& by 10.2% pa between Q1 2008
& 2015
Grew by 21.6% Q1 2014 - 2015
& declined by 1.0% pa Q1 2008 2015
to Mpumalanga’s
employment
Declined by 0.4%
Q1 2014 - 15 & by
2.2% pa Q1 2008 - 15
21.7%
TRANSPORT
contributes
FINANCE
contributes
3
5.7%
11.0%
to Mpumalanga’s
employment
Grew by 26.1% Q1
2014 - 2015 & by
6.6% pa Q1 2008 - 15
to Mpumalanga’s
employment
Grew by 4.4% Q1
2014 - 15 & by
9.0% pa Q1 2008 - 15
31
EMPLOYMENT PER INDUSTRY
Industry
Q1 2008
Q1 2015
% Share
Change in Change in %
number (average pa)
Agriculture
85 298
77 780
6.7%
-7 518
-1.3%
Mining
65 218
55 706
4.8%
-9 512
-2.2%
Manufacturing
80 132
100 120
8.7%
19 988
3.2%
Utilities
20 065
39 714
3.4%
19 649
10.2%
Construction
104 274
97 206
8.4%
-7 069
-1.0%
Trade
282 149
242 199
21.0%
-39 951
-2.2%
Transport
42 291
65 992
5.7%
23 700
6.6%
Finance
69 374
127 162
11.0%
57 788
9.0%
Community services
153 293
249 983
21.7%
96 690
7.2%
Private households
91 645
98 182
8.5%
100.0%
6 537
1.0%
160 302
2.2%
Total
993 740 1 154 043
32
ECONOMIC SECTORAL INDICATORS
INDICATOR
PRIMARY SECTOR
Agriculture
Mining
SECONDARY SECTOR
Manufacturing
Utilities
Construction
Trade
TERTIARY SECTOR
Transport
Finance
Community
services
ECONOMY
Contribution to national
industry
8.6%
21.4%
6.8%
15.3%
6.3%
7.2%
4.7%
4.1%
5.2%
Contribution to provincial
economy
3.0%
25.4%
13.3%
5.4%
3.3%
15.0%
6.0%
12.2%
16.4%
Important sub-industry
Agriculture &
hunting +
Forestry &
logging
Coal & lignite
mining
Real estate
activities +
Finance &
insurance
Education +
Public
administration &
defence
Location of activities
41.6% in Gert
Sibande
70.2% in
Nkangala
51.9% in Gert
Sibande
72.5% in
Nkangala
41.0% in
Ehlanzeni
44.0% in
Ehlanzeni
38.3% in
Nkangala
43.1% in
Ehlanzeni
44.5% in
Ehlanzeni
Economic growth per
annum (1995-2013)
2.9%
0.8%
3.0%
1.8%
4.8%
3.2%
5.0%
3.9%
2.4%
Economic growth per
annum (2009-2013)
-0.7%
2.3%
2.1%
0.6%
1.3%
2.2%
1.8%
2.2%
2.6%
2.1%
3.1%
0.1%
-0.1%
2.2%
1.5%
1.3%
1.3%
2.7%
Medium
Low
Medium
Medium
Medium
Medium
Medium
Medium
Medium


x
x

x
x
x
6.7%
4.8%
8.7%
3.4%
8.4%
21.0%
5.7%
11.0%
21.7%
-5.5%
-43.1%
4.6%
27.1%
21.6%
-0.4%
26.1%
4.4%
17.5%
-1.3%
-2.2%
3.2%
10.2%
-1.0%
-2.2%
6.6%
9.0%
7.2%

x
x
x


x
x

x




x

x
x
x


x




x
Economic growth (2013)
Economic growth (20132018)
Comparative advantage
Contribution to provincial
employment
Employment growth per
annum (Q1 2014-2015)
Employment growth pa (Q1
2008-2015)
High labour intensity
High labour elasticity
High labour productivity
Fuel, petroleum Electricity, gas
& chemical
& steam
products + Metals

