The eleventh National Development Plan (NDP 11) is the first medium term plan towards the implementation of the country’s second vision – Vision 2036. The Plan will run from 1st April 2017 to 31st March 2023.

Taking into account the development challenges facing the country, and the need to align the focus of the Plan with global, continental and regional initiatives such as; the UN’s Sustainable Development Goals, AU Agenda 2063, and the Revised SADC Regional Indicative Strategic Development Plan, NDP 11’s theme is “Inclusive Growth for the Realisation of Sustainable Employment Creation and Poverty Eradication”. This theme will be realised through the implementation of six national priorities, namely: developing diversified sources of economic growth; human capital development; social development; sustainable use of national resources; consolidation of good governance and strengthening of national security; and implementation of an effective monitoring and evaluation system.

As part of the preparation of NDP 11, a review of the performance of the domestic economy during NDP 10 was undertaken. The review showed that the actual average rate of growth for the NDP 10 was 3.9 percent per annum. While this growth rate is slightly above the NDP 10 target of 3.3 percent, it is substantially below the Vision 2016 average target of 7.5 percent. This lower growth was mainly the result of low performance of the mining sector, stemming from global uncertainties and low commodity prices, faced during NDP 10 period. On the positive side, the review showed that the domestic economy withstood the adverse effects of the global financial crisis, due to the resilience of the non-mining sector. In the event, the domestic economy contracted by 3.0 percent in 2009/2010, compared to the potential decline of 16.5 percent had it not been cushioned by the non-mining sector.

This underscores the crucial importance of economic diversification to reduce the country’s heavy reliance on diamond production. Another achievement during NDP 10 was that the reduction in the cumulative budget deficit from P31.9 billion projected in the Plan to P8.4 billion. Thus, the overall budget balance outturn for NDP 10 was better than projected, despite the global financial and economic crisis during the early part of the Plan period.

It is on the basis of the performance of NDP 10, and taking into consideration the development challenges facing the country that NDP 11 advocates for various policies and strategies to promote growth and create employment opportunities in the economy. Among the broad strategies to be pursued during NDP 11 are: (i) developing diversified sources of economic growth through initiatives such as beneficiation, cluster development, special economic zones, economic diversification drive, and local economic development; (ii) the use of domestic expenditure as a source of growth and employment creation by ensuring that domestic aggregate demand, including Government expenditure, is employed to support growth and employment creation; and (iii) pursuing an export-led growth strategy given the limited size of the domestic economy. The export-led growth strategy will draw from the cluster model, where the initial focus will be on diamonds, tourism, finance and mining, among others.

The implementation of these strategies and other sub-strategies is expected to promote domestic and foreign direct investment to grow the economy and create employment opportunities. This is because increased aggregate demand generates business confidence to invest more in productive activities. In addition, Government will continue to reform the country’s regulatory environment with a view to easing doing business and fostering global competitiveness for local businesses.

However, the efficacy of these strategies during NDP 11 will require a stable macroeconomic environment, whose main elements will include low inflation, sustainable budget balance, supportive monetary policy, and competitive exchange rate. In addition to ensuring macroeconomic stability during the Plan period, the country will also continue to work on improving the microeconomic environment. In this regard, Government will ensure that programmes aimed at eradicating poverty, and promoting sustainable livelihoods of the poor and people living with disabilities will be implemented during the Plan.

Furthermore, the Small Medium Micro Enterprises and Informal Sector models, as well as Local Economic Development approach will remain an essential part of NDP 11 strategy for promoting inclusiveness. Social protection programmes, especially the provision of social safety nets and other poverty related measures, will be strengthened to complement existing productive activities.

The Plan also gives the estimated financial resources that are likely to be available to Government, as well as their proposed allocations between the recurrent and development budgets. Under the Base Case scenario, total revenues and grants are estimated at P365.08 billion for the NDP 11 period; of which, 34.2 percent will be Mineral revenue, and 26.1 percent will be Customs and Excise. This means that over 60 percent of the projected revenues during the Plan will come from mineral and customs and excise, which are volatile and susceptible to regional and global economic trends. It is therefore imperative that, efforts to diversify the sources of Government revenues through the expansion of the domestic revenue base should be intensified during the course of NDP 11. The projected total expenditure for NDP 11 on the other hand amounts to P364.03 billion, comprising P262.40 billion, or 72.0 percent as recurrent budget, while P101.42 billion or 27.9 percent is earmarked for development expenditure.

Given the estimated total revenues and projected expenditures for the NDP 11 period, budget deficits are projected for the first half of the Plan period, while modest surpluses are expected for the second half, resulting in a small cumulative surplus of P1.05 billion. However, this modest surplus will only be realised, provided that the anticipated global, regional and domestic economic environment does not turn out to be worse than expected. This, therefore, calls for continued vigilance and prudence in spending, as the revenue outturn may turn out to be lower than expected during NDP 11, due to continued uncertainties in the performance of the global economy.

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» Download: National Development Plan 11: Volume 1, April 2017 – March 2023 (PDF, 4.47 MB)