Transcript Department of Trade and Industry

PRESENTATION TO THE SELECT COMMITTEE
ON TRADE AND INTERNATIONAL
COOPERATION
Medium Term Strategic
Framework
2009 - 2012
26 June 2009
1
CONTENTS
2009 - 2012 MTSF
the dti’s Vision, Mission & Strategic
Objectives
Overview of the Economy
Overview of the dti Strategy – Key
Interventions
Allocated resources
Challenges
Annexure
 Additional information on institutional mechanisms
2
VISION
2009 - 2012 MTSF
The Department of Trade and Industry’s vision is
of a South Africa that has a vibrant economy,
characterised by growth, employment and
equity, built on the full potential of all citizens.
To this end the dti seeks to be an outwardly
focussed, customer-centric organisation.
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MISSION
2009 - 2012 MTSF
Provide leadership to the SA economy through its
understanding of the economy, its ability to identify
economic opportunities and potential, and its
contribution to government’s economic priorities.
Act as a catalyst for the transformation and
development of the economy and respond to the
challenges and opportunities of the economic citizens,
in order to support the government's economic goals of
growth, employment and equity to support the
government’s strategic objectives.
Provide a predictable, competitive, equitable and
socially responsible environment for investment,
enterprise and trade.
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STRATEGIC OBJECTIVES
2009-2012 MTSF
Promoting
the
co-ordinated
and
accelerated
implementation of the 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 New Partnership for African
Development (NEPAD).
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2009-2012 MTSF
OVERVIEW OF THE ECONOMY
the dti’s Challenges and Response
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OVERVIEW OF THE ECONOMY
2009 - 2012 MTSF
The current economic environment is shaped overwhelmingly
by the prevailing global economic crisis.
While the crisis first appeared in the financial sector, it has now
become a deep real economy and jobs crisis, which threatens
to severely damage economies in the developed and
developing world
Domestic economy is in recession GDP contracted by 6.4% in
Q1 2009, on an annualised basis
The crisis threatens South Africa’s industrial base:
- Manufacturing production decreased by 11,7% in March ‘09
- 23 of 39 industrial subsectors experienced output declines,
including in basic steel products (-24,1%), autos (-26.8%),
chemicals (-8,8%)
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OVERVIEW OF THE ECONOMY
2009-2012 MTSF
Labour-intensive sectors (wood products, leather and
clothing & textiles) also declined
Feb’09: manufacturing capacity utilisation dropped from
84,6% to 78,6%
Mining production decreased by 12.8% in March 2009. The
decline was driven by PGM (-17,1%) and diamonds (52,2%)
Company liquidations in Q1 2009 increased by 46,7% (from
687 to 1008) and Quarterly Labour Force Survey indicated
that a total of 208 000 South Africans lost their jobs
between Q1 2009 and Q1 2008
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OVERVIEW OF THE ECONOMY
Response to the Crisis
2009 - 2012 MTSF
On February 19 2009, government and social partners in
Nedlac agreed on a “Framework for SA’s response to the
international crisis”
The framework outlines: Defensive measures aimed to protect our economy and
society in the face of the economic crisis. The cluster,
together with our social partners, need to urgently
expedite implementation of the framework agreement
 Transformative measures to deal with the long standing
structural economic problems
Specifically the focus areas will be:
 Maintaining high levels of public investment in
infrastructure to support private and public job
preservation and creation
 Deploying macroeconomic policies in combination and
aggressively, where required, to address the economic
crisis
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OVERVIEW OF THE ECONOMY
Response to the Crisis
2009-2012 MTSF
 Utilising industrial and trade policies to rebuild local
industrial capacity and avoid the erosion of the
country's manufacturing base
 Utilising a combination of measures on public
employment, private sector initiatives, including
training, to avoid massive job loses
 Scaling up social interventions to address the jobs
challenge and ensure social protection
 Leveraging DFI and SOEs more effectively
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OVERVIEW OF THE ECONOMY
the dti response to the crisis
2009-2012 MTSF
For its part in the response, the dti will focus on:
 Improving access to finance;
 Addressing under invoicing, dumping and illegal imports;
 Leveraging the capital expenditure programme and
broader government procurement to stimulate demand
and support the local manufacturing base;
 Improving competitiveness of local industries by
intensifying awareness campaigns on the suite of
incentives on offer; as well as strengthening the fight
against cartels;
 Addressing growing global protectionism through active
participation in trade negotiations; and
 Promoting diversification of South Africa’s exports
markets to emerging economies which are still recording
positive growth and are forecast to recover earlier from
the crisis.
