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Conference of Mayors and the dplg
The Presidency
May 2006
Inform the 5-year strategic
plans of national and
provincial departments
New electoral mandate
and changes in global
and domestic conditions
Define a new development
path
Focus on the critical things
that need to be done to
blaze out on the new path
of development.
‘The advances made in the First Decade by far
supersede the weaknesses. Yet, if all
indicators were to continue along the same
trajectory, especially in respect of the dynamic
of economic inclusion and exclusion, we
could soon reach a point where the negatives
start to overwhelm the positives. This could
precipitate a vicious cycle of decline in all
spheres.
‘Required are both focus and decisiveness on the
part of government, the will to weigh trade-offs
and make choices, as well as strategies to inspire
all of society to proceed along a new trail. If
decisive action is taken on a number of focused
areas, the confluence of possibilities is such that
the country would enter a road of faster economic
growth and job-creation, faster and more efficient
provision of quality services, increased social
cohesion and reduction of the paradigm of
exclusion prevalent among sections of society.’
S’gudi S’nais
Dulisanang
He Who Benz the Rules, Rules
the Road
We’re all in this taxi together
Skedonk
Shosholoza
It goes, but only just
On the Fast Track
1. Grow the economy – central and main intervention
2. Active state intervention to promote involvement
of marginalised in economic activity and ensure
sustainable livelihoods
3. Reliance of EAP on welfare grants should be
temporary, as growth and inclusion improve
4. Performance of the state, the
campaign against crime and
international relations through prism of
economic growth and inclusion.
- Economic and fiscal policy tradeoffs -
?
Key things that ought to be the
focus of government in the coming
three to five years
 The appropriate balance
between short to
medium-term equity
concerns and mediumterm growth concerns


?
?
 Choices between a range
of alternative economic
infrastructure investments
and social investments
Optimal direction of scarce resources
Prevent and limit the diffusion of government energy on a
wide front with little decisive impact.
Accelerated and Shared Growth Initiative (AsgiSA)
Methodology to identify and address binding constraints to growth
?
Macroeconomic balances:
inflation and interest rates,
budget deficit, value of
currency?
?
Infrastructure development:
national/provincial projects –
logistics & public transport,
electricity, water
Skills development: general
education, FET/SETA,
universities, JIPSA
Growth sectors: immediate
and medium-term
Second Economy
Interventions: EPWP,
microcredit, co-operatives
 Attached to this is meaning of People’s Contract/Social Compact
AsgiSA – Infrastructure Programme
Overall government plans for infrastructure spending
totals some R370bn over the current MTEF
• Further allocations are envisaged going forward
• Such investment levels have not been seen for
decades 1994
50% To be spent by the three spheres of govt
5%
To be spent through Public Private Partnerships
3-5% To be spent by development finance institutions
40% To be spent by State Owned Enterprises
AsgiSA – Infrastructure Programme
Public Sector capital expenditure
annual increase
April 2001 - March 2005
2005 - 2008
11,7%
18,8%

Additional resources allocated
for 2005 - further additions are
expected in the coming period
Additional allocations during the current MTEF
R3bn
R4bn
R2bn
R3bn
R1,3bn
Additional amounts
(further allocations
envisaged)
MIG
Provincial infrastructure
Housing
Community infrastructure
Roads & passenger rail infrastructure
Water resources, infrastructure, public
works, hospital revitalisation, prisons,
police stations & court facilities
Under-expenditure
 Skills shortage
 Weaknesses in
implementing
PPPs

Steps needed to:
Improve govt
capacity, cost,
procedures
 Remove
bureaucratic
PPP capacity: Regulatory and implementation functions hurdles
should remain as separate, capacity in both improved

AsgiSA – Infrastructure Programme
 Identified for implementation in the
‘Provincial projects’
Note:
coming 3 - 5 years
 Selected for:
– Impact on employment, poverty
eradication and economic growth
– Sustainability and possibility to
leverage private sector funding
• All initiatives identified in the ASGI will take place in provinces
• The process of aligning the NSDP with Provincial GDSs and
municipal IDPs will result in identification of many other projects
• Provincial projects will require outlay of resources from the fiscus yet most will leverage private sector partnerships and crowd in
private sector investment
Some projects have been mooted before - designation as special
projects will help release provincial resources for other activities
AsgiSA – regulations & land use
Critical issues pertaining to regulations
Regulatory Impact Analysis (RIA) system …


Government to consider introducing a RIA system, possibly legislated
The RIA system will impose more discipline in identifying and addressing
potentially negative consequences of laws and regulations, especially
regarding employment
Framework for planning and management of land use …

