Transcript Case Study - Parliamentary Monitoring Group

Economic Development Department
2014/15 Annual Report
Presentation to the Portfolio Committee on Economic
Development
15-October-2015
Tabled at Portfolio Committee
1
Introduction
The Annual Report of the EDD setting
out the details of activities undertaken
and performance against the Annual
Performance Plan, was tabled in
Parliament at the end of September
2015. This presentation highlights a few
areas covered in the Report and is not a
detailed account of activities.
2
Context at start and during year
 Annual Report period 1 April 2014 to 31 March
2015.
 Transition between Administrations
 Global context: growth slowed down
 China’s demand for resources declined
 Investor confidence in SA was still positive
 Developed markets growth lackluster
 Energy shortages
 Impact of industrial action
3
Context of EDD interventions
Faced with these challenges, EDD’s focus in this period was on 8 key
interventions:
1. Infrastructure
2. Industrialisation and investment
3. Trade measures
4. Competition measures
5. Provincial interventions
6. Social dialogue
7. Coordination
8. Equitable growth
4
Economic Highlights: Jobs
405 000

Jobs grew by

Total employment
of 15.5 million by March 2015
 Women’s employment grew by 111 000 (total women in
employment 6.8 million)

The number of jobs
6.2 million)
for youth increased by

Since adoption of the New Growth Path in October 2010, employment
233 000 (total youth jobs:
grew by 1.8 million
5
Other economic Highlights
 GDP is now R3,8 trillion for the year and growth rate was
1.6%
 Investment grew by R47 billion
 Government infrastructure
spending was R254 billion
 Agricultural value add grew by R5 billion or 7.5%
 Manufacturing value add declined by R1.1 billion
or 0.3%
6
Institutional Highlights
IDC
highlights
– Investment approvals of R11.5
billion
– Funding disbursements of R10.9 billion
– R5.9 billion in black-empowered and owned companies in 85
transactions
– 20 388 jobs supported
Sefa
highlights
– R1 billion funding approved
– R924 million set aside for youth-owned enterprises over 3
years
7
Institutional Highlights
 By March 2015, PICC monitored infrastructure
projects spending had reached R1 trillion
 R880 million was received from the Competition
Commission for fines and penalties imposed by the
Tribunal
 39 mergers with employment and other public
interest conditions that were imposed by the
Competition Commission
 ITAC tariff increases on 9 products
 ITAC tariff rebates (reductions) on 7 products
8
Intervention 1: Infrastructure
Maintaining large-scale infrastructure spending
boosts growth and jobs
- Support for an innovative system:
the PICC
- 200 000 jobs in PICC-monitored projects
- Substantial gains made for both large projects and at a
community level, though much remains to be done. Examples -
- 160 000 new houses connected with electricity
- Cities building new bus lanes for BRT
- BRT operational in three cities with thousands of users
- Tshwane every bus has free Wi-Fi, useful to students
9
Infrastructure
Examples of work done by EDD on infrastructure includes:
Operationalisation
of the Infrastructure Development Act
including appointment of members of governance structures (Secretariat,
Manco and Council)
Monitoring 18 Strategic Integrated Projects (SIPs)
for Cabinet to provide high-quality, credible information for policy-making
72 progress reports to Cabinet
 Tracks projects worth R1 trillion to monitor spending patterns
 EDD convened and provided assistance to PICC
Secretariat and Manco meetings, including
• meeting packs, documentation and discussion documents on key issues
• Identifying key blockages for consideration by the PICC
• Developing a records of decisions for Cabinet and follow up of decisions
10
Infrastructure
Examples of work done by EDD on infrastructure includes (cont..):
 Completed project on skills
for infrastructure with DHET
 After obtaining inputs from relevant departments, EDD drafted a
discussion document on
how infrastructure supports
inclusive growth,
with a review of some key trade-offs,
opportunities and risks
 At Dirco’s Heads of Mission Conference on 25 August
2014, the Minister presented a strategic vision on how South Africa’s
missions abroad can support domestic economic development through
efforts with infrastructure and industrialisation
– The focus was on expanding markets for South African products as well as
accessing technology and capital from abroad as appropriate
– The presentation had reference to the National Infrastructure Plan
11
Infrastructure
 Support for President’s role as champion on
infrastructure in the African Union which includes
unlocking key corridors, water and energy projects for the
continent
 The President also engaged with global business at the
World Economic Forum meeting in January 2015 in
Davos, Switzerland on African infrastructure.
