1 the dti Strategic Plan & Annual Performance Plan Presentation to the Select Committee on Trade and International Relations (NCOP) Date : 25 April 2012

2 CONTENTS the dti’s Vision, Mission and Strategic Oriented- Outcomes Goals Key achievements for the 2011/12 financial year Key Interventions for the 2012/13 period Allocated resources Challenges

3 VISION “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”.

4 STRATEGIC FOCUS STRATEGIC FOCUS 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.

5 CORE 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 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 and Co-ordination - effective co-ordination of departmental programmes and provision of necessary support for efficient implementation.

6 KEY ACHIEVEMENTS FOR 2011/12

7 Key Achievements SO1: Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation  Designation of 5 sectors and promulgation of the amended PPPFA Regulations (Buses, Canned Vegetables, Textile and Clothing, Leather and Footwear, Power Pylons and Rail Rolling Stock)  Passenger Railway Agency of South Africa (PRASA) agreement on 40% local content for rail signaling in Western Cape and Durban  91 projects supported through the Automotive Incentive Scheme (AIS) with the value of investment leveraged being R4,7 bn  72 Film and TV productions supported with the value of investment leveraged being R2 bn  The Manufacturing Competitiveness Enhancement Programme (MCEP) being finalised with the National Treasury  6 projects with the value of R9 bn investment has been approved under CIP with projected direct jobs of  In the Automotive sector R15 bn has been secured in investment commitments from assemblers and component suppliers. FAW has committed a further $100 m for a truck and car assembly plant  In Business Process Services, R4bn new investment has been facilitated with the potential of being jobs created Industrial Development 7

8 Overview of Industrial Development Incentives Description Actual Number of firms/projects supported Investment leveraged No. of jobs created as per the approved projects AIS92R4,7 bn9 344 BPS23 projectsR4 bn (3years) Film & Television72 Film productionsR2 bn - 12 I14 projectsR22,2 bn1 969 CIP6 projectsR9,9 bn14 835

Trade, Investment & Exports SO2: Build mutually beneficial regional and global relations to advance South Africa’s trade, industrial policy and economic development objective  Investment Pipeline of potential investment projects of R 34,4 bn e.g. Nestle and Unilever  Facilitated business delegations and fora to emerging markets, e.g. Mozambique, Benin, Cameroon, Turkey and UAE and Oman  Submitted a revised list to China on value added exports to and investment from China  High level in-principle paper on Regional Industrial Development Policy finalised with regards to the SACU 5 point plan 9

Broadening Participation SO3: Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth  Facilitated the establishment of 180 new small scale Co-operatives.  Reviewed Codes of Good Practice and ready to be gazetted pending Presidential Council endorsement.  Feasibility study for the proposed Saldahna IDZ completed and out for public comment.  806 projects supported through the Enterprise Investment Programme (EIP) with the value of investment leveraged being R12,3 bn and potential jobs being created.  183 Cooperatives supported through Cooperative Incentives Scheme.  548 Enterprises supported through the BBSDP. 10

Regulation SO4: Create a fair regulatory environment that enables investment, trade & enterprise development in an equitable & socially responsible manner  Co-operatives Amendment Bill submitted to Cabinet and Business Case to National Treasury (NT).  B-BBEE Amendment Bill approved by Cabinet and issued for public comment.  SEZ policy & bill approved by cabinet for public comment.  IP Amendment Bill for Protection of Traditional Knowledge adopted by National Assembly.  National Lotteries Policy Framework and Bill drafted for approval.  Finalised the Gambling Review process and the review of the Gambling Act.  Established and launched the Companies Tribunal.  Reviewed and developed the policy on the National Credit Act (NCA).  Developed the Policy and started the drafting of the Businesses Act. 11

Administration & Co-ordination SO5: Promote a professional, ethical, dynamic, competitive & customer-focused working environment that ensures effective & efficient service delivery  Vacancy rate as at 31 March 2011 was 16.9%. Reduced to 8.45% as at 29 February  Achieved targets of 43.11% of women in SMS and 2.34% of persons with disabilities.  92% of all creditors payments made within 10 days, 8% of all creditors payments made within 14 days 12

13 Overview of the dti’s key interventions over the 2012/13 period

14 KEY INTERVENTIONS – INDUSTRIAL DEVELOPMENT Sector interventions Upscale industrial policy by tabling the annual rolling Industrial Policy Action Plan to Cabinet and implementation carried out. Complete and submit designation templates to the National Treasury for three (3) subsector/sectors for local procurement. Support technological competencies via the Technology and Human Resources for Industry (THRIP), by supporting students and 850 researchers in Chemical, ICT, Metal and Minerals, Agriculture and Biotech and Energy. Support 20 new projects to the total value of R36m (SPII contribution R20m and industry contribution R16m) through the Support Programme for Industrial Innovation (SPII).

