Nine-Point Plan

In his 2015 State of the Nation Address, President Jacob Zuma announced the Nine-Point Plan to boost economic growth and create much-needed jobs.

In addition to projected growth of 2% in 2015, the NinePoint Plan could potentially accelerate the growth of the economy by an additional 0,8 percentage points in the short-term and one percentage point in the medium to long-term. Below are the various aspects of the plan and some of the progress made thus far.

1. Resolving the energy challenge

Substantial progress has been made in resolving energy challenges in South Africa since the inception of the FivePoint Energy Plan in December 2014.

  • On 21 December 2015 the Department of Energy published a determination on the nuclear programme, whereby 9 600 megawatts should be generated from nuclear energy.
  • The Medupi Power Station’s Unit 6 came online in August – producing 794 megawatts (MW) of electricity bringing the total installed capacity of the grid to about 45 000 MW.
  • The R2 billion Coega Wind Farm project was officially opened in September.
  • Eskom has also signed short-term power purchase agreements to secure additional electricity during peak periods, while a further 800 MW will be added to the grid through co-generation.
  • Energy-efficiency programmes have resulted in savings of 450 MW.
  • Various renewable energy projects under the Renewable Energy Independent Power Producer Programme currently supply 1 800 MW to the grid.
  • In October, Energy Minister Tina Joemat-Pettersson announced the 10 preferred bidders in the small projects renewable energy independent power producers’ programme. In addition, the department released a report titled the State of Renewable Energy in SA revealing that the renewables sector attracted R192.6 billion in investment, contributed more than 109 000 construction jobs and cut the equivalent of 4.4 million tons of carbon dioxide.

More on the energy challenge:

Lead department:
Department of Energy
Tel: 012 406 8000
 

2. Revitalising agriculture and the agro-processing value chain

  • 43 of the 44 Agri-Park sites had been identified by August with one Agri-Park already launched in North West. The programme aims to help create 300 000 new small-scale producers and 145 000 new agro-processing jobs by 2020.
  • The total number of jobs in agriculture increased by 183 000 between 2014 and 2015 reaching a total of 891 000.
  • With regards to acquiring strategically located high-value agricultural land for key Agricultural Policy Action Plan commodities, 24 162 hectares were acquired and allocated to smallholder farmers.
  • Fruit production stood at 268 563 tons (7 988 hectares) representing an increase of R685 million with a potential of 1 868 jobs – this exceeds the annual growth target of 10 898 hectares.
  • Aquaculture has shown growth in five years, with production from 2014 up fivefold to 20 000 tons. Year on year growth between 2013 and 2014 was 25%, which exceeds the average global growth rate of 7%. Aquaculture has contributed as much as R3 billion to the economy.

Statements:

Lead departments

Department of Agriculture, Forestry and Fisheries
Tel: 012 319 6787

Department of Rural Development and Land Reform
Tel: 012 312 8911

3. Advancing beneficiation or adding value to the mineral wealth

  • The draft amendments of the Mineral and Petroleum Resources Development Act, which contain provisions to stimulate local beneficiation, were referred back to Parliament in January after concern expressed by the President over whether it would pass constitutional muster.
  • The Department of Trade and Industry (the dti) plans to develop the Mineral Beneficiation Action Plan as part of its objectives contained in its 2015/16 strategic plan and incorporate this into the Industrial Action Policy Plan.
  • The Minister of Trade and Industry Rob Davies said in his Budget Vote in May that significant industrial development opportunities were emerging in the form of clean energy and mineral beneficiation, these include the development of hydrogen fuel cells using the country’s rich platinum deposits.
  • In April, Impala Platinum installed a 1.8 MW fuel cell at its Springs refinery, which offers a renewable energy alternative.