12
Infrastructure
EDD engages pro-actively
behalf of the PICC
to unblock projects on
 Case study: Hobhouse in Mantsopa in the Free State
– A site visit was conducted by the PICC
– It helped to unblock efforts to finalise a bucket eradication project
– The technical quality of the system requires further work
 Case study: Ngobi in Moretele in the North West
– This is a Presidential Nodal Point Project identified as part of water and
sanitation hotspots under SIP 18 by the PICC
– The PICC mobilised Eskom to connect electricity to boreholes.
– The boreholes have been commissioned and are functional
 Case study: Gibson Bay Wind Farm in the Eastern Cape
– The wind farm will involve an investment of over R2 billion as part of the
renewable energy independent power producer drive
– It required authorisation under the Subdivision of Agricultural Land Act
– The PICC, with support from DAFF, unblocked the application, enabling
the wind farm to go ahead
13
Infrastructure
 Case study: Mokolo Crocodile Water Augmentation Project
Phase 2 (MCWAP2)
- Conditional National Treasury approval for the increase in the
pipeline was obtained.
 Case study” Olifants River Water Resource Development
Programme (ORWRDP Phase 2)
- The directive for ORWRDP Phase 2D and other subsequent
phases has been issued to the National Water Resource
Infrastructure to implement the project and the Trans-Caledon
Tunnel Authority (TCTA ) to provide technical support.
 Promoting transformation: the competition probe into
cartels operating in the infrastructure space is intended to
open the market to new entrants, including bringing black
construction companies into the infrastructure mainstream,
thus promoting transformation and economic development.
14
Infrastructure & Investment
 EDD monitored spending
patterns across the three
spheres of government
and provided feedback to
Cabinet, Premiers and
Metro mayors through the
PICC
 R 254 billion spent over
the 12 months
 Highest spend yet in SA
 Lays the foundation for
higher growth and
development
15
Case Study: Infrastructure & local procurement
Through the PICC, the department supported efforts to localise the manufacture of
components and rolling stock for the National Infrastructure Plan. New and
expanded factories directly supplying components for rolling stock infrastructure
include:
• Thin-film solar experimental plant in Stellenbosch
• Wind-towers plant in Coega
• Large truck factory in Coega, with 450 new jobs
• Factory to assemble and laminate solar panels in Epping
• Truck and bus plant in Pretoria , with 350 new jobs initially
• Factory making solar inverters in Cape Town
• Majority black-owned factory in Blackheath that supplies buses to
municipalities
• Expansion in locomotive-furbishing capacity
• 200 new jobs in Atlantis in a further wind tower plant
16
Intervention 2: Industrialisation and Investment
1. EDD interventions supported the development of opportunities for
industrialisation, higher levels of private investment and
industrial funding and localisation in the economy. These included
- addressing investor meetings and addressing challenges
- supporting efforts to maintain high levels of IDC funding
- supporting localisation and local procurement
- promoting the development of new sectors
- unblocking, fast tracking investment
2. The principal investment institution in the state is the Industrial Development
Corporation, whose policy-framework is set by the Ministry. The IDC approved
investment projects with private investor partners worth
R36,8 billion with the
IDC committing R11,5 billion of its resources
3.sefa’s R1 billion supported the development of small businesses and
cooperatives
17
Infrastructure
Examples of work done by EDD on infrastructure includes (cont..):
 Cable and Metal Theft, PICC recommendations on cable and
metal theft were approved by the PICC Council at its 11th December 2014
meeting.
 EDD coordinates and participates in the Presidential
Business
Work group: Infrastructure Technical Task Team.
The work covers the following.
a) Create early visibility of government’s infrastructure build programme
b) Maintaining & upgrading municipal infrastructure
c) Strengthen mechanisms of incorporating and effective execution of
developmental targets in programme and project procurement designs
d) Strengthen / optimise infrastructure procurement systems
d) Unlock private sector investment in and funding of infrastructure
18
Case Study: Building renewable energy industry
 Minister issued a
industry
Directive to the IDC
to develop a renewable energy
 IDC invested R14 billion in solar, wind and renewable projects
 During the year: opening of the Kaxu Solar Plant in Pofadder in N Cape
 The plant brings 100 MW of solar energy onto the grid
 By March 2015, South Africa generated 1 730 MW of energy from the sun,
wind and water.
