PRESENTATION TO THE PORTFOLIO COMMITTEE ON TRADE AND INDUSTRY 2006/07 ANNUAL REPORT 24 OCTOBER 2007

PRESENTATION CONTENT Economic Context dti Strategic Objectives 2006/07 ANNUAL REPORT Economic Context dti Strategic Objectives 2006/07 Achievements, Progress and Challenges Six Year Expenditure Comparison Analysis of 2006/07 Under Expenditure Analysis of current MTEF YTD Expenditure – 31 August 2007 Conclusion

KEY OUTPUTS 2006/07 ANNUAL REPORT The department seeks to organise its work in terms of the following areas on which the annual report is based:- Industrial development Trade, investment and export Broadening participation Regulation Administration and coordination

ACHIEVEMENTS AND PROGRESS 2006/07 ANNUAL REPORT Industrial Development Purpose: Provide leadership in the development of policies and strategies that promote competitiveness, enterprise development and the efficient administration of support measures. Progress Cabinet endorsement of National Industrial Policy Framework, followed by outline of the Industrial Policy Action Plan Finalisation of key sector strategies (eg chemicals & pharmaceuticals; automotives, metals & capital equipment; forestry, pulp, paper & furniture; & clothing & textiles) Implementation of key sector strategies (BPO&O, tourism) Implementation of the National Industrial Participation Programme (150 projects, US$7.5 billion 12,000 direct jobs)

ACHIEVEMENTS AND PROGRESS 2006/07 ANNUAL REPORT Industrial Development Progress – cont. Key incentives have contributed to the manufacturing & services industries: SMEDP - 11,309 projects approved since 2000 with R12,7b in incentive value. Since April 2006 2,501 projects approved with incentive value of R2,96b Strategic Industrial Projects (SIP) – 45 approved projects in July 2005 when scheme expired. Estimated value of ongoing investment of R28,7b with estimated 8,446 direct & 104,545 indirect jobs being created. 22 of the approved projects already established with investment of R10b.

ACHIEVEMENTS AND PROGRESS 2006/07 ANNUAL REPORT Industrial Development Progress – cont. Critical Infrastructure Programme (CIP) – 19 projects approved to date with qualifying investment of R32b & infrastructure investment of R9,2b Industrial Development Zones – attracting growing investor interest with commitments currently valued at R28b. Film & TV production – 31 productions approved since 2004 with R1,8b in local expenditure. In 2006/07 four local productions assisted to the value of R31,3m incl. Oscar winning Tsotsi Support for technology & innovation:- Support Programme for Industrial Innovation (SPII) – 85 projects endorsed to the value of R250m (18% female & 34% BEE)

ACHIEVEMENTS AND PROGRESS 2006/07 ANNUAL REPORT Industrial Development Progress – cont. Technology & Human Resources for Industry Prgramme (THRIP) – assisted 746 researchers; 3,178 students & 371 industry partners (36% female & 55% BEE) The South African National Accreditation System (SANAS) & the South African Bureau of Standards are also major contributors to this area of the dept’s work Centres of Excellence established to increase manufacturing skills (i.e. Aerospace, Clothing & Textiles, Advanced Eng., etc.) Launched support measures for the development of the aerospace industry (eg. aerospace village) Comprehensive review of all major incentives undertaken to guide future support for Industrial Policy

ACHIEVEMENTS AND PROGRESS 2006/07 ANNUAL REPORT Trade, Investment and Export Purpose: To promote economic development by working to build an equitable multilateral trading system that facilitates development; strengthening trade and investment links with key economies; and by fostering African development including through regional and continental integration and development co-operation in line with NEPAD Progress Leadership role in WTO Doha Round negotiations Key bilateral trade links and negotiations (EU, EFTA, USA, India, Brazil (and IBSA), China) EFTA agreement ratified by South Africa. Lesotho, Namibia & Swaziland to ratify agreement SACU-Mercusor PTA – major progress made & negotiations expected to be finalised in the current financial year.

ACHIEVEMENTS AND PROGRESS 2006/07 ANNUAL REPORT Trade, Investment and Export Progress – cont. SACU-US – a Trade Investment & Development Co-operation Agreement proposed as framework for these relations Clothing and textile quotas against import surges from China instituted to provide relief to local manufacturers Ongoing negotiations to promote African and regional economic integration Bilateral Investment Treaties - signed with one country; negotiations concluded with 7 countries; ongoing negotiations with 3 countries; & planned negotiations with 9 countries Engaged in the set-up of new SACU institutional arrangements

ACHIEVEMENTS AND PROGRESS 2006/07 ANNUAL REPORT Trade, Investment and Export Progress – cont. Ongoing export promotion activities on the basis of a revamped export strategy, including trade missions & national pavilions, identification & dissemination of trade leads & financial assistance to exhibitors & market researchers Wide range of investment promotion activities undertaken, including investment pavilions & seminars; ministerial & presidential missions; international investment council meetings; investment conferences & sector specific briefs

