- The Public Investment Program will run for two financial years
- PIP will run from April 2023 to March 2025 with P64 billion budget
- Ongoing projects will get P37.3 billion, new projects P26.8 billion
The Projects | National Development
The fourth session of the 12th parliament has approved the Transitional National Development Plan (TNDP) for the period April 2023 – March 2025 presented by Minister of State President Honourable Kabo Morwaeng, with a development budgetary estimate of P64.07 billion over the two years.
On the 6th of October 2023, Parliament approved the principle that a two year “Transitional National Development Plan” for the period 2023/24-2024/25 be prepared and tabled before parliament and that National Development Plan 12 be implemented thereafter effective, 2025/26 financial year.
Minister Morwaeng said the fundamental objective during the implementation of the TNDP would be to achieve diversified private sector-led growth, with Government only playing a facilitating role.
“The Plan should serve as an action plan for reforms towards the future we want, building on the NDP 11 fundamentals of achieving inclusive growth; creation of sustainable employment; and poverty eradication,” he said.
Under the TNDP there will be Public Investment Programme (PIP) which will have a development budget estimate of P64.07 billion. The PIP provides an estimate of the amount of investible resources that have been allocated to various Ministries, Departments, and Agencies for implementation of projects and programmes aimed at addressing the national development priorities during Financial Years 2023/24 and 2024/25, covered by this Transitional National Development Plan.
The PIP has been partly informed by the Medium-Term Fiscal Framework (MTFF) and the macroeconomic forecasts, which indicate available resources and define the ceilings for both the recurrent and development fund envelopes. It is also informed by the development imperatives as defined by the national priorities set out in the Plan.
Minister Morwaeng said on account of the huge deficit that this country has had regarding infrastructure development, the PIP for this Transitional National Development Plan goes beyond the fiscal ceilings set by the Ministry of Finance.
“I must emphasize that Government is committed to seeking alternative sources of finance to close this funding gap,” he said, noting that options will include sourcing of loans from international partners, grants, as well as, enlisting private sector participation through Public-Private-Partnerships.
Morwaeng said, although project implementation has generally been a challenge in the past, during National Development Plan 11, the situation was much more serious on account of COVID – 19, which slowed down activity because of lockdowns and restrictions imposed on movements. “These have caused a serious backlog on implementation, with a number of projects either delayed or even failing to start,” he said.
The PIP for the Transitional National Development Plan largely comprises “Ongoing Projects”. These are projects whose funds have already been approved, with contracts signed, and are currently being implemented. These projects have an allocation of P37.3 billion or 58.2 percent of the total PIP.
The other set of projects in the PIP are “New Projects”. These are projects whose implementation has not started, but have been identified for inclusion in the new plan. These projects have been assessed and found to be consistent with current priorities, but are yet to be prepared in detail. These new projects constitute an amount of P26.8 billion, or 41.8 percent of the total PIP.
Out of the total PIP of P64.07 billion development expenditure proposed for the two years, P29 billion or 45.2 percent is for the Financial Year 2023/24, while P35.1 billion or 54.8 percent is for 2024/25 Financial year.
Minister Morwaeng told parliament that infrastructure development remains critical to unlocking opportunities for trade, value chain and export-led development, economic diversification, competitiveness increased productivity and private sector engagement.
Amongst the major projects are developments of major roads; village infrastructure; cross border connectivity, including One Stop Border Posts and new railway links; airport and water infrastructure; sanitation upgrades and maintenance, including waste water recycling; electricity grid strengthening – specially to accommodate variable renewable energy and electricity exports; targeted rural infrastructure to support agriculture; and digital connectivity infrastructure, to mention just a few. These developments, together with the maintenance of existing infrastructure, take the bulk of the PIP in the Plan period.
The rest of the PIP addresses other priorities, including human capital and skills development and programmes aimed at supporting private sector led growth, such as ensuring that the necessary business environment reforms are in place.
In terms of poor implementation of projects which has over the years been a major challenge for Government, Minister Morwaeng said a plan is in place to make it a thing of the past.
He noted that these challenges have ranged from inadequate project planning, where projects are prematurely included in the Plans, including inaccurate costing, appraisal and assessment of feasibility adding that in most cases, there has been insufficient monitoring and evaluation of projects, resulting in cost overruns, and service provision that is below standard specifications.
“All this is within an environment of questionable project management skills, both in Government and the private sector. Lengthy procurement processes, coupled with weak contract management, have also impacted negatively on delivery. Lastly, some of our own citizen-owned contractors have, over time, shown limited capacity and experience, especially in handling large-scale projects. This is a challenge that we must address within the spirit of successfully implementing the Citizen Economic Empowerment Policy and the Economic Inclusion Act,” he said
To address these challenges, Minister Morwaeng said a new arrangement called Development Manager approach to project delivery will be introduced. This will allow for major public projects to be packaged, and their implementation outsourced to private companies with requisite capacity.
According to Morwaeng, this will assist in addressing some of the capacity constraints that continue to undermine efforts towards successful project implementation. He noted that, however, this model on its own will not be sufficient. “There is therefore an urgent need to address capacity limitations across the board,” he said.
Minister Morwaeng said the Office of the President, through the National Planning Commission, will engage all Ministries, Departments, Agencies and key stakeholders, to find better ways of improving implementation, and ensuring that appropriate measures for monitoring and evaluation are put in place and implemented as part of a government-wide accountability system.
