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Presentation to the Portfolio Committee Presentation to the Portfolio Committee on Trade and Industry-on Trade and Industry-

the dti’s the dti’s 2014/15-2016/2017 Annual Performance Plan2014/15-2016/2017 Annual Performance Plan

Date: 01 July 2014Date: 01 July 2014Director-GeneralDirector-General

Mr Lionel OctoberMr Lionel October

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CONTENTSCONTENTS

the dti’s Vision, Mission and Strategic Goals

Key Interventions for 2014/15

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 GOALS STRATEGIC GOALS 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 CLUSTERSCORE 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 of interventions and strategies that promote enterprise growth, empowerment and equity.Regulation – 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 – effective co-ordination of departmental programmes and provision of necessary support for efficient implementation.

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PROGRAMMES OF the dtiPROGRAMMES OF the dti

• Programme 1: Administration (Office of the DG & GSSSD)• Programme 2: International Trade and Economic

Development

• Programme 3: Broadening Participation

• Programme 4: Industrial Development

• Programme 5: Consumer and Corporate Regulation

• Programme 6: Incentive Development and Administration

• Programme 7: Trade and Investment South Africa

Global Economic ContextGlobal Economic Context

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• Global growth strengthening but still at best moderate.• US recovery is surprisingly strong, largely on the back of the shale gas

impact on US manufacturing and President Obama’s focus on ‘re-shoring’.

• China’s growth after softening in 2013, now appears to be responding to stimulus package from Government.

• European Union – Recovery in ‘core’ uneven with UK and Germany strong but France and Italy weak.– Periphery emerging unevenly from recession.

• BRICS– Brazil, Russia and SA weak.– India and China strengthening.

• Africa– Sub-Saharan Africa still strong.

• Across the globe, Q1 2014 growth was disappointing.

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Economic overview – GDPEconomic overview – GDP

• Gross Domestic Product (GDP) seasonally adjusted and annualised quarter-on-quarter (q-o-q) contracted by 0.6% in Q1 2014.

• The contraction of the SA economy in Q1 2014 is primarily due to the substantial loss of production in the platinum industry due to the long-running wage strike.

– Mining and Quarrying sector contracted by 24.7%.– Manufacturing sector declined by a more modest 4.4%.– Construction sector grew substantially at a rate of 4.9%.– Agriculture sector grew by 2.5%. – Electricity, Gas and Water sector was stable with growth of just 0.1%.

• Concerning as any contraction in GDP is, quarterly data is volatile and has been annualised (essentially multiplied by 4). The actual contraction was just 0.15%.  

• SA GDP in Q1 2014 is 1.8% higher than in Q1 2013.

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Economic overview - GDPEconomic overview - GDP

Source: StatsSA

Economic Overview - EmploymentEconomic Overview - Employment

• Non-agriculture employment increased by 9,000 from 8,498,000 in Dec 2013 to 8,507,000 in March 2014.

• About 50,000 jobs were created in community services, 7,000 in finance and 5,000 in construction.

• Employment declined the most in the trade sector (-34,000), followed by mining (-13,000).

• Manufacturing employment declined by 3 000.• The productive sectors of the economy struggled to create

employment in Q1 2014. The decline in economic activity (in particular low production and sales in the mining and quarrying and manufacturing sectors) have contributed to lower employment in the two sectors.

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Economic overview - EmploymentEconomic overview - Employment

Source: StatsSA

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OVERVIEW OF the dti’s KEY PRIORITIES FOR 2014-2019

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SP (5-year)21 priorities

NDP

5-year MSTFOutcomes

APP (3-year)

the dti

ESEC

The Presidency

Impact

Outcomes

Outputs

Activities

Inputs

IPAP

MTEF (5-year)

ENE (3-year)

Link to NDP, MTSF

Priorities for 2014 - 2019Government

outcomes

the dtithe dti’s MTSF Interventions Linkage to the dti’s

Strategic Outcomes-

Orientated Goal

Outcome 4:

Decent employment

through inclusive

growth

Proclaim three SEZs

All IPAP interventions implemented

250 investment projects facilitated

implemented

IDC to fund 2 higher level beneficiation

projects

Develop MBAP and incorporate into

IPAP

Increase use of local metals in SA

Manufacturing

Increase localisation to 75% target

Develop and cost options for stable and

competitive exchange rate

Facilitate transformation

of the economy to

promote industrial

development,

investment,

competitiveness and

employment creation

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Priorities for 2014 - 2019Government

outcomes

the dtithe dti’s MTSF Interventions Linkage to the dti’s

Strategic Outcomes-

Orientated Goal

Outcome 11:

