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Overview of MTSF 2014-2019


An Overview of Government s Medium Term Strategic Framework (MTSF) 2014-2019 for the Standing Committee on Finance * Impact indicators are intended to be ... – PowerPoint PPT presentation

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Title: Overview of MTSF 2014-2019

An Overview of Governments Medium Term Strategic
Framework (MTSF) 2014-2019 for the Standing
Committee on Finance
  • Background to the Medium Term Strategic
    Framework 2014-2019
  • MTSF 2009-2014
  • The National Development Plan
  • An overview of the 2014-2019 MTSF
  • Two overarching themes
  • Radical economic transformation
  • Improving service delivery
  • Selective review of the priority outcomes

  • According to a 2003 DPSA report on the Machinery
    of Government the MTSF would inform the
    business plans of Departments, as required by the
    National Treasury in terms of the requirements of
    the MTEF
  • The draft MTSF itself would emerge from an
    internal government process short, medium and
    long- term priorities are drafted by departments,
    refined by clusters and FOSAD Forum of South
    African Directors-General, and finalized by
    Cabinet at the January Lekgotla
  • Annual reviews
  • Relevant MTSF would be reviewed at mid-year
    Cabinet lekgotla
  • This would inform the MTEF and governments
    annual Programme of Action
  • MTSF 2004-2009 and MTSF 2009-2014
  • Relatively high-level, informed by broad
    electoral commitments and scenario planning as
    well as the internal planning process referred to

National Strategic Planning and the NDP
  • Green Paper on National Strategic Planning (2009)
    lays out the rationale for more extensive
  • mobilisation of society around a commonly agreed
    set of long-term goals
  • Greater coherence in governments work
  • Longer term planning is good for South Africa...
    will encourage a longer term view from all key
    institutions, allowing them to invest with
    greater confidence
  • The Green Paper notes a change in the MTSF,
    becoming more detailed with the outcomes and
    targets being inputs into the Presidencys
    performance management work
  • On the role of Parliament will need to
    develop mechanisms to oversee the planning
    process and to contribute to ensuring successful
    implementation of a national plan
  • Green Paper process culminated in the National
    Development Plan 2030 Our future, make it work

(No Transcript)
From NDP to the MTSF
  • In the presence of the NDP as an overarching,
    long-term plan the MTSF process has been
    reoriented toward conversion of the NDP into
    medium-term 5 year plans
  • Cabinet decided in 2013 that the 2014-2019 MTSF
    should form the first five-year implementation
    phase of the NDP
  • MTSF has been aligned to the national governing
    partys 2014 election manifesto
  • As with previous MTSFs the intention is that MTSF
    2014-2019 will directly inform departments
    planning and oversight of plans and performance
  • Performance agreements between the President and
    each Minister will reflect the relevant actions,
    indicators and targets set out in the MTSF
  • National and provincial departments will submit
    strategic plans for the period 2015-2020 to
    Parliament and provincial legislatures by
    February 2015 incorporating relevant actions and
    targets in the MTSF
  • It appears that the process by which MTSF is
    developed has also remained the same
    intergovernmental process across spheres of

Initial responses to the MTSF
  • The MTSF 2014-2019 was released by the Presidency
    on the 8th of August 2014 but there has been
    relatively little response to date
  • A recent report by one private economic
    consultancy suggests that few in the private
    sector are aware of the MTSF and there is
    significant scepticism among those who are
  • Some concerns have been expressed that the aim of
    reducing unemployment to 14 by 2019 (from 25.5
    at present) may be unrealistic
  • Broader issue is the relationship between the NDP
    and MTSF
  • NDP was based on wide consultation, though the
    final report was still subject to significant
  • The MTSF is an internal governmental process that
    does not involve further external consultation
    with stakeholders and citizens
  • Remains to be seen whether the process from NDP
    to MTSF has addressed some stakeholder concerns
    or/and introduced new ones

Structure of MTSF 2014-2019
  • Two overarching themes radical economic
    transformation and improving service delivery
  • 14 priority outcomes, building on previous MTSF
    and the NDP. Within each priority outcome there
  • Broad objectives and themes
  • A set of specific sub-outcomes specifying
    actions required, Minister responsible, the
    relevant indicator with current baseline and the
    MTSF target
  • A set of core impact indicators drawn from
    the sub-outcomes that will be used to monitor
    and evaluate performance in the relevant area
  • Two perspectives particularly relevant to the
    Standing Committee on Finance
  • The role of SCoF in conducting oversight over the
    activities and performance of National Treasury,
    its agencies and SARS
  • The role of SCoF in conducting oversight over
    alignment of the Budget, fiscal framework,
    revenue collection and various money bills with
    policy priorities
  • Remainder of the presentation discusses two core
    MTSF themes and provides a selective overview of
    the priority outcomes with emphasis on issues
    particularly relevant to the Standing Committee

Theme 1 Radical economic transformation
  • placing the economy on a qualitatively different
    path that ensures more rapid, sustainable growth,
    higher investment, increased employment, reduced
    inequality and deracialisation of the economy
    (MTSF 2014-2019)
  • Emerged from 2014 election manifesto
  • No technical definition of this notion contested
    because ideas of radical interventions vary
    depending on perspective
  • Broad agreement on the fact that radical change
    requires multiple, mutually reinforcing
  • E.g. Changing the urban spatial distribution
    requires initiatives relating to urban planning,
    local economic development, transport
    infrastructure and services, housing, etc.

