South Africa: The NDP- The Right Plan For Private Sector Participation

Last Updated: 6 January 2014
Article by Stanley Subramoney and Lindi Magana

The success of South Africa's National Development Plan 2030 (NDP), regarded as one of the country's most strategic initiatives, will ultimately depend on all the stakeholders involved and whether they are prepared to make compromises to make it work. The Plan cannot be achieved and delivered by Government alone, but requires a joint collaborative approach by public, private and non-governmental sectors together with citizen participation and involvement. Globally development plans are not new. Modern day China's first 5 year plan was structured in 1953 and is currently in its 12th plan.

The NDP aims to eliminate poverty and reduce inequality by 2030. Nineteen years into democracy, South Africa has made a number of gains on the economic front, in particular on its macro-economic policy. However, there is still broad consensus in the market that South Africa remains a highly unequal society, with poverty, inequality and unemployment as the three main challenges.  To eliminate poverty and reduce inequality, the economy must grow faster and in a more inclusive way that will benefit all South Africans.

In June 2011 the National Planning Commission released its Diagnostic Report which set out South Africa's achievements and shortcoming since 1994. It identified a failure to implement various policies and an absence of broad partnerships as the main reasons for slow progress, and set out nine primary challenges:

  1. Too few people work
  2. The quality of school education for black people is poor
  3. Infrastructure is poorly located, inadequate and under-maintained
  4. Spatial divides hobble inclusive development
  5. The economy is unsustainable resource intensive
  6. The public health system cannot meet demand or sustain quality
  7. Public services are uneven and often of poor quality
  8. Corruption levels are high
  9. South Africa remains a divided society

This led to the development of the draft National Development Plan (NDP)released in November 2011.

There are a number of initiatives where the Government has already commenced work on different aspects of the NDP. Different sectors from society have formed partnerships and alliances in the hope that the plan will work. The Government and business are also engaged in meaningful dialogue on how the business sector can contribute to the implementation of the NDP.

The proposals contained in the NDP are aimed at moving us from where we are to an improved state. However, the NDP does not offer all the answers and solutions to the current challenges and difficulties, we as a nation face. As Minister Trevor Manuel, Chair of the National Planning Commission, aptly says: "Learning as we implement allows us an opportunity to get better at implementation rather than become better at planning."

South Africa has held steady in the face of the recent economic uncertainty. The country has a large and sophisticated economy, and is recognised for having a number of sound and effective financial systems. South Africa was ranked as the 52nd most competitive country out of 144 surveyed in the World Economic Forum's 2013 Global Competitiveness Index, making it the second highest ranked country in Africa after Tunisia. The country also scored well on the index for the quality of its institutions, ranking first for the strength of auditing and reporting standards, efficacy of boards, and second in protection of minority shareholders' interests.

However, there are weaknesses that the country will have to address to enhance its competitiveness. These include infrastructure, poor quality of primary education and the quality of its maths and science education.

South Africa needs an economy that is inclusive, more dynamic and one in which the fruits of growth are shared equitably. But the latest GDP data released by Statistics South Africa show that for the first quarter of 2013, South Africa achieved a growth rate of only 0.9%. The NDP requires a growth rate of at least five percent or more to place the economy back on the track.

What will South Africa look like in 2030?

The NDP beckons us to look beyond our current challenges to the imperatives of transformation in 20 years. Over the coming decades, demographic changes and economic forces will combine to transform the business landscape. The future will look very different, in particular the way in which the workforce is managed; an explosion of activity and business growth potential has already contributed to a significant increase for companies to move people and source talent from around the world.

Public sector organisations around the world face a stark challenge: adjust to the reality of 'doing more for less' – or even 'doing less for less' – while focusing on what society needs and wants, and doing all this at a time of seismic changes. South Africa's National Development Plan 2030 presents an ever greater challenge and opportunity to redefine service delivery locally, map a course for future development, poverty alleviation and inequality reduction, presenting a vision for the new South Africa in 2030 and beyond. 

The new normal is for governments and public sector organisations to deal with uncertainty while delivering services that are affordable, all set in the context of deficit-reducing budget cuts.

In the longer term, economic and demographic forces are steadily leading towards a fundamental change in the way in which we work. 'Generation C' will have certain characteristics that employers can't afford to ignore. 'Generation C' will have grown up under the influence of Twitter, Facebook, phone apps and iEverything. Technology will have been seamlessly woven into their lives that the distinctions between work, school and life will all be intertwined into one. They will burn their way through a number of employers as they look for career satisfaction and fulfillment. The place of work will consist of more mobile and remote workers. This, however, will be dependent on the access to broadband and other technology enablers.

The role of cities will become increasingly significant as the large majority of people live and work in mega urban cities, tending to desert rural areas. Corporations will need to develop a physical space as well as a virtual space for workers and organisation's customers. Technology will become present in virtually all human activities, with a network organised in clouds. Cities will become intelligent growth zones of opportunity.