19
Industrialisation and Investment
 Facilitated,
fast-tracked
and/or
unblocked
13
investment initiatives
 Sectors included forestry, agro-processing, biofuels, pulp
and paper, chemicals, textiles, construction, green energy
and steel
 Unblocking included:
•
•
•
•
•
•
•
•
securing land and finalising lease agreements
facilitating access to financing
mobilising trade measures
addressing energy challenges
helping secure pricing that promotes local manufacturing
supporting with social dialogue
measures to deal with illegal imports
fast tracking administrative processes to save jobs
20
Industrialisation and Investment
Examples of Unblocking
1. Potato processing industry: The potato processing
industry was destabilised by a surge in imports. EDD facilitated
interaction with ITAC to fast-track consideration of an application for
increased duty. Based on the evidence before it, ITAC decided to
increase the duty. The IDC offered a loan to a processing company in
the Eastern Cape to expand production to supply Spur. The result
was an expansion of local productive capacity.
2.
Nestle complained of water and electricity
cuts in Babelegi near Tshwane as a result of cable theft, which led
to R47 million losses in the period from January to 5 March 2014.
EDD convened a meeting of COGTA, the dti and Eskom in July
2014 to discuss the challenges. As a result of the intervention,
mitigation measures were put in place in the area, including better
policing of hot spots.
21
Industrialisation and Investment
Examples of Unblocking
buy-out by Lewis
Furniture of 68 Beares Furnishers (the Lewis offer to
3. Fast-tracked the competition process for the
purchase was time bound). The intervention avoided the liquidation of
these stores and resulted in the saving of 393 jobs, with the potential
for the creation of 126 additional jobs
4. EDD’s intervention facilitated the decision by the Ekurhuleni Metro
Municipality to provide the required energy for the construction of a
R350 million plant by Mpact to recycle plastic bottles
5. Pulp United Company – Resolved a dispute between
the
IDC and the uMhlathuze municipality on the price for the purchase of
municipal land. This resulted in the IDC taking a decision to do a
feasibility study for an investment in a pulp factory valued at US$250
million
22
Industrialisation and Investment
Examples of Unblocking
6
Hall Longmore, a steel pipe company in KZN, complained that
Greytown water treatment works was in the process of procuring steel
pipes from a Chinese Company. EDD held discussions with
ArcelorMittal South Africa (AMSA) who provided raw steel at a
discounted price to Hall Longmore. In order to provide a competitive
pricing, Hall Longmore also reduced their profit margins and
consequently secured the order to manufacture
7
locally
Subsequent to the successful sales of Lodox Machines to the
Gauteng Provincial Department of Health, EDD assisted Lodox in
finding markets in the other Provinces. EDD introduced Lodox to the
KZN Department of Health. Four Lodox Scanners were sold to the
Provincial Department of Health in KZN. This initiative has leveraged
South African medical technology developed through the
commercialisation of an IDC project
23
Industrialisation and Investment
 The Minister engaged with companies in the labour-intensive clothing and textiles
industry to ascertain the impact
and identify additional requirements
of government programmes
• Engagements took place with both employers and workers at
Trade Core Investments Apparel (TCIA), Colibri, Peter Blond, Impahla
Clothing and House of Monatic
• It sought to identify the
impact of IDC and government
support in the sector, as well as export opportunities and import
penetration
• Investment and incentive support by government and its agencies was
R5,1
billion in the sector over the past five years
• Action on illegal imports was highlighted – in three years, government
confiscated R1,8 billion in clothing and textiles imported
illegally into SA
24
Industrialisation and Investment
 The Minister launched the development of a R25-million
design
centre at TCIA in Cape Town, part of a focus on improving fashion
innovation in South Africa
 EDD obtained a legal opinion on the pricing of mineral products
under the MPRDA amendments, which entailed a Ministerial level meeting
with legal advisors as well as engagement with DMR, the dti and NT
 EDD drafted a report for the Presidency on migrant
labour in the
platinum belt and how it relates to workplace conflict, in collaboration
with TIPS and SWOP
 Numerous engagements had taken place Steel,
Finance, Tourism,
Agro-processing, Retail, Telecommunications and
other sectors in order stabilise sectors where required, attract
investment, promote industrialisation and localisation, etc.