Statements

Lead department

Department of Trade and Industry
Tel: 0861 843 384
 

4. More effective implementation of a higher impact Industrial Action Policy Action Plan (IPAP)

  • The 7th iteration of IPAP, which is aimed at raising the impact of government interventions to support industrial development and re-industrialise the country, was launched in May.
  • The dti has designated 16 sectors, subsectors and products for local procurement. This year further designations for local procurement include transformers, power-line hardware and structures, steel conveyance pipes, mining and construction vehicles and building and construction. In the 645 infrastructure projects across the country valued at R3.6 trillion the state must procure these types of products from local manufacturers.
  • Government has also introduced the Black Industrialist Programme, which is designed to transform the manufacturing sector and unlock the potential of black entrepreneurs. Initial funding of R1 billion has been secured from the department for the current financial year and R23 billion from the Industrial Development Corporation (IDC) for the next three financial years.
  • The IDC also set up its new industries unit earlier this year to focus on supporting and funding the entire value chain of emerging innovative sectors.
  • Rail and ship manufacturing has been successfully revitalised.
  • Ships for the South African Navy and locomotives are being built in South Africa.

Statements:

Lead department

Department of Trade and Industry
Tel: 0861 843 384
 

5. Encouraging private-sector investment

  • President Zuma announced in August that an investment clearing house is being set up in the dti to support local and international investments to help identify bottlenecks, remove administrative barriers, reduce regulatory inefficiencies, set up norms and standards, improve turnaround times, and coordinate and fast-track investment enquiries.
  • In the past financial year the department helped facilitate an investment pipeline of over R43.8 billion.
  • As of August, South Africa was handling 116 foreign direct investment (FDI) projects.
  • In October, the department’s Director of Economic Research and Policy Coordination Timothy Dladla said that South Africa registered FDI inflow of R43.3 billion from January to July this year, which helped create 5 037 jobs.
  • Big drivers of investment are the six industrial development zones that have attracted R10 billion.
  • Progress is being made in finalising the regulations for special economic zones (SEZs). A board has been established for the SEZs and a supporting secretariat has been approved. The department is close to completing the feasibility studies for the eight new SEZs.
  • The Promotion and Protection of Investment Bill, which is aimed at clarifying the level of protection that an investor may expect in South Africa and to further ensure that South Africa remains open to foreign investment, was tabled in Parliament this year.
  • President Zuma told heads of business in August at the annual Presidential Business Working Group that he had initiated a feasibility study for an initiative aimed at supporting increased investment to meet the needs of the National Development Plan.

Statements:

Lead department

Department of Trade and Industry
Tel: 0861 843 384

6. Moderating workplace conflict

  • Deputy President Cyril Ramaphosa is leading a special dialogue between business and labour to improve labour relations.
  • Two technical teams are working on the violent nature of strikes and the issue of wage inequality. In September, Economic Development Minister Ebrahim Patel said he expected the first phase of their work to be completed by the end of the year.
  • A consensus on a working definition of a national minimum wage has been reached at the National Economic Development and Labour Council.

Statements:

Lead department

Department of Labour
Tel: 012 309 4662

7. Unlocking the potential of SMMEs, cooperatives, townships and rural enterprises

  • The Department of Small Business Development continues to pilot its informal sector support policy, which includes the provision of business training, grants and co-funding in partnership with municipalities to revamp factory and business premises infrastructure.
  • A special unit has been established in the Department of Planning, Monitoring and Evaluation to investigate cases of late or non-payment of suppliers.
  • In September, the Minister in The Presidency Responsible for Planning, Monitoring and Evaluation, Jeff Radebe, said a comparative analysis of national departments between 2013 and 2014 showed that despite delays in payment remaining a major problem, there had been improvement in the average number of invoices paid within 30 days.
  • Provincial departments for the same period reveal a marginal improvement of 5% in the average number of invoices paid within 30 days.

