[{"bbox": [85, 153, 304, 180], "category": "Section-header", "text": "## 2.2 Lessons learnt"}, {"bbox": [85, 197, 1146, 358], "category": "Text", "text": "South Africa has over 20 years of experience utilising budget support as an aid modality. The National Treasury International Development Cooperation (NT:IDC) has developed nine guidelines and manuals to manage EU Budget Support Programmes effectively and align budget support funds with South African priorities within the public sector management system. Beneficiary departments have become familiar with the operational procedures, fund release requirements, and reporting mechanisms. Several evaluations have shown that most programmes were successfully implemented, achieving the intended outputs and impacts."}, {"bbox": [85, 368, 1146, 476], "category": "Text", "text": "However, in recent years, the triangular relationship and working arrangements between NT:IDC, the beneficiary department(s), and the EU Delegation have deteriorated leading to adverse effects on performance. Delays in fund releases—sometimes exceeding one year—were caused by a combination of factors, including human resource limitations, time constraints, and misunderstandings of the Budget Support guidelines and manuals."}, {"bbox": [85, 487, 1146, 622], "category": "Text", "text": "To address these challenges and eliminate bottlenecks, the National Treasury and the EU Delegation decided to streamline their relationship by excluding the involvement of third parties such as line departments or agencies. Under this new approach, the National Treasury/GTAC will serve as the sole counterpart of the Delegation. This modus operandi is expected to enable more straightforward and timelier implementation, enhance and structure policy dialogue, and undoubtedly reduced transaction costs for both parties."}, {"bbox": [85, 632, 1146, 767], "category": "Text", "text": "The programme will also align with and reinforce South Africa's five guiding principles for Official Development Assistance (ODA): innovation, piloting and testing, risk mitigation (to attract investment in SME initiatives), fostering catalytic initiatives, promoting best practices, and transferring skills and capacities. The funds allocated to this programme will not be used to cover financing gaps but will instead be blended with matching allocations from the National Treasury."}, {"bbox": [85, 778, 1146, 965], "category": "Text", "text": "In terms of implementing complementary measures, it is worth noting the long-standing (over 25 years) partnership with the National Treasury on capacity development in public finance management. The NT's Capacity Development Directorate is responsible for coordinating, supervising, and reporting all donor support in this area. This management system has proven to be both efficient and effective. The Directorate convenes regular meetings at the project and at the policy level with all donors involved. The projects implemented with Southen Africa-Towards Inclusive Economic Development (SA-TIED), the Delegation having co-financed Phase II of this programme, and with the South Africa Reserve Bank (SARB) will follow similar approaches"}, {"bbox": [85, 975, 1146, 1057], "category": "Text", "text": "Quantifying results in public finance management has always been a complex task. Consequently, developing a robust monitoring and evaluation and learning system based on objectively variable indicators or KPIs will be essential to track progress and measure outcomes."}, {"bbox": [85, 1069, 342, 1100], "category": "Section-header", "text": "## 2.3 Problem Analysis"}, {"bbox": [85, 1113, 1146, 1249], "category": "Text", "text": "South Africa has a severe unemployment crisis, with one of the highest rates globally. The latest quarterly labour force survey (LFQS) published in November 2024¹ by Stats SA is very telling in that regard. The official unemployment rate stands at 32.1%, while the expanded definition, which includes discouraged job seekers, exceeds 43%. These figures highlight a deeply entrenched structural issue in the labour market, driven by factors such as low economic growth, skills mismatches, and systemic inequality."}, {"bbox": [85, 1260, 665, 1288], "category": "Text", "text": "Unemployment in South Africa reveals significant dimensions:"}, {"bbox": [85, 1300, 897, 1328], "category": "List-item", "text": "* Age-based challenges - the unemployment crisis is particularly dire among the youth:"}, {"bbox": [122, 1328, 1146, 1407], "category": "List-item", "text": "  - **Youth unemployment is staggering**: For individuals aged 15-24, the unemployment rate exceeds 60%, making South Africa one of the worst countries globally for youth joblessness. This generation faces barriers such as inadequate access to quality education, skills mismatches, and limited entry-level opportunities."}, {"bbox": [122, 1407, 1146, 1461], "category": "List-item", "text": "  - **Discouraged youth**: Many young people lack education, employment, or training (NEET). This group is at risk of long-term economic exclusion, perpetuating cycles of poverty."}, {"bbox": [122, 1461, 1146, 1538], "category": "List-item", "text": "  - **Older workers**: Those nearing retirement age also face challenges, particularly in industries undergoing structural changes, such as mining and manufacturing. Without access to retraining, these workers are often unable to transition to new industries."}, {"bbox": [85, 1622, 295, 1646], "category": "Footnote", "text": "¹ P0277September2024.pdf"}, {"bbox": [1037, 1680, 1146, 1707], "category": "Page-footer", "text": "Page 5 of 29"}]