National Development Plan autopsy confirms SA Left’s gloom-and-doom predictions

by Apr 23, 2024Amandla 92, Feature

The two most prominent openly pro-corporate politicians active in South Africa since the early 2010s­ – Trevor Manuel and Cyril Ramaphosa – teamed up in 2009-12, during Jacob Zuma’s presidency, to produce a National Development Plan (NDP). They were supported by a neoliberal-dominated National Planning Commission (NPC). 

It could have been even worse

Three separate NPC reviews of the NDP’s fate, published in 2022-23, cannot help admitting the worsening poverty, unemployment, income and wealth inequality, social stresses and ecological destruction since mid-2012. Of course, it could have been worse had the NDP actually succeeded in drawing resources into the two largest hare-brained schemes within the Presidential Infrastructure Coordinating Commission’s Strategic Integrated Projects (PICC SIPs): an R800 billion high-pollution plunder of resources (nearly entirely coal) and massive transport upgrade from the Waterberg (next to Botswana) to Richards Bay (PICC SIP1); and a R250 billion Durban dig-out port expansion and refurbishment of the rail line to Johannesburg (PICC SIP2). 

Thank goodness, in spite of the NDP’s enthusiasm for both, neither has been implemented. In part, this is because the Manuel-Ramaphosa diagnoses of South African and global economic conditions were excessively optimistic: “The share of exports in South African output will rise and the profile will be more diverse, with a growing portion of non-mineral manufactures and services.” The opposite happened: from 2008-19 (just before Covid-19 disruptions), South Africa witnessed dramatic deglobalisation, as trade/GDP fell from 66% to 54%. That ratio mainly reflects commodity prices, which rose again in 2021-22 but then crashed. 

SOEs fall apart

Moreover, the parastatal corporations that the NDP relied upon began falling apart, beset by the overindebtedness and widespread corruption initiated under Thabo Mbeki’s rule when Manuel was Finance Minister: 

  • In 2005, Transnet’s first megaproject was a multi-product petroleum pipeline from Durban to Johannesburg, whose cost soared from R5 billion to R28 billion;
  • In 2006, in the wake of another FIFA scandal­—Mbeki’s bidding team spent R190 million bribing two Caribbean and New York soccer scammers to win 2010 World Cup hosting rights­ – the R35 billion worth of soccer stadium construction collusion was initiated by 15 major Johannesburg firms (several of which were subsequently bankrupted by overcapacity); 
  • In 2007, Sanral’s corruption-riddled Gauteng highway e-tolling began, causing such intense controversies that, within a few years, the consumer payment boycott rate had hit 75%, and the project’s financial model crashed;
  • In 2007, Eskom awarded the main Medupi and Kusile 4,800 MW coal-fired power plant procurement deals (worth R38 billion) to Tokyo-based Hitachi because of an enormous kickback given to the main investment arm of the ruling African National Congress, Chancellor House (later prosecuted under the US Foreign Corrupt Practices Act, but not here). 

Matters degenerated even more rapidly when Zuma ushered the Gupta empire into the heart of Eskom and Transnet in the early 2010s. Financiers (mainly Western) and suppliers (often Chinese) were perfectly willing to fund prolific Gupta-related graft in Durban port cranes, Transnet locomotives and Eskom projects. 

The Ramaphosa connection

At the same time the NDP was coming together in the early 2010s, Ramaphosa was engaged in an already-dubious partnership with the Switzerland-based Glencore commodity trading firm (the world’s largest) run by Johannesburg-born corporate tsotsi Ivan Glasenberg. Glencore was prosecuted in 2017-2022 in the US and UK and fined $1.1 billion for bribing politicians in the Democratic Republic of the Congo, Nigeria, Brazil, Côte d’Ivoire, Cameroon, Equatorial Guinea, and Venezuela. Of course, just as in the Hitachi case, no prosecution has been launched here. Recall that Ramaphosa’s major Shanduka Coal mining investment, in partnership with Glencore, was in the notorious Optimum Mine, which he chaired until 2014 when he became Deputy President. 

The two most prominent openly pro-corporate politicians active in South Africa since the early 2010s – Trevor Manuel and Cyril Ramaphosa – teamed up in 2009-12, during Jacob Zuma’s presidency, to produce a National Development Plan (NDP).

At the same time, Ramaphosa held a large investment in Lonmin­ – more than 9% at the time he was Manuel’s NDP deputy­ – which helps explain the NDP’s overwhelming reliance upon the “Energy Intensive Users Group” agenda of mineral extraction and CO2-intensive smelting, and exports. The extraordinary events at Marikana were recalled in a 2013 analysis by Niall Reddy: “On the 15th of August 2012, the NPC, three years after its establishment, announced the NDP to the nation. The next day, police shot dead 34 mineworkers striking to demand a living wage of R12,500.” 

