NDP delays ‘may spark downgrade’

The decision by the ANC and its alliance partners to adapt parts of the National Development Plan (NDP) could lead to another ratings downgrade and deter investors, believes Nedbank chief economist Dennis Dykes.

His comments come amid a heated debate about the status of the NDP and warnings that delays in the plan could cement South Africa’s image as a dithering decision-maker.

On the other side of the spectrum, commentators say the business community has got the wrong end of the stick and that the plan should be fluid and open to change.

“The ANC accepted the plan. So did the Cabinet. The president adopted it in his State of the Nation speech this year. It was re-emphasised big-time in the budget – and now suddenly it’s a smorgasbord,” says Dykes.

He told Business that the plan risked being a “kiss of death” if only the popular parts of it are agreed on and implemented.

The ANC, which adopted the NDP at its Mangaung conference last December, now says the plan was not cast in stone and needs to be adapted.

Cosatu and the South African Communist Party (SACP) have fiercely opposed aspects of the NDP, particularly those relating to the economy and labour.

ANC deputy president Cyril Ramaphosa told the Banking Summit last week that the parts of the NDP that were agreed to by everyone should be implemented, while some of it should be left to “dialogue”.

Investec CEO Stephen Koseff accused Ramaphosa of being “totally on the wrong bus” with his suggestion. But the director of the Centre for the Study of Democracy, Stephen Friedman, believes the NDP is not the holy grail and is open to negotiation.

“Nobody who has a plan for economic change can be taken seriously until the plan is negotiated by the major economic actors.”

Friedman says the National Planning Commission (NPC), which devised the plan, should be recognised as the independent commission it is and not as a government implementer.

“It’s a long-term vision. I thought what Ramaphosa said was pretty accurate – that the aspects that everyone agrees should be implemented – and others need more debate, such as those around labour markets and infrastructure.

“It was made absolutely clear from the beginning that the NDP is a basis for negotiation.”

The NPC was appointed in May 2010 to draft a vision and deve-lopment plan and consisted of an advisory body of 26 people drawn largely from outside government.

“The key problem is that it’s not just a neo-liberal plan concocted by neo-liberal economists. It’s already a compromise by different players in the economy. It’s not something you compromise from,” says Dykes.

Raymond Parsons, the author of the recently published Zumanomics Revisited – the Road from Mangaung to 2030, believes the run-up to next year’s general elections has made its mark on the decision.

Parsons believes this will inevitably influence the remarks, tactics and timing around the implementation of the NDP. “It is understood that the targets of the plan have already been written into the key performance areas of Cabinet ministers.”

He believes that with the danger of the economy drifting into a low growth trap of 2 to 3%, commitments to implement policies within the framework of the NDP are crucial.