Statements:

Lead department

Department of Small Business Development
Tel: 012 394 3027

8. Boosting the role of state-owned companies, information and communication technology infrastructure and broadband roll-out, water, sanitation and transport infrastructure

  • Government is making progress with its broadband rollout by August 41 351km of fibre optic cables had been laid.
  • In October, Telkom launched Openserve, a wholesale division aimed at facilitating the entry of new Internet service providers, particularly black companies.
  • As part of the Independent Communications Authority of South Africa’s universal service obligations 623 schools have been connected via various service providers across the country.
  • The Universal Service and Access Agency of South Africa connectivity project is currently underway in the Vhembe and Gert Sibande Districts.
  • The Department of Science and Technology will finalise the Sovereign Innovation Fund, a public-private funding partnership aimed at commercialising innovations that are from the ideas from the public and the public sectors.

The Department of Science and Technology and its various agencies – like the National Research Foundation and the Council for Scientific and Industrial Research – provide a platform for research, development and innovation towards addressing various social and economic challenges. The department's role is to provide space for research and demonstrate that innovations really work. Once that is done, an entrepreneur, sometimes with the help of financial backers such as the Industrial Development Corporation, can commercialise the innovation. The department:

  • is working on sanitation technologies that use less water and on the development of crops that are drought resistant.
  • can also use satellite imagery to do what is called precision farming - this technology enables the farmer to know the exact amount of water in the ground.
  • is piloting alternative, environmentally friendly ways of generating electricity, including hydrogen fuel cell technologies.
  • plans to support industrialisation aggressively by technology that will make industry more competitive, attracting investment into South Africa, and also to export that technology to other countries.

Meanwhile, government has identified water as a critical resource for economic development and work continues to implement the Five-Point Plan for water and sanitation. The plan entails:

  • Maintaining and upgrading existing water and sanitation infrastructure.
  • Building new dams and developing ground water.
  • Improving water quality.
  • Developing smart technologies for water and sanitation information management.
  • Ensuring an enhanced and integrated regulatory regime such as water-use licensing.

Progress with regard to water and sanitation include:

  • In October, the Department of Water and Sanitation, together with Umgeni Water and the Ugu District Municipality, announced the completion of the Mhlabatshane Dam at Umzumbe in KwaZulu-Natal. It will provide about 100 000 people with potable water.
  • Water was supplied to 19 119 households in the 27 priority District Municipalities.
  • 11 waste water treatment works have been refurbished.
  • 75 projects involving the maintenance and upgrading of existing water infrastructure are under construction.
  • Government is intervening to stop water leaks which cost the country R7 billion a year. Government’s programme, through the Department of Water and Sanitation, to train 15 000 artisans and plumbers to fix leaking taps in their communities, was officially launched in Port Elizabeth, Eastern Cape, in August. The first intake of 3 000 is being recruited in the 2015/16 financial year.

Statements

Lead departments
Department of Telecommunications and Postal Services
Tel: 012 427 8000

Department of Water and Sanitation
Tel: 012 336 7500

Department of Transport
Tel: 012 309 5000

Department of Science and Technology
Tel: 012 843 6300
 

9. Operation Phakisa, which is aimed at growing the ocean economy and other sectors

Government has made much progress since it launched its fast results delivery methodology, Operation Phakisa, in the health and ocean economy sectors in 2014.

  • Progress has been made in small harbour upgrades such as Saldanha Bay, Struisbaai, Gansbaai, Gordon’s Bay and Lamberts Bay.
  • Nine catalyst projects are in progress.
  • 10 fish farms have been supported with the industry investing R305 million, government R105 million and 521 new jobs created.
  • Operation Phakisa had also resulted in decisions to expand the domestic shipbuilding sector and the development of Saldanha Bay as an oil and gas hub.
  • A Mining Phakisa, aimed at minerals beneficiation, will be launched by the end of 2015.

More about Operation Phakisa:

Lead departments

Department of Environmental Affairs (Oceans Economy)
Tel: 012 395 1682

Department of Mineral Resources (Mining)
Tel: 012 444 3000

Department of Health (Health)
Tel: 012 395 9591

Department of Tourism (Tourism)
Tel: 012 310 3631

Department of Basic Education (Basic Education)
Tel: 012 357 3000

Source: GovComm November 2015

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