9 minute read
Medium Term Development Plan (MTDP)
The Road To 2030
By Koketso Mamabolo
The Medium Term Development Plan 2024-2029 (MTDP) focuses on the delivery of basic services, strengthening public institutions, spatial transformation, job creation and fighting crime and corruption. It outlines a vision where the energy and logistics sectors are transformed and made more effective as the backbone of the economy. It envisions growth underpinned by exports and strategic advantage in the digital and green economies.
“This is the vision of ‘Building a nation that works for all’, a vision of a society in which there is dignified work for all, the latent energy and potential of the economy are unleashed, social protection is sufficient to provide support to those in need, and growth is rapid, inclusive and sustainable,” explains the Department of Planning, Monitoring and Evaluation, led by Minister Maropene Ramokgopa.
Along with the United Nation’s SDGs, the African Union’s Agenda 2063 and SADC’s Regional Indicative Strategic Development Plan, the MTDP aligns with the country’s National Development Plan (NDP). The NDP aims to eliminate poverty, reduce inequality to a Gini Coefficient of 0.6 (currently at 0.63) and to reduce unemployment to 6%, which was sitting at 32.9% in the first quarter of 2025. The NDP highlights the importance of economic transformation and the need for an average annual GDP growth rate of 5.4%. The economy only grew 0.6% in 2024 from 2023.
“Recent reviews have shown that these targets are unlikely to be met by 2030. Some of the worst impacts of poverty have, however, been substantially mitigated by the expansion of the social wage, including through social grants and the expansion of access to basic education and healthcare.
“Demographic changes in the country pose both opportunities and threats. The continued rapid growth of the population offers a potential ‘demographic dividend’ as more young people join the labour market. This can, however, also be a liability if there are constraints to economic inclusion and employment. While basic services are more widely available, a large part of the population still lives in dysfunctional settlements with weak local administrations and [are] distant from economic opportunities.”
The economy has not grown fast enough to create enough jobs for all those of working age and despite progress in expanding service delivery there is great room for improvement. The MTDP has three main priorities and five goals:
Dynamic, growing economy
A more equal society, where no person lives in poverty
A capable state delivering basic services to all citizens
A safe and secure environment
A cohesive and united nation
Strategic Priority 1: Driving Inclusive Growth and Job Creation
The MTDP repeatedly makes reference to the philosophy of ‘leaving no-one behind’, with the main objectives being to improve the standard of living, incomes and material conditions. It also refers to the need to transform the economy by dealing with the unequal distribution of economic assets and opportunity.
Women, youth and persons with disabilities, in particular, need access to finance, supply chains and knowledge. The MTDP recognises that economic growth has knock-on effects, such as reducing poverty and crime reduction, promoting social cohesion and providing the government with more revenue for social spending.
In March this year President Cyril Ramaphosa - in an article co- authored with Brazilian President Luiz Inácio Lula da Silva and Spanish Prime Minister Pedro Sánchez touched on the danger of people and nations being left behind: “Income inequality is widening— both within and between nations. Many developing countries struggle under unsustainable debt burdens, constrained fiscal space, and barriers to fair access to capital. Basic services such as health or education must compete with growing interest rates.”
In the medium-term, according to the plan, we will require a GDP growth rate of 3% by 2029 to support the sustained increase in employment. It will also be important to increase private sector investment, creating an environment which encourages innovation and competitiveness.
“The strategy to drive inclusive growth is centred on continuing structural reforms, upgrading and expanding network infrastructure and repositioning state-owned enterprises (SOEs). Operation Vulindlela, supported by farreaching legislative, institutional and policy changes, has addressed long-standing constraints. The Operation Vulindlela approach will be strengthened and sustained.”
Curbing and ultimately reversing de-industrialisation will be another key driver of growth. The MTDP mentions how industrial policy incentives to be “results-based and linked to clear measures of performances, and targeted at sectors with the best potential to create jobs at scale.”
The energy sector, in particular, holds the potential to not only create a large number of jobs but also stimulate growth by reducing the costs of manufacturing and, through the use of solar and wind resources, make manufacturing more sustainable and reduce the environmental impact of scaling.
“South Africa must leverage its well established international relations to deliver economic outcomes through inward foreign direct investment (FDI), growth in export markets, tourism and cultural industries, knowledge and access to technology. Economic relationships with competing global power blocs must be maintained while simultaneously promoting interests in Africa. The country’s economic diplomacy capabilities must be navigated and international relations leveraged.”
