1. the dti Strategy and Budget 2004 - 2007 Presentation to Parliamentary Committees 26 May 2004

2. Contents Opening remarks What we achieved in 2003/4 Our vision and plans for the next three years How the budget supports our strategy

3. Opening remarks 5 th budget presentation by this DG At 1 st budget presentation in 2000, the dti had underspent by almost 1/3! At this 5 th budget presentation in 2004, by working together, we -the dti and the committee - have balanced the budget! Also, this is the 2 nd time the department will report to the committee on its performance against the targets set out in the Vote 32 Continue good working relationship between the department and parliament: –Oversight role of the committees in ensuring the department fulfills its mandate –Contribution the committee makes to policy development (IMS, cooperatives, Apex Fund)

4. What we achieved in 2003/4

5. the dti house Ministry Office of the DG Economic Research and Policy Coordination International Trade and Economic Development Enterprise and Industry Development Consumer and Corporate Regulation The Enterprise Organisation Trade and Investment South Africa Marketing Group Systems and Support Services

6. Key outputs delivered – programme 1 - Administration Public-private partnership to finance and construct the new dti campus Research study on the effects of a volatile exchange rate on manufacturing exports Launch of an industry forum for dialogue with sectors Development of a set of key performance indicators to measure the impact of the dti’s work on the economy Web-based research database launched Research fellowship programme with Pretoria and Vista Universities launched Investment Climate Survey, in conjunction with the World Bank, initiated

7. Key outputs delivered – programme 2 – International Trade and Economic Development Leadership at the World Trade Organisation Ministerial in Cancun and participation in the formation of the G20 group of developing countries Five negotiating sessions were held between SACU and the US as part of the free trade agreement negotiations Three negotiating sessions were held with EFTA as part of the free trade agreement negotiations Negotiations between SACU and Mercosur on are on-track Exploratory talks were conducted with India and China 10 Investment Protection Agreements and Bilateral Cooperation Agreements concluded, 20 technical and trade missions to other African countries Turnaround time for tariff investigations has been halved from 6-months to 3- months Improvement in compliance with import and export controls – 287 inspections conducted 17 100 import permits issued – 5583 export permits issued

8. Key outputs delivered – programme 3 – Enterprise and Industrial Development (1) More than 15 000 small enterprises were trained, mentored and assisted by Ntsika 213 training courses were provided by Ntsika and 3 new courses were developed 282 service providers were trained and 209 were supported by Ntsika Khula provided 628 credit guarantees to the value of R180m R99.3m in loans was disbursed by Khula 1477 properties were provided to SMMEs by Khula’s Property Portfolio Khula financed 3 new retail finance institutions Khula equity fund financed deals to the value of R19,6m Namac assisted and supported more than 2000 manufacturing enterprises creating 1744 new jobs and retaining 14 726 existing jobs

9. Key outputs delivered – programme 3 – Enterprise and Industrial Development (2) Technology and innovation projects worth R205m supported through SPII 1125 researchers, 2651 students, and 376 enterprises supported through Thrip 292 new technical standards issued, and 301 standards revised including a label of origin for all locally made clothing 29 medical labs, 22 inspection bodies, and 25 test labs accredited and certified through SA National Accreditation System 3 research studies on critical skills completed: transport sector, chemicals sector, and Top 500 companies Publication of the broad-based black economic empowerment strategy and the enactment of the Act Participation in strategic charter processes – financial services, maritime, tourism More than R4bn loans to black companies approved by IDC

10. Key outputs delivered – programme 4 – Consumer and Corporate Regulation Draft corporate law reform policy finalised Draft consumer protection policy finalised Comprehensive research on consumer credit patterns completed and presented to Cabinet and Parliament Consumer credit complaints have fallen from between 1 and 12 months, to between 3 and 20 days, time to resolve a consumer complaint has fallen from between 90 and 180 days to between 1 and 3 days – a 600% improvement! 82 complaints were resolved by the Competition Commission 250 mergers were approved by the Competition Commission R286m of lotteries funds was paid out: 61% to charities, 22 to sports and recreation, and 14% to arts, culture and heritage