ACHIEVEMENTS AND PROGRESS 2006/07 ANNUAL REPORT Broadening Participation Purpose: Lead in the development of policies and strategies that promote enterprise growth, empowerment and equity in the economy Progress Support for small enterprise development through the rollout of SEDA & SAMAF, and increased financing of SMEs by Khula, NEF & IDC Codes of Good Practice for BBBEE adopted by Cabinet, gazetted in February 2007 & under implementation (incl. Sector Charters) Regional Industrial Development work being linked to the National Industrial Policy Framework & Local Economic Development work BEE and women empowerment also supported by key incentive schemes:- BBSP, SPII & THRIP

ACHIEVEMENTS AND PROGRESS 2006/07 ANNUAL REPORT Broadening Participation Progress – cont. Training workshops on women empowerment and access to finance through SAWEN Cooperative legislation developed and support to cooperatives provided – 4 large projects totaling R9m & 16 small projects totaling R3,78m Products for targeted procurement from SME’s by government departments identified & to be endorsed before implementation of the scheme Publications, road shows and imbizo’s to promote awareness of the dti’s services and offerings

ACHIEVEMENTS AND PROGRESS 2006/07 ANNUAL REPORT Regulation Purpose: Develop and implement coherent, predictable and transparent regulatory solutions that facilitate easy access to redress and efficient regulatory services for economic citizens. Progress National Credit Act proclaimed and Regulator established Companies Bill published for public comment Consumer Protection Bill published for public comment Competition Policy Review completed & drafting of amendments to Act started Corporate laws Amendment Bill introduced in 2006 Processed the FIFA request for trademark protection & issued public notice

ACHIEVEMENTS AND PROGRESS 2006/07 ANNUAL REPORT Regulation Progress – cont. Legislation passed: Measurement Units & Measurements Standards Act (Act 18 of 2006) Accreditation for Conformity Assessment, Calibration & Good Laboratory Practice Act (Act 19 of 2006) Amendments to the Close Corporations Act, 1984 Subordinate legislation introduced: Regulations under the Cooperatives Act, 2005 Regulations under the National Credit Act, 2006 Amendments to regulations made under Legal Metrology Act 1973

ACHIEVEMENTS AND PROGRESS 2006/07 ANNUAL REPORT Regulation Work undertaken on the following legislation for introduction in 2007/08 The Consumer Protection Bill Intellectual Property Laws Amendment Bill Competition Amendment Bill Companies Bill National Gambling Amendment Bill National Regulator for Compulsory Specifications Bill The Standards Bill The Lotteries Amendment Bill

ACHIEVEMENTS AND PROGRESS 2006/07 ANNUAL REPORT Administration and co-ordination Purpose: Ensure efficient and effective coordination and systems within the dti and with stakeholders & partners Progress HR is a critical challenge & ongoing efforts made to fill key vacancies, incl. use of specialized recruitment agencies 213 vacancies were filled out of 323 in the year to 31 March 2007, & the vacancy rate stood at 27% An integrated HRD strategy under development, covering recruitment, retention & training Greater alignment, co-operation & co-ordination with dti agencies (COTII), including leveraging capacity in agencies (eg. IDC)

ACHIEVEMENTS AND PROGRESS 2006/07 ANNUAL REPORT Administration and co-ordination Progress – cont. Strong Corporate Governance maintained Unqualified dti audits over several years & unqualified COTII audits in 2006/07, except for two agencies All COTII agencies tabled annual reports timeously Key Boards of Directors & CEO appointments made Estate Agency Affairs Board (EAAB) Small Enterprise Development Agency (SEDA) South African Bureau of Standards (SABS) SABS Trade Metrology Advisory Committee (TMAC) National Credit Regulator (NCR) International Trade Administration Commission of SA (ITAC)

ACHIEVEMENTS AND PROGRESS 2006/07 ANNUAL REPORT Administration and co-ordination Progress – cont. South African Micro-finance Apex Fund (SAMAF) Companies & Intellectual Property Registration Office (CIPRO) National Metrology Institute of South Africa (NMISA) Commissioner of the Competition Commission Effective & efficient use of allocated funds

Six year comparison of budget vs expenditure 2006/07 ANNUAL REPORT

ANALYSIS 2006/07 UNDER EXPENDITURE 2006/07 ANNUAL REPORT Under-expenditure in 2006/07 occurred in mainly in the following areas for which roll-overs have been approved:

ANALYSIS OF CURRENT MTEF 2006/07 ANNUAL REPORT On average, the allocation of the budget over the MTEF period is as follows: 27% to agencies 53% to incentive payments 10% to compensation, after deducting the budget for agencies (8% of total budget) 12% for goods and services, of which 7% is already committed

ANALYSIS OF CURRENT MTEF 2006/07 ANNUAL REPORT

YTD Expenditure 31 August 2007 2006/07 ANNUAL REPORT Expenditure to 31 August = 42% of total budget vs straight line projections which would have been 42% Only 5% under spent against projections

CHALLENGES In conclusion 2006/07 ANNUAL REPORT In conclusion Overall we have achieved our targets for the reporting period Challenge is to enhance impact of the department through:- Ensuring effective programme & project performance Stronger strategic & operational management Greater integration of work, including with agencies Adequate financial resources for extensive dti programmes HR challenge of recruitment, retention and development Improved cluster co-ordination

2006/07 ANNUAL REPORT THANK YOU & QUESTIONS