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the dti Strategic Plan 2012-2017 & Annual Performance Plan 2012-2015

Presentation to the Select Presentation to the Select Committee on Trade and Committee on Trade and

International Relations (NCOP)International Relations (NCOP)Date : 25 April 2012Date : 25 April 2012

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CONTENTSCONTENTS

the dti’s Vision, Mission and Strategic Oriented-Outcomes Goals

Key achievements for the 2011/12 financial year

Key Interventions for the 2012/13 period

Allocated resources

Challenges

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VISIONVISION

“A dynamic industrial, globally competitive South African economy, characterised by inclusive growth and

development, decent employment and equity, built on the full potential of all citizens”.

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STRATEGIC FOCUS STRATEGIC FOCUS • Facilitate transformation of the economy to promote industrial

development, investment, competitiveness and employment creation.

• Build mutually beneficial regional and global relations to advance South Africa’s trade, industrial policy and economic development objectives.

• Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth.

• Create a fair regulatory environment that enables investment, trade and enterprise development in an equitable and socially responsible manner.

• Promote a professional, ethical, dynamic, competitive and customer-focused working environment that ensures effective and efficient service delivery.

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CORE PROGRAMMES AND CLUSTERS

Industrial Development – the development of policies and strategies that promote sector competitiveness, growth, job creation and efficient administration of support measures.Trade, Investment and Exports – the strengthening trade and investment links with key economies and fostering African development, including through regional and continental integration and development co-operation in line with the New Partnership for African’s Development (NEPAD).Broadening Participation - the development interventions and strategies that promote enterprise growth, empowerment and equityRegulation – the development and implementation of coherent, predictable and 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 ACHIEVEMENTS FOR 2011/12KEY ACHIEVEMENTS FOR 2011/12

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Key AchievementsKey Achievements

SO1: Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation

Designation of 5 sectors and promulgation of the amended PPPFA Regulations (Buses, Canned Vegetables, Textile and Clothing, Leather and Footwear, Power Pylons and Rail Rolling Stock)

Passenger Railway Agency of South Africa (PRASA) agreement on 40% local content for rail signaling in Western Cape and Durban

91 projects supported through the Automotive Incentive Scheme (AIS) with the value of investment leveraged being R4,7 bn

72 Film and TV productions supported with the value of investment leveraged being R2 bn

The Manufacturing Competitiveness Enhancement Programme (MCEP) being finalised with the National Treasury

6 projects with the value of R9 bn investment has been approved under CIP with projected direct jobs of 14 835

In the Automotive sector R15 bn has been secured in investment commitments from assemblers and component suppliers. FAW has committed a further $100 m for a truck and car assembly plant

In Business Process Services, R4bn new investment has been facilitated with the potential of 2 690 being jobs created

Industrial DevelopmentIndustrial Development

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Overview of Industrial Overview of Industrial Development IncentivesDevelopment Incentives

Description

Actual

Number of firms/projects

supported

Investment leveraged

No. of jobs created as per the approved

projects

AIS 92 R4 ,7 bn 9 344

BPS 23 projects R4 bn (3years) 15 149

Film & Television 72 Film productions R2 bn -

12 I 14 projects R22,2 bn 1 969

CIP 6 projects R9,9 bn 14 835

Trade, Investment & ExportsTrade, Investment & ExportsSO2: Build mutually beneficial regional and global relations to SO2: Build mutually beneficial regional and global relations to advance South Africa’s trade, industrial policy and economic advance South Africa’s trade, industrial policy and economic development objectivedevelopment objective

Investment Pipeline of potential investment projects of R 34,4 bn e.g. Nestle and Unilever

Facilitated business delegations and fora to emerging markets, e.g. Mozambique, Benin, Cameroon, Turkey and UAE and Oman

Submitted a revised list to China on value added exports to and investment from China

High level in-principle paper on Regional Industrial Development Policy finalised with regards to the SACU 5 point plan

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Broadening ParticipationBroadening ParticipationSO3: SO3: Facilitate broad-based economic participation through targeted Facilitate broad-based economic participation through targeted interventions interventions to achieve more inclusive growthto achieve more inclusive growth

Facilitated the establishment of 180 new small scale Co-operatives.

Reviewed Codes of Good Practice and ready to be gazetted pending Presidential Council endorsement.

Feasibility study for the proposed Saldahna IDZ completed and out for public comment.

806 projects supported through the Enterprise Investment Programme (EIP) with the value of investment leveraged being R12,3 bn and 17 330 potential jobs being created.

183 Cooperatives supported through Cooperative Incentives Scheme.

548 Enterprises supported through the BBSDP.

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RegulationRegulationSO4: Create a fair regulatory environment that enables investment, trade & enterprise SO4: Create a fair regulatory environment that enables investment, trade & enterprise development in an equitable & socially responsible manner development in an equitable & socially responsible manner

Co-operatives Amendment Bill submitted to Cabinet and Business Case to National Treasury (NT).