Against this backdrop, Africa is set to become one of the major battlegrounds for large multinationals. Natural resources have long been the focus for organisations entering the African arena, but investors are attracted to the fast-growing infrastructure and consumer markets on the continent.

The NDP acknowledges the global shift of economic power from West to East, and the rise of the African continent. Africa accounts for about 18 percent of total exports and nearly a quarter of manufactured exports. The South African Government has taken a number of initiatives to assist business to operate and do business in other countries. These include measures to relax cross-border regulations and tax requirements. Similar measures are in place for foreign companies wanting to invest in African countries using South Africa as their regional headquarter.

In our view, tomorrow's public body will need to act quite differently; more like a living organism, adapting to change, creating prototypes and evolving to address society's needs as they develop. The Government and public sector leaders have a key role in this shift, re-focusing their organisations on their changed environments and projecting a clear and vibrant picture for the future.

One big challenge is to find new ways of how to lead strategic collaborations and partnerships with stakeholders from other sectors of society. The NDP 2030 provides public and private sector as well as society at large this unique opportunity to jointly plan, deliver and implement a new South Africa.

The NDP also aims to uplift the country's education system in line with international norms. Before 1990, less than a quarter of black learners completed matric. In 2012, this figure is close to two-thirds. By 2030 between 80-90 percent of learners should complete 12 years of schooling and or vocational education, according to the NDP. The goal is to also increase enrolment at universities by at least 70 percent. Some of the ways in which these goals can be achieved is by introducing incentive schemes to reward top performing schools; improving the infrastructure at poor schools in rural areas and improving the competency of teachers and principals. These initiatives will go some way towards uplifting and promoting the quality of the country's educational system.

What role can business play?

Business is allocated a definitive role to play in the NDP. Without business, the objectives of the NDP cannot be achieved. Accordingly it is crucial for business and the Government to work together to drive competitiveness and promote long-term growth, as well as the creation of jobs.

Undoubtedly there is a shared agenda where business can share collaboration and joint responsibility with the Government on issues, such as developing a skilled workforce, protecting intellectual property and dealing with the consequences of climate change. However, collaboration needs persistent engagement. A long term view, investment in relations and effective governance arrangements all need to be in place to achieve desired outcomes. Otherwise businesses and governments risk the possibility of distrust and parochialism and investing sub optimally in the country and economy they both seek to build.

Education is the cornerstone of any economy particularly in the new knowledge economy. Both government and business have a vested interest in ensuring the best systems possible. The issue arises as to how to integrate the private sector in education and define an agreed role for them.

Another area ripe for collaboration between business and Government is innovation and the protection of intellectual capital. Governments need to foster innovation. Fostering innovation is vital to creating competition and promoting growth. Yet governments often face legal, tax and fiscal considerations when deciding on their policies. Successful innovation requires a focus on well-functioning markets, low corporate taxes, appropriate R&D incentives and support for higher education and foreign direct investment – all areas which are priorities for government attention. Innovative public sector organisations have the ability and capacity to incubate ideas and delivery models and accelerate their impact by scaling up via rapid prototyping.

South Africa needs to fix the future, starting today. If the NDP succeeds the South Africa of today will look very different in 2030. The economy will be more inclusive, more dynamic and in which the fruits of growth are shared equitably. So how can this vision be delivered? Firstly, public sector must view themselves through three different lenses that guide their behaviour:

  • Citizen-centricity: meeting citizen needs effectively, affordably and in a timely manner
  • Internal/external balance: getting the right balance between managing internal organisational efficiency/effectiveness, and externally delivering 'good growth'
  • Sustainable outcomes: strategically building the assets for society by managing the 'capitals' needed for long-term prosperity – such as economic, social, environmental, financial, cultural etc.

In addition, there are four key characteristics that the leading public sector body of the future must exhibit. These will influence the behaviour needed to deliver the outcomes and impacts:

  • Agile: ready to anticipate situations, and adapt and react to unforeseen events in a speedy and cost-effective manner
  • Innovative: capable of incubating ideas and delivery models, accelerating their  impact
  • Connected: collaborating across sectors/borders/organisations to give service delivery through partnerships/co-ventures/co-creation/co-design
  • Transparent: being truly accountable for actions and outcomes, in today's era of eroding trust and legitimacy.

We do not underestimate the scale of the transition needed, in South Africa. The challenges we're faced with require a major shift change in skills, education, and service delivery capability. Making change happen will require agile, inspirational leadership and a talent strategy which majors on attracting, developing and retaining people with the necessary attitudes and behaviours.

It will require both politicians and officials holding their nerve as they make the transition from old-style static, bureaucratic organisations to dynamic, adaptive entities capable of responding calmly but effectively to disruptive events and rising to new challenges.

The future is a matter of choice we therefore collectively need to ask ourselves what the opportunity cost of not participating, becoming involved and supporting the planning, institutionalisation and implementation would be?

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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