1. 13 October 2015 The Department of Planning Monitoring and Evaluation
EDD PROGRESS REPORT ON THE IMPLEMENTATION OF
THE MEDIUM-TERM STRATEGIC FRAMEWORK (MTSF)
13 October 2015

2. INTRODUCTION
The MTSF is government’s first five year implementation plan of the NDP, covering the financial years 2014/15 to 2018/2019
This report reviews overall progress against the targets in the MTSF for the 14 outcomes over the financial period 2014/15
The 14 outcomes are aligned with the National Development Plan:
Quality basic education
A long and healthy life for all
All people in South Africa are and feel safe
Decent employment through inclusive economic growth
Skilled and capable workforce to support an inclusive growth path
An efficient, competitive and responsive economic infrastructure network
Vibrant, equitable, sustainable rural communities contributing to food security for all
Sustainable human settlements and improved quality of household life
Responsive, accountable, effective and efficient local government system
Protect and enhance our environmental assets and natural resources
Create a better South Africa, a better Africa and a better world
An efficient, effective and development oriented public service
Social protection
Nation building and social cohesion

3. INTRODUCTION (2)
The MTSF outcomes seek to address the triple challenges of unemployment, inequality and poverty espoused in the National Development Plan
The report does not cover every target in the MTSF – for each outcome the report covers a selection of targets, strategic issues requiring change and provides pointers to critical future focal areas
By focusing on a limited set of key indicators, the methodology enables evidence-based assessment of progress against the NDP
The methodology helps us to focus on outcomes and impacts rather than just activities

4. INTRODUCTION (3)
Refinement of some indicators in MTSF chapters for alignment with SONA, the Nine Point Plan, and other recent developments
Proposed refinement timely as mid-2015 represents the end of the first year of the fifth Administration
Using the NDP as the blueprint, DPME and STATSSA are working with departments to ensure that indicators are refined so they are always measurable, accurate, reliable and time-bound.
Areas of under-targeting and over-targeting are being looked into and addressed, and consensus is sought across all contributing governments and spheres. The quality of the data used in the Nine Point Plan will also form part of this ongoing process to ensure credibility.

5. APPROACH OF THE PRESENTATION
The focus is on the monitoring and evaluation of the Medium Term Strategic Framework (MTSF) as government’s first five year implementation plan of the NDP, covering the financial years 2014/15 to 2018/2019
The presentation is informed by the radical socio-economic transformation agenda.
Using the performance rating system, the presentation highlights progress in key targets, key challenges and what is being done to address these challenges. Where appropriate, links are drawn to the Nine Point Plan
We look at Management Performance using the MPAT assessments

6. RADICAL SOCIO-ECONOMIC TRANSFORMATION
MTSF focus on achieving radical socio-economic transformation
Ensuring a stable macroeconomic and financial framework to support employment-creating growth
Crowding in productive investment through infrastructure build programme
Enhancing competitiveness in the productive sectors of the economy
Addressing spatial imbalances in economic opportunities
Elimination of unnecessary regulatory burdens
Improving workers’ education and skills development
Reducing workplace conflict and improving cooperation between government, business and labour
Enhancing opportunities for small businesses and historically excluded and vulnerable groups
Expanding public employment schemes
Improving service delivery

7. CLASSIFICATION OF PERFORMANCE FOR THIS REPORT
Green
Target has been achieved, or
Target has been exceeded, or
Target has almost been achieved, or
Target will be achieved
Amber
Some progress or substantial progress towards meeting the target
Red
No progress towards meeting the target
Blue
System for measuring the indicator not yet in place, or
Data not available or not released during the reporting period under consideration

8. Latest available measurement
Sub-outcome 1: Productive Investment is effectively crowded in through the infrastructure build programme
Indicator
2014 level (baseline)
MTSF target
Latest available measurement
Note
Rating
New productive investments utilise the infrastructure provided by every SIP
Every major economic infrastructure project will have a list of productive investment projects utilising its key elements by 2019
On-going long-term projects (Confidential in nature)
Detailed report can to be accessed from - PICC
% of infrastructure projects subjected to authorised system
100% of infrastructure projects valued at over R100m by 2019
Evaluation is underway for an appropriate system. Piloting one case study.