B-BBEE Amendment Bill approved by Cabinet and issued for public comment .

SEZ policy & bill approved by cabinet for public comment.

IP Amendment Bill for Protection of Traditional Knowledge adopted by National Assembly.

National Lotteries Policy Framework and Bill drafted for approval .

Finalised the Gambling Review process and the review of the Gambling Act.

Established and launched the Companies Tribunal.

Reviewed and developed the policy on the National Credit Act (NCA).

Developed the Policy and started the drafting of the Businesses Act.

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Administration & Co-ordinationAdministration & Co-ordinationSO5: SO5: Promote a professional, ethical, dynamic, competitive & Promote a professional, ethical, dynamic, competitive & customer-focused working environment that customer-focused working environment that ensures effective & ensures effective & efficient service deliveryefficient service delivery

Vacancy rate as at 31 March 2011 was 16.9%. Reduced to 8.45% as at 29 February 2012.

Achieved targets of 43.11% of women in SMS and 2.34% of persons with disabilities.

92% of all creditors payments made within 10 days, 8% of all creditors payments made within 14 days

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Overview of the dti’s Overview of the dti’s key interventions over the 2012/13 periodkey interventions over the 2012/13 period

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KEY INTERVENTIONS – KEY INTERVENTIONS – INDUSTRIAL DEVELOPMENTINDUSTRIAL DEVELOPMENT

Sector interventionsSector interventions

Upscale industrial policy by tabling the annual rolling Industrial Policy Action Plan to Cabinet and implementation carried out.

Complete and submit designation templates to the National Treasury for three (3) subsector/sectors for local procurement.

Support technological competencies via the Technology and Human Resources for Industry (THRIP), by supporting 2 200 students and 850 researchers in Chemical, ICT, Metal and Minerals, Agriculture and Biotech and Energy.

Support 20 new projects to the total value of R36m (SPII contribution R20m and industry contribution R16m) through the Support Programme for Industrial Innovation (SPII).

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Support to enterprises through Automotive Incentive Scheme (AIS) and 12I tax allowance AIS: 54 enterprises; Value of investment: R2bn; and projected jobs: 2 300 12I: 12 enterprises; Value of investment: R10bn; and projected jobs: 2 000

Critical Infrastructure Programme (CIP) – support twelve (12) enterprises worth R6bn.

Business Process Services (BPS), Film and TV Production-support 15 BPS projects, 63 Film productions worth R400m and R1.8bn respectively.

Business Process Services (BPS), support 6 000 jobs projected from applications for BPS grants.

Export Market and Investment Assistance (EMIA)-support 860 enterprises to participate in the EMIA Scheme.

Green Enterprise Competitiveness (GEC)- to support 140 enterprises.

Launch the Manufacturing Competiveness Enhancement Programme (MCEP)

KEY INTERVENTIONS – KEY INTERVENTIONS – INDUSTRIAL DEVELOPMENTINDUSTRIAL DEVELOPMENT

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Africa regional development programme implemented-report on implementation of agreed programme and projects for priority development areas in SACU, SADC-FTA and SDI infrastructure projects.

Conclusion of EPA trade negotiations with the EU, SACU-EAC-COMESA (T-FTA) - Report on conclusion of trade negotiations.

Increased manufactured exports under EMIA by increasing the value of exports to R850 m.

Investment facilitation in targeted sectors to R45bn

KEY INTERVENTIONS – TRADE, KEY INTERVENTIONS – TRADE, INVESTMENT & EXPORTSINVESTMENT & EXPORTS

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seda Technology Support Programme (stp) Establish 44 incubators Approve 40 technology transfer interventions Support 268 SMMEs

Implement Enterprise Investment Programme (EIP) Enterprises Supported

Approve 450 SMMEs for MIP (Manufacturing Incentive Programme)

Approve 300 SMMEs for TSP (Tourism Support Programme)

Value of projected investments MIP-R6.3bn TSP-R4.2bn

Number of new jobs projected MIP- 9 240 TSP- 6 160

KEY INTERVENTIONS – BROADENING PARTICIPATIONKEY INTERVENTIONS – BROADENING PARTICIPATION

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Implement approved action plan emanating from the SMME review report.

Implement the agreement with National Treasury on the Ten-set aside products.

Support 30 new contracts with companies to participate in the Workplace challenge programme.

Utilisation of SEZs to facilitate regional economic activity – request to all provinces to submit 2 proposals for SEZs.

Release the amended Codes of Good Practice for B-BBEE

implementation.

KEY INTERVENTIONS – BROADENING KEY INTERVENTIONS – BROADENING PARTICIPATIONPARTICIPATION

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Finalise the National Strategic Framework on Gender and Women Economic Empowerment.

Support 60 new projects through the Isivande Women’s Fund.

Cooperative Incentive Scheme (CIS) and Black Business Supplier Development Programme (BBSDP): Support 490 enterprises through CIS. Support 700 enterprises through BBSDP.

