AN UPDATE ON BUDGET REVIEW AND RECOMMENDATION REPORT (BRRR) PROCESS PRESENTED BY: ZIBELE NGXISHE 24 AUGUST 2011 1

Contents of the presentation Purpose of BRRR process Dti’s three main strategic themes i.t.o MTSF (econ. participation; trade; Industrial dev.) Scope of BRRR - interface between themes and targeted programmes Methodology: overview of programmes & key achievements; expenditure trends and key issues 2

BROADEN PARTICIPATION - EMPOWERMENT AND ENTERPRISE DEVELOPMENT Objective: Inclusion of HDI and SMMEs into mainstream economy Strategy: develop coops; promote black owned businesses; growth of SMMEs Instruments: SEDA & SEDA technology programme

OVERVIEW OF PROGRAMME & KEY ACHIEVEMENTS SEDA available budget R402 m and zero variance to reach 63 916 new clients SEDA to increase SMMEs and coops: network of 42 branches in SA; 17 mobile units; 58 Enterprise Information Centres THRIP from NRF received R151 m and zero variance Technology incubation programme: 1209 SMMEs supported & 35% women and led to 893 direct jobs Coops development: 100 new small coops developed with approx. 500 new jobs and the A/B for coop Act (Act no. 14 of 2005) and strategy approved by cabinet for further consultation;

CONTINUATION ON OVERVIEW OF PROGRAMME Equity & empowerment: SAWEN R10 m and no variance & IDC Isivande women’s fund R10.5 m with no variance SMME procurement services: presidential hotline facilitated R230 m in payments to SMMES within 30 days IDC SPII received R74.5 m and no variance National productivity Institute Workplace challenge R11.5 m and no variance

MAIN EXPENDITURE TRENDS ON EEDD Empowerment & enterprise development received R814 m and spent R801 (98 %) with 2% variance On current payments R11 m under expenditure In 2011/12 FY EEDD spent R230 m of the allocated R237 m with 2.8 % variance and this is in line with 25 % expenditure requirement per quarter

INDUSTRIAL DEVELOPMENT – IDD & TEO Revised IPAP 2 to strengthen govt. interventions on industrial dev. & job creation in line with NGP Key areas: Skills development; technological innovation and public procurement Under new Clothing and Textile Competitive Programme 40 591 jobs were supported an 1 111 new jobs created BPOs yielded R42 m in new investments and linked to 806 jobs

PROGRAMMES OVERVIEW AND KEY ACHIEVEMENTS Under IDD Clothing and Textile R400 m allocated with no variance SABS research contribution R178.8 m and no variance; SABS plant infrastructure R174 m and no variance; NMISA R57,5 m and no variance IDC CSP R51 m and it was all spent

PROGRAMMES OVERVIEW AND KEY ACHIEVEMENTS TEO was allocated R3 047 bil. and constitute 49.2% of the total budget TEO provide incentive measures to support investment, job creation & regional Econ. Dev SMEDP R587 m and all spent; EIP R 262 m and no variance; APDP R538 m and with a variance of 45 %; CIP R81 m and no variance IDZs (Coega, EL and Richards Bay) received R932 m and all spent

TRADE, INVESTMENT AND EXPORTS - TISA TISA informs SA’s trade policy which is aligned to our industrial policy framework SADC-EAC –COMESA, EPAS TISA received R353 m and spent R329 m with 7% variance

DTI OVERALL EXPENDITURE OUTLOOK DTI received R6.2 billion in 2010/11 and spent R5.8 billion with 6.4 % variance Shifts and Virements: Total virements and shifts (before and during the adjusted estimates) amounted to R698.9 million. Major shifts were from savings under various incentive schemes (Business Process Outsourcing Programme [R160 million]

CONTINUATION Small and Medium Enterprise Development Programme [R120 million]; Enterprise Investment Programme [R100 million]; and the APDP [R200 million]), towards the three Industrial Development Zones (IDZs) (R457 million): East London IDZ (R198 million), Richard’s Bay IDZ (R20 million), Coega IDZ (R239 million) and the Black Business Supplier Development Programme (R65 million). National Treasury has during March 2011 approved virements and shifting of funds to the value of R129 million to other areas prioritised by the DTI.

Thank you