The NGP and Local Government

Economic Planning and Coordination27 May 2011

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Outline

• EDD’s role

• National Challenges

• Key features of the New Growth Path

• Proposed framework for alignment

• Local strategies to create jobs

• Conclusion

EDD’s role

• Address macro and micro-economic development planning

• Cross-cutting focus-National Depts., Provinces and Local Government

• Economic development planning• Work with other departments and spheres of

government to promote –coordination• Ensure job creation at the centre of economic

policies- for better employment outcomes

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National challenges:

• Economic growth since 1994 has equalled the average for middle-income countries

• Emissions intensity is very high, mostly due smelting and refining of mining products

• BUT – SA remains one of the

most inequitable countries in the world

– Unemployment is far higher than the norm

– Deep historical inequalities in asset ownership and access to education

Jobs- priority

• RDP- Creation of decent work and economic security

• Gear- targeted new jobs per annum-104 000 average

• ASGISA- halve unemployment rate by 2014

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The New Growth Path• Brings focus on employment creation and seeks to

achieve 5 million new jobs in the next decade-2020• Identifies areas of job drivers- key sector• Complements the Industrial Policy Action Plan 2• Deal with cross-cutting issues• Proposes macro and micro economic policy

interventions to support more equitable and employment-intensive growth

• Emphasizes the importance of social dialogue

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Look for employment opportunities in “jobs drivers” and implement policies

to take advantage of them

InfrastructureEnergy, transport, communications,

water,housing.

Spatial opportunities:

Rural development

African regional development

Main economic sectors:

Agriculture & agroprocessing

Mining and beneficiationManufacturing (IPAP2)Tourism/other services

Social capital:The social economy

The public sector

New economies:Green economy

Knowledge economy

Jobs drivers

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Alignment with NGP

Proposed framework for alignment

- Balanced economic development plansacross9provinces

- Address marginalisation and poverty,particularlyin ruralareas

- Criteria for evaluating distressed areas willfocuson,1. Poverty and deprivation measured

through composite index in the form ofIndices of Multiple DeprivationdevelopedbyCASASP(OxfordU)

2. Employment measured through labourabsorptionrateofeconomicactivity

3. Areas of low economic growthestimated at GVA for specificgeographic area – particularly forhistorically disadvantaged areas andformerhomelands

4. Grading/mapping municipalities’vulnerability according to 2009 StateofLocalGovernmentReport (COGTA)

- Coherence of provincial and LEDplans

- Identify: Corridor opportunities,economic clusters across sectorsand regions, competitiveadvantagesin each province and linkagesbetween them, strategic relationshipbetween SALGA and metropolitancouncils, coherence and linksbetween national and provincialdevelopment agencies, identifysocial partnership opportunities topromoteeconomicdevelopment

Spatial economic development action plans

Coherence of provincial and localeconomic development (LED) plansandagencies

Proposed framework for alignment

Assessment Indicator /Measurement Review

• Job creation (opportunities, saved, lost, etc.)

• Low-carbon (human settlements, transport, etc.)

• Green/knowledge economic• Mapping key distressed areas

– poverty/ deprivation, unemployment, inequality

• Co-ordinate/ provide strategic inputs from EPC

• Involve DFIs in specific funding arrangements/unblock obstacles related to governance and finance

Proposed framework for alignment

• Identification of viable and sustainable opportunities (e.g. smallholder schemes intheECcan producefor factories in PE or EL; tourism in Mpumalanga reliesprimarilyon visitors from Gauteng);

• Adapting the broad drivers in NGP to their circumstances. A spatial economicstrategy will indicate how the job drivers affect different provinces, municipalitiesand rural areas, linking in to the rural development strategy and industrial policies;

• Enhancing communication between spheres of government on their developmentstrategiesand improving their alignment.

• Lack of infrastructure (e.g. delay to approved airport construction in DTP area;);funding (e.g. Aspire, ELIDZ, EC – SOE’s and DFI’s to play greater role); morecommunity and local government involvement required (e.g. Aspire); under-investment by public organisations in regional infrastructure (e.g. at ELIDZ – port ofEast London and Buffalo City Municipality, EC in areas of former Transkei); railinfrastructureand rail services linking EL to other regions in SA/SADC.

• Obstacles at LG (e.g. DTP where regulatory approvals are required andrezoning/space guidelines are not clear - eThekwini Municipality, ELIDZ); moresupport to regional development agencies required (e.g. Aspire, UMDA)

Key interventions and challenges

Local strategy for job creation

Concluding remarks

• The NGP seeks to mobilise the country around one vision- job creation

• Private sector, local communities, SMMEs, NGOs critical in achieving the objectives

• Efficient governance and administration at local government level is fundamental

• Implementation will have challenges, but we should not despair

• Local Government is a key partner in the implementation of the NGP to achieve in creating and saving jobs

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