Economic Development Department Annual Report 2010/11 Presentation to the Portfolio Committee 11 October 2011

Presentation outline Highlights from the 2010/11 Annual Report –NGP and dialogue –Working with other departments –Engaging provincial and local government –Oversight of agencies –Green Economy –Retirement Conference –International work Key performance areas in the 2010/11 Annual Report –Policy and analytical papers –Policy platforms –Intergovernmental engagements –Engagements with DFIs and ERBs –Sector, spatial and national plans –Special financing –Leveraging state expenditure and procurement –Social dialogue and capacity building –Economic development agreements Corporate services Annual Financial Statements Concluding remarks 2

Highlights from the 2010/11 Annual Report 3

NGP and dialogue EDD drafted the New Growth Path (NGP) approved by Cabinet in October 2010 Led social dialogue on key measures of NGP Engaged with various forums of government to align key aspects of work with the principles of the NGP EDD and DPME developing a system to measure the employment impact of government programmes and policies Promoted dialogue to save and create jobs at sector and workplace levels Held three meetings of the Economic Advisory Panel Held capacity building workshops with social partners 4

Working with national departments EDD, the dti and NT finalised the Delivery Agreement of Outcome 4: Decent Employment through Inclusive Growth Worked with the dti and NT in proposing changes to procurement regulations Worked with Department of Energy and the IMC, finalised South Africa’s new electricity plan, the IRP2 Worked with DMR on development of the beneficiation strategy Worked with DIRCO and DEA in preparing South Africa’s position for the Climate Change Conference of the Parties (COP 17) Worked with DOH on National Health Insurance Did initial work on the Youth Employment Strategy, economic inclusion and the social economy 5

Engaging provincial and local government Participated in the Anti-Poverty visits of Deputy President Motlanthe EDD engaged with provincial and local governments to align the provincial growth and development strategies and integrated development plans to the NGP Convened Economic MinMecs to discuss the NGP, IPAP2 and the Green Economy Initial work done on economic spatial perspectives as part of the envisaged regional economic planning framework Provided project facilitation support by intervening to address blockages hindering the progress of province-led projects 6

Oversight of agencies EDD assumed oversight responsibilities over six agencies Secured additional funding for agencies Worked with agencies to realign, where appropriate, their mandates to the employment-focus of government Merging the small business lending facilities of the Industrial Development Corporation (IDC), Khula and Samaf Participated in the Walmart/Massmart merger hearings convened by the Competition Tribunal Supported conditions for Kansai/Freeworld merger 7

Green Economy EDD engaged in a number of government initiatives including COP 17 and the Upington Solar Park Initiative EDD completed a comprehensive research report on the efficiencies and opportunities presented by different solar energy generation technologies EDD collaborated with the IDC on various initiatives including a business plan for a Green Fund and concessionary financing EDD worked to resolve regulatory challenges faced by renewable energy, energy efficiency and waste management investors EDD hosted a Green Economy workshop on the construction industry, co-hosted the Green Economy Summit and hosted a Green Economy Business Forum 8

Retirement conference Conference “Investing in the New Growth Path: Mobilising Savings/or Retirement Funds for Development” held on 18 February 2011 Conference served as a platform for industry stakeholders to engage with the establishment of a viable financial instrument, such as the development bond Related stakeholder engagements took place between EDD and: the Government Employees Pension Fund, the Association for Savings and Investment South Africa and private sector players EDD also engaged the International Finance Corporation on Green Economy investment opportunities 9

International work Deputy Minister Mahlangu-Nkabinde attended the Crans Montana Forum in Brussels on 7-10 April 2010 Minister participated in the drafting of the Beijing Declaration (Comprehensive Strategic Partnership Agreement) Accompanied President Zuma on a State visit to Beijing in August 2010 Minister participated in Bi-National Commission with China in November 2010 Minister visited Saudi Arabia in December 2010 Minister participated in the World Economic Forum in Tanzania in May 2010 and in Davos in January 2011 Minister accompanied Deputy President Motlanthe on a working visit to the United States in March 2011 Minister visited Oman and UAE from 7-10 May

