1. Government Employees Medical Scheme
28 July 2018
Accelerated and Shared Growth—South Africa (ASGI-SA)
A Summary & Role of DPSA
5 June 2006
Private and Confidential

2. Outline of Presentation
Objectives
Background and Introduction
Binding Constraints
Response
Role of DPSA
Relationships
Conclusion

3. Challenge: objectives set in May 2004
Halve poverty from about one third of households in 2004 to less than one-sixth of households by 2014
Halve unemployment from about 30% in 2004 to lower than 15% by 2014
This requires growth averaging over 5% between 2004 and 2014
The objective we set was to average >4.5% growth up to 2009 and >6% growth after 2010

4. ASGISA task teams
Strategy project driven by Minister of Finance reported on parameters of strategy to July 2005 Lekgotla
President appointed a team to transform strategy into an initiative:
led by Deputy President and including
Ministers of Finance, T&I and Public Enterprises,
Premiers of Gauteng and Eastern Cape, and
Mayor of Johannesburg
Objective: not a new economic policy, but initiatives to sustain higher and shared 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%
Reasonably strong employment growth in recent years
Trend towards significant reduction of poverty since 2000
Strong commodity prices and capital inflows, and strong growth and broadening of domestic consumption

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 2005
Difficult conditions for producers of tradable non-commodity goods and services
Risk of “hollowing out”—potentially vulnerable economy to changes in world economic conditions
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 remittances and social grants

7. Need to focus on key issues and implementation modalities
Approach of identifying the “binding constraints”—not the unfocussed approach of the Washington Consensus
The binding constraints are those 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. Binding Constraints
Relative volatility of the currency, and current strength
Cost and efficiency of national logistics system and some infrastructure
Shortage of suitably skilled labour and disjointed spatial settlement patterns
Barriers to entry and competition in sectors of the economy & lack of investment opportunities
Regulatory environment and burden on SMMEs
Deficiencies in state organisation, capacity and strategic leadership impacting on delivery

9. Government Employees Medical Scheme
28 July 2018
Infrastructure
Overall government plans for infrastructure spending totals over R370bn over the current MTEF
Further allocations are envisaged going forward
50%
To be spent by the three spheres of govt
40%
To be spent by State Owned Enterprises. 5%
To be spent through Public Private Partnerships
3 - 5%
To be spent by development finance institutions
2nd economy benefits are considerable but must be spelt out
Private and Confidential

10. Some key infrastructure elements
Challenge of monitoring and trouble shooting—new systems in DPE and NT
Challenge of supply industries and shortage of managerial, professional and artisan skills
Developmental opportunities: employment, enterprise development, BBBEE
Provincial projects as flagships

11. Sector strategies (industrial strategies)
Focus on sectors with potential for high growth, employment creations and enterprise development
Immediate focus on BPO and Tourism (strategies are essentially complete)
Focus on agriculture/agro-processing for next set of initiatives: biofuels, timber, food production and processing
Other sectors include: chemicals; metals beneficiation (including capital goods); creative industries; clothing and textiles; durable consumer goods

12. Crosscutting industrial issues
Weak competition and import parity pricing
Capacity for trade negotiations
A more coordinated Africa development strategy
Better incentives for R&D investment
Better use of BBBEE to encourage industry transformation beyond the transfer of equity

13. Education and skills development
Interventions in quality of general education: QIDS-UP; Maths & Science (Dinaledi schools); stronger career guidance programmes
Strengthening of FET system: R1.9 billion injection over next 3 years
Much strengthened ABET programme
Next phase of National Skills Development Strategy: better targeting on skills needs
Joint Initiative for Priority Skills Acquisition

14. Eliminating the second economy
Expansion of EPWP: bigger rural road projects; focus on maintenance; roll out of Early Childhood Development component
Strengthening of microfinance initiatives especially loans between R and R
Targeted initiatives for women and youths
All sector strategies must have developmental elements
Regulatory environment for SMMEs
Realisation of dead assets

15. Macroeconomic issues
Challenge of volatility—accumulation of reserves and related strategies
Challenge of improving budgeting in government—need to predict income and expenditure better
Need to monitor better implementation of decisions to spend, especially on capex
Need to review the economic parameters of our strategy over time—work with the Harvard-based team

16. Governance issues
ASGISA standing agenda item for monthly Investment & Employment Cabinet Committee
Focus on local government delivery capacity—Project Consolidate and related skills development and skills pool schemes
Economic departments—address capacity constraints
Better mechanisms for GDS implementation
Review of role of DFIs
One-stop investment trouble shooting centre
Introduction of RIA system
Improvements in planning, zoning and administration

17. Role of DPSA
Creating an enabling and supportive environment focusing on:-
HRM & D
Remuneration and conditions of service
Service delivery improvement
ICT issues
Improvement of working environment

18. Role of DPSA (cont) Key focus areas
Support departments in conducting capacity assessments – ability to deliver
Identification of short, medium and long term skills requirements
Development of strategies to recruit and retain required skills
Improving ICT to foster planning, implementation, monitoring and reporting across Government – both inter-sphere & depts
Policies, procedures and practices to improve administration and management

19. Role of DPSA (cont) Current activities Single Public Service
Improving access to services via multiple channels of service delivery
Integrated ICT
Integrated planning, budgeting, monitoring, etc
Improved inter-governmental relations
Personnel Expenditure Review
Wage policy for the public sector
Recruitment and retention strategies
Career pathing & remuneration for professionals

20. Role of DPSA (cont) Current activities HRM & D
HR Planning tools
Skills management information system
Public Service HRDS II
Flow of skills into the Public Service
Focused training and development
Capacity assessment to implement ASGI-SA
To determine the right-mix of resources – human, leadership, financial, institutional and physical
Infrastructure projects – specific focus on transport sector
Durban-Gauteng corridor & 2nd economy interventions related to rail and road infrastructure

21. Relationships DPSA and JIPSA DPSA and Economic Cluster
MPSA serves on the Task Team
Samdi and DPSA serve on the technical working group
Internal focus – skills requirements of govt depts to deliver
DPSA and Economic Cluster
Capacity assessment
Skills requirements at DTI
External focus - MIS

22. Conclusion
ASGISA will be improved from time to time drawing on experts, social partners etc
We believe that we have built a basis for a national programme for shared and accelerated growth—not a “government programme”
On this basis our economic goals and our social goals are achievable, as well as our Millennium Development Goals
Indeed, we believe we should be able to surpass our goals, especially poverty eradication