Economic Development Department 1st Quarterly Report 2012/13 Presentation to the Portfolio Committee on Economic Development 18 September

Presentation 1st Quarter performance –Economic Policy Development –Economic Planning and Coordination –Economic Development and Social Dialogue Progress against ENE targets Human Resources Financial Performance Concluding remarks 2

Economic Policy Development (1) EDD Conference held on 19th April 2012 Theme of infrastructure and development – opportunity to present National Infrastructure Plan High-level participation from government, business, labour, academia and communities, including Chair of the Portfolio Committee Keynote by Professor Joseph Stiglitz Proceedings being developed as a booklet Regulatory impact process reviewed to align with NGP Development of guidelines for a socio-economic impact assessment system (SEIAS) Should help focus attention on employment creation, equity and growth. Collaboration in coming months to develop expertise and best-practice approach Linked to broader effort to sensitise departments to employment and economic impacts 3

Economic Policy Development (2) Outcome 4 quarterly report completed with National Treasury and DTI and submitted to Cabinet –Satisfactory progress on employment creation –But risks arising increasingly out of global slowdown –Need to do more to manage administered, input and food prices Policy Platforms Launch of the financialisation project with the UN-DESA and the CSID –Participation by leading national and international experts –Major findings relate to unusually high level of portfolio capital inflows compared to other middle-income economies and very rapid growth in financial sector with limited employment creation Support for International Economics Association meeting on industrial policy in Africa, led by Professor Stiglitz and the World Bank’s Justin Lin, with local and international experts Platform held with Social Dialogue branch on the role of government policy in promoting SMMEs with speakers from NPC, SAntrepreneur and SALGA 4

Economic Policy Development (3) Other outputs Support provided for engagements at NEDLAC on multi-pronged youth employment strategy –Key initiatives proposed include public employment schemes with youth brigades; expanded apprenticeships and internships; targets for new entrants in Jobs Drivers; explore subsidies to employment creators and employees Briefing notes on the financialisation of the South African economy Draft discussion paper on inequality developed – to be finalised by end September 2012 Inputs for major speech on women and the New Growth Path Submission on proposed amendments to the BBBEE Code to Minister 5

Economic Planning and Co-ordination (1) Spatial planning Holistic process with DRDLR and CSIR to identify functional regions as basis for improving spatial integration Identify key value chains and other opportunities for linking historically marginalised regions into core economy Basis for planning for infrastructure, SEZs and provincial growth and development strategies Work on 23 districts with DRDLR and PICC – central to improving opportunities in former so-called “homelands ” 6

Economic Planning and Co-ordination (2) Growing the Green Economy solar water heaters installed in collaboration with DOE and Eskom; of these, low pressure SWH that are affordable for low-income households; working toward local production of panels Support for Red Cap, Innowind and Phytoenergy – projects to provide clean energy that, if successful, can support growth and employment in the Eastern Cape Participation in inter-departmental processes to ensure coherent implementation of green economy strategies in ways that support employment creation and SMMEs, and to improve modelling of the transition to a lower-emissions economy 7

Economic Planning and Co-ordination (3) Promote investment for economic development Support for catalytic projects including Rise Up co-op bakeries SEFA launched in April 2012 –Doubling of resources available for SMMEs –Both direct lending and through intermediaries –Targeted support for micro and survivalist enterprise as well as small and medium enterprise Business hub and training with SA Institute of Chartered Accountants to improve employment opportunities for young accountants while supporting SMMEs Continued work with IDC to support employment-creating growth aligned with New Growth Path and IPAP Quarterly meeting chaired by the Acting DG held with the entities on 5 June 2012, including heads of ITAC and Competition Tribunal 8

Economic Planning and Coordination (4) Special financing by the IDC A total of R165.8million was disbursed during this quarter to 8 companies: –426 jobs saved and/or created at a cost of R per job –IDC Distress fund: R4,981 billion to 128 companies –Transfers to IDC for SEFA: R42,245 million –Transfers to IDC: R36 million Leveraging state expenditure and procurement Engagement with the Department of Energy on the appliance standard and labelling project Procurement - National Treasury signed 5 instruction notes on the designated sectors 9