 Minister addressed global investors in Davos, London, New York,
Indonesia to share the South African infrastructure and investment narrative
25
Industrialisation: IDC Investment
EDD
provided
oversight
and
strategic guidance to the IDC during
the year through engagements with
Board, management and potential
investors
26
Industrialisation: IDC Investment
IDC highlights in the past year, in tough circumstances
• R11.5 billion approved
• R10.9 billion disbursed
• 20 388 jobs supported
• Approved R5.2 billion for manufacturing industry
• Approved R5.9 billion for black empowered
businesses
• Approved
business
R756 million for women empowered
• R36.8 billion total investment including counterparty investment
27
Industrialisation: IDC Provincial Investment
 IDC investments are situated
across South Africa, providing
local jobs and supporting local
economies.
 Of the R9.7 billion funding
approvals within South Africa,
46% went to transactions in
targeted provinces.
 The funding allocated to these
provinces also accounted for
42% of jobs IDC expects to
create/save.
 Of the priority provinces, the
Eastern Cape is the largest
beneficiary in terms of number
of projects, with 19 projects
that are worth R50 million and
above, across 9 sectors.
28
Examples of IDC projects
 Case study: Greening the Manufacturing
Sector
- Since 2011, the IDC has worked with an enterprise
that produces sports and leisure wear for an
international brand. The company is South Africa’s
first carbon-neutral clothing company. It has
increased its employment from 190 to 431 in the
past three years.
- In the 2014/15 financial year the IDC approved
a R2-million facility to be utilised for asset
and working capital for the establishment of new
manufacturing lines.
29
Examples of IDC projects
 Case study: Chic Shoes
- The Minister conducted a site visit to Chic Shoes, a
major shoe factory, and opened its new premises on
16 September 2014, as part of the EDD’s work to
support job creation and evaluate the
impact of government measures.
- The company was started by a black woman in 2004
and now employs 300 workers, with plans to
expand to over 500 in the coming two
years.
- It has received support from the IDC as well as a
competitiveness grant
30
Industrialisation: sefa Investment case study
 EDD provided oversight of sefa for the year under review
sefa highlights
•
•
•
•
R1 billion approved
R1 294 million disbursed
Benefitted 51 460 SMMEs and cooperatives
Approved R437 million to women-owned
enterprises
• Approved R848 million to black-owned enterprises
• Approved R292 to youth-owned enterprises
• Developed a new innovative supplier credit scheme
to increase use of the Khula Credit Guarantee
Scheme
31
Industrialisation: sefa Investment case study
sefa highlights
• 74% of funds disbursed benefitted
black-owned business
• 49% enterprises in rural and periurban areas
• 37% to women-owned businesses
32
Intervention 3: Trade measures
Using trade measures to back
South African manufacturers in tougher
global
conditions,
through
trade
remedies, tariffs, rebates and policy
measures to promote inputs with a
developmental impact/local use of
national inputs
33
Trade measures
Examples of work done by EDD on trade measures
 A paper on South Africa’s trade flows over the last few years
manufacturing sectors broadly and
catalytic converters in particular was produced. The
paper highlights, amongst others, that South Africa is the third
largest exporter of catalytic converters in the
focusing on
world and in 2012 sustained thousands of direct and indirect jobs.
