Status Quo analysis of economic targets in LEDGP and NDP

Introduction

• Provide analysis of economic growth, inequality and unemployment in LEGDP and NDP

• Overview about implications of reaching targets in NDP by 2030 in Limpopo

Economic Growth

LEGDP target = 7,5%

NDP = average GDP growth rate of 5,4%

Economic Growth in Limpopo since 2001

Contribution to the national economy

Analysis of growth potential

National economy

Historical SA growth performance

SA growth performance

Consumer price inflation

Balance on the Current account

SA growth constraint• Ceese Bruggemans – Long run growth 3 -3 ,5%• Will probably not even reach 3% this year• SA highly dependant on imports – BoP

constraint• Skills crises. Schools not providing the skills

needed for modern economy• Electricity and infrastructure constraints• Railways and harbours

Analysis of growth potential

Provincial economy

HP filter for Limpopo province

2002 2003 2004 2005 2006 2007 2008 2009 2010

-3

-2

-1

0

1

2

3

4

5

6

4.4

2.4

3.1

4.34.8

4.5

2.6

-1.7

2.6

3.89 3.72 3.56 3.40 3.23 3.07 2.90 2.74 2.56

actualHP

GDP per capita

GDP per capita

LEGDP• The LEGDP does not have a specific target for

GDP per capitaNDP• GDP per capita to increase from R50 000 to

R110 000 in constant prices

GDP per capita 2006 2007 2008 2009 2010 2011Real GDP [Millons)

109 094 113 967 116 923 114 978 117 935 120 582

Population

5 316 325 5 347 061 5 371 643 5 387 332 5 411 815 5 435 966GDP per capita

20 521 21 314 21 767 21 342 21 792 22 182

*Based on 2005 base yearPopulation numbers from Global Insight

Analysis

• Limpopo GDP per capital much lower than NDP base value of R50 000

• GDP per capita – 4,95 times increase to reach 2030 target

• GDP to increase to R605 000 million• R26 912 million annual increase (average 9%

pa)

Poverty

• NDP target R418 per month reduced from 39% to 0 in 2030

• Limpopo halving poverty before 2014

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Number of households by income categoryLimpopo, African

2400000+1200000-2400000600000-1200000360000-600000192000-360000132000-19200096000-13200072000-9600054000-7200042000-5400030000-4200018000-3000012000-180006000-120002400-6000

Source: IHS Global Insight Regional eXplorer version 658

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

0

1

1

Poverty OverviewLimpopo, Total

Nr of people in poverty

Nr

of p

eopl

e in

pov

erty

Source: IHS Global Insight Regional eXplorer version 658

Inequality

Targets

• LEGDP• No target was set for Inequality in the LEGDP• NDP• Overall Gini reduced from 0,7 to 0,6 by 2030.

Gini coefficient in Limpopo

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110.54

0.56

0.58

0.60

0.62

0.64

0.66

0.68

Gini coefficientLimpopo, Total

Source: IHS Global Insight Regional eXplorer version 658

Inequality in Limpopo

• Gini already in target range of 0,6 -0,7• Well developed countries 0,4• Possible target 0,5

Unemployment

Targets

LEGDP target• To create 262000 jobs by 2014• To halve unemployment by 2014.NDP Target• Reduce unemployment to 14 % in 2020 and

6% in 2030

Job creation – 2009-2013

• 2009 – 905000• 2013 – 1092000• 187000 jobs created

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

0

0

0

Unemployment rate, official definition (%)Limpopo, Total - Total

Number of unemployed people

Num

ber

of u

nem

ploy

ed p

eopl

e

Source: IHS Global Insight Regional eXplorer version 658

Analysis to reach NDP target• Unemployment rate 19,6% Dec 2012• Unemployed 266 000 out of labour force of

1358 000• Potential labour force 3 442 000• 2084 000 not economically • 330 000 discourage workers• Need additional 75880 jobs by December 2019• Need additional 184520 jobs by 2030• Assumptions very conservative

Access to basic services

• LEGDP: no target• NDP - In 2030 all South African citizens will

have affordable access to sufficient safe water and hygienic sanitation to live healthy and dignified lives.

Limpopo

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Households by toilet facilitiesLimpopo

No toiletBucket systemPit toiletVentilation Improved Pit (VIP)Flush toilet

Source: IHS Global Insight Regional eXplorer version 658

Access to water

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Households by water infrastructureLimpopo

None

>200m from dwelling

<200m from dwelling

In Yard

Inside dwelling

Source: IHS Global Insight Regional eXplorer version 658

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110

1

1

Household Infrastructure OverviewLimpopo

Limpopo

Index

Source: IHS Global Insight Regional eXplorer version 658

Conclusion

• NDP targets could be achieved in Limpopo • Need correct policy measures• Do things differently to get different results• Need social dialogue to determine different

roles of social partners