Transcript 2009/10 targets and achievements

Presentation to the Portfolio Committee on
Trade and Industry – the dti’s 2009/10 Annual
Report
Date : 2 November 2010
Director-General
Mr Tshediso Matona
1
Presentation Outline
 Economic Context
 Strategic Objectives
 Achievements against planned targets
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Industrial Development
Trade, Investment & Exports
Broadening Participation
Regulation
Administration & Co-ordination
 Financial Management
 Challenges
2
Economic Context
 In the reporting period, 2009/10, the overarching focus and thrust of
the dti’s work has been to take decisive actions to address some of
the binding constraints that are impeding the economy’s growth and
employment potential, and its diversification and value-adding
capacity.
 Specifically, the dti finalised the next phase of the Industrial Policy
Implementation Plan (IPAP 2).
 Although the economy’s positive growth rate reached a post-1994
peak of 5% pa in the period 2004/07 (see figure 1), this did not
significantly reduce unemployment which never fell below 22.8%.
 This growth has been driven mainly by international commodity price
increases; credit-induced consumption; and therefore not sufficiently
underpinned by growth of the production sectors of the economy,
was an indication of a deep-seated structural problem facing our
economy.
 The economy’s growth went into reverse during 2008/09 due to the
global recession, reaching a low of 1.8% in 2009.
 However, the economy quickly recovered in 2009/10, recording a
rate of 3.2% in the fourth quarter of 2009 and 4.6% and 3.2% in the
first and second quarters of 2010, respectively.
3
Economic Context
Data received from Stats SA, dti graph
4
Economic Context
 This recovery was led by the primary sector
although the secondary sector also showed
solid performance, growing by 7%, a decline
from 8.1% in the last quarter of 2009, and led
by manufacturing with 8.4% growth in the first
quarter of 2010. (Source: Reserve Bank
Quarterly Bulletin, June 2010)
5
Economic Context
Manufacturing performance
 Key sub sectors driving the manufacturing sector include the
manufacturing of motor vehicles, components and other
transport equipment driven by firmer domestic and foreign
demand.
 Also showing some improvement were other tradable goods
such as chemical products and basic metals and steel.
International Trade performance
 Export volumes declined by 3.3% in the first quarter of 2010 and
that can be attributed to weaker macro-economic conditions in
certain European countries as well as the strength of the rand
which impeded the competitiveness of the South African
products in the international markets.
6
Economic Context
 The most negatively affected sectors included Machinery
and Electrical equipment; Agricultural products and
Transport equipment destined for Europe.
 The decline further exacerbated the pressure on the
balance of payments.
 The current account showed a deficit of R12.9 bn in the
first quarter of 2010, a deterioration from a surplus of
R24.9 bn in the last quarter of 2009.
7
Economic Context
 Investment performance
 Real gross fixed capital formation increased marginally at an
annualized growth rate of 0.2% in the first quarter of 2010
following three consecutive declines of 2.5% in the second
quarter, 6.5% in the third and 0.9% in the fourth quarter of
2009, respectively. This growth was a result of investment by
public corporations while investment by private business
enterprises declined by 0.7% preceded by 4 consecutive
declines in 2009.
 Employment performance
 Formal non-agricultural employment declined by 3% in 2009,
after increasing by 1.8% and 2.9% in 2008 and 2009
respectively.
 For the private sector the decline was even higher at 4.8% in
2009, although there was a 1.2% increase in the last quarter.
 This decline was mitigated by an increase of 3.7% in public
sector employment for the same period.
8
Economic Context
 Major job loses in 2009 were in:
 manufacturing sector losing 87 000 jobs
 construction losing 38 000 jobs;
 non-gold mining losing 22 500;
 trade, catering and accommodation losing 66 900;
 finance and insurance losing 90 200.