Current regulatory framework inadequate, resulting in carte blanche
behaviour by developers in major cities, which:
- impedes spatial planning for industrial and settlement purposes
- undermines forward planning
Proposal: Speed up development of a legislative framework on land use
management, informed by the National Spatial Development Perspective,
e.g.:


Special dispensations for mega-projects in industry
Large-scale housing development projects
AsgiSA – Expanded PWP

Need continually to build on
progress in the
implementation of the EPWP
programme, e.g. speedy rollout of the Early Childhood
Development and other
social sector programmes



Guidelines, incentives
and penalties to be
considered wrt utilising
labour-intensive and other
public works methods in
utilising infrastructure
grants
Specific measures to be put in place to extend
Zibambele (KZN) and Gundo Lashu (LP) road
building and maintenance programmes to all the
other provinces
Specific major projects
should be identified for
labour intensive methods
of implementation, e.g.
dams, housing projects, etc.

Funds for EPWP community
infrastructure programmes should be
pooled and targeted on specific areas in
a phased manner for maximum impact may require a national funding facility
AsgiSA – some state capacity issues
Review of all
Development
Finance Institutions
Cabinet to conduct
a review of all
Development
Finance
Institutions
 If necessary,
redefine their
mandates and
modus operandi in
line with the
imperatives of the
ASGI

One-Stop call centre
for setting up
enterprises
Management
Information System
(capex)
Critical constraint: setting
up enterprises by foreign
and local investors –
matter left to individual,
often ‘junior’ officials
 SOEs’ decisions in
pricing negotiations can
scupper strategic
projects
 One-Stop response
centre proposed,
probably at TISA at the
dti, where blockages can
be cleared
Management
Information System (NT)
– National Treasury to set
up new Management
Information System:
 to monitor
implementation of
capital investments
 to identify blockages
and, working with
other depts assist all
spheres, especially
municipalities, to
carry out plans

Nationality
Language
Race
Class
Race
Class
Nationality
Language
Religion

Do these multiple identities fuse in a melting-pot of national
identity?

Do they co-exist in a variety of multiple combinations, with an
overarching common identity?
Characterisation of Society and Main Social Trends
A society in dynamic change with improving sense of overarching identity – at least with geographic and state entity
Race identity seems to be receding but rural and private sectors
lag behind in relations; class on the rise; nationality precarious
Reconstruction and development, nation-building and
reconciliation define aspiration: but are they a Vision?
Contradiction between market-based economic system and
desire to build a caring society: impacts societal outlook and
values, lifestyles, aspirations and conduct incl. crimes of greed
Characterisation of Society and Main Social Trends
Two Economies & high inequality: challenge is job-creation and
entrepreneurship among Africans and Coloureds
Centrality of education in social upliftment: employment, h/h
income, entrepreneurship and women migration/independence
An increase in single or extended households and relative
decline in nuclear family
Social conditions are a critical underlying factor for the
incidence of contact crimes: poverty, built environment
recreation forms, etc
Comprehensive document discussed by extended
Cabinet workshop:
Re-examine configuration
among departments and
strengthen integration and
peer accountability
Strengthen
integration of
planning and
implementation
Improve executivemanagement relations
and key performance
assessment system
Decisive
interventions to
strengthen
local
government
Improve morale within public service, and ensure acquisition of
scarce skills and their retention
Further work being done in consultation with the President
Carry out Vulindlela Project in relevant departments
 Proposals on operationalisation of system finalised
 To be implemented in phases across all spheres
 Will require strengthening of capacity in The
Presidency and Premiers’ and Mayors’ Offices
 To be presented by G&A Cluster and relevant
outcome incorporated into MTSF
 Work continuing, in the immediate to update NSDP,
develop guidelines on PGDS and consult on
assessment of each PGDS
 Process to be undertaken at metro/district level –
ultimately ensuring that the aggregate of
metro/district IDP becomes the basic local
expression of national development plans
 Implication for MTSF – need to improve capacity in
The Presidency as various elements of system
come on stream.
Broad Perspectives
 Ensures shared understanding of national space
economy and provides normative principles for
development planning
 Given our objective to grow the economy, create jobs,
address poverty and promote social cohesion, need to
confront three fundamental planning questions:
 Focus investment and development interventions to
ensure maximum and sustainable impact
 Spatial arrangements to facilitate nation building and
social and economic inclusion
 Ensure government implements its programmes taking
into account economic, social and demographic realities
International Experience
International experience shows that spatial inequality and its reversal
happen historically and culturally over a long period of time:
most countries/regions have extreme spatial inequalities:
50% of US GDP produced in 2% of space
50% of the EU’s GDP is produced in 20% of its area


