The government’s draft policy blueprint for the medium term has targeted GDP growth ranging from 2% to 5.4% by 2029, deputy minister of planning, monitoring and evaluation Seiso Mohai said on Wednesday.
The projection assumes that over the next five years the government will implement accelerated reforms while addressing infrastructure and fiscal pressures. President Cyril Ramaphosa is expected to address the final medium-term development plan (MTDP), to guide the government of national unity (GNU) partners, in his state of the nation address in February.
Performance agreements of the ministers within the GNU will be based on the final MTDP. Mohai said in the National Council of Provinces (NCOP) that the draft MTDP was presented to an extended cabinet meeting in October.
The meeting decided on further consultations on the policy document before it was finalised.
The work with the economic cluster also developed three growth scenarios. These scenarios outlined projected growth associated with a ‘business as usual’ scenario and two more optimistic scenarios associated with reforms outlined in the draft MTDP 2024-2029.
— Seiso Mohai, deputy minister of planning, monitoring and evaluation
The document is expected to be finalised by January during a cabinet lekgotla.
“The work with the economic cluster also developed three growth scenarios. These scenarios outlined projected growth associated with a ‘business as usual’ scenario and two more optimistic scenarios associated with reforms outlined in the draft MTDP 2024-2029,” Mohai said.
“Departments will have to make sure that their departmental plans account for the strategic priorities of government and the supporting targets for implementation over this term.”
The growth targets outlined in the draft MTDP differ slightly to those presented by the Treasury in October’s medium-term budget policy statement.
The Treasury’s optimistic scenario sees real economic growth rising progressively by 1.8 percentage points above the 2023 baseline (when growth was below 1%) in 2028 and by 2.4 percentage points above the baseline in 2032.
The more pessimistic scenario sees it declining from zero growth in 2024 and progressively drop to a decline of 0.5 percentage points below the baseline, which continues at this level from 2027 to 2032.
The Treasury says the positive scenario incorporated additional capacity from energy investments, coupled with the success by the national logistics crisis committee in resolving problems in ports and certain rail corridors.
“The MTDP will serve as the implementation framework for the National Development Plan (NDP) vision 2030 and guide the work of the seventh administration and to put South Africa on a path of inclusive economic growth and development,” Mohai said.
The goals of the NDP are to reduce poverty, inequality and unemployment and these continue with the MTDP 2024-2029.
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