SED & ED: Is the IPP Office Measuring The Correct Things? 18 September 2016

At present, the IPP Office requires two types of reporting on Socio-economic Development (SED) and Enterprise Development (ED). This is in the form of annual plans as well as quarterly reports. The annual plan is a forecast of the types of programmes and individuals to be supported in the coming year as well as the estimated budgets for each intervention. The monetary sum of interventions must equate to the project’s obligated spend on SED and ED, relative to the forecasted revenue for that year. On a quarterly basis, the IPP Office requires historical reporting to evidence that the spend which has taken place complies with the committed amounts and has been directed mostly at Black individuals from the host communities. In ‘Lost In Procurement’ (written in 2013 and formally published in the MISTRA book Earth, Wind and Fire in 2015) we argued that the IPP Office’s narrow definition of financial spend as measures of Socio-economic and Enterprise development impact would prove problematic. Indeed, now that projects are operating and spending on these elements, it is clear that we are missing an opportunity to understand the development impact of Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).

According to the IPP Office, the bulk of SED and ED investments have been directed at education interventions. For this reason, it makes for a fairly universal interrogation of the distance between spend and development. We’ll use an example from one of our own programmes. We run a bursary programme that supports the acquisition of critical artisanal skills through highly ranked Further Education and Training Colleges. At the beginning of the year, we paid for all the candidates’ fees upfront. The only cost incurred on a monthly basis is their living stipend, which is marginal relative to spend on fees, relocation and accommodation. However, one candidate has dropped out of college. This is unfortunate, but it happens. It therefore means that the project supporting this initiative can no longer report a total of 20 candidates supported. Because, despite the expenditure, we in fact have one less candidate on the programme.


However, the current reporting framework has no way of picking up on this. It only recognises activity at the point of expenditure. Therefore, per the IPP Office, the project has successfully spent on the education of 20 individuals because a cheque was signed in the first quarter of the year to that effect. No further questions are asked about the substance underlying that payment, beyond this point. And so what happens?


Projects do not report on the human impact of spend and as a result, the IPP Office has no way of reporting on the development value of the R25 billion that they proudly claim to have been invested in SED and ED as a result of REIPPPP.


This unfortunate outcome can be averted through an improved reporting system which has development rather than money at the heart of its logical frame. Through such a system, we would be able to link money to development indicators. A more accurate way of reporting, would therefore require us to list programme participants, indicate the longevity of the programme/ investment and define its outputs over that period. It is through this kind of reporting, that we will pick up on multi-million rand after school programmes that don’t work. In fact, learning that some things don’t work is to the collective benefit of all IPPs. And the IPP Office is the one institution that has the ability to aggregate our lessons to ensure that we make better investments, with each successive year. This can only be done if we convert SED and ED into what they actually are: development problems that are much bigger than their financial accounting form.


Indeed, this is not a moral imperative. It is a matter of fiscal accountability to the citizens of the country. Indeed, as projects start to connect to the grid, the heavier weight placed on economic development in REIPPPP must now be evidenced by verifiable claims.


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