the Portfolio Committee on Trade and Industry 2005/6 Annual Report to the Portfolio Committee on Trade and Industry 1 By: Director General, Tshediso Matona November 2006

CONTENTS Economic Context dti Strategic objectives 2005/6 ANNUAL REPORT Economic Context dti Strategic objectives Summary of Key Outputs 2005/06 Spending trends Breakdown of the budget Proposed interventions

ECONOMIC CONTEXT Increased manufacturing confidence (BER report), underpinned by: A increase in domestic investment A increase in foreign investment Strong performance in key industrial sectors:autos production up 11.6% Conditions created for a more robust industrial policy Economic/investment growth GDP 4.9% Investment 8% = Growth in manufacturing 4.1% Employment growth of 540 000 in past year Employment elasticity Increase to 0.8% relative to GDP growth = Challenge: Trade deficit : strong currency has resulted in widening trade deficit – challenge is to increase value added exports. 3

STRATEGIC OBJECTIVES 2006-2009 Promote co-coordinated implementation of accelerated & shared growth initiative Raise the level of exports and promote equitable global trade Promote direct investment and growth in the industrial and services economy, with particular focus on employment creation Contribute towards the development and regional integration of the African Continent within the NEPAD Framework Promote broader participation, equity and redress in the economy

KEY OUTPUTS IN 2005/06 2005/6 ANNUAL REPORT This section will cover high level outputs in the following areas: Enterprise & industry support & development which will encompass:- Policy & Strategy Financial support International Trade & Economic Development Legislation & Regulation HR & Governance

ENTERPRISE & INDUSTRY SUPPORT & DEVELOPMENT KEY OUTPUTS IN 2005/06 2005/6 ANNUAL REPORT ENTERPRISE & INDUSTRY SUPPORT & DEVELOPMENT Policy & Strategy ASGISA – contributed to framework & leads key interventions eg. Sectors (BPO), Small Business, etc. National Industrial Policy Framework – undertook consultations & research towards draft policy Other Sector Policy initiatives - Clothing & Textiles, Chemicals, Metals, Agro-processing, automotives, Forestry & Wood, Pulp & Paper, Film and Services Integrated Small Business Strategy & Co-ops strategy finalised & SEDA roll out launched Regional Industrial Development Strategy - undertook consultations & research towards draft policy

ENTERPRISE & INDUSTRY SUPPORT & DEVELOPMENT KEY OUTPUTS IN 2005/06 2005/6 ANNUAL REPORT ENTERPRISE & INDUSTRY SUPPORT & DEVELOPMENT Policy & Strategy Broad Based Black Economic Empowerment – finalised phase 1 & launched phase 2 of codes Import Parity Pricing policy finalised Policy Reviews Incentives, incl. IDZ’s Competition Policy Export & Investment Strategies Draft strategic framework on Gender & Women’s Economic Empowerment completed

ENTERPRISE & INDUSTRY SUPPORT & DEVELOPMENT KEY OUTPUTS IN 2005/06 2005/6 ANNUAL REPORT ENTERPRISE & INDUSTRY SUPPORT & DEVELOPMENT Financial support 9 Strategic Infrastructure Programs (SIP) approved with projected 778 direct & 31 481 indirect jobs 10 new infrastructure projects (CIP) were approved with project investment of R8,5b 1 924 SMEDP incentives were approved with expected investment of R14,7b & the creation of 41 873 jobs. R733m claims paid during the period. Assisted 577 firms (900 applications) through the BBSDP scheme to the value of R29m 10 Film incentives were approved, productions of which will result in investment of R360m

ENTERPRISE & INDUSTRY SUPPORT & DEVELOPMENT KEY OUTPUTS IN 2005/06 2005/6 ANNUAL REPORT ENTERPRISE & INDUSTRY SUPPORT & DEVELOPMENT Financial support – cont. EMIA assisted 267 companies to exhibit at foreign national pavilions, 547 firms (882 applied) for other export initiatives & 86 companies participated in local pavilions & 41 outward-bound trade missions to 23 countries, with expected export sales of R5,6b NEF financed 66 deals with a total value of R467m Khula approved R462m worth of transactions and disbursed R316m, whilst approving 334 business plans. 56% went to financing black businesses, 32% to women & 35% to poorer provinces Co-operatives Support - Developed Incentives & obtained donor funding

INTERNATIONAL TRADE & ECONOMIC DEVELOPMENT KEY OUTPUTS IN 2005/06 2005/6 ANNUAL REPORT INTERNATIONAL TRADE & ECONOMIC DEVELOPMENT Negotiations – WTO, EU, US, EFTA Implementing – SACU, EU, Mercosur Other Trade Initiatives – China, IBSA, Trade & Investment Protection Agreements Africa/NEPAD – APRM, Trade & Technical Co-operation missions

LEGISLATION & REGULATIONS KEY OUTPUTS IN 2005/06 2005/6 ANNUAL REPORT LEGISLATION & REGULATIONS Finalised Bills: Co-operatives Bill National Credit Bill Close Corporations Amendment Bill Patents Amendment Bill Interim Companies Amendment Bill Outstanding Bills Consumer Protection Bill, Enterprise Development Bill, Intellectual Property Amendment Bills, Sugar Bill

HR & Governance TOTAL NO OF POSTS AS AT 1 APRIL 2006 1098 2005/6 ANNUAL REPORT TOTAL NO OF POSTS AS AT 1 APRIL 2006 1098 VACANCIES AS AT 332 APPOINTMENTS 1 APRIL 2006 – 30 SEPTEMBER 2006 94 TERMINATIONS 31 VACANCIES AS AT 30 SEPTEMBER 2006 269

HR & Governance Appointment of Board of Directors Khula ECIC SEDA Appointment of CEO’s and DG IDC NEF CIPRO Appointment of Board of Directors Khula ECIC SEDA

HR & Governance Audits & Reports Unqualified Audits for the dti & all COTII agencies except one All COTII agencies tabled annual reports, incl. Programs such THRIP & NIPP

7 YEAR EXPENDITURE TRENDS 2005/6 ANNUAL REPORT

ANALYSIS OF MTEF 2005/6 ANNUAL REPORT

BREAKDOWN OF BUDGET 2005/6 ANNUAL REPORT On average the structure of the budget allocation over the MTEF period is: 40% to agencies of the dti 40% to incentive payments 13% to compensation after deduction to agencies (8% of total budget) 12% to goods & services, of which 8% is overhead commitments, leaving only 4% to fund projects/new initiatives MTEF Preliminary Outcome Requested additional R8b over MTEF period but got allocated R1,3b

CONCLUSION 2005/6 ANNUAL REPORT Overall we have achieved our targets for the reporting period Could do more with additional financial resources Some challenges remain in respect of: Institutional development Skills & Training Inter-departmental/cluster co-ordination

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