34
Intervention 3: Trade measures
Trade measure highlights
• 9 tariff increases
• 2 anti dumping duties investigations finalised and
duties imposed
• Anti dumping duties maintained in 2 reviews
• Safeguard duties imposed
• 18 454 import permits issued
• 14 181 export permits issued
• Legal support for ITAC decisions
• Scrap copper exports fell 71% and scrap iron ore
exports by 14%
35
Trade measures
• 9 tariff increases
benefitting:
–
–
–
–
–
–
Sugar
Heat exchange units
Enamels
Wire products
A3 and A4 paper
Paper and paper board
coated in plastic
– Coated fine paper
– Coated wire
– Coil springs
 2 anti dumping duties finalised and
imposed:
– Soda ash
– FrozenChicken
 2 Duties maintained after sunset review:
– Gypsum plasterboard
– Wire rope and cables
• 1 safeguard duty imposed:
– Potato chips
 7 rebates imposed including:
– Components for florescent lamps
– Cranberry juice concentrate for fruit
juice
– Upholster furniture fabric
– Components for dust masks
– Chemicals for washing preparations
– Fabric for slippers
– Chemicals for water purification
36
Intervention 4: Competition measures
Challenging monopolies and
cartels in the economy through
competition
measures
to
improve the dynamism of local
industries and prevent abuse of
market dominance
37
Intervention 4: Competition measures
Competition measure highlights
• Investigations into cartel activity
• R880 million received from the Competition
Commission for fines and penalties imposed
by the Tribunal
• Dismantling the construction cartel
• Oversight of Funds
• Jobs emphasised in mergers and
acquisitions
• Health care enquiry and retail market enquiry
38
Oversight of Funds
 Walmart Supplier Development Fund
 Afgri Fund
 Agro Processing Competitiveness
Fund
39
Examples of Competition measures
During the financial year 395 mergers were notified.
The Commission imposed conditions on 43 cases,
of which 39 addressed public interest issues
The total number of jobs saved amounted 5 340.
 Case Study1: The Retail Beverage Company and
Dairybelle’s Yogart/ UHT Milk Business
• Public interest: Behavioural and employment
• Continue to provide distribution services
• Moratorium on retrenchments and obligation to provide
training
40
Examples of Competition measures
 Case Study 2: Mergence
Africa Property
Investment Trust and Redefine Properties
• Public interest: Small business
• Removal of exclusivity clause in lease agreement in:
- Meadow Point Shopping Centre
- Protea Point Shopping Centre
- Dobson Point Shopping Centre
- Pimville Square Shopping Centre
- Kudube Shopping Centre
41
Examples of Competition measures
 Two search and seizure operations undertaken
against companies for colluding to divide markets Unilever and Sime Derby Hudson and Knight, for
allocating markets for food oils and fats; and two
panel beaters in collaboration with a vehicle
accident assessment centre.
 In Phase II of the construction investigation, a
further settlement was reached with Harding
Allison for colluding on a private-sector project in
KwaZulu Natal
42
An outcome of Competition measures
The Afgri agreement
 Agreement was reached with Afgri as part of the Competition
Commission’s review of a takeover by Agrigroupe, a foreign investor
 The agreement required Afgri to undertake a variety of support measures
for small farmers
 Since April 2014 Afgri has:
– Spent R9,8 million on training to 68 farming entities consisting of
170 people.
– On-lent R14 million to 13 entities from the Land Bank to
smallholder farmers (Afgri assumes risk on the loans)
– Provided 40% discount on storage to 213 farmers who stored
under ten tonnes of grain
– Purchased 14% of its poultry from smallholder
farmers, to whom it provides extension and veterinary services as
well as technical, feed and management support
43
Intervention 5: Working with provinces
Working with provinces to enhance their
capacity and increase their impact on local
economies
Highlights
• Engagement with provinces
• Working with provinces to align provincial
development priorities to NDP and to
prioritise jobs
• MinMecs coordination of work with provinces
• An analysis of employment, migration and
growth trends by province was undertaken
44
Working with provinces
EDD developed an integrated approach to supporting small business support across
government to guide the work of agencies reporting to the Minister
 It worked closely with sefa and the IDC to hold roadshows in every province
 The roadshows enabled SMMEs to engage with sefa, seda, IDC, provincial DFIs
and local business chambers to understand their products
 Roadshows were held in Mpumalanga, the Western Cape and Polokwane, and at
the ABSIO Youth Economic Indaba (Milpark)
 The Minister participated in the roadshow in Delft, where he also met with Women
in Construction to discuss opportunities arising out of the National Infrastructure
Plan
 A small business toolkit was produced by EDD and printed for a first-phase pilot
 The Minister convened a small business conference on 7 April 2014 that brought
together hundreds of new or small entrepreneurs to engage with public agencies
 The Minister opened the Shanduka Black Umbrella Enterprise Development
Awards, which facilitate private support for SMMEs, in Cape Town on 9 April 2014
45
Case Study Working with Provinces
 Deputy Minister engagements with provinces and municipalities
 Areas of work included:
• Economic development frameworks
• Alignment of provincial and local economic
development priorities to NDP
• Social accords
• Unblocking constraints to economic
Deputy Minister Madala Masuku, visits Bloemfontein Oct 2014
development at provincial and local levels.