That very day of the NDP launch, the former trade unionist Ramaphosa was busy sending email letters (for which he later apologised) to the police and mining ministers and to Lonmin management, insisting that mineworkers were not engaged in a labour dispute, but instead were ‘dastardly criminal,’ requiring ‘concomitant action.’ For Reddy, “History may well judge the significance of the NDP launch based on how it channels or amplifies the political events unleashed by the massacre.”

The NDP’s narrative 

Kusile’s broken chimney. In 2007, Eskom awarded the main Medupi and Kusile 4,800 MW coal-fired power plant procurement deals to Tokyo-based Hitachi, because of an enormous kickback given to the main investment arm of the ruling African National Congress, Chancellor House.

South Africa has to exploit its strengths to increase exports. If the economy is less competitive in one area, it will have to do better in others. The country’s comparative advantages include its mineral and natural resource endowments, a sophisticated financial and business services sector, proximity to fast-growing African markets, high-quality universities and a modern, productive agricultural sector. South Africa also has companies that are global leaders in sectors like civil construction. South Africa holds large global shares in platinum group metals, gold, diamonds, manganese, coal, iron ore and uranium. Yet, over the past decade, domestic mining has failed to match the global growth trend in mineral exports due to poor infrastructure, alongside regulatory and policy frameworks that hinder investment. South Africa can benefit greatly from Asia’s growing demand for commodities. To do so means improving water, transport and energy infrastructure and providing greater policy and regulatory certainty to investors. This will enable the mining sector to deploy the skills, resources, know-how and capital that are available and allow the government to raise much more tax revenue than it does at present.

Reality check

  • The country’s main source of declining wealth is the vast mineral and natural resource endowment depletion, destruction and pollution. Even a conservative World Bank measure of wealth (which ignores platinum, diamonds and other South African minerals) considers the local mining industry responsible for a negative net impact on the country’s assets. 
  • The “sophisticated financial and business services sector” attracted an international greylisting due to rampant illicit financial flows.
  • The “proximity to fast-growing African markets” caused a crisis for many firms when even 2010s stars Zambia, Ghana and Ethiopia defaulted on their foreign debt in the early 2020s after interest rates soared, and when Zimbabwe, Angola and Nigeria wouldn’t repatriate earnings in US$s to Johannesburg corporations. 
  • The “high-quality universities” were only rewarded with sufficient grants by the Treasury after the intense 2015-17 #FeesMustFall protests (and were subsequently defunded by Finance Minister Enoch Godongwana). 
  • The “modern, productive agricultural sector” has suffered severe electricity, water and transport shortages thanks to the service delivery crisis, as well as a chaotic global price structure­ – and still awaits land reform
  • The “global leaders in sectors like civil construction” shrunk rapidly during the 2010s fixed-investment drought, partly when local procurement mafias shut down projects.

Finance is so uncritically blessed in the NDP that in a December 2023 Report on Monitoring National Development Plan Indicators and Targets, the NPC claims Treasury’s “carbon tax gives effect to the polluter-pays-principle and helps to ensure that firms and consumers take the negative adverse costs (externalities) of climate change into account.” Yet that tax is only R6/tonne of CO2 for Eskom and Sasol (by far the two largest emitters), whereas the comparable Swedish tax is R2,500/tonne­—thus ensuring the SA economy becomes a victim of European and UK climate sanctions in 2026 and 2027 respectively.

NDP funeral

As one of the most embarrassing post-1994 policy failures, the NPC authors­—now led by Ramaphosa­—will end up burying their NDP work in the same dump where so many other diversionary rhetorical statements continue rotting away.

The NDP was meant to spell out the government’s long-term development plan. So, it is central to any assessment of the last 30 years. The NDP sought to provide 5% per annum growth. Given the ANC government’s neoliberal economic strategy, that was always going to be a pipedream. GDP ignores resource depletion, greenhouse gas emissions, other pollution and women’s unpaid labour. Whilst GDP growth does not guarantee income goes to the poor and marginalised, the NDP’s status quo strategy left South Africa with shrinking wealth as mining stripped out natural capital. The NDP, in short, proved fatal to any hope of reversing unemployment, inequality, poverty, gender oppression and ecological destruction. 

Patrick Bond teaches sociology at the University of Johannesburg.

Share this article:


Latest issue

Amandla 92