Post-apartheid South Africa has had many blueprints for economic growth and development, reflecting a complex interplay between ambitious ideals, pragmatic imperatives and a government that was strong electorally but weak administratively.
The 1994 reconstruction & development programme (RDP) aimed to address deep-seated inequalities by prioritising redistribution and comprehensive service delivery. It was the first major economic policy initiative of the new democratic government and it gained substantial credibility in areas such as low-income housing.
However, as the economic landscape evolved, policymakers pivoted towards a more conservative plan known as growth, employment & redistribution (Gear), seeking to stimulate investment and job creation amid global economic pressures. Gear emphasised conservative macroeconomic interventions, mostly crafted by experts from the Reserve Bank and the National Treasury, and it laid the groundwork for a more ambitious vision: the national development plan (NDP).
The NDP’s 13 chapters outlined goals for achievement by 2030, the core aim being to reduce unemployment and inequality. Despite these good intentions, the lack of effective implementation has stymied progress.
Strategic vision is important but so is action to translate policy into tangible outcomes. That in turn might require addressing such sacred cows as the national minimum wage and BEE — which, though laudable in theory, has only fattened small elites while neglecting the poor.
Even when economic growth has been encouraging, as in the early 2000s under president Thabo Mbeki and finance minister Trevor Manuel, South Africa experienced “jobless growth”. Better GDP performance is certainly necessary, but is not sufficient.
The GNU seems to have brought renewed energy and President Cyril Ramaphosa unveiled yet another plan in his state of the nation address (Sona). The medium-term development plan (MTDP) stretches to the end of the GNU’s term and aims for 3% GDP growth by 2029. In 2024, growth was a dismal 1%.
More details and the map to implementation were outlined by minister in the presidency Maropene Ramokgopa. “The MTDP is a comprehensive framework guiding government action and priorities for this administration, and is rooted in principles of economic growth and jobs, inclusivity, poverty eradication and sustainable development.”
Nothing new or remarkable there, though the MTDP spells out various actions. Ramokgopa says the plan “seeks to overcome some of the challenges that have hindered effective service delivery, such as fragmented priorities, misalignment of budgets, and a lack of integration across national, provincial and local levels of government”. The MTDP seeks to ensure a better alignment between various plans and budgets by “streamlining priorities and emphasising practical implementation”, she says.
However, given the obstacles — such as a stagnant economy, significant bottlenecks in the rail and port sector and the collapse of service delivery in many metros and smaller municipalities — does the latest plan have a chance? Perhaps it will come down to political will, with the 2026 local government elections looming large.
DA chief whip George Michalakis tells the FM that the party views the MTDP as a “synthesis of the manifestos of all the GNU parties. It involved setting specific, measurable performance targets for the five-year term of office.”
He says the MTDP strikes the right balance and he is cautiously optimistic. “There were economic reforms that we supported that would drive growth, but implementation will now be key and we are waiting for the final document to be presented to the cabinet to see if the agreement we reached will be honoured.”
Eldrid Jordaan, CEO of technology and AI firm Suppple (listed in Austria), says it’s time for plans to actually deliver. “It’s time for action. We’ve seen it with Gear, we’ve seen it with the NDP, and we’ve seen it with the district development plans. There are too many plans.”
Jordaan says the GNU has instilled a sense of optimism among businesses. “There’s a different mood in the air.” He cites the departments of home affairs, sports, arts & culture and basic education, all now run by non-ANC ministers. “It’s just a freshness.” However, he acknowledges there is not always going to be agreement between GNU partners.
Michalakis says the DA’s views were taken into account in drawing up the MTDP, but the party still has “several issues” with some of the targets.
Ramaphosa signed the contentious National Health Insurance (NHI) Bill into law last year and it is poised to shake up the skewed health sector. At the time, the DA accused the president of signing the “death warrant” of health care in the country.
However, the DA has apparently won a major battle on NHI, with some of the most damaging provisions now removed — such as those that would scrap private medical aids or effectively make it impossible for them to survive financially.
Before Sona, Ramokgopa announced that the ANC and the DA had reached an informal agreement on NHI, following the removal of parts of the law that would have eliminated medical aids. Previously this had seemed to be non-negotiable. As a consequence, Michalakis says, the DA expects NHI to allow the private sector to help provide quality health care for all, “protect medical aids as agreed ... and to protect doctor and patient choice”.
[The DA] will continue to hold the executive to account and be vocal on matters that we don’t agree with
— George Michalakis
However, health minister Aaron Motsoaledi seems not to have received the memo. His repeated line is that NHI will be implemented in its original shape.
Pushed for details on the legislation’s provision for an NHI “ministerial council”, Ramokgopa says this will deal with such issues as health-care benefits and the accreditation framework for stakeholders. Medical aids will have representatives. Some health experts have said that establishing a dedicated council system will help to ensure that standards in the sector are upheld.
Areas of concern about the MTDP for the DA include the speed of implementation of job creation policies and energy reforms. Michalakis says: “We will continue to use our influence to shift the president’s continued commitment to the transformation fund and the Public Procurement Act, as in their current form they threaten to undermine our goal of creating jobs for all.”
Ramaphosa announced the establishment of a R100bn transformation fund, with the aim of uplifting millions of black South Africans who are economically excluded. For the next five years, the fund will allocate almost R20bn annually to support black-owned small businesses. But there is widespread scepticism that this will achieve anything other than further enrichment of cronies, without supporting genuine entrepreneurship.
Michalakis says the party “will continue to hold the executive to account and be vocal on matters that we don’t agree with”. He acknowledges that in a coalition “compromise is an essential part, but we will continue to put the DA’s alternative on the table through parliament”.
His comments reflect a broader hope that despite the pessimism of many commentators about the MTDP, things might be different this time. Previous plans depended entirely on the political will of the ANC. With other parties involved, there is hope for a more inclusive, collaborative and pragmatic approach.
DA trade & industry spokesperson Toby Chance tells the FM: “Our view is that the ANC’s plans themselves are not great. The idea of ‘smart cities’ and things like that are pie-in-the-sky concepts and actually need to be put to one side. The focus needs to be on the basics. With the DA in cabinet and in government, we will focus on the basic priorities.”
No longer an unfettered opposition party whose high-minded ideas and plans were never put to the test, the DA now has to show voters that it can temper the impractical or undesirable tendencies of the ANC and usher in positive policies. The proof of the pudding will not be in the language of the MTDP as much as in the action that follows.
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