Create a better

South Africa and a

better world

Export Council to develop African Export

Markets

FDI investment pipeline R50bn

Economic diplomacy and pavilions

7 investments and 5 trade promotion projects

SA position on SADC RISDP

SACU development integration

Tripartite-Free Trade Agreement

SA position on TFTA and CFTA

26 bilateral co-operation agreements in Africa

3-8 engagements on SDI projects

59 bilateral with countries of the South

Build mutually

beneficial regional

and global relations to

advance South

Africa’s trade,

industrial policy and

economic

development

objectives

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Priorities for 2014 - 2019Government outcomes the dtithe dti’s MTSF Interventions Linkage to the dti’s

Strategic Outcomes-

Orientated Goal

Outcome 4: Decent

employment through

inclusive growth

National Rural investment

incentive

Develop Supplier Development

Incentive for procurement

5 investors per district municipality

Facilitate broad-based

economic participation

through targeted

interventions to achieve

more inclusive growth.

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KEY PLANNED INTERVENTIONS FOR 2014/15 FINANCIAL YEAR

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KEY INTERVENTIONS – INDUSTRIAL KEY INTERVENTIONS – INDUSTRIAL DEVELOPMENTDEVELOPMENT

Upscale industrial policy by tabling the annual rolling Industrial Policy Action Plan (IPAP) to Cabinet and produce quarterly implementation reports.

Two (2) sector specific action plans (in support for local Manufacturing arising from Broadband implementation and for Beneficiation in 5 value chains) developed to influence and respond to the changing economic environment to enhance manufacturing potential.

Two (2) key research projects (Fluorspar Beneficiation and Feasibility Study for the establishment of a Syringe manufacturing plant in South Africa) will be undertaken to facilitate development of interventions to expand value-added activities in existing and new sectors of the economy including beneficiation.

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KEY INTERVENTIONS – INDUSTRIAL KEY INTERVENTIONS – INDUSTRIAL DEVELOPMENTDEVELOPMENT

Two (2) key initiatives to promote regional industrial development proposed by South Africa to deepen Regional Industrial development in Africa.

Special Economic Zone (SEZ) Regulations approved, gazetted, implemented and report produced to enact the Act SEZ Act and Regulations approved promulgated.

Support technological competencies by supporting 1 458 students and 756 researchers via the Technology and Human Resources for Industry (THRIP).

Support 20 firms/projects under the Support Programme For Industrial Innovation (SPII) with R46m investment.

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KEY INTERVENTIONS – INDUSTRIAL KEY INTERVENTIONS – INDUSTRIAL DEVELOPMENTDEVELOPMENT

Tool-making apprentice programme Support 250 students enrolled for the tool making apprentice

programme.

Industrial upgrading programme Support 200 workers trained through the industrial upgrading

programme.

950 enterprises approved to participate in Exporting, Marketing and Investment Assistance (EMIA) scheme.

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Industrial Development IncentivesIndustrial Development Incentives

Description

PlannedNumber of firms/projects

supportedPotential jobs

supportedInvestment leveraged

Industrial FinancingAutomotive Incentive Scheme (AIS)

25 550 R1.7bn

Business Process Services (BPS) 10 2 000 R600m

Film and Television 70 - R1.9bn

12I 12 2 200 R12bn

Critical Infrastructure Programme (CIP)

13 3 600 R6bn

Manufacturing Competitiveness Enhancement Programme (MCEP)

350 99 600 -

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Africa regional development programme implemented-progress report produced on implementation of agreed programme and projects for priority development areas in SACU, SADC-FTA and Spatial Development Initiatives (SDI) infrastructure projects.

Conclusion of Economic Partnership Agreement (EPA) trade negotiations with the European Union (EU), Southern African Customs Union (SACU) India Preferential Trade Agreement (PTA), Southern African Development Communities (SADC)- East African Community (EAC)- Common Market for Eastern and Southern Africa (COMESA) Free Trade Agreement (FTA) –Tripartite-Free Trade Agreement (T-FTA): Status report produced on progress towards conclusion of trade negotiations.

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

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Increased manufactured exports under EMIA by increasing the value of exports to R 3 billion.

Investment facilitation in targeted sectors- R 40 billion.

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

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Implement Broad-Based Black Economic Empowerment (B-BBEE) Amendment Act and Code of Good Practice for B-BBEE.

Phased-in operationalisation of the B-BBEE Commission.

Approve 90 incubators for the Incubator Support Programme (ISP) incentive.