11. Key outputs delivered – programme 5 – The Enterprise Organisation Investment incentives –6000 enterprises –R1,3bn investment generated –19 700 new jobs created –44 500 jobs sustained –40 new technology projects Infrastructure investments –R2,4bn investment in 7 infrastructure projects IMS support measures –247 enterprises Black business supplier development programme –259 enterprises 15 Strategic Industrial Programme projects approved - R4.7bn investment

12. Key outputs delivered – programme 6 – Trade and Investment South Africa R5,8bn investment secured, 305 projects facilitated 5506 exporters assisted and advised 50% of EMIA recipients were SMMEs, 21% were enterprises owned by HDPs 29 national pavillions were held generating R324,8m in export sales for participating enterprises 45 inward investment and buying missions 28 outward selling missions

13. Key outputs delivered – programme 7 – Marketing Average of 88 000 website hits per month 10 000 new clients were reached through phase 2 of the the dti Business Express, 500 000 clients were reached through exhibitions and events Almost 5m people read the dti’s regular publications Sisebenza Sonke, My Business, businessSA and 76 ad hoc, one-off, or specialised publications, brochures and pamphlets were published In total, over 3,52m economic citizens were reached through publications and advertising 76% of all calls are handled within 30 seconds 98% of all escalated queries are resolved within 48 hours

14. the dti’s vision for 2004 – 2007 What do we want to achieve ?

15. For the first time, a strategic planning process was implemented in the dti in June 2003 This new process involved: Strategising – setting out a common vision of where we want to go as a department Planning – putting together a set of concrete and practical tasks to achieve the vision Budgeting – allocating money and people to these tasks Making strategic choices about which tasks were the most important, which would have the biggest impact Getting different parts of the department to work together more closely on shared tasks

16. We will work to increase the contribution of small enterprises to the economy by Launching the Apex Fund for micro-credit this year Merging Ntsika and Namac into a single agency this year with an annual budget of R120m Providing financial and technical assistance to cooperatives later this year including R3,5m to the National Cooperatives Association of SA Finalising a cooperatives development strategy New legislation to promote and support franchising Enterprise development bill to provide streamlined system of providing grants and incentives to all kinds of enterprises in all sectors R2m to support the SA Women’s Empowerment Network R25m to Khula

17. We will make significant progress in achieving broad-based black economic empowerment by Implementing the Broad-Based Black Economic Empowerment Strategy including establishing the Advisory Council and gazetting the Codes of Good Practice Raising an additional R1bn to capitalise the National Empowerment Fund and fund new financial products for BEE to be launched on 31 May R10m for the operating budget of the NEF

18. We will raise the level of investment in the economy as a whole and in priority sectors by R503m in investment incentives for enterprises R72m for investment promotion and facilitation R32m for sector strategy development and projects to grow Completion of the investment climate survey New incentives for labour-intensive sectors: film and business process outsourcing Improving the functioning of foreign economic offices Regional initiatives like cross-border Spatial Development Initiatives and the Coega Industrial Development Zone

19. We will increase the market access opportunities available to our enterprises and increase exports of South African goods and services by R36m on bilateral and multilateral trade negotiations R243m on export development and export promotion –Including, R200m for the Export Credit Insurance Corporation –Plus R112m for the Export Marketing and Investment Assistance scheme R43m for the International Trade Administration Commission Nepad business initiative Commonwealth business council

20. We will contribute to building skills, technology and infrastructure platforms to make our enterprises competitive by Advocacy role in the cluster and working with other government departments R100m for critical infrastructure projects R7,6m for the Youth Internship Programme in the ICT sector R135m for the Technology and Human Resources for Industry Programme R83m for the Support Programme for Industrial Innovation R48,6m for technology incubators R6m for Technology for Women in Business R10m for technology venture capital

