Presentation on use of Statistics by Provincial Planning 10-11 October 2013

1. Presentation on use of Statistics by Provincial Planning 10-11 October 2013

2. Focus of the presentation • The presentation will focus on utilising the FSGDS on how statistics was used • Various snap shots of different slides of FSGDS presentation will be used to illustrate this

3. Rationale and Significance of the FSGDS Chapter 1 Rationale and Significance of the FSGDS 1994 1999 GEAR 2004 2009 1996 IDP, LED AsgiSA, JipSA, NSDP 2010 5+2 Priorities/Outcome Based Approach 2011 Chapter 2 Provincial Growth and Development Analysis Chapter 3 Provincial Vision and Strategic Vision Chapter 4 Provincial Strategic Growth and Development Pillars Chapter 5 Implementation, Monitoring and Evaluation

4. Provincial Growth and Development Analysis The structure of the provincial economy that limits job creation • Over the years, the province has experienced a significant decline of the mining sector. Mining’s share was 16% in 1996 and by 2010, this has declined to 8% and 7% in 2012. • In 1996, the mining sector employed about 118 000 people. This figure was about 180 000 in the late 1980s. This dropped to about 33 000 by 2010. Layoffs are still continuing in this sector with devastating consequences not only on individuals, but also the areas that significantly depend on this sector. 1 4

5. Provincial Growth and Development Analysis • Another sector is agriculture which has experienced relative decline and is now stagnant. In 1996 agriculture contributed 5.3% to the provincial economy compared to 3.5% in 2010 and 3.7% in 2012. • Notwithstanding these challenges, agriculture still accounts for a significant number of informal employment in the province. At the same time, besides high labour absorption rate, agriculture is important for food security and rural development. The structure of the provincial economy that limits job creation 1 5

6. Provincial Growth and Development Analysis • The manufacturing sector contributed 16.4% of the provincial gross domestic product in 2012. However, the petro-chemicals sub-sector made up more than 85% of this sector and contributed on average, 9.6% to the provincial economy. • The challenge is that the manufacturing sector is concentrated in terms of ownership, production and geographical location. The sector is largely disconnected from the rest of the provincial economy. The structure of the provincial economy that limits job creation 1 6

7. Provincial Growth and Development Analysis Increasing unemployment • Unemployment is the most serious challenge confronting the province. • In the Free State, unemployment rate increased from 32% in the third quarter of 2012 to 33.2% in the fourth quarter of 2012, and 33.1% in the second quarter of 2013. • Unemployment can mainly be attributed to the relative decline in agriculture and the mining sectors combined with the limited industrial base in the province. • A total of 25 000 job losses were recoded in the agricultural sector followed by mining at 4 000. in contrast, significant jobs were created in the community and social services, 28 000. • The most unemployed are largely women, the youth and unskilled workers 2 7

8. Provincial Growth and Development Analysis • The Free State’s contribution to the national economy was 5% in 2010. This was down from the 5.8% contribution it made to the national economy in 1996. • In 2011, the real economic growth rate, at 2005 constant prices, was 2.5% in the Free State in comparison to 3.5% for the entire country. • The New Growth Path emphasises employment creation in the following sectors: Infrastructure, agriculture, mining, the green economy, manufacturing and tourism. • In the province, the construction and the electricity sector that also forms the basis of the infrastructure job driver have stagnated at 1.7% between 2011 and 2012 whilst electricity have marginally declined from 2.4% to 2.3% in the same period. • Whilst agriculture has seen a marginal growth from 3.3% in 2011 to 3.7% in 2012, mining declined from 7.7% to 7%, and manufacturing stagnated at 11.7% in the same period. Although the Free State’s captured 7.3% of the foreign tourists in 2010 which was 8.2% in 2009, tourism still remain significant for the growth and development of the province. Other sectors such as the green economy are yet to be fully developed. It is also anticipated that major infrastructure investments will bring the desired growth. • Poor Growth Performance 3 8