15 Support to enterprises through Automotive Incentive Scheme (AIS) and 12I tax allowance  AIS: 54 enterprises; Value of investment: R2bn; and projected jobs:  12I: 12 enterprises; Value of investment: R10bn; and projected jobs: Critical Infrastructure Programme (CIP) – support twelve (12) enterprises worth R6bn. Business Process Services (BPS), Film and TV Production-support 15 BPS projects, 63 Film productions worth R400m and R1.8bn respectively. Business Process Services (BPS), support jobs projected from applications for BPS grants. Export Market and Investment Assistance (EMIA)-support 860 enterprises to participate in the EMIA Scheme. Green Enterprise Competitiveness (GEC)- to support 140 enterprises. Launch the Manufacturing Competiveness Enhancement Programme (MCEP) KEY INTERVENTIONS – INDUSTRIAL DEVELOPMENT

16 Africa regional development programme implemented-report on implementation of agreed programme and projects for priority development areas in SACU, SADC-FTA and SDI infrastructure projects. Conclusion of EPA trade negotiations with the EU, SACU- EAC-COMESA (T-FTA) - Report on conclusion of trade negotiations. Increased manufactured exports under EMIA by increasing the value of exports to R850 m. Investment facilitation in targeted sectors to R45bn KEY INTERVENTIONS – TRADE, INVESTMENT & EXPORTS

17 seda Technology Support Programme (stp)  Establish 44 incubators  Approve 40 technology transfer interventions  Support 268 SMMEs Implement Enterprise Investment Programme (EIP)  Enterprises Supported  Approve 450 SMMEs for MIP (Manufacturing Incentive Programme)  Approve 300 SMMEs for TSP (Tourism Support Programme)  Value of projected investments  MIP-R6.3bn  TSP-R4.2bn  Number of new jobs projected  MIP  TSP KEY INTERVENTIONS – BROADENING PARTICIPATION

18 Implement approved action plan emanating from the SMME review report. Implement the agreement with National Treasury on the Ten-set aside products. Support 30 new contracts with companies to participate in the Workplace challenge programme. Utilisation of SEZs to facilitate regional economic activity – request to all provinces to submit 2 proposals for SEZs. Release the amended Codes of Good Practice for B-BBEE implementation. KEY INTERVENTIONS – BROADENING PARTICIPATION

19 Finalise the National Strategic Framework on Gender and Women Economic Empowerment. Support 60 new projects through the Isivande Women’s Fund. Cooperative Incentive Scheme (CIS) and Black Business Supplier Development Programme (BBSDP):  Support 490 enterprises through CIS.  Support 700 enterprises through BBSDP. Release the approved amended Co-operatives Act for implementation. Finalise Informal Sector Strategy. Finalise Youth Enterprise Development Strategy. KEY INTERVENTIONS – BROADENING PARTICIPATION * Internal targets for BBSDP & CIS will be set for the 2012/13 financial year to ensure a more equitable geographic spread

20 KEY INTERVENTIONS - REGULATION Submission of three (3) reports on Regulatory Impact Assessment (RIA) for regulation on business and economic citizens. Development of the National Credit Act (NCA) policy. Development of two (2) Regulations on Intellectual Property for the protection of Indigenous Knowledge (IK) and the National Lotteries Board. Special Economic Zones Bill to be processed. Businesses Amendment Bill to be processed. Release the approved amended B-BBEE Act for implementation. Legal Metrology Bill to be processed.

21 KEY INTERVENTIONS – ADMINISTRATION & COORDINATION Attract, develop & retain professional and skilled officials Reduction of the vacancy rate to 5% Reduction of the staff turnover rate to 9% Employment of People With Disability increased to 2.4% Employment of Women in senior management positions increased to 43% Financial Management All eligible creditors’ payments to suppliers made within 30 days Service Delivery Improvement The Service Delivery Improvement Plan (SDIP) approved and implemented.

22 KEY INTERVENTIONS – ADMINISTRATION & COORDINATION Public Awareness Platforms and Events Conduct 12 programme focused publications to improve the public awareness. Conduct 6 multimedia awareness campaigns. Conduct 80 outreach initiatives. Roll-out of Roll-out of Intellectual Property for the Protection of Indigenous Knowledge Bill

23 ALLOCATED RESOURCES

MTEF PER PROGRAMME Programmes (‘000)2012/132013/142014/15 Totals MTEF Administration608,742690,473722,2132,021,428 International Trade and Economic Development133,462137,804149,851421,117 Broadening Participation879,891928,362985,5882,793,841 Industrial Development: Policy Development1,482,8561,535,8731,673,1784,691,907 Consumer and Corporate Regulation244,713259,580248,490752,783 Industrial Development: Incentive Administration5,437,5656,472,0836,960,51218,870,160 Trade and Investment South Africa304,826328,173378,3021,011,301 TOTAL9,092,05510,352,34811,118,13430,562,537

MTEF PER ECONOMIC CLASSIFICATION Economic classification (‘000)2012/132013/142014/15 Totals MTEF Compensation of employees 713,995798,624825,3212,337,940 Goods and services 589,371634,461687,5451,911,377 Payment for capital assets 14,11010,30910,61435,033 Transfers & subsidies 7,774,5798,908,9549,594,65426,278,187 TOTAL9,092,05510,352,34811,118,13430,562,537

2012/132013/142014/15 R’000% % % Less: Payments to agencies1,060, %1,190,52611,5%1,281, % Less: Compensation713,9957.8%798,6247.7%825,3217.4% Less: Incentives6,648, %7,646, %8,198, % Incentives capital1,344, %1,433, %1,261, % Other incentives5,303, %6,213, %6,936, % Less: Goods & Services589,3716.4%634,4616.1%687,5456.2% Less: Other Payments*66,2190.7%72,2390.7%115,4041% Less: Capital14,1100.2%10,3090.1%10,6140.1% Total9,092,055100%10,352,34811,118,134100% *Other payments includes payments to: Universities and Technikons, Foreign governments & international organisations, Non-profit institutions, Households, Payments for financial assets and Interest and rent on land Categories of which the Department’s expenditure are classified

Five year comparison of Budget vs expenditure

CHALLENGES The prolonged global recession especially in relation to South Africa’s traditional trading partners, which had a negative impact on the domestic economy. The high cost of capital for productive sectors. Steeply escalating administered prices, especially electricity and ports charges. Skills shortages in critical areas. 28

29 THANK YOU QUESTIONS ?