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2009-2012 MTSF
Overview of the dti’s strategy
Key interventions over the MTSF
period
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KEY INTERVENTIONS
2009 - 2012 MTSF
The work of the dti is organised in terms of the
following themes:Industrial development;
Trade, Investment and Exports;
Broadening participation;
Regulation, and
Administration and co-ordination
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MISSION
2009 - 2012 MTSF
The work of the dti is organised in terms of the following themes:Industrial Development – development of policies & strategies that
promote sector competitiveness, growth, job creation & efficient
administration of support measures
Trade, Investment and Exports - strengthening trade & investment
links with key economies; & fostering African development, including
through regional and continental integration & development cooperation in line with the New Partnership for African’s Development
(NEPAD)
Broadening Participation - developing interventions & strategies
that promote enterprise growth, empowerment & equity
Regulation - development & implementation of coherent,
predictable & transparent regulatory solutions that facilitate easy
access to redress and efficient regulatory services for economic
citizens.
Administration and Co-ordination - effective co-ordination of
departmental programmes and provision of necessary support for
efficient implementation.
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KEY INTERVENTIONS
2009 - 2012 MTSF
INDUSTRIAL DEVELOPMENT
Grow and diversify manufacturing and tradable services by
facilitating and monitoring the implementation of the industrial
policy action plan over the next 3 years.
Foster an enabling environment for industrial upgrading and
support for sustainable development by developing and
implementing a technical infrastructure strategy (including
standards, quality, assurance, accreditation and metrology). The
agencies such as South African Bureau of Standards (SABS),
National Metrology Institute of South Africa (NMISA), South
African National Accreditation System (SANAS), National
Regulator for Compulsory Specifications (NRCS)
Strengthen regional industrial development and cooperation by
collaborating with regional economic communities to harmonise
business laws and develop strategies on continental norms for
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agricultural, industrial and environmental standards
KEY INTERVENTIONS
2009 - 2012 MTSF
INDUSTRIAL DEVELOPMENT
Providing following incentives to support, enterprise development,
competitiveness, investment, job creation & exports









Export market and investment assistance programme
Business process out-sourcing and off-shoring
Black business supplier development programme
Enterprise development programme
Enterprise investment programme
Co-operatives incentive scheme
Critical infrastructure programme
Tax incentive
Automotive Investment Allowance
Amend incentive rules to accommodate approved firms in distress
Review industrial financing policy framework
Utilisation of the COEGA, East London & Richard Bay IDZs to
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attract new foreign & local investment and the creation of jobs
KEY INTERVENTIONS
2009 - 2012 MTSF
INDUSTRIAL DEVELOPMENT
Develop new institutional, governance and financing
framework for IDZs
Support industrial development and retention jobs by
leveraging government procurement through the national
industrial participation programme
Respond to the impact of climate change by developing and
implementing an industrial climate change response plan and
launching cleaner production initiatives.
Improve administrative efficiency and improve turnaround
times on project approvals and claims payments & make
administrative requirements for incentives more user friendly
Implement a monitoring and evaluation system to:
 Assess the impact of incentives
 Continuously evaluate alignment with NIPF priorities
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KEY INTERVENTIONS
2009 - 2012 MTSF
INDUSTRIAL DEVELOPMENT
Increased reliance for industrial financing will be placed on the
IDC in this area of work, particularly with respect to addressing
the current economic crisis
To increase its impact the IDC will continue with the establishing
its presence in every province & to more effectively serve clients
in them
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KEY INTERVENTIONS
TRADE, INVESTMENT & EXPORTS
2009 - 2012 MTSF
Manage South Africa’s integration to global economy to
explicitly support industrial development objectives and create
conditions to facilitate export of higher value added goods
Intensify work programme to deepen links with dynamic and
still growing economies of the South – China, India, Brazil
Consolidate trade and investment relations with countries of
the North (sources of investment, trade, technology) including
through continued engagement with EU under the TDCA/EPA
and with the US under AGOA
Ensure compliance with international non-proliferation treaties
by monitoring production and trade in relevant industries.