 EDD hosted a conference on “Aligning Economic Planning and
Development across the state”. It:
• re-emphasised need for integrated economic development planning
• agreed on framework to ensure that national policies, strategies and
plans find expression at provincial and local level
46
Intervention 6: Social Dialogue
Supporting social dialogue to strengthen
support for national priorities and build a
broad consensus in addressing key
challenges
 social accords
 Engagements at Nedlac
on the National minimum wage and
industrial conflict
 Work in clusters to contribute to the development of
sectors and employment
 Workplace dialogue
47
Social Dialogue: Social Accords
 EDD has contributed to monitoring and implementation
 EDD completed its Draft Annual Report on the Progress
towards the Implementation of the Green Economy Accord.
 The report showed significant progress in achieving government
targets on the Green Economy Accord, including.
• By March 2015 the IDC had provided funding to the Green
Energy Sector of R14bn, facilitating the creation of an
additional 7 733 jobs
• Approximately 500 000 Solar Water Geysers had been
rolled out since the start of the SWH programme – the majority
of which were low pressure systems
• Designation of SWG of 70% local content was done in
August 2014
48
Social Dialogue
 EDD contributed to monitoring and implementation of the
Youth Employment Accord, including:
• Briefing provinces on progress of the Youth Employment
Accord and explaining how they can provide information
required for monitoring
• EDD successfully organised the report back in the
Western Cape on for the Presidential Youth
Indaba, with over 400 delegates attending
 In addition, a report on the implementation of the other
social accords for the fourth quarter 2013/14 was
completed.
49
Social Dialogue: Cluster
 Case Study - facilitating
funding and operations
to create jobs
– EDD facilitated funding for and sits on the steering
committee of the Western Cape Furniture Cluster, which
brings together small furniture producers to improve training
and productivity.
– The Western Cape Furniture Quarterly Cluster Initiative
Steering Committee Meeting was held on 24 June 2014.
– The Cluster manages a training programme. Phase 1
commenced in June 2014 with a total of 147 people from
19 companies. It focused on compliance training which
included Occupational Health & Safety and Employment
Equity.
– The major output of the cluster process will be provision of
on-the-job skills training in the furniture industry for 200
workers.
50
Social Dialogue
 The Minister launched the Mitchells Plain Skills Centre
in April, following technical support and premises supplied
through EDD intervention.
• The centre will provide training in upholstering, baking,
gardening and entrepreneurship
• It also provides an enterprise incubator and co-ops training
• It has capacity to train 2
840 learners and support
32 businesses
 Concluded Partnership Agreements
with the Following
Partners:
1.TUGO Builds Pty(Ltd) – A construction toy company which had been
granted funds from the Support Programme for Industrial Innovation.
EDD signed an MOU to support social dialogue activities to promote
economic development, innovation, equity and reduce workplace
conflict.
51
Social Dialogue
Partnership Agreements with the Following Partners (cont.):
2. Conver–Tek Pty (Ltd) – EDD signed an MOU with the polymer
company to assist in establishing a forum for regular engagement.
3. Elungileyo Solutions Pty (Ltd) – The company is a Structural and
Thermal Construction Company. EDD signed an MOU with the company
to promote social dialogue activities to promote economic development,
innovation and reduce workplace conflict.
52
2017-04-11
Social Dialogue Case Study: Local Chicken Production
 EDD identified cooperative small scale farmers’
preferences.
 EDD arranged for Umthombo Agri-business Institute
to offer training on improving indigenous chicken
production processes and flock management
 This training was free of charge to small scale
farmers in Nkandla, KZN
 About 55 farmers, most of whom were members of
co-operatives attended the training.
