Accelerated and Shared Growth Initiative - South Africa (ASGI- SA) Presentation to Public Works Portfolio Committee 13 June 2006

2 Challenge: Meeting objectives set by Government Halve poverty from above one third of households in 2004 to less that one-sixth of households in 2014; Halve unemployment from about 30% IN 2004 to lower than 15% by 2014 This requires growth averaging over 5% between 2004 and 2014.

3 ASGISA Task Teams Strategy project driven by Minister of Finance reported on parameters of strategy in July 2005 Lekgotla; President appointed a team to transform strategy into an initiative: - led by Deputy President; -including Minister of Finance, Trade & Industry and Public Enterprise, Premiers of Gauteng & Eastern Cape and Mayor of Johannesburg.

4 ASGISA Task Teams contd ….. Objective: not a new economic policy, but initiatives to sustain higher and share growth.

5 Building on firm foundations GDP Growth in first decade of Freedom averaged about 3% per year Since 2004 it has averaged over 4% Reasonable strong employment growth in recent years Trend towards significant reduction of poverty since 2000 Strong commodity prices and capital inflows.

6 But growth is somewhat unbalanced First imbalance is growth profile - Strong commodity prices and capital inflows lead to strengthening of the rand; - Trade deficit of 4.3% of GDP in Second imbalance is the fact that one-third of the population cannot directly benefit from the stronger growth – the second economy remains largely excluded except through social grants.

7 Need to focus on key issues and implementation modalities Approach of identifying the “binding constraints” which, if removed, would have a considerable effect on accelerating and sharing growth in the short to medium term The key innovations of ASGISA are to focus on key initiatives and provide strong coordinating and monitoring structures

8 To accelerate growth Overall government plans for infrastructure spending total R370bn over the current MTEF: - Spread in all spheres of government, SOEs, PPPs, DFIs Considerable second economy benefits: - Developmental opportunities: employment, enterprise development, BBBEE;

9 Sector (Industrial) Strategies Focus of sectors with potential for high growth, employment creation, enterprise development - Tourism, agriculture / agro-processing: biofuels, timber, food production and processing

10 DPW Contribution to ASGISA Scale up EPWP in infrastructure and social sectors Pool EPWP recourses to ensure maximum impact Improve maintenance of public infrastructure Prioritise the construction industry as a growth industry

11 DPW Contribution to ASGISA Ensure that capital budgets are spent without rollovers Address scarce skills issue (JIPSA) Expand SMME sector with emphasis on BBBEE

12 Placement initiative as a sub-programme of JIPSA : - skills development in the construction, finance and hospitality industries -currently targeting women in these sectors -unemployed graduates, professionals, business women -programme started with placements in UAE DPW Contribution to ASGISA

13 Progress with DPW ASGISA Initiatives Scaling up the EPWP in access roads : –Plan produced to scale up EPWP in roads sector, with dedicated funding –Recently obtained agreement with National Treasury regarding process for funding from 2006/2007 –Now working with DOT and provincial roads departments to develop provincial plans for funding from 2006/2007 (led by DOT)

14 Progress with DPW ASGISA Initiatives contd Scaling up the EPWP in the social sector: –National Treasury allocated substantial additional funding to provinces from the current financial year –Expansion of Early Childhood Dev and Home Community Based Care led by DSD, Health and Education –DPW and Business Trust providing support to provinces to put in place capacity and management systems, and working with relevant SETAs

15 Progress with DPW ASGISA Initiatives contd Infrastructure maintenance strategy: –Draft national infrastructure maintenance strategy produced in collaboration with CIDB and CSIR –Currently obtaining final comments from other infrastructure departments –Intend to submit the strategy to Cabinet

16 Progress with DPW ASGISA Initiatives contd CIDB and DPW developed document on positioning the construction industry as a growth industry in ASGISA DTI using that document, working with DPW and CIDB, to include sections on the construction industry in the national industrial strategy

17 Progress with DPW ASGISA Initiatives contd Ensuring that capital budgets are spent without rollovers: –IDIP being implemented in national DPW and all provincial DPW’s Addressing scarce skills issues in the construction industry under JIPSA: –CIDB, DPW and DPE collaborating on study to determine skills shortages over time –CIDB and DPW carrying out feasibility study on creation of ESDLA to address skills gaps

18 Progress with DPW ASGISA Initiatives contd Expand SMME sector with emphasis on BBBEE: –Contractor Incubator Programme –Realigned ECDP –Vuk’uphile –CIDB contractor development initiative

19 Progress with DPW ASGISA Initiatives contd Progress on the placement initiative: - recruitment of candidates (over 500 applicants and 123 selected) -negotiations underway for placements in: >UAE, South Africa, India, Japan, China, Malaysia Programme to be expanded to other countries in the future.

20 Thank you..