LABOUR
Construction
Retail &
Land transport +
wholesale trade
Post &
telecommunication
33
IMPROVE EDUCATION OUTCOMES
2014 Maths
pass rate 56.6%
2014 Physical
Sciences pass
rate 58.7%
2014 ANA average
mark for Maths:
Grade 3 – 52.5%
Grade 6 – 39.9%
Grade 9 – 11.3%
2030
throughput rate
must be 80%
Only 39.4% of
2014 grade 12
took Maths
Only 33.7% of
2014 grade 12
took Physical
Sciences
2014 ANA ≥50% for
Maths:
Grade 3 – 60.3%
Grade 6 – 27.0%
Grade 9 – 1.9%
Grade 12 class
of 2030 could be
55% larger
Low pass rate &
number vs high
skills demand
Low pass rate &
number vs high
skills demand
2014 ANA average for
Home Language:
Grade 3 – 54.2%
Grade 6 – 62.0%
Grade 9 – 53.3%
2014
throughput rate
only 50.3%
34
IMPROVE EDUCATION OUTCOMES
Unemployment rate with matric & certificate
was 24.9% in Q4 2014 &
23.7% in Q1 2015
• 8 423 or 18.7% of
matriculants obtained
admission to higher
certificate studies in
2014
Unemployment rate with matric & diploma
was 7.9% in Q4 2014 &
13.3% in Q1 2015
• 15 898 or 35.3% of
matriculants obtained
admission to diploma
studies in 2014
Unemployment rate with matric & degree+
was 4.7% in Q4 2014 &
13.3% in Q1 2015
• 11 229 or 24.9% of
matriculants obtained
admission to bachelor
studies in 2014
How many can & will
pursue the opportunity?
• Unemployment rate with only matric was
29.3% in Q1 2015
35
POVERTY & INEQUALITY
CRITICAL ANALYSIS
• Improvement in the share of population below the lower bound poverty
line & distribution of income since 2009 more or less the same
• Increase in social grants responsible for some improvement in poverty rate
– Approximately 1 million grants pm (R459 million pm) in 2009/10 to 1.3
million grants pm (R704 million pm) in 2013/14
• Despite impact of social grants, job creation the most important factor to
impact positively on poverty
• Reduce poverty by building & developing capabilities of workforce on a
broad scale
• Labour market inequality central to overall inequality & poverty
• Skills constraints push up the premium for skilled labour, inducing large
differences between salaries of skilled & unskilled people and thus raising
levels of inequality
• Income inequality can most effectively be reduced by improving the labour
force’s skill levels and thus removing the premium for skilled labour – income
inequality can’t be reduced without good quality education
• Interventions should be aligned to socio-economic status of specific area
36
POLICY RESPONSE
37
NDP ECONOMIC INTERVENTIONS
The national development plan will be achieved through:
•
•
•
•
•
•
•
•
•
•
Improve skills base through better education & vocational training
Raise exports – specifically in mining, construction, manufacturing,
agriculture & agro-processing, tourism & business services
Support small businesses (better coordination of activities in small business
agencies, development finance institutions & public & private incubators)
Increase investment in social & economic infrastructure to lower costs, raise
productivity & bring more people into mainstream of economy
Reduce regulatory burden in sectors where private sector is the main
investor to achieve greater capacity & lower prices
Increase size & effectiveness of innovation system & closer alignment
with companies that operate in sectors consistent with growth strategy
Improve functioning of labour market to help economy to absorb more
labour, through reforms & specific proposals concerning dispute resolution &
discipline
Improve capacity of the state to effectively implement economic policy
Greater cooperation between public & private sectors, sometimes through
PPP’s
Corruption - capacity of corruption-fighting agencies needs to be enhanced
38
MPUMALANGA VISION 2030:
PRIORITY OUTCOMES
•
In line with the principles of the NDP, V2030 highlights the following socio
economic outcomes as priorities:
• Employment & Economic Growth
• Education and Training
• Health Care for All
• Social Protection
•
These priorities do not imply that the “normal business of government”
should be deferred, but rather aim to focus the activities and decisions of
the Province on key areas, leveraging high impact for improved and
sustainable long term socio-economic development in Mpumalanga
•
The achievement of these outcomes is further dependent on the critical
success factors described as “mechanisms” and “conditions” below
39
Organizing Structure of the
Framework
40
NDP, MP Vision 2030 and MEGDP Linkages
CREATE
JOBS
TRANSFORMATION
AND UNITY
EXPAND
INFRASTRUCTURE
TRANSITION
TO LOW
CARBON
ECONOMY
FIGHT
CORRUPTION
MEGDP
TRANSFORM
URBAN AND
RURAL SPACES
BUILD A CAPABLE
STATE
PROVIDE
QUALITY
HEALTHCARE
EDUCATION AND
TRAINING
41
MEGDP TARGETS
Unemployment
MEGDP Targets
• Reduce the
unemployment rate
to 15% by 2020
Inequality
• Reduce inequality by
enhancing the skills of
the labour force, fixed
capital investment
and improvements in
education
• Reducing the Ginicoefficient to 0.55
Poverty
• Reduce the poverty
rate to 25% by 2020
• Focus will be on job
creation through
public works
programmes,
employment
guarantee schemes,
education and skills
attainment
Foundation: 5-7% provincial GDP growth per annum
42
MEGDP
Job Drivers
Infrastructure
For Employment and
Development
Economic Infrastructure
Social Infrastructure
Spatial Development:
Rural Development
Regional & International Cooperation
“Job drivers” to create
employment opportunities
and implement policies to take
advantage of them
Investing in Social
Capital & Public
Service
The social economy
The public sector
Job Creation in Strategic
Economic Sectors:
Agriculture & Forestry Value
Chain
Mining and Mineral Beneficiation
Manufacturing
Tourism and Cultural Industries
Seizing the Potential
for New economies:
Green Economy
ICT
43
MEGDP Principles Underpinning
Developmental Initiatives
SMMEs
Co-operatives
BBBEE
Access to
funding
Youth focused
jobs and
development
MEGDP
principles
Beneficiation
& agroprocessing
Communitydriven
development
44