 EDD developed “The Indigenous Chickens UserFriendly Guide for Small Scale Famers” together
with the Developing Poultry Farmers
 EDD paid for packaging and printing
 The guide has also been translated from English
and into Venda, Sepedi and Zulu and published
53
Intervention 7: Coordination
Coordinating efforts in the state to enhance outcomes
for the economy as a whole and catalyse projects
EDD participated in a 
number of forums that
aimed
to
improve
coordination of economic 
strategies across the state.
These
included
participation
in
the
Industrial Policy Action
Plan ( IPAP) , the Outcome 
4 processes, the Economic
Sector, Employment and
Infrastructure Development
Cluster ( ESEID Cluster )

The EDD contributed in the development of the five
point plan of the Electricity Technical Implementation
War Room to address challenges in the energy sector.
In 2014/15 the EDD undertook a range of activities
focused on coordination of government economic
development efforts and implementation of the NGP
and catalysing inclusive economic growth, participation
and job creation.
Reports were compiled against the targets set for
Outcome 4; Decent employment for inclusive growth,
and these reports were submitted to Cabinet in
collaboration with the dti and the National Treasury.
The reports noted key trends, tracked progress in
terms of employment, equity, growth and investment
as well as the resulting opportunities.
54
Coordination of Minmecs
Coordination

signing of an MOU between EDD, DPME
and the Nelson Mandela Bay Metro for the Red tape
The
reduction plan on selected city by-laws and approval processes had been
agreed to in principle.


The Metro also approved the inclusion of SEIAS (on which EDD
staff provide training for various government institutions) in the City’s Policy
Development Framework. This should assist in reducing red tape
and promote the ability of the Metro to identify growth opportunities for
enterprises.
In partnership with the University of Johannesburg, a regulatory entities
capacity building programme was developed and training
provided. A range of entities attended the training including ICASA, the
Competition Commission, Nersa, National Treasury, the Ports Regulator and
the Department of Energy. The training addressed areas including economics,
finance and law for regulators. The close out report was finalised during the
2014/15 financial year.
55
Intervention 8: Equitable growth
Supporting equitable
growth through integration
of marginalised groups into
the economy
56
Equitable growth
Conference on “Manufacturing-led growth for employment and equality”
 EDD hosted a conference on “Manufacturing-led
growth for employment and equality.” This is in line
with the EDD’s mandate to encourage a broad discussion on how
to foster inclusive growth
 The conference heard presentations on the theme from a number
of leading academics, officials and stakeholders,
including
– Professor Gabriel Palma, an internationally renowned Latin
American expert on industrial policy
– The EU Chief Economist, Dr Francesco Caballero-Sanz
– South African economists
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Equitable growth
Conference on “Manufacturing-led growth for employment and equality”
 It was attended by around 200
academics, officials
and stakeholders, as well as academics from
Mozambique, Zambia, Mauritius, Zimbabwe and other African
countries
 Over 30
papers were presented, with topics ranging from
South Africa’s Super Exporters to industrial policy
in the South African clothing sector and the interface between
mining and manufacturing
 EDD was able to source financing for the conference from a
dedicated EU partnership facility, which provided R1,8 million
for the conference, saving money for the Department in
the process
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Equitable growth
 The department hosted two
small business
knowledge network sessions on unlocking the
economic potential of townships in the North West and the
Eastern Cape with civil society, government officials and
academics
- The meeting focused on the need to improve the integration
of township enterprises into formal value chains as well as to
address the constraints on their development (infrastructure,
market institutions, commercial and industrial sites)
- Participants identified the main economic opportunities as
participating in the supply chains of the mining houses in the
North West and mohair producers in the Eastern Cape. The
sessions then explored ways to access these supply chains.
- Following the network sessions, the department has received
requests to provide capacity building on township economy
initiatives and locations; spatial planning alignment support;
and green economy implementation support.
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Equitable growth
On 29 August 2014 the Minister with the Premier of
Gauteng launched an incubation hub in
Diepsloot.
– The hub provides step-by-step support for small
companies, starting with rent-free facilities and
business support services, gradually building up to
normal tenancy in the site.