Conclude bilateral trade and investment agreements and
MoUs
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KEY INTERVENTIONS
TRADE, INVESTMENT & EXPORTS
2009 - 2012 MTSF
Strengthen continental integration and development through
negotiated frameworks in the AU and NEPAD
Support development in Africa at bilateral level by building
investment, trade and infrastructure programmes, including
Spatial Development Initiatives (SDIs)
Continued importance of regional markets and integration, but
we need to rationalise integration agenda in SADC around FTA
and in SACU due to EPA
Develop and implement work programme for strengthened
economic links under ANSA Framework (Angola, Namibia and
South Africa) built on SDIs
Advance a developmental outcome in the Doha Round to
protect industrial and employment objectives
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KEY INTERVENTIONS
TRADE, INVESTMENT & EXPORTS
2009 - 2012 MTSF
Conclude PTA negotiations with India
Develop and advance national positions on Trilateral FTA with
SADC-EAC-COMESA
Conclude trade and investment policy reviews
Promoting awareness of investment opportunities in South
Africa through international invest. Conferences and pavilions,
ministerial, presidential & technical missions
Improve the capacity of new exporters by training small
exporters, identifying customers & distribution of publications
Promote South African products in targeted high growth market
by conducting international trade initiatives, pavilions & funding
trade missions amongst others through the export council and
provincial investment promotion agencies
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KEY INTERVENTIONS
TRADE, INVESTMENT & EXPORTS
2009 - 2012 MTSF
The Export Credit Insurance Corporation (ECIC) will also
support the export initiatives by underwriting new capital goods
and services export projects & by developing new products for
small transactions
Further, the International Trade Administration Commission
of South Africa (ITAC) will continue with proactive
management of South Africa’s tariff regime (ie. tariffs, trade
remedies, import and export controls, and duty credit
certificates) to control both import & exports
22
KEY INTERVENTIONS
BROADENING PARTICIPATION
2009 - 2012 MTSF
Forster the growth of SMMEs and cooperatives by creating an
enabling environment and overseeing the support provided by
agencies such as Khula, the Small Enterprise Development
Agency and the South African Micro-finance Apex Fund (all of
whom have presence in the Provinces) to increase the number of
SMMEs & cooperatives
Facilitate access to government procurement opportunities by
SMMEs and cooperatives through overseeing the implementation
of the 10 approved products
Facilitate the increased participation of black people in business
and business transactions through promoting empowerment and
equity policies by facilitating the effective implementation of
BBBEE holistically including Sector Charters.
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KEY INTERVENTIONS
BROADENING PARTICIPATION
2009 - 2012 MTSF
Continue to utilise the Technology and Human Resources for Industry
Programme(THRIP), Support Programme for Industrial Innovation
(SPII) & seda Technology Programme to support SMME’s & BEE
enterprises.
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KEY INTERVENTIONS
REGULATION
2009 - 2012 MTSF
Increase access to economic opportunities for historically
disadvantaged individuals by overseeing the department’s
regulating entities
Establish the Companies Commission, to enforce and
implement the newly signed Companies Act which seeks,
among others, to introduce corporate governance culture in
companies & reduce regulatory burden on SMMEs
Establish the National Consumer Commission, to implement
the newly signed Consumer Protection Act and enforce
consumer rights contained in the Act
Introduce the Intellectual Property Laws Amendment Act and
publish a policy document on intellectual property reform for
public comment in 2009/10, which aims to align and harmonize
IP Laws and national policies related to IP
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KEY INTERVENTIONS
REGULATION
2009 - 2012 MTSF
Develop regulations in terms of the Companies Act of 2008
and the Consumer Protection Bill
Promote competitive and socially responsible business by:
 implementing amendments to the Competition Act (1998) by
developing regulations which will strengthen cartel
enforcement & empower Competition Authorities to proactively
investigate markets to ensure market transparency
 reviewing the Lotteries Act (1997) which regulates distribution
of lottery funds; & the Estate Agency Affairs Act (1976) which
mainly regulates estate agents activities in order to protect
consumers.