9. Latest available measurement
Sub-outcome 1: Productive Investment is effectively crowded in through the infrastructure build programme
Indicator
2014 level (baseline)
MTSF target
Latest available measurement
Note
Rating
Measurable improvement in support of end-users
List of off-take agreements for major economic infrastructure where applicable
On-going off-take agreements negotiated with Eskom and Transnet – PICC to provide info in Q4.
Progressively rising local content levels in government infrastructure
75% of all procurement of those products capable of being manufactured locally on a commercially feasible basis, by 2019
PICC tracking local procurement in six factories and five projects – on going

10. Latest available measurement
Sub-outcome 2: The productive sectors account for a growing share of production and employment
Indicator
2014 level (baseline)
MTSF target
Latest available measurement
Note
Rating
Develop and review realistic and sustainable strategy to grow output and employment and improve equality, support alignment across the state, manage monitoring of actions, address blockages and identify new opportunities and risks as they arise Sector and cross-cutting interventions towards growth, employment creation and higher incomes for poor households underway in specified jobs drivers
Coordinating structures modelled on the PICC established for 10 Jobs Drivers (some may be combined if appropriate) Sector and cross-cutting interventions being implemented for specified jobs drivers
Agriculture: Meeting held between Ministers of EED, DTI, Small business, DAFF, DRDLR; Land Bank; Competition Commission, IDC; ITAC; Namac; Foskor; PICC. EDD is developing a dashboard on agriculture and agro processing including jobs, GDP and unblocking. Dashboard to be presented to the Ministers

11. Latest available measurement
Sub-outcome 2: The productive sectors account for a growing share of production and employment CONT…
Indicator
2014 level (baseline)
MTSF target
Latest available measurement
Note
Rating
Measurable improvements in funding for identified job drivers
90% of the agreed target
Report on Q funding completed
Improvement in the operational plan of the NGP
Regular reports provided on review and updates
Report on the employment done

12. Latest available measurement
Sub-outcome 2: The productive sectors account for a growing share of production and employment
Indicator
2014 level (baseline)
MTSF target
Latest available measurement
Note
Rating
Measurable improvements in analytical reports on trade data
Measurable Improvement in ITAC administration
Regular reports provided
Trade flows report done

13. Latest available measurement
Sub-outcome 2: The productive sectors account for a growing share of production and employment CONT…
Indicator
2014 level (baseline)
MTSF target
Latest available measurement
Note
Rating
Inflationary prices identified and where necessary options reviewed and interventions proposed
PPIs for steel, electricity, diesel, petro, cement monitored
Strong actions taken against cartels and public interest clauses included in mergers and accusations
Regular reports provided
BRICS International Competition Conference planned with the Competition Commission. MoU developed with UJ and Wits to do research on public interest clauses and cartels. Research commencing on cartels

14. Latest available measurement
Sub-outcome 5: Spatial imbalances in economic opportunities are addressed through expanded employment in agriculture, the build programme and densification in the metros
Indicator
2014 level (baseline)
MTSF target
Latest available measurement
Note
Rating
Measurable improvement in support by DFI’s
10% rise in support over 2 years from baseline
Report on funding of township economy completed

15. Latest available measurement
Sub-outcome 6: Macro-economic conditions support employment-creating growth
Indicator
2014 level (baseline)
MTSF target
Latest available measurement
Note
Rating
Increase in industrial finance available
30% increase on baseline
Report on IDC funding completed
Measurable improvement in turn-around times
95% achievement of new targets set off the existing baseline
Measured turnaround time for IDC.

16. Latest available measurement
Sub-outcome 8: Economic opportunities for historically excluded and vulnerable groups are expanded and the number of sustainable small businesses and cooperatives is improved markedly
Indicator
2014 level (baseline)
MTSF target
Latest available measurement
Note
Rating
Youth in employment or education
Measurable increase
Work has started, however detailed report to be submitted in Q2

17. Key Achievements
Government agencies invested just over R1 trillion in infrastructure between 2009 and 2013 in energy, road, rail, bulk water, higher education infrastructure, SKA and Meerkat, km of fibre optic cables for broadband and other infrastructure programmes identified and implemented through the PICC and SIPs
Significant investments, both foreign and local in key manufacturing sectors: auto, agro-processing and electronics. Examples include Mercedes Benz (R5 bn), Ford (R3.6bn), Unilever (R4bn in 4 plants over the past for years and SAMSUNG (R228 million)
Strong turnaround in manufacturing, exports, e.g. auto exports in 2014, amounting to R115 billion (12.7% of total exports)