(Source: Reserve Bank Quarterly Review, June 2010)
9
Strategic Objectives
10
Strategic Objectives
the dti’s strategic objectives for the period under
review were:
 Promoting the coordinated and accelerated
implementation of government’s economic vision
and priorities;
 Promoting direct investment and growth in the
industrial and services economy, with particular
focus on employment creation;
 Raising the level of exports and promoting
equitable global trade;
 Promoting broader participation, equity and
redress in the economy; and
 Contributing to Africa's development and regional
integration within the NEPAD framework
11
The structure of the dti‘s
work
the dti’s work is organised in terms of the
following clusters:
 Industrial development;
 Trade, Investment and Exports;
 Broadening participation;
 Regulation, and
 Administration and co-ordination
12
Achievements against
planned targets
13
Industrial Development
2009/10 targets & achievements - IPAP
Finalise and publish a 3-year IPAP
 Industrial Policy Action Plan 2 (IPAP2) finalised
 Also undertook work on the Framework to SA Response to
the Global Economic crisis, focusing on the IDC fund of R6,2
billion for distressed firms
 Regarding the energy crisis, the dti participated in the
National Energy Response Team and Electricity Growth
Management task team and developed criteria for New Large
Electricity Connections
 National Industrial Participation – implemented 20 new
projects (total 230 since inception) with $15 billion investment
value and 25 000 jobs created
14
Industrial Development
2009/10 targets and achievements - Sectors
Develop & implement key action plans for priority sectors
Automotives
 Finalised the Automotive Investment Scheme (AIS)
 Secured investments to the value of R2,770bn by BMW, including by
component producers following the T6 Puma expansion programme
launched by Ford in 2008/09
 Multi-year Supplier Development Programme finalised for component
producers
BPO
 Finalised review of the incentive scheme based on past experience
 Completed pilot project for Monyetla training scheme – 90% successful
 BPO incentive supported 11 enterprises, with R796,8m investment &
11852 projected jobs of which 1854 have already been created
15
Industrial Development
2009/10 targets and achievements - Sectors
Develop & implement key action plans for priority sectors
Tourism
 Niche Tourism draft strategy completed & registration of SA
Youth Tourism Confederation being finalised
 Established groundwork for Tourism Export Council
 Tourism Support Programme supported 164 projects with
projected investment of R2,3 billion & 4 770 projected jobs
Furniture
 Developed furniture cluster pilot in KZN
 Launched R20 million Mthatha furniture incubation centre
16
Industrial Development
2009/10 targets and achievements - Sectors
Develop & implement key action plans for priority sectors
Other ongoing sector work
 Metals – finalised proposal on scrap metal export tax
 Clothing & Textiles Competitiveness Programme
implemented & illegal imports task team established with
SARS
 Creative industries – craft hubs established & Mzansi
Stores high-end retail concept developed
 Bio-fuels – Investment feasibility study for bio-diesel
refinery finalised & enabling regulatory environment being
addressed
17
Industrial Development
2009/10 targets and achievements - Sectors
Develop & implement key action plans for priority
sectors
Other ongoing work
 Climate Change & Green Industries – Climate Change
Response Plan study completed & initial work on green
industries undertaken involving solar water heating
 Modernisation of SA Technical Infrastructure including
upscaling of technical & operational capacity of SQAM in line
with IPAP2
 Developed draft regulations for the National Regulator
for Compulsory Specifications, including stakeholder
consultation
18
Industrial Development
2009/10 targets and achievements – Industrial Financing
Support investment of R 6, 8 bn and R 3,0 bn in new
expansion projects via the Enterprise Investment
Programme and Tax Incentives respectively
 Revised guidelines for EIP, completed AIS & Section
12i Tax Allowance regulations in conjunction with
National Treasury
 EIP supported 448 companies with a total investment
of R8,4bn
 CIP leveraged 4 (target 12) investments worth R8,9bn,
with 4832 projected jobs in the mining, energy,
manufacturing and chemicals sectors
19
Industrial Development
2009/10 targets and achievements – Industrial Financing
80 New film and television productions assisted
