Too few are employed
Current statistics
South
Africa
The National
Development
Plan.
Out of 144 economies, ranks 113th in
labour market efficiency, 143rd in its
hiring and firing practices, and 144th
in labour-employer relations
40%
South Africa’s roadmap
to eliminating poverty and
inequality by 2030
working-age population
is employed
NDP vision/objective
The aim is to create 11
by 2030
29 to 40%
41 to 61%
of adults
working should
increase
The NDP responds to the nine inter-related challenges
identified in the National Planning Commission’s
(NPC’s) diagnostic document. It offers a long-term
vision towards a more inclusive economy that will
address the country’s socio-economic imbalances.
million jobs
of adults in rural
areas working
should rise
The NPC Diagnostic
Report identified
9
primary challenges
Key role
players
Government
Private
Building trust and confidence
to encourage long-term
investment, incentivise private
sector and job creation
Focused partnerships,
investment, skills transfer, job
creation, greater involvement
Society
Decision and oversight
involvement
Sources: National Development Plan,
SA Reconciliation Barometer Survey: 2012, OECD
Economic Survey 2013, World Health Statistics 2013,
UNAIDS Report 2012, WEF Global Competitiveness
Survey 2012-2013, World Bank 2012
The role of the NDP and infrastructure funding
With its main objectives being to eliminate poverty and to reduce
inequality by 2030, the National Development Plan (NDP) has
been launched which aims to address the identified nine primary
Sector
challenges that have impeded the overall successful transition
into a democratic society since 1994. One such challenge is
infrastructure. The plan identifies infrastructure as an enabler
of development, which can facilitate economic activity that is
conducive to growth, job creation and better service delivery.
Taking a large project through all the steps required to implement
it (namely project feasibility, procurement, delivery and funding)
is essentially the challenge that infrastructure projects are facing.
The funding requirement for the infrastructure component within
the NDP is estimated to be around R3 trillion, but government
does not have the resources to fund this entirely on its own, so the
question is “how and where will the funds come from?”.
One such method of project structuring is public–private
partnerships (PPPs), as they create the opportunity for projects
to be ring-fenced, packaged and funded by multiple parties.
However, partnerships can be structured in other ways to bring
parties together for funding a project.
The private sector, in particular the financial sector, has a role to play
in addressing the question of where funding for the plan is coming
from. However, the how needs to be looked at further.
Potential funders and entrepreneurs were brought together.
Entrepreneurs, who had undergone an initial selection process, were
given 15 minutes to submit their business propositions and funding
requests to a panel that represented the major funding bodies.
Where individual funders and investors liked the initial pitch, they
had one-on-one follow-up meetings with the project promoters
concerned. The rationale behind the concept was equally straight
forward – to get as many project promoters in front of as many
possible funders and investors in a focused two-day session.
Funding an infrastructure programme of this nature will rely on
multiple sources of funds and project structures that leverage
both public-sector and private-sector funds. The way in which
infrastructure projects are conceptualised and structured will play a
significant role in facilitating private-sector funding.
Deloitte_DPS.indd 2
One innovative funding option that has been tried on a smaller
scale but is currently being envisaged for infrastructure projects
is a funding-fair model. In April 2013, a Funding Fair was held.
This was a partnership between Deloitte and the KwaZulu-Natal
Provincial Treasury and the Department of Economic Development
and Tourism. The fair created a space and structure for face-toface contact between project promoters, entrepreneurs, business
development bodies, venture capital and private equity investors
and lenders. The concept was simple – as was the process.
2013/09/25 8:39 AM