9. Provincial Growth and Development Analysis • The provincial spatial economy exhibits increasing levels of economic concentration. While Matjhabeng has lost its share of the economy due to mine downscaling Metsimaholo and Mangaung have increased their share. • In 1996 these two municipalities contributed approximately 45% of the provincial economy, compared to 55% in 2010. Together, these two municipalities had only approximately 35% of the Free State’s population in 1996, which in 2011 was 32% of the entire 2.7 million provincial population. If Matjhabeng is also taken into account, these three municipal areas contribute 70% of the Free State’s economy. • Metsimaholo is also the municipality with the largest economic growth rate of 4.6% per annum between 1996 and 2010. Other municipal with moderate economic growth between 1996 and 2010 are: Mangaung (2.6%); Letsemeng (3% due to mining activities and high valued agricultural products) and Moqhaka (2.1% . • Increasing Spatial Concentration of Economic Activity Excludes the Majority 4 9

10. Provincial Growth and Development Analysis • Under-Utilisation and Declining Infrastructure • In 2001, it was estimated that 2% of paved roads are in a very good condition while 6% are in a good condition, 29% are in a fair condition, 36% are in a poor condition and 27% are in a very poor condition. About 82% of the road network had not been resealed in the past 12 years • The under-utilisation of infrastructure, especially rail, is connected to the decline in mining and the difficulties faced by the agricultural sector. This in turn led to disinvestment in rail. Generally, the backlogs in infrastructure are due to historic decline in public sector investment since the late 1970’s. Major investments in water were last seen in the early 1980’s. The result has been dilapidation of water catchment areas, dysfunctional irrigation systems, especially canals and tunnels. • The 2012 Stats SA General Household Survey released on 23 August 2013 indicates that 59,3%of residents rated the provision of water services as good with only 5% indicating water in the province is not safe to drink 5 10

11. Provincial Growth and Development Analysis • The educational profile shows laudable improvement in respect of particularly Grade 12 pass rates since the demise of apartheid. The Grade 12 pass rate in the province has increased from 75.7% in 2011 to 81.1% in 2012. • Despite these attainments, as revealed by Stats SA 2011 Census, 7.1% of persons aged 20 years and above in the province had no schooling (Xhariep 12.9%, Lejweleputswa 6.8%, Thabo Mofutsanyana 9.1%, Fezile Dabi 7.3% and Mangaung 4.3%). • The shift in the structure of the economy towards finance and business services leaves the majority of the province’s youth behind, creating a mismatch between the elementary skills of the provincial population and needs of the evolving economy. • The capital-intensive petro-chemicals sector requires skilled people, The roll-out and maintenance of infrastructure requires artisans, engineers and builders, which cannot be produced in required amounts in the light of the low quality of basic education. • Poor Quality of Education, Skills Shortages and Mismatches 6 11

12. Provincial Growth and Development Analysis • Additionally, the morbidity and mortality profiles of the Free State are dominated by HIV/AIDS. According to 2011 statistics, 70% of the case load in the public health system were attributed to HIV and AIDS related illnesses. • The 2011 National Antenatal Sentinel HIV & Syphilis Survey in South Africa, HIV prevalence amongst antenatal women was 32%. The highest prevalence was in Fezile Dabi at 35.6%, followed by Lejweleputswa at 34.2%, Thabo Mofutsanyana at 31.9%, Mangaung at 29.9% and Xhariep at 26.1%. • The estimated provincial HIV prevalence in the general population (15-49 years) increased from 19.47% in 2010 to 19.58% in 2011. • The shortage of skilled health professionals also presents a serious challenge. Not only does it impact on the quality of the services provided, it also has a negative bearing on the management of infrastructure and hospitals. • Despite some of these challenges, the 2012 Stats SA General Household Survey released on 23 August 2013 indicates that 68.4% users of the public healthcare facilities in the province are very satisfied with those facilities compared to only 6% who said they were very dissatisfied. • The Capacity of the Health System is Unable to Deal with the High Disease Burden 7 12

