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THE importance of public-private partnerships is a prevalent theme of the National Development Plan. Such a partnership is already taking place at the very highest level between business and government with dedicated task teams working behind the scenes to tackle difficult issues of the NDP, says Leslie Maasdorp, CEO of education group Advtech who is extensively involved in the process.

Progress is slow, concedes Cas Cavoodia in a presentation in August. Cavoodia, as acting head of Business Unity SA (Busa), is co-ordinating business’ engagement with government. However, each of the five task teams, made up of government and business representatives, has drafted a plan of action. Most have appointed consultants and work is now under way. Cavoodia was commenting in a Busa presentation in August.

Business was at least partly motivated out of alarm at the legislation rushed through Parliament before the May elections, including the Immigration Act and amendments to the Mineral and Petroleum Resources Development Act, which pose a serious risk to economic activity and many goals of the NDP. One of the task teams is addressing these.

Further progress is crucial: with SA’s slowing economic growth rate, it becomes ever more important to implement the NDP “sooner rather than later”, says Professor Raymond Parsons of North West University Business School and former Deputy CEO of Busa.

Parsons points out that the economy has deteriorated markedly since the NDP was approved by Parliament in 2012 and endorsed at the ANC’s Mangaung policy conference in December, emphasising the sense of urgency. “There are many red lights flashing in the SA economy, including recent socioeconomic trends, suggesting that unless SA can project and progressively implement a shared vision of where it is going, we risk falling into a low-growth trap.”

The dire state of the economy is in itself a barrier to progress in the NDP. While the plan proposes various measures to accelerate economic growth, many are based on a supposition of a reasonably healthy economy. The National Infrastructure Plan, for example, would not be such a formidable obstacle if the government and the private sector could afford to fund it between them. To implement the full infrastructure plan, SA would need to borrow money, but that has become more expensive following the downgrades to SA’s sovereign debt ratings.

Infrastructure poses the biggest funding problem but every facet of the NDP — from implementing pre-school nutrition programmes to housing the homeless — needs funding. In a strong, growing economy, such funding is obviously easier to come by.

The emphasis now, says Parsons, has to be on implementation. “We need to build capacity in the public and private sectors to ensure implementation takes place on a consistent, coherent basis.”

That is the goal of the partnership between government and business. The five task teams, each co-chaired by a government and business representative, are tackling labour relations, education & training, inclusive growth, infrastructure and the regulatory impact on investment. Each team is assessing the problems in their specific areas, identifying obstacles to progress and proposing solutions.

What is encouraging, says Maasdorp, who co-chairs the inclusive growth task team, is the attitude of the government delegates.

“We have found government to be extremely enthusiastic about working together,” he says. “Their attitude is that they don’t have all the answers and nor do we in the private sector. But I think there is genuine sincerity from all sides to find solutions.”

Following a meeting of government and the business leaders at the Sefako Makgatho Presidential Guesthouse in Pretoria on October 24, the Presidential Business Working Group said it was encouraged by the progress made since the group’s previous meeting in August 2013 but emphasised the need for further engagement. At the meeting, each of the task teams reported their progress and challenges.

Education & skills development

The task team’s priorities are:

• Scale up work-integrated learning and work-based learning to assist students to complete their studies.

• Support the skills needs and pilot models under the National Infrastructure Plan’s strategic integrated projects (Sip) that demonstrate how working together, government and business could meet the skills needs of the infrastructure rollout.

• Work to ensure that entrepreneurship education is scaled up and its quality improved.

• Support the work being done by the National Education Collaboration Trust (NECT) and other foundations supporting the improved quality of education.

The NECT is shouldering much of the responsibility of upgrading school infrastructure and professionalising the teaching service. Another core focus area of the task team is to promote work-integrated learning — learning through practical work-like experiences.

There are obvious benefits to this: learners see how academic theory is put into practice, develop practical skills themselves and enhance their employment prospects. But they also learn softer skills such as communication, teamwork and business writing skills.

In terms of the education task team’s action plan, a forum to co-ordinate business-government efforts to promote work-integrated learning will be established and a concept note drawn up to identify blockages, propose solutions and develop funding arrangements.

Tools are already in place to track implementation and there is even a proposal to link government and private sector databases of learners requiring work-integrated learning and employers offering opportunities.

The task team is also tackling the issue of ensuring adequate skills are available, with the right experience and in the right localities, to support the infrastructure plan’s Sips programme. For this, it is establishing district-based skill development programmes.

Through the NECT and other organisations, there are various other projects on the go, ranging from improving entrepreneurship skills to an ICT implementation strategy — some of which are covered in this publication.

Infrastructure

The task team’s priorities are:

• Establish complementary measures to support new investment based on the improved provision of logistics, energy and water.

• Increase local procurement by supporting local production of infrastructure inputs.

• Assist in assessing the macro-and microeconomic costs and benefits of infrastructure projects and recommending appropriate financing strategies and tariffs on that basis.

The Presidential Infrastructure Coordinating Commission (PICC) was established by the Cabinet in 2012 to co-ordinate, integrate and accelerate implementation of the National Infrastructure Plan. It is tasked also with developing a 20-year planning framework beyond one administration to avoid a stop-start pattern to the infrastucture rollout. It has established 18 strategic integrated projects which cover social and economic infrastructure . The Sips include catalytic projects to fast-track development and growth.

In this area, business is preparing proposals in various areas with a focus on four main ones:

• Shared-services models where municipalities can draw on a pool of skills to ensure infrastructure programmes are planned, executed and maintained.

• Models of infrastructure provision, operation and maintenance which provide services on a fair and equitable basis.