Economic Planning and Coordination (5) Implementation of the National Infrastructure Plan Seven SIPs launched at Intergovernmental Forums Aim of launches: –Bring together stakeholders within the state to ensure co-ordination around the SIPs –Identify lead agency that will co-ordinate SIP and drive implementation These engagements were attended by the President, Deputy President, Ministers, Deputy Ministers, Premiers, Executive Mayors, representatives of SALGA, heads of SOEs and other stakeholders Two engagements held with social partners Presentation of Plan to stakeholders and experts at EDD Development Conference Monitoring system established to provide quarterly reports on progress 10

Economic Planning and Coordination (6) African regional economic development/strategic trade policy EDD participated in consultative fora on 15th March 2012 and 13th June 2012 as preparation for Rio+20 Summit. Discussions centred on South Africa’s inputs to the Summit Participated in preparation for the 5th Forum on China - Africa Cooperation (FOCAC). Process clarified South Africa’s position in preparation for the Forum EDD collaborated with National Treasury, the dti and DIRCO in compiling a BRICS country strategy for South Africa. Focused on issues that inform elements of South Africa’s economic strategy towards BRIC countries EDD collaborated with the dti, DIRCO, DBSA, DPE in 6 meetings regarding the North South Corridor infrastructure work. Meetings took place in February, May and June

Economic Development and Social Dialogue (1) Social dialogue and capacity building engagements Task team meeting on 29 June with social partners to update the meeting on the development of the National Skills Accord Meeting with Proudly South Africa at Nedlac House on 31 May to outline and ratify the implementation plan of the local procurement accord as it is relates to PSA and its implementing bodies Information sessions with regional businesses in Mpumalanga, Western Cape May and Kwa-Zulu Natal 24 May on local procurement and the accord Presentation to SANCO and the Women’s Coalition, on the Local Procurement Accord and their constituencies’ role in marketing and implementing the Accord Presentation to SA Council of Churches and Diakonia, on the Local Procurement Accord and the churches’ role in implementing commitments Policy platform on infrastructure addressed by business, labour and government leaders 12

Economic Development and Social Dialogue (2) Organised labour and other social partners capacity building Capacity building programme on the New Growth Path and the Social Acc ord: 3 workshops Interventions to create or save jobs 30 Day Payment Campaign rolled out across the country with provincial and national departments. Objective is to sensitise departments to the effects of late payments to service providers & SMMEs Agreement between shoe manufacturing co-op, Ujima Bakwena, and suppliers, Mossop Western Leathers & United Farm Suppliers will assist the co-op by supplying raw materials at a discounted price and assisting with machine parts Partnered with Proudly SA to present mini-exhibitions and “Buy local” marketing events across the country 13

Economic Development and Social Dialogue (3) Knowledge networks Two 2 knowledge network sessions –The Role of Government Policy in Promoting Small Businesses in South Africa; and –Planning in South Africa as a Tool for Public Investment Decisions Economic Development Agreements Steering committee meeting with the Western Cape Furniture Initiative on 27 March to discuss development of an agreement with the Furniture Industry Signed agreement with Bantex, committing the company to discount its prices of locally made folders Signed agreement with Proudly SA to implement the buy local programme in terms of the Local Procurement Accord 14

Economic Development and Social Dialogue (4) Presentation to Portfolio Committee on objectives, content and implementation of Local Procurement Accord 15

ENE targets for 2012/13 (1 of 2) 16 Indicator1st Q target 1 st Q actual Annual target Number of Regulatory Impact Assessment on key NGP outcomes per year Number of sector strategies produced, reviewed or monitored per year- - 2 Number of interventions promoting economic development through leveraging off state expenditure and procurement per year Total value of special financing facilitated for small businesses, targeted growth sectors and companies in distress R1.25bn R165.8m R5bn Number of spatial plans produced or reviewed2 4 15