– It is an interesting example of a private-sector-led
initiative to support small business
– The Minister of Small Business Development and
the Mayor of Johannesburg also participated in the
event
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Equitable growth
 EDD compiled a progress report on BBBEE with specific
reference to the impact of transformation policy on
Ownership and Procurement. The authors estimated that:
- R600 billion worth of BEE transactions had taken place up
to 2013
- The black business supplier development programme
launched by the dti in 2010 have approved applications
worth R797 million
- Black owned SMMEs have been supported to the tune of
R451 million in the 2012/13 financial year
 EDD held a BBBEE workshop with stakeholders from
government, private sector and state agencies on the 12th
December 2014 on the impact of transformation policies
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Equitable growth
• IDC youth funding approvals increased 73% from the
previous financial year to to R158 million
• sefa youth empowered businesses approvals
increased 86% from the previous financial year to
R292 million
• sefa disbursed R259 million to 403 women owned
smme’s
• IDC funding for women empowered businesses grew
from R71 million in 2011 to R756 million in 2015
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Equitable growth
 Case study: Supporting the construction industry
- The IDC approved R7 million for an Eastern Cape
manufacturer that produces a wide range of toughened
glass for the construction and building industry. The
company is a level-one BBBEE Contributor.
- The resources approved in this quarter will support
production of insulated toughened glass in line with new
energy-efficient regulations, while the other project will
manufacture aluminium framed shower doors, windows and
other such building materials. This will lead to the direct
creation of 40 jobs.
 Case study: Youth enterprise
- The IDC is supporting a young black woman to set up a
factory to manufacture compressed biomass logs for braais
and fireplaces. The logs will be manufactured from recycled
waste and the factory will create 45 jobs.
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ILO – social economy
 EDD developed a partnership
with the International Labour
Organisation (ILO) on
implementing social economy
initiatives.
 An MOU was signed, which
includes profiling and
determining priority sectors for
the Social Economy
 Some of the key issues in the
MOU
• Partnering on hosting a
global conference on the
social and solidarity
economy
• Establishment of a National
Steering Committee on the
Social Economy
• Determine Priority Sectors
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Equitable growth
 EDD held a research round table on township economies on 24
February 2015. This was convened in partnership with the SA Cities
Network and attended by government institutions, research organisations
and academia. The round table took stock of existing research on
township economies as a basis to support policy and planning. Research
was presented and discussion was held a variety of topics including:
• Townships as domestic tourism destinations
• The growth of property markets and property prices in an area in
Gauteng
• Informal banking and saving systems operated by foreign owned stores
and how they acted as a catalysts for growth of those operations
 The programme to support black South Africans in the productive
economy is leading to a shift from a “black empowered” model to a “black
industrialist” model
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2017-04-11
The APP
 The APP provides basis for audit against
pre-determined objectives
 It does not include all the work of the EDD
 As required by the Auditor General, the
tables in the published Annual Report
provide an overview of the number of
achievements and reasons for variation
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Performance Overview for the 2014/15
Overall Performance Level
Budget Programmes
Total
indicators
Indicators met
against targets
Indicators
exceeded
against
targets
Indicators
not met
against
targets
Economic Policy Development
4
2
2
-
Economic Planning and Coordination
13
5
8
-
Economic Development and Social Dialogue
5
4
1
-
Total
22
11
11
-
 EDD had 154 targets for its frontline work, and achieved 209 deliverables
 For the financial year under consideration, the Department spent 99.7%
of its allocated budget, met all its targets and exceeded its targets for
50% of the indicators included in its Annual Performance Plan (APP) for
2014/15.
 For the year under consideration the EDD and all its agencies received
unqualified audit reports.
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New Global Headwinds and the Role of Infrastructure
 The IMF’s latest global growth forecast in October 2015 has
downgraded growth from the earlier July 2015 estimate by a
further 0.2%
 Declining commodity prices have been cited as a key constraint on
growth as have crisis legacies in some advanced economies
 Infrastructure investment, even in a challenging fiscal
environment, is critical to:
– Mitigate against global economic headwinds
– Promote developmentally driven growth
 The 9 Point Plan, announced in SONA, identifies a series of
additional interventions in this fiscal year that is more challenging
than in 2014/15
 Partnerships between government, the private sector and
organised labour need to be strengthened in the period ahead
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THANK YOU
SIYABONGA
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