In terms of the progress made in job creation, the MTDP cites the number of people who have been given access to “earning opportunities” through the Presidential Employment Service while calling for the expansion of public employment programmes. The Presidential Youth Employment Initiative, with SAYouth.mobi at its core, has 4 million unemployed young people registered. The network it has created has been institutionalised through the SA Youth Trust as a way of fostering collaboration between the public and private sector.
Strategic Priority 1 Goals and Objectives
Increased employment and work opportunities;
Accelerated growth of strategic industrial and labour-intensive sectors;
Enabling environment for investment and improved competitiveness through structural reforms;
Increased infrastructure investment, access and efficiency;
Improved energy security and a just energy transition;
Increased trade and investment;
A dynamic science, technology and innovation ecosystem for growth;
Supportive and sustainable economic policy environment; and
Economic transformation and equitable inclusion of women, youth and persons with disabilities for a just society
Strategic Priority 2: Reducing poverty and tackling the high cost of living
The second strategic priority is one which addresses rights enshrined in the Bill of Rights. Around half the population lives in poverty and 13.8 million people experience food poverty. “An extensive social protection system is therefore necessary to avert destitution for more than half of the South African population,” says the MTDP.
Minus debt servicing costs, 60% of the government budget goes towards the social wage. This points towards progress since 1994 which includes 90% of people having access to electricity compared to 58% at the dawn of democracy.
“Nevertheless, a significantly greater effort is required to make a dent in poverty and accelerate progress towards the NDP goals. Substantial public investment in employment creation and social protection will be necessary as part of a broader economic growth strategy and will require a reprioritisation of expenditure to accommodate increases on social spending and direct transfers while ensuring fiscal sustainability. Government will pursue both these imperatives simultaneously.”
The government also plans on expanding one of the newer forms of social spending, the Social Relief of Distress (SRD) grant for the unemployed which will function as a basic income grant. The initiative will also evolve to provide SRD grant recipients with employment opportunities and support for jobseekers, among other interventions.
“In addition to social protection and active labour market programmes, a renewed focus on spatial transformation must prioritise cities as engines of growth and centres of economic dynamism, and support the viability of rural areas as sustainable centres of development.
The potential economic and social impacts of spatial transformation must be optimised through support for MSME, cooperatives and village enterprises, particularly those owned by WYPD [women, youth and people with disabilities]. Further progress must be made in building sustainable human settlements and addressing asset poverty through improving access to land, housing and title deeds.”
Another major priority which will have a wide impact is the implementation of the National Health Insurance (NHI) scheme which will be complex undertaking involving all levels of the public sector and coordination with the private sector which continues to provide input on its concerns and recommendations regarding the best route to offer quality healthcare to the entire population.
Strategic Priority 2 Goals and Objectives
Reduced poverty and improved livelihoods;
Improved coverage of social protection;
Improved access to affordable and quality healthcare;
Improved education outcomes and skills;
Skills for the economy
Social cohesion and nation building
Strategic Priority 3: Building a Capable, Ethical and Developmental State
A major priority in the 6th administration and now the 7th administration - improving capabilities and promoting good governance - is something which underpins the first two priorities. As South Africa strives to function as a developmental state, expertise and sound ethics will determine how effectively the plans in the MTDP are implemented. Progress has been made but, as acknowledged in the report:
“Some challenges remain and include an emphasis on compliance at the expense of delivery, fragmented structures, weak technical capacity, a focus on process rather than outcomes and a failure to promote and reward innovation and success.”
State capture and what President Ramaphosa has in the past referred to as the “nine wasted years” have made things worse. “As a result, the ethical foundations of the state were eroded while the state’s capacity to deliver on complex projects and objectives was weakened. The long-term consequences of State Capture for many institutions that manage public services have been disastrous for the economy and the state’s ability to deliver to its citizens.”
The Public Service Commission and the National School of Government will continue to play an important role in ensuring public servants are capable and the Office of the Head of the Public Administration (HOPA) will be created to assist the Director-General in the Presidency to manage the appointment of senior public servants and their career progression. Local Government interventions will also be key in building a capable, ethical state.
Strategic Priority 3 Goals and Objectives:
Improved service delivery in the local government sphere;
Improved governance and performance of public entities;
An ethical, capable and professional public service;
Digital transformation across the state;
Mainstreaming of gender, empowerment of youth and persons with disabilities;
A reformed, integrated and modernised Criminal Justice System;
Effective border security;
Secured cyber space;
Increased feelings of safety of women and children in communities;
Combat priority offences (economic, organised crime and corruption);
Advance South African foreign policy for a better world;
Enhanced peace and security in Africa
Source: World Bank | Aljazeera | StatsSA