• Identify available skills within the private sector and develop a mechanism to mobilise such skills in support of the infrastructure programme.

• Develop a model to optimise infrastructure procurement processes to ensure cost-effective and efficient delivery of infrastructure projects.

Business and government are also focusing on unlocking private sector funding for infrastructure projects to enhance government’s own budgeted expenditure.

Regulatory impact on investment

The task team is focusing on:

• Improving engagement and trust with economic stakeholders on key areas of interest to identify blockages to production and employment.

• Improving the systems and capacity for assessing the impact on growth, investment and employment of proposed and existing regulations.

• Reducing delays and unnecessary red tape around authorisations needed for investments.

• Improving regulation for and reducing the burden of importing critical skills needed for the economy.

Cabinet approved the use of regulatory impact assessments (RIAs) as far back as February 2007 but this has not been effective.

Parsons points out that one of the NDP’s main messages is that SA must try harder to get more things right at the first attempt. Integral to that, he says, is building state capacity. Two other factors are important. The first is to make better use of RIAs and this should be done prior to even announcing policy publicly. The second is to extend the use of public-private partnerships, particularly to improve infrastructure delivery and to get important projects off the ground.

“Investor and business confidence depend on greater coherence and consistency in policy-making. RIAs would have avoided many problems. There’s still too much of an ad hoc approach and that needs to change.”

He questions whether RIAs were implemented — or whether they were assessed for NDP compliance — for some recent policy and legislation, including the nuclear power project, the 50-50 land reform proposal (to give half of farms to workers) and the cessation of bilateral investment treaties with European countries.

The task team’s action plan includes developing a tool for RIAs and institutionalising a process to implement them. Government plans to establish an inter-departmental committee to oversee their implementation. Government and business are also engaging on a list of new and existing legislation to be prioritised for impact assessment.

Labour relations

Priorities are:

• Reduce workplace conflict and facilitate constructive labour relations, in particular by engaging with business and labour on skills development.

• Improve communication in the workplace.

• Reduce inequality in the workplace.

• Enhance workplace-level co-operation.

• Improve labour regulation.

Underlying all themes, employment creation is the core objective.

The labour relations indaba hosted by the National Economic Development and Labour Council (Nedlac) on November 4 was flagged as a core part of the process to restore social dialogue and trust between parties. Key items on the agenda were labour market stability, growth, income inequality and minimum wages.

SA’s labour relations environment is highly complex. Differing agendas ensured that the parties at the indaba failed to make any breakthroughs, but a roadmap for resolving the problems, endorsed by government, business and labour, was adopted. However, it shies away from concrete actions identifying “focal areas” to “frame the discussion” while resolving to “work together to remove obstacles” and “explore all options”.

One focal area is to promote “employment, labour market stability, including the right to strike”. A more concrete one is to address wage inequality by engaging on a national minimum wage. Deputy President Cyril Ramaphosa announced that he would lead a committee of constituents within Nedlac to establish the best approach for introducing a national minimum wage. The committee will present its findings in July next year.

The indaba declaration concedes that, “given the enormity of challenges identified by constituencies” the social partners “appreciate that it would not be possible for the indaba to address all of the issues”.

Inclusive growth

This task team has identified the following priorities:

• Introduce interventions that support the revitalisation of township economies. A proposed intervention here is to introduce a more balanced approach to spatial and economic development.

• Promote industrialisation through the support of local procurement targets. This serves also to create jobs. One approach is to identify value chains that can be developed to increase procurement of locally produced goods.

• Catalyse the development of a local tablet computer industry.

The Presidential Business Working Group says that to address skewed spatial development, a government fund is being launched to support informal sector enterprises, especially in the townships. It has an initial budget allocation of R50m from government.

Joint cluster investment plans for specific townships are also being developed, while government and business are collaborating on the development of business and technology incubators with 50/50 cost-sharing.

To promote industrialisation, government has committed to ensuring 75% local content in all its purchases across all tiers of government. Government is also working towards state-owned entities meeting the 75% target. Business and government will also create public-private-partnerships to encourage local procurement in priority sectors such as mining capital equipment.

Promoting a local tablet computer industry fits in with the NDP’s goals of modernising education and developing the digital economy in SA. Business and government are tasked with developing a partnership involving cellular operators, software developers and tablet hardware producers. It is to develop a roadmap for the large-scale rollout and localisation of tablet computers in SA.

No quick fix

The action plans of each of the task teams make it clear that quick, concrete solutions are a pipe dream. Each team faces complex issues and it will take a long time, with lots of hard work on the part of both government and business, before real change is felt on the ground and reflected in SA’s economic indicators.

What is heartening for the country is that this private-public partnership is in itself overcoming a major problem in SA: the trust deficit between business, government and labour.

The NDP itself identifies a lack of trust between government and the private sector as one of the factors to explain the difficulty in achieving greater policy coherence in SA. Parsons says the task teams are building trust “by being seen jointly working on challenges and finding solutions that make a difference on the ground. That means more pragmatism and less ideology in tackling SA’s socioeconomic challenges: this is the message of the NDP.”

The trust deficit can be overcome, he says, if there is a willingness to compromise and co-operate. However, trust between labour and government is at a low point – reflected in events surrounding Marikana — and business-labour relations are often acrimonious.

“At the end of the day we are all in the same boat and a key challenge is to narrow the trust deficit,” he says. “You cannot run the country as a zero-sum game.”

Parsons sees SA not so much at a cross road but a T-junction: “The NDP creates a wonderful opportunity for SA to do things differently and much better in the years ahead. SA can take the high road of the NDP or continue muddling through on the low road leading to a low-growth trap.”