 finalise regulations necessary for implementation of the
Interactive Gambling Amendment Act of 2008
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KEY INTERVENTIONS
REGULATION
2009 - 2012 MTSF
Intensify the work of the Competition Commission &
Competition Tribunal in investing & prosecuting firms that
contravene the act, timeous investigation and hearing on
mergers
The National Gambling Board will continue monitoring
licensees to ensure compliance with legislation & license
conditions and increase public education to minimise negative
impact of gambling
The National Lotteries Board will review & improve systems
for the regulation of the lottery (particularly the termination of
illegal lotteries/competitions) and the National Lotteries
Distribution Trust Fund
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KEY INTERVENTIONS
REGULATION
2009 - 2012 MTSF
To enhance the protection of consumers the: National Credit Regulator will continue with registration of credit
providers & debt counsellors, establish a national register of credit
agreements and increase national awareness of specific
protective measures contained in the National Credit Act and
 National Consumer Tribunal will ensure a consistent & coherent
application of the National Credit Act & National Consumer
Protection Act by timeous adjudicating of matters brought before it
The Companies and Intellectual Property Registration Office
(CIPRO) is an important institution responsible for registration of
businesses. To increase its impact and efficiency the decentralising of
its services to the provinces will continue over the MTEF period.
CIPRO’s systems will also be improved to safeguard & provide
reliable and accurate information
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KEY INTERVENTIONS
REGULATION
2009 - 2012 MTSF
Over the MTEF the Estate Agency Affairs Board (EAAB) will
focus on
 Raising the profile of the estate agency profession through raising
the qualification standards of estate agents
 Empowering the consumer through education campaigns on the
role and functions of the registered estate agents
 Establishment of an inspectorate capability to carry out
inspections to ensure compliance to the Act
 Continued support to transform the profession through education
programs and support of Estate Agents Transformation Charter
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KEY INTERVENTIONS
2009 - 2012 MTSF
ADMINISTRATION AND CO-ORDINATION
Attract, develop & retain professional and skilled officials:
 Implementation of Human Resource Development Strategy
 Implementation of Human Resource Retention Strategy;
 Implementation of the reviewed Performance Management
System
 Reduction in the vacancy and staff turnover rates
Implement transformation through employment equity and
broad based black economic empowerment:
 More people with disability appointed
 Implementation of the Disability Management Strategy
 More women appointed in senior management positions
 Accelerated training and development programmes for women
 More HDI’s empowered through procurement spend
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KEY INTERVENTIONS
2009 - 2012 MTSF
ADMINISTRATION AND CO-ORDINATION
Ensure value adding business resource management that
enhances efficiency:
 Information Security Strategy
 Master Information System Plan
 Office Space Planning Strategy
Strengthen the dti’s corporate governance:
 Fraud Prevention Plan
 SMS & MMS training on corporate & enterprise risk
management
Intensify Communication & Marketing to raise the profile of the
the dti’s work and to increase awareness, facilitate access,
and promote the dti’s offerings
31
2009 - 2012 MTSF
Allocated resources
32
MTEF BUDGET
2009 - 2012 MTSF
P1: Admin.
2009/10
R’000
420 858
2010/11
R’000
444 514
2011/12
R’000
449 925
P2: ITED
P3:EED
P4: ID
P5: CCRD
P5: TEO
P6: TISA
P7: Comm & Market.
TOTAL
173 571
1 307 854
414 586
238 595
3 439 983
283 051
65 724
6 344 192
183 288
979 723
634 069
264 990
2 868 845
302 726
74 832
5 752 987
182 355
1 050 146
597 448
287 773
3 034 008
323 068
79 046
6 003 769
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ANALYSIS OF CURRENT MTEF
2009 - 2012 MTSF
On average, the allocation of the
budget over the MTEF period is as
follows:





7,8% to compensation
9,4% to goods and services
20,4% to agencies
61,0% to incentive payments
1% to capital payments
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FIVE YEAR COMPARISON OF
BUDGET VS EXPENDITURE
2009 - 2012 MTSF
R'000
5,000,000
4,000,000
Budget
3,000,000
Expenditure
2,000,000
Unspent
1,000,000
% Unspent
0
2004/05
2005/06
2006/07
2007/08
2008/09
Budget
3,623,291
3,907,420
3,942,028
5,479,433
5,126,893
Expenditure
3,424,138
3,631,304
3,804,720
5,295,250
5,056,989
Unspent
199,153
276,116
137,308
184,183
69,904
5%
7%
3%
3%
1%
% Unspent
35
CHALLENGES
2009 - 2012 MTSF
Challenges are to enhance the impact of the dti
through ensuring
 Effective programme & project performance;
 Stronger strategic & operational management;
 Greater integration of work, including that of
agencies;
 Adequate financial resources for extensive dti
programmes;
 HR challenge of recruitment, retention and
development; and
 Improved cluster co-ordination
36
2009-2012 MTSF
QUESTIONS ?