(No Transcript)
Theme 2 Improving service delivery
  • Improving the capacity of the public service is
    one of the core issues addressed by the NDP, but
    it is an issue that relates to all other specific
    functions. MTSF notes that
  • backlogs remain and the quality of services is
  • challenge is therefore to improve the quality and
    consistency of services, which requires
    improvements in the performance of the public
    service, municipalities and service providers
  • Measures to improve the capacity and
    developmental commitment of the state will
    therefore receive high priority over this MTSF
  • Local level
  • national and provincial departments of local
    government will focus on improving the quality of
    targeted oversight and support available to
  • focus on ensuring that municipalities provide and
    properly maintain an adequate core set of basic
    services including water, sanitation,
    electricity, municipal roads, refuse removal and
    traffic lights

Theme 2 Improving service delivery
  • Provincial level particular attention will be
    given to the management of service delivery,
    human resource management and financial
  • National level bring greater predictability and
    stability to the management of the
    political-administrative interface by
    establishing the role of administrative head of
    the public service
  • Corruption Prevent public servants doing
    business with the state ensure transparency in
    public expenditure and contractual relations with
    the private sector improve capacity to
    investigate and prosecute corruption cases
    strengthen anti-corruption legislation

Priority outcomes
  1. Quality basic education
  2. A long and healthy life for all South Africans
  3. All people in South Africa are and feel safe
  4. Decent employment through inclusive growth
  5. A skilled and capable workforce to support an
    inclusive growth path
  6. An efficient, competitive and responsive economic
    infrastructure network
  7. Vibrant, equitable, sustainable rural communities
    contributing towards food security for all
  8. Sustainable human settlements and improved
    quality of household life
  9. Responsive, accountable, effective and efficient
    local government
  10. Protect and enhance our environmental assets and
    natural resources
  11. Create a better South Africa and contribute to a
    better Africa and a better world
  12. An efficient, effective and development-oriented
    public service
  13. A comprehensive, responsive and sustainable
    social protection system
  14. A diverse, socially cohesive society with a
    common national identity

Outcome 4 the economy
  • Twenty pages detailing ten sub-outcomes, which
    align to the elements of radical economic
    transformation already outlined above. Informed
    by the NDP vision to accelerate economic growth
    to reduce unemployment and inequality and create
    an inclusive society (decent employment through
    inclusive growth)
  • Locates existing plans (Industrial Policy Action
    Plan (IPAP), New Growth Path (NGP), Agricultural
    Policy Action Plan (APAP), Minerals Beneficiation
    Action Plan (MBAP), National Infrastructure Plan,
    etc) within a broader framework
  • Aims to find a balance between creating a stable
    and supportive environment for growth and
    investment while at the same time addressing
    structural challenges in the economy and society
  • Recognises that inequality is an obstacle to
    growth and investment so growth-oriented policies
    must address the distribution of ownership and
  • Provides a set of high-level impact/outcome

Impact indicator Minister responsible for reporting on the indicator 2009 Baseline Latest Baseline of the indicator 2019 target NDP 2030
  1. GDP growth (annualised and quarterly)   Finance GDP shrank by 1.5 in 2009 2.5 in 2012 5 growth in 2019 4.5 annual growth
  2. Investment rate ( of GDP)   Finance 22 in 2009 20.5 of GDP in 2012 25 of GDP 30 of GDP
  3. Public sector investment ( of GDP)   Finance 8.3 in 2009 7.8 of GDP in 2012 10 of GDP 10 of GDP
  4. Share in household income of the poorest 60 of households   Economic Development 6.1 in 2009 5.6 in 2011/12 10 10
Impact indicator Minister responsible for reporting on the indicator 2009 Baseline Latest Baseline of the indicator 2019 target NDP 2030
  5. Employment creation   Economic Development 1 million jobs lost in downturn from 2008 to mid-2010 200 000 in year to March 2013 but over 300 000 in 2011 Annual employment growth to increase by 350 000 a year in 2014-15 and thereafter the rate of employment growth to increase, with targets set annually. 11 million more jobs, with annual targets set on a rising scale
  6. Official unemployment rate   Economic Development 24 in 2009 25 in 1st Quarter 2013 14 in 2020 6
  7. Percentage of adults working in rural areas   Economic Development 20 of the labour force 20 in fourth quarter 2012 30 40
  8. Investment in Research and Development as of GDP   Science and Technology 0.87 in 2009/10 0.76 in 2011/12 1.5 by 2019 No target specified but commitment made to increasing investment in RD
Outcome 6 Infrastructure
  • NDP identifies the need to invest in economic
    infrastructure to support the countrys economic
    and social objectives
  • to deliver electricity, water and sanitation,
    telecommunications and public transport
  • to diversify the countrys industrial base, raise
    exports and compete internationally
  • Challenges expand provision and coverage
    maintain existing infrastructure coordinate
    investment between government and private sector
    create appropriate institutional, policy and
    regulatory environment
  • Issues of possible interest to the Committee
  • Sustainable financing of infrastructure plans
    given large demands in many sectors, including
    choice of appropriate financing options (e.g.
    user pays versus financing from general tax
  • Need for pricing to incentivise investment
    without hurting growth
  • The role of Regulatory Impact Assessments for
    infrastructure projects
  • Aims for public investment to constitute 10 of
    GDP by 2019 (6.8 now)
  • Five sub-outcomes