18. Key Achievements (2)
PRASA investment into new rail rolling stock estimated to cost R51 billion and will spend R4 billion on new hybrid locomotives over a ten-year period.
A factory will be established in Nigel, Ekurhuleni for the manufacture and assembly of locomotives and trains. This could result in direct and indirect jobs
The Renewable Energy Independent Power Producer Programme (REIPPP) is the first large scale private sector procurement in the electricity generation industry in South Africa & one of the largest renewable energy programmes in the world
Due to the programme, South Africa is now considered amongst top 10 renewable energy investing country leaders in renewable energy Independent Power Producer (IPP) investments
Four bidding windows have successfully been launched, resulting in the procuring of 92 renewable energy projects (including wind, solar photovoltaic and concentrating solar power technologies).
Window 4, with additional request for bids have been announced and preparation towards the finalisation of Window 5 is in progress

19. Key Achievements (3)
These REIPP projects translate into approximately R193bn in private sector investment. To date, projects totalling approximately MW have already been commissioned under the 4 bid windows and are selling power to the grid, helping to reduce the current supply shortfall
Over the course of the four bidding rounds, the price of electricity from each technology dropped substantially, solar PV decreased by 75% and wind by 50% - while increasing both local content and job creation, partially driven by strong competition in the sector
Unit 6 at Medupi completed with full commercialisation
At the level of supporting regional infrastructure initiatives, President Zuma is the political champion of AU Presidential Infrastructure Championing Initiative which has resulted in a number of regional infrastructure projects

20. Key Challenges (1)
Investment in the productive sectors has lagged investment in the tertiary industries
Progress on investment other elements of National Infrastructure Plan is steady
Progress towards the 75% local procurement target has also been slow largely due to conflicting views on the implementation of the policy
Electricity supply constraints is a significant impediment to economic growth
High risk of frequent and major load-shedding over coming months could last up to 3 years. Load shedding is a high cost to the economy - costing on average between R9 – R15 kWh compared to running diesel generators (R4-R5 kWh)

21. Key Challenges (2)
Delays in build of Medupi and Kusile (poor planning, skills shortage due to boom in the building of power stations, poor contractor performance, weaknesses in contract management, strikes)
Large amount of existing generating capacity not available due to breakdowns - average plant availability has dropped from 85% to 68% (causes: insufficient maintenance due to policy of keeping the lights on, possibly weaknesses in maintenance practices and operation of plant)
The use of diesel is costly and unsustainable in the medium term (R10-R12bn annually since last year) but remains a short term necessity
Distribution infrastructure NOT adequately maintained and thus decaying expansion and growth of new connections to the network, but more importantly the quality of supply is causing disinvestment
Resolving the electricity supply constraint requires a mix of energy options including coal, gas, renewables, shale, nuclear as well as oil and gas

22. Interventions Underway
The focus on the Nine Priority Areas is gaining traction:
Unlocking increased private sector investment will require using the infrastructure programme to crowd in the private sector investment, improving regulatory efficiencies at all levels of government
Expand exports especially outside of Europe and China (and focus especially on Africa) by using new opportunities
Focus on trade promotion measures combined with more efficient regulation and possibly export-import financing, in Africa

23. Interventions Underway (2)
Implement key initiatives of the Agricultural Policy Action Plan to support growth and employment in agriculture and agro-processing
Increase support for existing smallholder farmers and explore ways to substantially expand the number of agricultural producers
Realise the enormous potential of South Africa’s ocean economy, to contribute to growth, job creating and poverty reduction

24. Interventions Underway (3)
Implement the Mining Phakisa to double investment
Advance beneficiation to add value to our mineral wealth
Finalise the Minerals and Petroleum Resources Development Amendment Bill
Review Mining Charter to set targets for local manufacturing of capital goods
Continue to implement the New Growth Path to promote growth and employment from new opportunities such as the green economy, exports of goods and services to growing African markets and shale & offshore oil and gas
Strengthen support for cooperatives, particularly in marketing and supply activities to enable small scale producers to enter formal value chains and take advantage of economies of scale

25. Interventions Underway (4)
Put in place a more focused project-managed initiative to comprehensively eliminate unnecessary regulatory burdens which impede growth and investment, and to make necessary regulations more efficient
The Socio-Economic Impact Assessment System (SEIAS) is being implemented following Government approval in 1 July 2015.
Urgent intervention required to immediately assess the impact of the new immigration regulations on tourism and scarce skills and to provide recommendations to Government on how to address any unintended consequences
Government has appointed an IMC led by Deputy President, to deal with the unintended consequences in the implementation of the immigration regulation
Continued implementation of One Stop Investment centres; the co-location of SMME support agencies by DSBD; and the Strategic Environmental Assessments (SEAs)

26. Management Performance

27. Management Performance (2)

28. Thank You