21. We will seek to reposition the economy in higher value-added activities by Implementing the IMS and sector strategies Hosting an international symposium on competitiveness in June 2004 R45m for the Competitiveness Fund and R13m for the Sector Partnership Fund R7m for the Fund for Research on Industrial Development, Growth and Equity at Nedlac R7m for the Workplace Challenge

22. We will contribute to providing economic citizens with better and easier access to redress by R95m for efficient and accessible regulatory services Consumer Protection Law, Consumer Credit Law and Corporate Law reform processes will be completed Education and communication campaigns including the consumer help-line R23m for enforcement and compliance of consumer and corporate regulations R15m to the Micro-Finance Regulatory Council

23. We will continue the day-to-day operations that keep the economy functioning Registering companies and close corporations Issuing technical standards for product quality and safety Resolving consumer complaints Investigating anti-competitive practices Issuing General System of Preferences certificates to exporters Issuing import and export permits Conducting tariff investigations Answering 16 000 calls per week from economic citizens seeking information about the dti and about the economy, opportunities and available support Manage 19 agencies and 42 foreign economic offices

24. We will continue to improve the efficiency and capacity of the dti to deliver Moving into the new campus Rolling out an extensive programme for the training and development of staff Introduction of better reporting and measurement systems to make sure we meet our targets R76,7m to extend our accessibility to economic citizens through our marketing efforts and investigating better ways of delivering services

25. Our ‘Flagship Projects’ for this year are (1) Finalise the consumer credit law reform process Merge Ntsika and Namac into a single enterprise development agency Disburse the first loans from the Apex Fund by the end of the year Implementing the cooperatives development strategy Finalising a strategy to promote a more equitable geographic spread of sustainable and productive economic activity Implementing the Broad-Based Black Economic Empowerment strategy including establishing the Advisory Council, issuing codes of good practice, and disbursing new financial products for black enterprises

26. Our ‘Flagship Projects’ for this year are (2) Finalising a strategy to increase level of trade between African countries Investigating options to improve the delivery of the dti’s services to the second economy Introduce to Parliament the Enterprise Development Bill to provide a streamlined and transparent way of providing grants to enterprises in all economic sectors

27. How does the budget support the strategy?

28. Better planning means better budgeting, less under-spending and a balanced budget

29. What is the dti’s budget? From 2000/01 to 2006/7, the average annual increase in the budget of the dti is 6.8% –R2, 159bn in 2000/01 –R2, 848bn in 2004/5 –R3, 023bn in 2005/6 –R3, 213bn in 2006/7

30. In the Estimates of National Expenditure (Vote 32), the budget is divided into 7 programmes 1. AdministrationR236m 8.3% 2. International Trade and Economic DevelopmentR97,9m 3.4% 3. Enterprise and Industry DevelopmentR1,015bn35.7% 4. Consumer and Corporate RegulationR130m 4.6% 5. The Enterprise OrganisationR943,2m33.1% 6. Trade and Investment South AfricaR348m12.2% 7. MarketingR76,7m 2.7%

31. Another way of looking at how the dti spends its budget Staff costs = 9.9% = R281m Procurement of goods and services = 12.5% = R357m Transfers to agencies = 38.5% = R1,09bn Grants to enterprises = 31.6% = R900m Equipment = 0.5% = R13,6m

32. Which are the programmes that have received more money this year? Increase to Programme 1 – Administration –Strengthen strategic planning, monitoring and evaluation, agency management and internal audit functions Increase to Programme 2 – International Trade and Economic Development –Increased number of trade negotiations –Extend the African economic development programme Increase to Programme 2 – Consumer and Corporate Regulation –Incubate new agencies for consumer credit regulation and consumer protection Increase to programme 5 – TEO –Transfer of EMIA from Tisa to Teo

33. Thank You