  • Impact indicators
  • Energy Ministry
  • Adequate generating capacity commissioned
  • Electricity generation reserve margin increased
  • Additional SA coal and gas enabled for energy

Outcome 7 Rural areas
  • Vision is to have rural areas which are,
    spatially, socially and economically well
  • Economic growth, food security, jobs and improved
    access to basic services, quality education and
  • Aim that by 2030 agriculture will create 1million
    new jobs
  • Need for leadership on land reform, communal
    tenure security, financial and technical support
    to farmers, and the provision of social and
    physical infrastructure for successful
  • Priorities
  • Sustainable land reform
  • Small famer development and support (financially
    and other wise)
  • Growth of sustainable rural enterprises and
    industries resulting in rural job creation

Outcome 8 Human settlements
  • strive to achieve measurable progress towards
    breaking apartheid spatial patterns with
    significant advances made towards retrofitting
    existing settlements offering the majority of
    South Africans access to adequate housing,
    affordable services in better living
    environments, within a more equitable and
    functional residential property market
  • Three sub-outcomes toward the above goal
  • Adequate housing and improved living environment
  • Develop a functional and equitable residential
    property market
  • Improve institutional capacity and coordination
    for better spatial targeting (government)
  • One area that may be pertinent to SCoF is the
    role of development finance institutions (DFIs)
    in providing finance for developmental housing
    initiatives and projects

Outcome 9 Local government
  • Given its role at the front line of service
    delivery, local government has a critical role to
    play in the NDPs vision but faces a number of
    key constraints. Some are addressed in general
    initiatives to improve the public service (see 12
    below) but others require specific local
    government attention.
  • The five sub-outcomes are
  • Members of society have sustainable and reliable
    access to basic services
  • Intergovernmental and democratic governance
    arrangements for a functional system of
    cooperative governance strengthened
  • Sound financial and administrative management
  • Promotion of social and economic development
  • Local public employment programmes expanded
    through the Community Work Programme (CWP)
  • MTSF also contains an updated list of 27 district
    priority areas based on limited access to basic
  • National Treasury is responsible (with COGTA) for
    supporting and overseeing sound financial and
    administrative management, as per the relevant
    impact indicator

Outcome 10 Environment
  • NDP vision South Africas transition to an
    environmentally sustainable, climate-change
    resilient, low-carbon economy and just society
    will be well under way by 2030
  • MTSF refers to three phases
  • 2014-2019 creation of a framework to implement
    the (above-mentioned) transition
  • 2019-2024 implementation of sustainable
    development programmes and targeting greenhouse
    gas emissions
  • 2024-2029 final steps in the transition and
    reductions in poverty and unemployment assisting
    in South Africas emissions peaking in 2030
  • Some issues possibly relevant to the Committee
  • Potential short-run tradeoffs between
    environmental protection and economic objectives
  • The possibility of future legislation on carbon
  • Constraints to economic activity from
    environmental limitations (e.g. water shortages)

  • Impact indicators
  • Increased FDI
  • Increased tourism arrivals
  • Increased tourism spend
  • Increased value-added exports

combines market integration, cross-border
infrastructure development and policy
coordination to diversify production and boost
intra-African trade
Problem of excessive turnover of department heads
Identification of areas where departments/entities
are not coordinating
NT to issue guidelines for financial delegations
and support implementation of these
Outcome 13 Social protection
  • Follows from NDP vision of providing a minimum
    standard of living, while also recognising the
    developmental and transformative role of social
  • The overarching challenge is to develop a
    comprehensive system of social protection by 2030
    while ensuring that the nature of the expansion
    is sustainable
  • Sub-outcomes
  • Strengthening social welfare delivery through
    legislative, policy reforms capacity building
  • Improved quality and access of Early Childhood
    Development Services for children aged 0-4
  • Strengthened community development interventions
  • Deepening social assistance and expanding access
    to social security
  • Optimal systems to strengthen coordination,
    integration, planning, monitoring and evaluation
    of social protection services
  • Relatively few impact indicators for this
    outcome halve rate of stunting access to social
    assistance up to 95 for those eligible double
    number who can access labour-related social
    insurance double access to Early Childhood

Thank you
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