Release the approved amended Co-operatives Act for implementation.

Finalise Informal Sector Strategy.

Finalise Youth Enterprise Development Strategy.

KEY INTERVENTIONS – BROADENING KEY INTERVENTIONS – BROADENING PARTICIPATIONPARTICIPATION

* Internal targets for BBSDP & CIS will be set for the 2012/13 financial year to ensure a more equitable geographic spread

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KEY INTERVENTIONS - KEY INTERVENTIONS - REGULATIONREGULATION

Submission of three (3) reports on Regulatory Impact Assessment (RIA) for regulation on business and economic citizens.

Development of the National Credit Act (NCA) policy.

Development of two (2) Regulations on Intellectual Property for the protection of Indigenous Knowledge (IK) and the National Lotteries Board.

Special Economic Zones Bill to be processed.

Businesses Amendment Bill to be processed.

Release the approved amended B-BBEE Act for implementation.

Legal Metrology Bill to be processed.

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KEY INTERVENTIONS – KEY INTERVENTIONS – ADMINISTRATION & COORDINATIONADMINISTRATION & COORDINATION

Attract, develop & retain professional and skilled officialsAttract, develop & retain professional and skilled officials

Reduction of the vacancy rate to 5%

Reduction of the staff turnover rate to 9%

Employment of People With Disability increased to 2.4%

Employment of Women in senior management positions increased to 43%

Financial ManagementFinancial ManagementAll eligible creditors’ payments to suppliers made within 30 days

Service Delivery ImprovementService Delivery ImprovementThe Service Delivery Improvement Plan (SDIP) 2012-2015 approved and implemented.

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KEY INTERVENTIONS – KEY INTERVENTIONS – ADMINISTRATION & COORDINATIONADMINISTRATION & COORDINATION

Public Awareness Platforms and EventsPublic Awareness Platforms and Events

Conduct 12 programme focused publications to improve the public awareness.

Conduct 6 multimedia awareness campaigns.

Conduct 80 outreach initiatives.

Roll-out of Roll-out of Intellectual Property for the Protection of Indigenous Knowledge Bill

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ALLOCATED RESOURCESALLOCATED RESOURCES

MTEF PER PROGRAMME

Programmes (‘000) 2012/13 2013/14 2014/15Totals

MTEF

Administration 608,742 690,473 722,213 2,021,428

International Trade and Economic Development 133,462 137,804 149,851 421,117

Broadening Participation 879,891 928,362 985,588 2,793,841 Industrial Development: Policy Development 1,482,856 1,535,873 1,673,178 4,691,907Consumer and Corporate Regulation 244,713 259,580 248,490 752,783 Industrial Development: Incentive Administration 5,437,565 6,472,083 6,960,512 18,870,160 Trade and Investment South Africa 304,826 328,173 378,302 1,011,301

TOTAL 9,092,055 10,352,348 11,118,134 30,562,537

MTEF PER ECONOMIC CLASSIFICATION

Economic classification (‘000) 2012/13 2013/14 2014/15Totals

MTEF

Compensation of employees 713,995 798,624 825,321 2,337,940

Goods and services 589,371 634,461 687,545 1,911,377

Payment for capital assets 14,110 10,309 10,614 35,033

Transfers & subsidies 7,774,579 8,908,954 9,594,654 26,278,187

TOTAL 9,092,055 10,352,348 11,118,134 30,562,537

  

2012/13 2013/14 2014/15

R’000 % R’000 % R’000 %

Less: Payments to agencies 1,060,178 11.7% 1,190,526 11,5% 1,281,173 11.5%

Less: Compensation 713,995 7.8% 798,624 7.7% 825,321 7.4%

Less: Incentives 6,648,182 73.1% 7,646,189 73.8% 8,198,077 73.7%

Incentives capital 1,344,617 14.8% 1,433,056 13.8% 1,261,153 11.3%

Other incentives 5,303,565 58.3% 6,213,133 60.0% 6,936,924 62.4%

Less: Goods & Services 589,371 6.4% 634,461 6.1% 687,545 6.2%

Less: Other Payments* 66,219 0.7% 72,239 0.7% 115,404 1%

Less: Capital 14,110 0.2% 10,309 0.1% 10,614 0.1%

Total 9,092,055 100% 10,352,348 11,118,134 100%

*Other payments includes payments to: Universities and Technikons, Foreign governments & international organisations, Non-profit institutions, Households, Payments for financial assets and Interest and rent on land

Categories of which the Department’s expenditure are classified

Five year comparison of Budget vs expenditure

CHALLENGESCHALLENGES

The prolonged global recession especially in relation to South Africa’s traditional trading partners, which had a negative impact on the domestic economy.

The high cost of capital for productive sectors.

Steeply escalating administered prices, especially electricity and ports charges.

Skills shortages in critical areas.

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THANK YOUTHANK YOUQUESTIONS ?QUESTIONS ?