convergence between developed and undeveloped regions takes
a long time – it took the Southern US states 100 years to reach a
similar level of economic development as the North
regions and countries with unequal spatial economies converge
at about 2% a year (if at all)
South Africa not unique: spatial configuration of our country
aggravated by apartheid spatial planning resulting in spatial
marginalisation from economic opportunities
Normative Principles
Principle 2:
Principle 1:
Rapid, sustained
and inclusive
economic growth
a pre-requisite for
the achievement of
other policy
objectives,
amongst which
poverty alleviation
is key
Government spending on fixed investment
should:
 address constitutional obligation to
provide basic services to all citizens
(such as water, electricity as well as
health and educational facilities)
 focus economic infrastructure
development on localities of
economic growth and/or economic
potential in order to gear up private
sector investment, stimulate sustainable
economic activities and create long-term
employment opportunities
Normative Principles
Principle 3:
Principle 4:
Focus on people not places:
In order to overcome the spatial
distortions of Apartheid:
 localities with both high levels of
poverty and economic potential
require emphasis on fixed capital
investment beyond basic services to
exploit potential
 localities with low economic potential,
beyond basic services, require
emphasis on social transfers, human
resource development and labour
market intelligence: enable people to
become more mobile and migrate, if
they so choose, to localities that are
more likely to provide sustainable
employment or other economic
opportunities
 future settlement and economic
development opportunities should
be channelled mainly into activity
corridors and nodes that are
adjacent to or link the main growth
centres
 economic infrastructure investment
should primarily support localities
that are or will become growth
nodes in South Africa and the
SADC region to create regional
gateways to the global economy
Economic Distribution
Economic
activity is
spread over
the country,
but bulk of
the generated
GVA is still in
historically
strong
growth points
Categories of Economic Potential
Innovation and experimentation:
R&D and application of novel technologies
Production:
Labour-intensive, massHigh value, differentiated
produced goods (more
goods (not strongly
dependent on labour costs
dependent on labour
and/or natural resource
costs)
exploitation)
Public services and
administration
Retail and private sector
services
Tourism
0
Source: Ricon (Pty)
Ltd, Regional
Economic Explorer
(version 190)
Thabo Mofutsanyane DM
Bojanala DM
Uthungulu DM
Central DM
Gert Sibande DM
Umgungundlovu DM
Nkangala DM
Ehlanzeni DM
Ekurhuleni MM
Mopani DM
City of Cape Town MM
Zululand DM
Sekhukune DM
Chris Hani DM
City of Johannesburg MM
Vhembe DM
Capricorn DM
Ethekwini MM
Amatole DM
O R Tambo DM
Twenty
district and
metropolitan
municipalities
with the
highest
percentages
of those living
below MLL in
the country
% of national population
Poverty Distribution per Municipality
7
6
5
4
3
2
1
Combined dynamic: Poverty, Economic Potential & Migration
Overall, national space economy also represents a
dualism …
Just 26 locations can
be said to represent
the engines of the
South African
economy
These areas and their immediate
hinterlands (70 km radius) are home to
70% of all people living under minimum
living level in the country, 79% of the total
population and generate 93% of the
national Gross Value Added (GVA)

In order to generate and sustain economic growth rates of 6% and more
and address poverty it will be important to focus on and factor in the role
of these areas

However, between 1996 and 2004 these areas have been generally only
growing at around or marginally above the natural population growth
rates: resources and collaborative government action should be directed
at making these areas more productive and socially inclusive
Alignment Process – PDGS Assessment
Minimum characteristics of a PGDS…

Use approach and principles of NSDP

Provide framework for both public and private sector investment,
indicating areas of opportunities and development priorities

Provide direction and scope for province-wide development
programmes, including metros/districts and local municipalities

Take into consideration resources; economic, political, social and
natural environment constraints and opportunities

Enable intergovernmental alignment and guide activities of all
agencies (including national and provincial departments;
parastatals; and metropolitan, district and local municipalities) in
the local areas
Alignment Process – IDP Process
Overall aim:
Metro / District IDP to become local expression of
development plans of all three spheres
Clarify authority of Districts in relation to local
municipalities
Methodology
Conduct spatial analysis of each
District/Metro with focus on:
need/poverty, development
potential, demographic patterns,
interventions required
 Incorporation of national and
provincial plans as they apply to
each District/Metro