Key performance areas in the Annual Report 11

Policy and analytical papers 1.The New Growth Path document and summaries 2.Discussion document on the social economy 3.Discussion document on the knowledge economy 4.Discussion document on mining and beneficiation 5.Discussion document on manufacturing 6.Discussion document on the public sector 7.Discussion document on agriculture and rural development 8.Socio-economic assessment of Integrated Resource Plan 9.Review on the introduction of a fabric rebate 10.Alignment of B-BBEE and HRD with NGP 12

Policy platforms 1.The 2nd Next Economy National Dialogue on lessons from the World Cup 2.EDD-ILO workshop on the construction sector and the green economy 3.Co-hosting of Green economy summit 4.Seminar on exchange rates 5.Policy Platform on Food Sufficiency 6.Green Economy Business Forum 7.Public Lecture by Prof Joseph Stiglitz 8.Seminar by Prof Joseph Stiglitz and Dr Jomo Kwame Sundaran 9.Discussion with the Mining Industry Growth, Development and Employment Task Team (MIGDETT) on implications of NGP for mining 10.Workshop on assessing the direct and indirect impact of the state on employment 13

Intergovernmental engagements 1.MinMEC 24 June 2.MinMEC 14 October 3.Technical MinMECs 6 August and 13 September 4.Minister and Deputy Minister visits to Free State MEC 5.Minister engagement with Eastern Cape MEC on strategic infrastructure projects 6.Minister engagement with Eastern Cape MEC regarding an Eastern Cape clothing firm 7.Deputy Minister engagement with KwaZulu-Natal (KZN) MEC 8.Engagement with local government on small business (Western Cape) 9.Visit to Nkandla 10. President’s Coordinating Council 11. Engagement on strategy with Mpumalanga province 12. Engagement with Gauteng Provincial Government 13. Engagement with Tshwane Metro’s New Growth Path workshop 14. Presentations to the Ekurhuleni Metro’s Economic Development Department 15. Meeting with the Western Cape Department of Economic Development 16. Meeting with KZN on the New Growth Path 17. Meeting with the Eastern Cape provincial government on the New Growth Path 18. Meeting with the North West Province provincial government on the New Growth Path 14

Strategic engagements with DFIs and ERBs 1.The DG and Minister engaged the agencies on their strategic plans 2.Meeting with all agencies on 4 June 3.COTII meeting on 30 June 4.Minister’s engagements with the IDC 5.Minister’s and Department’s engagements on Khula Direct 6.Minister’s engagements with the Competition Commission 7.Pioneer Foods settlement 8.Engagements with SOEs on the New Growth Path 9.Departmental engagements with the IDC 10.Khula Direct budget request 11.IDC Workshop with provincial and regional agencies 12.Quarterly dashboard reporting of public entities 13.Ministerial engagement with DFIs to discuss merger 14.Evaluation of entities’ strategic plans 15.Kansai/Freeworld merger 16.Walmart/Massmart merger 17.Agro-processing Competitiveness Fund budget request 15

Sector, spatial and national plans Sector plans 1.Green economy 2.Agricultural value chain 3.Steel sector 4.Sector assessment of the clothing and textile industry 5.Report on SKA for the Northern Cape Province National economic planning processes 1.National Industrial Development Zone Policy 2.Engagement with DOE on energy 3.Land Use Management Bill 4.Engagements with SOEs Spatial Plans 1.N2 Wild Coast Toll Road 2.Bitou Municipality 3.Coega IDZ 4.Atlantis 5.Ntunda 6.Economic Spatial Perspective 7.The Greater Taung Municipality 8.Peace Island 9.The Matzikama Municipality 16

Special financing Value of special financing for small businesses, targeted growth sectors and companies in distress Target: R2bn Achieved: R3,097 bn IDC distress funding: Value: R2,096bn Jobs saved: No. of Companies: 43 UIF Fund (excluding funds used for distress funding): Value: R1,001bn Jobs Saved: No. of companies: 48 17