13. Provincial Growth and Development Analysis High Poverty Levels, Income Inequality and Low Incomes • Poverty remains a huge socio-economic challenge facing the province. According to SASSA, the total number of grants paid grew from nearly 850 000 in 2010 to 949.44 in June 2013 which represent 35% of the province’s entire population. • Income inequality has also worsened from 0.59 to 0.64 over the same period. An assessment of poverty in the broader sense reveals that 51.0% of the Free State population is living in poverty. This means that approximately 1,122,500 people were living in poverty in 2010. In this context social grants and other government transfers become a major source of income for many people. 8 13

14. Provincial Growth and Development Analysis • Three environmental concerns that need to be addressed are Water Availability and Quality, Climate Change, Land Use and Biodiversity Conservation. • Water quality management needs to take place at the source, as well as at the level of distribution or use. A recent report assessing water quality data in the Orange River identified certain gaps in the present monitoring system. Specific problems shown by the report are the discontinuation of sampling at strategic points, poor sampling frequency and important variables not being measured. • Climate projections for southern Africa show that the greatest increase in mean temperature will possibly occur over the central interior where the Free State is located. • The arid and semi-arid regions towards the western interior are very likely to experience an increase of 2 to 3C in maximum temperature • The dominant land use in the Free State is agriculture which accounts for 90% of the total area of the province. There is also significant urbanisation taking place • Preserving the Environment 9 14

15. Provincial Vision and Strategic Pillars Vision 2030 acknowledges the central role that the state must play in addressing the historical legacy of dispossession, marginalization and domination. It recognizes the nexus between the state and the people. The draft Free State Vision 2030 draws on the experiences of the people in shaping the future they want. Chapter 3,4&5 of the NDP Chapter 9 of the NDP Chapter 8,10,11,12 of the NDP Chapter 6 of the NDP Chapter 15 of the NDP Chapter 12 and 14 of the NDP

16. Provincial Strategic Growth and Development Pillars 16

17. Pillar 1: Inclusive Economic Growth and Sustainable Job Creation 17

18. Pillar 1: Inclusive Economic Growth and Sustainable Job Creation:Agricultural Potential Mangaung Metro, Nala and Dihlabeng: maize, wheat, cattle and sheep. Distinct produce such as peaches, cherries, apples, cut flowers, sorghum, asparagus, beans, potatoes, cabbage and carrots are also produced in Dihlabeng. Municipalities with above average agricultural potential are Tswelopele, Setsoto, Maluti-a-Phofung, Nketoana, Moqhaka, Mafube and Metsimaholo 18

19. Pillar 1: Inclusive Economic Growth and Sustainable Job Creation 19

20. Pillar 1: Inclusive Economic Growth and Sustainable Job Creation:Mining Potential Two considerable gold reserves with an estimated 20 year life span still exist in Lejweleputswa district covering parts of Matjhabeng, Nala and Ngwathe, Metsimaholo municipalities. Whilst there is high production of diamonds in Moqhaka, production of this commodity is limited in Letsemeng municipality There is also significant potential for mining of low grade coal in Matjhabeng, Nala, Moqhaka, Ngwathe and Metsimaholo municipalities. There is some lower value mining potential in salt in Masilonyana, Tswelopele, Tokologo and Letsemeng. Clay fields in Moqhaka, Ngwathe and Metsimaholo. There are gypsum fields in Tokologo and discrete uranium in Setsoto and Dihlabeng. 20

21. Pillar 1: Inclusive Economic Growth and Sustainable Job Creation 21

22. Pillar 1: Inclusive Economic Growth and Sustainable Job Creation:Manufacturing Potential Metsimaholo is the leading locality with high manufacturing due to petroleum and chemicals sub-sector. Mangaung metro has above average manufacturing potential in the fuel, petroleum, chemicals, fuel, rubber and plastics. Mangaung also has potential in the food and beverage sub-sectors of manufacturing Matjhabeng, Dihlabeng and Moqhaka also have an above average potential in the manufacturing 22