Process: by February 2008



National workshop on
methodology
Identify select number of
districts/metros to pilot
application of methodology
Roll-out in remaining
districts/metros
 In 2001 Cabinet approved NPF to ensure integrated planning and
more efficient implementation. Defines cycle of:
Development of
Programmes
Policy
strategising
National
Planning
Framework
Public
announcement of
programmes
Monitoring
and
Evaluation
Budgeting
Political strategising
cycle
Budgetary processes
Poor communication and cycle
misalignment mean departments
do not use MTSF in MTEC
Planning cycles among
spheres do not feed into
one another
System is expected to improve
massively with the introduction
of effective M&E
No proper
alignment
Is SALGA representation
adequate for alignment of
other cycles with those of
local government; and how
align cycles of SOE & other
state entities?
Weaknesses can be corrected a.o. through:


Timely submission of MTSF to departments and provinces for
inclusion in submissions during MTEC and provincial budget
planning
Usage of MTSF as primary frame of reference in the MTEC
process

As part of M&E, government PoA should also be used for
reference purposes in the MTEC process

Where this does not exist, Provincial executives should
incorporate districts/metros in their planning sessions.
Yearly Reports to
Presidency 05 and 06
Preparation
of PoA 06
PoA 05 and broad
MTSF 06/09 ideas
Local govt
planning 06/09
SoNA/
Prov Address 2005
Budget
Speech
05/06
Medium Term BPS
06/09
Oct
March
MTEC Hearings for
06/09
Local govt
finalise
budget 05/06
Local govt
commences
with IDP
06/09
Local
Prov
`
05/08
National
06/09
MTSF 06/09
adopted
Local govt PoA &
budget 05/06
Draft MTSF 06/09
Jan ’05
PoA 05
Cabinet
Lekgotla Broad MTSF
Febr ’05
SoNA
05
March ‘05
Budget 05/06
Priorities
06/07 - 08/09
Provincial
Makgotla
PoA 05
Broad MTSF
Priorities
06/07 - 08/09
State of
the Prov
05
Budget 05/06
April ’05
Report to
Cabinet on
PoA 05
May ’05
June ’05
Report to
Cabinet on
PoA 05
July ‘05
Cabinet Lekgotla
 Review
implementation
of PoA 05
FOSAD MANCO
discusses draft
MTSF
Provincial
Inputs
Provinces discuss
own MTSF
Local Gov
Makgotla
PoA 05/06
Broad MTSF
Priorities 06/0708/09
FOSAD
workshop
finalises
draft MTSF
 Adopt
MTSF
06/07 -08/09
Provincial
Inputs
Provincial
Inputs
Provincial
Inputs
Provincial
Inputs
State of Local
Govt Addresses
(PoA &
Budget 05/06)
Aug ’05
Sept ’05
Report to
Cabinet
on PoA 05
Report to
Cabinet on
PoA 05
Departments submit
MTEF requests to
National Treasury
Provincial
Inputs
Provincial Makgotla
& MTEF requests
to National Treasury
Oct ’05
MTEC
Hearings
Medium Term
Budget Policy
Statement
(06/07-08/09)
Provincial
Inputs
Provinces
finalise
06/07
Budgets
Nov ’05
Dec ’05
Yearly
Reports to
Presidency
from Depts
 Review
 Detailed
FOSAD
Workshop
Yearly Reports
to Presidency
from
Provinces
Local Govt
Makgotla for 06/07
Budget onwards
PoA 05
PoA 06
 Broad
Priorities
for 07/08 – 09/10
Provincial
Inputs
Provincial
Inputs
Jan ’06
Review PoA 05
Detailed PoA 06
Cabinet
Lekgotla
Feb ’06
SoNA 06
Broad MTSF
Priorities 07/08-09/10
Provincial
Makgotla
Review PoA 05
Detailed PoA 06
Broad MTSF
Priorities 07/08-09/10
State of the
Prov 06
Budget 06/07
LG Communication Conference: May 2006
Observations:
Start process to strengthen municipal
communication and its interface with other spheres
Gaps identified: not seen as strategic function;
not structured; no overall political supervision
Way Forward

Five-year strategic plan on more
proactive communication
emphasising:
 direct communication
including door-to-door work

platforms incl. commercial &
community radio/np’s, ICT
Process: immediate action

Start process to have functional
units including designation of
Councillor

Exco focus incl. Current Affairs
(messages and interventions)

Provincial core teams on
roadshows to districts