ENE targets for 2012/13 (2 of 2) 17 Indicator1st Q target 1st Q actual Annual target Number of reports on the implementation of the green economy strategy- - 2 Number of interventions to save or create new jobs per year Number of social dialogue and capacity building engagements per year Number of economic development agreements (sectoral, workplace and national) facilitated with social partners per year

18 Employment Equity Statistics (30/06/2012 ) Designation WhiteBlackDisabilitySub-TotalTotal MFMFMFMF SMS MMS Level Level Sub-Total TOTAL % 10%90%043%57%

Summary Statistics (30/06/2012) All Staff MaleFemaleTotal % TOTAL % % 43%57% PERSONS WITH DISABILITY = 0% - the person with disabilities resigned in May. The post was advertised and an appointment was made. The incumbent commenced duties on 1 July SMS Members MaleFemaleTotal % of total staff TOTAL % % of SMS Members 65%35%

Recruitment Progress on recruitment plan in 1st quarter Total staff complement: appointments made during this period 2 terminations (1x resignation,1x contract expiry) 11 x interns were appointed and placed as follows: –1 x Economic Policy Development (Female – B Com(Hons) in development theory & policy) –2 x Social Dialogue (Males –Diploma :Economic Management) –2 x Economic Planning and Coordination (Male and Female -B Com: Economics) –2 x Internal Audit (Males –National Diploma: Internal Audit) –1 x Office of the DG (Female –BA Public Administration) –1 x Human Resource Management (Male –Diploma: Human Resource) –1 x Legal Services (Female –LLB) –1 x Finance (Female – National Diploma: Administrative Management Finance) 20

Financial Performance 2011/12 Audit and AFS Successfully completed external Audit process and AFS for 2011/12 Overview of Expenditure The information based on June 2012 IYM reports or section 40(4)of PFMA reports –Signed by the Accounting Officer and sent to National Treasury –Total budget of R million for 2012/13 financial year –Expenditure for the 1st quarter of 2012/13 is R million or 24% of the main appropriation of R million –Expenditure excluding transfers for the 1st quarter of 2012/13 is R 23.1 million or 15% of the main appropriation of R million –Commitments as at 30 June 2012 amounts to R 2.8 million 21

Financial Performance 22 Total Economic Development Department YTD EXPENDITURE Act 2012/13 Per ProgrammeQUARTER 1% SpentMain Appropriation R'000% ADMINISTRATION11,17319%60,065 ECONOMIC POLICY DEVELOPMENT3,91513%29,056 ECONOMIC PLANNING AND CO-ORDINATION145,84126%565,462 ECONOMIC DEVELOPMENT AND DIALOGUE3,40019%18,149 TOTAL INCL. TRANSFERS164,32924%672,732 TOTAL EXCL. TRANSFERS23,05415%149,275 Per Item ClassificationR'000% COMPESATION OF EMPLOYEES13,62815%91,616 GOODS AND SERVICES8,83218%50,153 DEPARTMENTAL AGENCIES AND ACCOUNTS141,27527%523,457 PAYMENT OF CAPITAL ASSETS5938%7,506 TOTAL INCL. TRANSFERS164,32924%672,732 TOTAL EXCL. TRANSFERS23,05415%149,275

Financial Performance Overview of Revenue Revenue collection for the 1 st quarter of 2012/13 is R 54.9 million or 9% of budgeted revenue of R million Main revenue generator is fines from penalties from Competition Commission and dividends from IDC 23

Concluding Remarks Governance & Administration Conclude 2011/12 Audit and Annual Report processes First draft submissions for 2012/13 MTEF budget and planning processes Focused implementation of recruitment plan Identify measures to ensure improved departmental expenditure Policy and implementation Support for National Infrastructure Plan Spatial strategy and catalytic projects Second round of local procurement designations Policy development: finalise inequality discussion paper; drafts completed on financialisation, gender, youth, SMMEs Finalise proposed amendments to BBBEE Codes and Competition Act 24

Siyabonga 25