Attract new investments to IDZs
 65 film productions supported of which 45 were South African
with a total SA production expenditure value of R1,3bn
 Coega: 3 investments signed (target 10) with a total
investment value of R1,865bn (target R5bn) & estimated 292
direct jobs (target 2000)
 East London: 6 investments attracted (target 5) with a total
investment value of R309m (target R250m) & estimated direct
jobs of 2050 (target 360)
 Richard’s Bay: no investments. Operator Permit was approved
 Provided assistance to Saldanha Bay, Gauteng, and Mafikeng
with feasibility and applications for new IDZs
20
Trade, Investment &
Exports
21
Trade, Investment & Exports
2009/10 targets and achievements – Trade Policy &
Strategy
Consolidate SA’s position in WTO Doha Development Round &
related multilateral negotiations
 Continued engagement in WTO Doha Round to secure
developmental outcome and led preparation for 7th WTO Ministerial
Conference
 Supported other related multilateral negotiations e.g. Copenhagen
Climate Change, G20 processes & World Economic Forum (WEF) &
FOCAC, India-Africa, EU-Africa, South America-Africa engagement
and TICAD with Japan
 Finalised overarching Trade Policy & Strategy Framework
document
 Review of Bilateral Investment Treaty (BIT) Policy and successfully
opposed litigation by Italian investors based on SA-Italy BIT
22
Trade, Investment & Exports
2009/10 targets and achievements – Trade Policy &
Strategy
Consolidate trade relations with countries of the North
 Continued to engage the EU on an Economic Partnership Agreement
that is acceptable to SA & coordinated positions with SADC partners
 SA-EU Enlargement Protocol signed, extending TDCA preferences
to Bulgaria and Romania
 SA-EU Cheese Agreement implemented
 Economic Cooperation Agreement signed with Hungary
 Lobbied for extension of AGOA & inclusion of SA in third country
fabric provisions
 Held technical discussions with the USA on the Trade, Investment,
Development and Cooperation Agreement
23
Trade, Investment & Exports
2009/10 targets and achievements – Trade Policy &
Strategy
Establish & strengthen relations with key countries of the South
 SACU-India Preferential Trade Agreement negotiations ongoing
 Started work on modalities for a SACU-Mercosur-India trilateral
trade arrangement
 Continued engagement with the People’s Republic of China on the
Partnership for Growth and Development (PGD), to be incorporated
in the Comprehensive Strategic Partnership Agreement (CSPA)
 SACU-Mercosur PTA submitted to Parliament for ratification
 MOU on trade and economic partnership signed with Brazil
 Participated in various activities under the IBSA framework, including
providing trade policy support to Ministers
24
Trade, Investment & Exports
2009/10 targets and achievements – Trade Policy &
Strategy
Promote regional integration in SACU & SADC
 Ongoing consolidation of the SADC FTA, involving harmonisation of policies &
engagement on the proposed SADC Customs Union
 Also developed an approach to advance the SADC-EAC-COMESA Tripartite
FTA
 Facilitated the adoption of the SADC Services Protocol
 Facilitated consensus on focus areas for SACU’s new strategic vision
 Continued to advance the Spatial Development Initiatives with specific focus
on Namibia and Angola
 Economic cooperation agreements signed with Angola, Nigeria, Zambia,
Egypt and Senegal
 Bilateral Investment Treaty signed with Zimbabwe and agreements with
Ethiopia, Uganda and Burundi concluded
 Participated in various multilateral processes under AU/Nepad to advance
African economic development
25
Trade, Investment & Exports
2009/10 targets and achievements – Investment &
Exports
Promote SA as an investment destination: targeting R145bn
investment value over the MTEF (2009/12)
 5 international investment conferences (target 3)
 53 investment presentations (target 90)
 12 Presidential/Ministerial missions (target 5)
 30 inbound missions (target 20)
 5 outbound missions (target 12)
 Project pipeline of R40 bn achieved (target R40bn)
26
Trade, Investment & Exports
2009/10 targets and achievements – Exports
Promote South African exports in targeted markets by training
exporters, undertaking trade missions & pavilions
 EMIA supported 799 companies (target 1500)
 365 emerging exporters trained (target was 200)
 49 trade missions (revised target 56) & 23 International Trade
Initiatives (target 6) took place
 24 pavilions (target 18) were undertaken
 Facilitated the participation of business people in delegations on