Leveraging state expenditure and procurement 1.New procurement regulations 2.Engagements with pharmaceutical sector 3.Local stationery procurement project 4.Local procurement of textiles 5.Engagement with SABS 6.The implications of the NGP on intergovernmental fiscal relations 18

Social dialogue and capacity building 1.Company-level dialogue 2.Leadership Task Team 3.Clothing sector 4.Solar Water Heaters 5.Procurement (Nedlac) 6.Electricity sector (Nedlac) 7.Eastern Cape Clothing Firm 8.Atlantis 9.Engagement with the Human Sciences Research Council (HSRC) on the social impact of the downturn 10.Dialogue with the Metals and Engineering Industry 11.Dialogue with a company regarding the Training Layoff Scheme 12. Dialogue with the construction sector 13. Engagement with the Furniture Industry 14. Meetings with manufacturers and the dti on Green Economy 15. Meeting with the Eastern Cape Socio-Economic Consultative Council 16. Meeting with the Solar Photo Voltaic (SPV) Industry Association 17. High level engagement with social partners on the NGP 25 November High level engagement with social partners on the NGP 8 February Clothing Accord 20. MEIBC engagement 19

Economic development agreements 1.Clothing agreement 2.Procurement agreement 3.Training layoff procedures agreement 4.Agreement to improve coordination on the Framework agreement 5.National Agreement on the Training Layoff Scheme 6.Agreement on a pilot project to build decent work in the construction industry 20

Corporate services EDD assumed responsibility for its finances, supply chain and human resource management and put the necessary systems in place EDD underwent first full audit by the Auditor-General and achieved an unqualified audit The internal audit function was established and the Audit Committee was established and was functional towards the end of the financial year Various committees were established: Bid Adjudication Committee, Training Committee, Employee Health and Wellness Committee and Moderating Committee As at 31 March 2011, 90 staff had been appointed, 15 of whom were due to commence work on or after 1 April officials were seconded from other government departments. There were 37 males (41%) and 53 females (58%) in the employ of EDD. 21

Staff complement as at 31 March 2011 ProgrammeNumber of funded posts Number of filled posts Number posts additional to the establishment Administration61533 Economic Planning and Coordination 2815 Economic Policy Development 2213 Economic Development and Social Dialogue

Annual Financial Statements The information presented is based on 2010/11 Audited Annual Financial Statements The Auditor-General expressed an unqualified audit opinion on the 2010/11 Annual Financial Statements 23

Overview of expenditure The total adjusted budget for 2010/11 financial year was R million Expenditure for 12 months of 2010/11 is R million or 89% of the adjusted appropriation Excluding transfers expenditure was R 44.2 million or 48% of adjusted appropriation of R 91.3 million No comparison with 2009/10 as EDD as a Budget Vote was in its first financial year of operation Compensation of employees a major cost driver which accounts for lower expenditure 24

Overall expenditure 25

Rollovers requested 26 Rollovers EDD had requested rollovers amounting to R 35.1 million Only R 3.3 million was approved for rollovers Rollovers were requested for the following:

Overview of revenue 27 Revenue collection for 2010/11 totaled R 547 million Main revenue generator for EDD is fines and penalties from Competition Commission Revenue projected exceeded as a result of Pioneer Food settlement among others

Concluding remarks EDD has achieved much in its first full year of operation –Finalised, consulted upon and implemented the New Growth Path –Met or exceeded most targets set in the Annual Performance Plan –Played a critical coordination role between national departments and with provincial and local government, especially in key areas of energy, green economy, water and environment –Completed important work in policy and developed plans –Ensured that its entities are aligned to the policy thrust of job creation –Created and saved jobs through the work of the IDC, Khula and samaf and Social Dialogue –Engaged competition authorities on public interest issues –Established its corporate services and ensured a clean audit 28

Siyabonga