37
2009-2012 MTSF
ANNEXURE: ADDITIONAL INFORMATION ON
INSTITUTIONAL MECHANISMS
38
INSTITUTIONAL MECHANISMS
2009-2012 MTSF
the dti is structured into eight (8)
programmes and 19 agencies
[herein referred to as Council of
Trade and Industry Institutions
(COTII)]
39
INSTITUTIONAL
ARRANGEMENTS
2009-2012 MTSF
Programme 1: Administration
Provide strategic leadership to the department and its agencies,
and facilitate the successful implementation of the department's
mandate through sustainable and integrated resource solutions
and services that are customer centric.
Programme 2: International Trade and Economic Development
Provide leadership on trade policy in South Africa to promote
economic development by: 1. working to build an equitable
multilateral trading system that facilitates development, 2.
strengthening trade and investment links with key economies,
and 3. fostering African development including through regional
and continental integration, and development cooperation in line
with NEPAD.
40
INSTITUTIONAL
ARRANGEMENTS
2009-2012 MTSF
Programme 3: Empowerment and Enterprise Development
Provide leadership in the development of policies and strategies
that create an enabling environment for small, micro and medium
enterprises, including cooperatives as well as enhance the
competitiveness of local and provincial economies, to achieve
inclusive shared equity, growth and job creation.
Programme 4: Industrial Development
The purpose of the division is to create an enabling environment
for the promotion of competitiveness, growth, job creation and
retention in the sectors guided by the Industrial Policy.
Programme 5: Consumer and Corporate Regulation
Develop and implement coherent, predictable and transparent
regulatory solutions that facilitate easy access to redress and
41
efficient regulation for economic citizens.
INSTITUTIONAL
ARRANGEMENTS
2009-2012 MTSF
Programme 6: The Enterprise Organisation
Stimulate and facilitate the development of sustainable,
competitive enterprises through the efficient provision of effective
and accessible incentive measures that support national
priorities.
Programme 7: Trade and Investment South Africa
Increase export capacity and support direct investment flows
through strategies for targeted markets and an effectively
managed network of foreign trade offices.
Programme 8: Communication and Marketing
Position the dti as a driver of economic development and growth
to economic citizens by employing integrated marketingcommunication techniques and systems aimed at intensifying
awareness, uptake and access to its products and services. 42
INSTITUTIONAL
ARRANGEMENTS
2009-2012 MTSF
Agencies
Industrial Development Corporation (IDC)
Khula Enterprise Finance Ltd (Khula)
National Empowerment Fund (NEF)
Export Credit Insurance Corporation (ECIC)
South African Micro-Apex Fund (SAMAF)
Competition Commission
Competition Tribunal
National Gambling Board (NGB)
National Lotteries Board (NLB)
National Credit Regulator (NCR)
National Consumer Tribunal (NCT)
43
INSTITUTIONAL
ARRANGEMENTS
2009-2012 MTSF
Agencies – cont.
Companies & Intellectual Property Registration Office (CIPRO)
Estate Agency Affairs Board (EAAB)
International Trade Administration Commission of South Africa
(ITAC)
Small Enterprise Development Agency (SEDA)
South African Bureau of Standards (SABS)
South African Accreditation System (SANAS)
National Metrology Institute of South Africa (NMISA)
National Regulator for Compulsory Specifications (NRCS)
44
Abbreviations
AGOA
COMESA
COTII
EAC
EPA
FTA
GDP
HDI’s
IDZ
LPM
NEPAD
NIPF
NLDTF
SDIs
SACU
SADC
SMME
SPII
TDCA
THRIP
African Growth and Opportunity Act
Common Market for Eastern and Southern Africa
Council of Trade and Industry Institutions
East African Community
Economic Partnership Agreement
Free Trade Agreement
Gross Domestic Products
Historical Disadvantaged Individuals
Industrial Development Zone
Limited Payout Machines
New Partnership for African Development
National Industrial Policy Framework
National Lotteries Distribution Trust Fund
Spatial Development Initiatives
Southern African Customs Union
Southern African Development Community
Small, Medium and Macro Enterprises
support programme for industrial innovation
Trade, Development and Cooperation Agreement
Technology and human resources for industry programme
45