KEY INTERVENTIONS – BROADENING KEY INTERVENTIONS – BROADENING PARTICIPATIONPARTICIPATION

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Broadening Participation IncentivesBroadening Participation Incentives

Description

Planned

Number of firms/projects supported

Potential jobs supported Investment leveraged

Enterprise Incentive Programme (EIP): Manufacturing Incentive Programme (MIP)

10 4 500 R822 m

EIP: Aquaculture Development Enhancement Programme (ADEP)

15 250 R150m

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KEY INTERVENTIONS - REGULATIONKEY INTERVENTIONS - REGULATIONImpact assessment of regulation on business and economic citizens

One (1) Regulatory Impact Assessment (RIA) Report on Intellectual Property (IP) for developed for approval by Minister.

Policies, Bills and Regulations to enforce fair business practices

Three (3) policy frameworks on Liquor, Gambling (Refinement and Finalisation) and Licensing of Businesses Bill developed for approval by Minister.

Six (6) Bills developed for approval by Minister on Promotion and Protection of Investment, Copyright Amendment, Liquor Amendment, Companies Amendment, Gambling Amendment and Licensing of Businesses

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KEY INTERVENTIONS - REGULATIONKEY INTERVENTIONS - REGULATION

Policies, Bills and Regulations to enforce fair business practices

Three (3) policy frameworks on Liquor, Gambling (Refinement and Finalisation); and

SEZ Regulations finalised and gazetted.

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KEY INTERVENTIONS – ADMINISTRATIONKEY INTERVENTIONS – ADMINISTRATIONAttract, develop and retain professional and skilled officials

Reduction of the vacancy rate from 9.4% to 6%. Reduction of the staff turnover rate to 6.8%. Employment of People With Disability to increase from 2.7% to 2.8%. Employment of Women in senior management positions to increase

from 44% to 46.5%.

Creditors’ Payments made in accordance with legislative requirements

All eligible creditors’ payments to suppliers made within 30 days.

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KEY INTERVENTIONS – ADMINISTRATIONKEY INTERVENTIONS – ADMINISTRATION

Public Awareness Platforms and Events Conduct 18 multimedia awareness campaigns: Incentive

Schemes, Film Promotion, National Liquor Authority, Buy local Promotion and Export Promotion.

Conduct 120 events, outreach engagements and exhibitions 30 Events 50 Outreach engagements 40 Exhibitions

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KEY INTERVENTIONS – ADMINISTRATIONKEY INTERVENTIONS – ADMINISTRATION

Conduct 2 multi-year evaluations on key programmes: Isivande Women’s Fund and the Workplace Challenge Programme.

Service Delivery Improvement Plan SDIP for 2012-2015 implementation monitored and a report

produced for 2013/14 financial year. Aims to improve turnaround times on Liquor Licenses and

Incentives.

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ALLOCATED BUDGETALLOCATED BUDGET

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Medium Term Expenditure FrameworkMedium Term Expenditure Framework2014/15 2015/16 2016/17

Medium-Term Estimates (R ’000)

Programmes Medium-Term Expenditure Framework (MTEF)

Administration 706 946 730 672 770 014

International Trade and Economic Development 147 197 154 812 163 780 Broadening Participation

1 005 777 1 060 173 1 118 065 Industrial Development

1 796 824 2 078 505 2 192 547 Consumer and Corporate Regulation 277 256 286 939 300 754

Incentive Development and Administration 5 540 281 6 246 470 7 050 814 Trade and Investment South Africa

360 748 370 094 387 554 TOTAL FOR PROGRAMMES

9 835 029 10 927 665 11 983 528

ConclusionsConclusions• Electricity: Eskom requests to industrial customers to reduce electricity

consumption by 10% has a direct impact on production.

• Exchange rate volatility.

• Global recovery remains uneven with downside risks.

• However, SA Foreign Direct Investment (FDI) doubled to $8bn in 2013.

• Domestic auto sector investment is at a record R8bn.

• Growth outlook for Africa remains positive and SA is well-placed to continue exporting value-added manufactured goods to the continent.

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THANK YOUTHANK YOU

QUESTIONS ?QUESTIONS ?

SMALL BUSINESSSMALL BUSINESS

• Functions to be transferred to SBD

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Implementation of the seda Technology Programme (stp)

6 new incubators established

46 established incubators supported

301 Small Micro and Medium Enterprises (SMMEs) created

962 of SMMEs approved for assistance by seda

Implementation of Co-operative Amendment Act

Phased-in operationalisation of the Co-operative Development Agency and

report produced.

Phased-in operationalisation of the Cooperative Tribunal and report produced.

 

KEY INTERVENTIONS – BROADENING KEY INTERVENTIONS – BROADENING PARTICIPATIONPARTICIPATION

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Finalisation and Implementation of Informal Sector Strategy

Pilot implementation of the National Informal Business Upliftment Strategy (NIBUS) and a report produced.