State visits to the following countries i.e. Angola (120), Zambia (80),
Brazil (60), Nigeria (50), UK (210) Uganda (40)
 Established new economic offices as part of the South African
Missions in Harare, Zimbabwe; Kinshasa, the DRC; and Tehran, Iran
27
Broadening
Participation
28
Broadening Participation
2009/10 targets and achievements – Enterprise
Development
Foster growth of SMMEs & Cooperatives by creating an
enabling environment & providing support
 the dti finalised a policy proposal for preferential procurement from
SMMEs (of ten products) which requires NT support for implementation
 the dti launched a call centre operated by seda to promote timely
payment to SMMEs, as well as developing other support tools
 Align all SMME programmes with provincial economic development
departments to ensure accessibility. DM Ntuli has been championing this
work and has prepared a report
 Legislative amendment of 2005 Cooperatives Act formulated and
gazette for public comment, as well as a Cooperative Development
Strategy agreed with stakeholders in Nedlac
 Established 100 youth-owned e-cooperatives and 20 women owned
cooperatives
29
Broadening Participation
2009/10 targets and achievements – Enterprise
Finance & Technology Support
Support SMMEs & Cooperatives through various incentive
programmes
 Black Business Supplier Development Programme (BBSDP)
supported 4008 enterprises (target 1600). The programme has been
redesigned to align it with transformation objectives/access
 Cooperative Incentive Scheme (CIS) supported 264 cooperatives,
mostly in rural provinces (target 220)
 Small & Medium Enterprise Development Programme (SMEDP)
refocused to assist firms in distress due to the recession
 The Technology and Human Resources for Industry Programme
(THRIP) - 214 projects funded (target 230) & leveraged R227m from
private sector and supported 298 enterprises (64% of which are
SMME’s) and 1936 students (target 2240) and 685 researchers.
30
Broadening Participation
2009/10 targets and achievements – Enterprise
Finance & Technology Support
Support SMMEs & Cooperatives through various incentive
programmes
 Support Programme for Industrial Innovation (SPII) supported
57 projects (target 80) with a total project value of R359m
 seda Technology Programme supported 29 incubators resulting in
the creation of 243 new SMMEs & supporting 675 SMMEs with 6778
projected jobs
 Other support provided via the Technology Transfer Programme
(66 SMMEs & on quality 1052) & the TechnoGirl Programme (10
schools & 100 learners)
 Assisted 23 cooperatives with market access including international
exhibitions
31
Broadening Participation
2009/10 targets and achievements – B-BBEE & Women
Empowerment
Establish institutional framework for implementing B-BBEE
Enhanced access to finance for women entrepreneurs
 B-BBEE Advisory Council established & its work plan adopted
 Made inputs into draft Preferential Procurement Regulations to
align PPPFA & BBBEE Act
 30 B-BBEE Verification Agencies accredited
 Launched women funding and support programmes - Bavumile
programme & Isivande Women’s Fund
 Started repositioning of SA Women Entrepreneurs Network
(Sawen)
32
Regulation
33
Regulation
2009/10 targets and achievements – Law Reform
Complete law reform processes
The following Acts were assented to by the President:
 Consumer Protection Act 68 of 2008, Companies Act 71 of
2008, Competition Amendment Act & started to develop
regulations for this legislation, including the Gambling Act &
processes to establish relevant institutions
 Intellectual Property Amendment Bill finalised & introduced into
Parliament
 Developed regulations for the protection of the World Cup 2010
event & ticket sales
 Developed regulations to guide the improved distribution of the
National Lottery Distribution Fund
34
Regulation
2009/10 targets and achievements – Policy reviews,
research and awareness campaigns
Review regulations & strengthen enforcement & monitoring
compliance
 Conducted legislative/policy reviews in the following areas:
Estate Agency Affairs, National Lottery Policy & Gambling Review
Commission established
 Conducted research to support policy work in the following
areas: Intellectual Property, Effect of advertising in the Gambling
& Liquor Industries, Greyhound/Dog Racing and Shareholder
Activism
 More than 50 campaigns conducted on consumer protection,
company regulation, intellectual property, liquor regulation &
SMME opportunities for the World Cup 2010
35
Regulation
2009/10 targets and achievements – Enforcement