23. Pillar 1: Inclusive Economic Growth and Sustainable Job Creation 23

24. Pillar 1: Inclusive Economic Growth and Sustainable Job Creation 24

25. Pillar 1: Inclusive Economic Growth and Sustainable Job Creation: Tourism Potential The only locality rated as having high tourism potential is Bloemfontein in Mangaung Metro. The following municipalities have also been categorised as municipalities with above-average tourism potential: Metsimaholo, Dihlabeng, and Matjhabeng. Other towns with proven tourism potential, though not adequately reflected in the data, are Clarens, Parys, Frankfort, Fouriesburg, Puthaditjhaba, Clocolan, the Memel area and Phillipolis. 25

26. Pillar 2: Education, innovation and skills development 26

27. Pillar 3: Improved quality of life 27

28. Pillar 3: Improved quality of life 28

29. Pillar 3: Improved quality of life 29

30. Pillar 3: Improved quality of life 30

31. Pillar 3: Improved quality of life 31

32. Pillar 3: Improved quality of life 32

33. Pillar 4: Sustainable rural development 33

34. Pillar 5: Build Social Cohesion 34

35. Pillar 6: Good governance 35

36. Towards FSGDS and NDP Implementation • On 25 June 2013, Minister Trevor Manuel, Premier Ace Magashule together with EXCO, all Mayors and some National Planning Commissioners had a dialogue to explore a pilot project to begin the implementation of the NDP. Based on the FSGDS, pillar 6 - Good Governance (Chapter 13 & 14 of the NDP) was identified as the most critical for the province. The province has developed a detailed NDP Free State Pilot Action Plan and will engage with the NPC secretariat to finalise it. The Plan identifies priorities, targets and timelines, and will serve as a performance and impact measure. • The province has also developed the FSGDS Implementation Plan aligned with the NDP. This plan provides systematic indicators and targets meant to bring focus in the priorities that should inform departmental strategic and performance plans. It will infuse MTSF priorities and serve as the basis for clusters’ programmes of action. • The province has completed the NDP and FSGDS Alignment Reference Book. The Reference Book presents a shared, consistent and coherent development agenda as outlined in the NDP and how it has found expression in the province through the FSGDS. Similarly, the province is also developing the NDP, FSGDS and IDP Alignment Guide including the NDP, FSGDS, Strategic Plans and APP Alignment Guide. These guides will serve as instruments of mutually reinforcing policy actions across government. They will detail the national, provincial and local government imperatives and their spatial growth and development application, and how they should inform integrated planning.

37. Towards FSGDS and NDP Implementation • We also commenced a process to review and develop the following sector specific strategies within the overarching provincial development bounds outlined in the NDP and FSGDS: Rural Development Strategy/ Economic Development Strategy / Poverty Alleviation Strategy/ Spatial Development Framework /Agriculture Development Strategy / Skills Development Strategy • Of outmost importance for the province has been the identification, packaging and implementation of major catalytical project based on provincial potential set in the NDP and FSGDS. These are to serve as the anchors to drive growth and development. The NDP Schema for Partial targeting identifies the following areas of potential as pivotal for the province: • Durban- Free State– Gauteng corridor -SIP 2 • The N8 corridor as a strategic trans-national development corridor linking Bloemfontein and Lesotho • Green economic zone in the Xhariep district • Resource critical areas in the goldfields region • Water resource areas • The province had thus had engagements with the following national departments to explore areas of cooperation in beginning to examine the potential of these projects : Economic Development, DTI, Public Enterprise , NPC and DBSA. As a step towards implementation, the province will establish a central coordinating unit to oversee the execution of these projects

38. Towards FSGDS and NDP Implementation Principles to be applied • In view of the completion of the NDP, immediate endorsement of the FSGDS is critical to begin with the implementation process The FSGDS must form the basis for planning in the province The FSGDS will constantly be updated in line with new developments Sector strategies must be based on the long-term programmes and strategies of the FSGDS

39. In conclusion • Snap shots of slides presented clearly indicate the level of detail required for provincial strategic planning

40. Thanks 40