Finalisation and Implementation of Youth Enterprise Development Strategy (YEDS)

Implementation report on YEDS produced.

Finalise and re-submit the National Strategic Framework on Gender and Women empowerment to Cabinet for approval.

KEY INTERVENTIONS – BROADENING KEY INTERVENTIONS – BROADENING PARTICIPATIONPARTICIPATION

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Broadening Participation IncentivesBroadening Participation Incentives

Description

Planned

Number of firms/projects supported

Cooperative Incentive Scheme (CIS) 431

Black Business Supplier Development Programme (BBSDP)

1 280

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Acronyms/AbbreviationsAcronyms/AbbreviationsTERM DEFINITION TERM DEFINITION

AIS Automotive Investment Scheme COTII Council of Trade and Industry Institutions

ADEP Aquaculture Development and Enhancement Programme CRM Customer Relationship Management

AGOA African Growth Opportunity Act CSIR Council for Scientific and Industrial Research

B-BBEE Broad-Based Black Economic Empowerment CFTA Continental Free Trade Area

BBSDP Black Business Supplier Development Programme CT Companies Tribunal, a public entity reporting to the dti

BEE Black Economic Empowerment DBSA Development Bank of Southern Africa

BPS Business Process Services DSBD Department of Small Business Development

BRICS Brazil, Russia, India, China and South Africa DG Director-General

CIP Critical Infrastructure Programme DFI Development Finance Institution

CIPC Companies and Intellectual Property Commission, a public entity

reporting to the dti

EA Enterprise Architecture

CIS Co-operative Incentive Scheme EAC East African Community

COMESA Common Market for Eastern and Southern Africa ECIC Export Credit Insurance Corporation SOC Ltd, a public entity

reporting to the dti

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Acronyms/AbbreviationsAcronyms/AbbreviationsTERM DEFINITION TERM DEFINITION

EIP Enterprise Investment Programme IDZs Industrial Development Zones

EMIA Export, Marketing and Investment Assistance IP Intellectual Property

ENE Estimates of National Expenditure IPAP Industrial Policy Action Plan

EPA Economic Partnership Agreement ISP Incubation Support Programme

EU European Union MBAP Mineral Beneficiation Action Plan

FDI Foreign Direct Investment MCEP Manufacturing Competitiveness Enhancement Programme

FTA Free Trade Agreement MIP Manufacturing Incentive Programme

GATT General Agreement on Tariffs and Trade MTEF Medium-Term Expenditure Framework

GDP Gross Domestic Product MTSF Medium-Term Strategic Framework

GSSSD Group Systems and Support Services Division MYECP Mass Youth Enterprise Creation Programme

ICT Information and Communication Technology NCA National Credit Act of 2005, as amended

IDC Industrial Development Corporation, a public entity reporting to

the Economic Development Department

NCC National Consumer Commission, a public entity reporting to the dti

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Acronyms/AbbreviationsAcronyms/AbbreviationsTERM DEFINITION TERM DEFINITION

NCR National Credit Regulator, a public entity reporting to the dti NLB National Lotteries Board, a public reporting to the dti

NCT National Consumer Tribunal, a public entity reporting to the dti NMISA National Metrology Institute of South Africa

NDP National Development Plan NRCS National Regulator for Compulsory Specifications, a public entity

reporting to the dti

NEAC National Export Advisory Council OCIO Office of the Chief Information Officer

NEDP National Exporter Development Programme ODG Office of the Director-General

NEF National Empowerment Fund, a public entity reporting to the dti OEM Original Equipment Manufacturers

NEPAD New Partnership for Africa’s Development P-AIS People-Carrier Automotive Investment Scheme

NES National Export Strategy PPP Public-Private Partnership

NGB National Gambling Board, a public entity reporting to the dti PTA Preferential Trade Agreement

NGP New Growth Path RISDP Regional Indicative Strategic Development Plan

NIBUS National Informal Business Upliftment Strategy (previously known

as the Informal Sector Strategy)

REIPPP Renewable Energy Independent Power Producer Procurement

Programme

NIPF National Industrial Policy Framework RIA Regulatory Impact Assessment

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Acronyms/AbbreviationsAcronyms/AbbreviationsTERM DEFINITION

stp seda Technology Programme

TDCA Trade, Development and Co-operation Agreement

TIFA Trade and Investment Framework Agreement

T-FTA Tripartite Free Trade Agreement

the dti The Department of Trade and Industry

THRIP Technology and Human Resources for Industry Programme

TSP Tourism Support Programme

WCP Workplace Challenge Programme

WIPO World Intellectual Property Organisation

WTO World Trade Organisation