Strengthen enforcement & monitoring compliance
 Conducted inspections on Country of Origin Labelling Notice
(109), on IP & Counterfeit goods (82) & on liquor (106)
36
Administration &
Coordination
37
Administration & Coordination
2009/10 targets and achievements – Human Resource
Management
Attract, develop & retain professional & skilled officials
 Completed and implemented the Human Resource Development
Strategy, Human Resource Plan, Human Resource Retention
Strategy and the Revised Performance Management System
 Reduced the baseline vacancy rate from 18.3% to 6.3%
 Strengthened the recruitment & selection processes by introducing
competency assessments for all management & professional segments
 Facilitated speedy appointment processes of boards and CEO’s of
agencies to maintain stability & performance
 Implemented corporate transformation initiatives involving gender
representation (achievement at 42% compared to 41% in 2008/09) &
people with disabilities (where target of 2% was exceeded)
38
Administration & Coordination
2009/10 targets and achievements – Human Resource
Management
Attract, develop & retain professional & skilled officials
 Developed a framework for industrial economists cadre
development with Wits University which will have its first intake of
students in Feb 2011
39
Administration & Coordination
2009/10 targets and achievements – Fraud &
Corruption
Intensify fight against corruption
 Ethics Management Framework adopted &
implemented revised fraud prevention plan
 Zero tolerance for fraud and corruption through
decisive action following disciplinary hearings
 Rated second at 86% on the Minimum anticorruption capacity audit by DPSA, with SARS at 87%
holding the first position.
40
Administration & Coordination
2009/10 targets and achievements – Financial
Management & Service Delivery
Robust financial management function
Payment of service providers within 30-days
 Finance unit has continued to produce unqualified
audit reports
 Payment to service providers occurs within 30-day
time period
 New Service Delivery Improvement Plan developed
 ICT Infrastructure upgraded to improve network
responsiveness
41
Administration & Coordination
2009/10 targets and achievements – Communication
& Marketing
Enhanced media interaction and effective management of events
Intergovernmental coordination & stakeholder relations
 Improved relations with the media, due to easy accessibility of
Ministers and senior officials. Conducted 7 site visits (target 12) to
projects funded by the dti
 Issued 64 media releases (target 40)
 102 events organised (target 100), including Taking the dti to the
People
 the dti is part of intergovernmental clusters: Economic, International
Relations & Governance
 the dti convened MINMEC quarterly & participated regularly in Nedlac
& in industry/CEO forums
42
Financial performance
43
Five Year Comparison of budget
vs Expenditure – R’000
7,000,000
6,000,000
Budget
5,000,000
Expenditure
4,000,000
3,000,000
Unspent
2,000,000
% Unspent
1,000,000
0
2005/06
2006/07
2007/08
2008/09
2009/10
Budget
3,907,420
3,942,028
5,479,433
5,126,893
6,402,076
Expenditure
3,631,304
3,804,720
5,295,250
5,057,064
6,237,955
276,116
137,308
184,183
69,829
164,121
7.07%
3.48%
3.36%
1.36%
2.56%
Unspent
% Unspent
44
Categories against which the
department’s expenditure had been
incurred
2009/10
R'000
2008/09
%
R'000
%
Total Allocated Budget
6,402,076
Less: Payments to agencies
1,440,308
22.5%
1,269,549
24.76%
445,577
7.0%
383,077
7.47%
3,762,528
58.8%
2,802,962
54.67%
Incentives capital
1,407,324
22.0%
983,507
19.18%
Other incentives
2,355,204
36.8%
1,819,455
35.49%
503,661
7.9%
524,101
10.22%
Less: Other Payments
60,230
0.9%
55,298
1.08%
Less: Capital
25,599
0.4%
22,077
0.43%
Total Unspent
164 121
2.56%
69,829
1.36%
Less: Compensation
Less: Incentives
Less: Goods & Services
5,126,893
45
Challenges
 Although the department has made achievements against
planned targets, the following were some of challenges
experienced during the reporting period:
 The reorganisation of government entailed that many
departments had to review key areas of work, which delayed
achievement of coherence
 The effects of the recession
 The need to enhance capacity, both financial and human
resources to deliver on the outcome of decent employment
through inclusive growth
 Managing achievement of targets against requirements for
stakeholder consultation
 Fragmentation of support across different spheres of government
and lack of coordination across government and support
agencies
46
Thank you
47