Post on 09-Oct-2020
EDD Presentation on the 2nd Quarter 2016/17
Presentation to the Portfolio Committee
Economic Development
15 November 2016
The report covers the period 1 July 2016 to 30 September 2016 unless otherwise stated.
Quarter 2 refers to the same period
1
Overview • New economic context: slower growth on the
continent
• Highlights from the Department‟s Report for the
quarter
– Infrastructure: biggest gas storage facility
– Manufacturing: new vehicle assembly plant announced
– New industries: investment in film sector
– Local economic development: example of Sutherland
• Standard report on KPIs
• Focus on human resources
• Standard report on finances
2
Hole in the Wall
3
BUT first, a promise to
the Portfolio Committee
Stunning areas - but infrastructure and marketing
could be improved.
4
Activities at Hole in the Wall
Hole in the Wall has a hotel, self catering accommodation
and a back packers lodge
BUT difficult to access
Getting to and staying at Hole in the Wall
Economic Context – additional data
5
154
156
158
160
162
164
166
168
170
172
Jan Feb March April May June July Aug Sep
Manufacturing Sales, Current Rand Bn, Jan-Sept 2016, Seasonally Adjusted
Retail Sales, Current Rand Bn, Jan-Sept 2016, Seasonally Adjusted
The latest available employment and GDP data was presented to the PC recently. New labour market data is expected to be available shortly. Additional economic data is
included above.
72
73
74
75
76
77
78
Jan Feb March April May June Jul Aug
• Since 2000, growth rates on the African continent have been
faster than global averages, driven by expanding commodity
demand, rising urbanisation and growing investment levels. SA
focussed on strengthening economic links with the rest of the
continent: trade, outward investment and infrastructure links are
being upgraded.
• BUT African growth is now slowing sharply. Major economies
are faced with lower commodity prices and demand, impacting
on economic performance.
• It raises the issue of the African growth path dependency on
mineral exports and the need to speed up economic
diversification.
• South African growth will be affected by weaker continental
growth.
6
Focus 1: New African context
The African growth and integration story
Trade with the
continent
2010: 19% of total trade
2015: 22% of total trade
7
Africa: contributor to SA
economic development
Biggest contributor to SA
export jobs: 240 000
Forex earner through positive
trade balance: R184bn
Africa: now our largest
export market, 2015
Africa: R276bn (31%)
Asia: R258bn (29%
Europe: R192bn (22%)
Americas: R 85bn (9%)
Africa: main export market for key SA products
Cars and Trucks: 26%
Machinery and mechanical appliances: 52%
Electrical machinery and equipment: 64%
Plastics: 76% Light trucks: 34% Tubes, pipes, hoses: 96% Washing machines: 99% Machine tools: 89% Medical instruments: 80% Milk 99% Suits 98%
Oil importing sources.
2005 2015
1. Saudi Arabia 39% Nigeria 54%
2. Iran 35% Saudi Arabia 18%
3. Nigeria 10% Angola 14%
4. Angola 5% UAE 4%
5. UAE 4% Kuwait 3%
• Other African countries – now our largest sources of imported oil
• 2005: Nigeria and Angola accounted for 15% of crude imports
• 2015 Nigeria & Angola accounted for 68%, displacing oil sourced from Middle east
SA presence
8
2015: Main Imports and Exports: Rest of Africa, and Top Product for Each
Export Import
1. Namibia (Trucks) Nigeria (Crude Oil)
2. Botswana (Refined Oil) Angola (Crude Oil)
3. Zambia (Refined Oil) Mozambique (Liquefied Natural Gas)
4. Mozambique (Electricity) Swaziland (Aromas for Food or Drink)
5. Zimbabwe (Soya Bean Oil) Namibia (Cattle)
SA retail stores in rest of
Africa including franchise and Group
Pick n Pay: 98
Shoprite: 401
Woolworths: 86
PEP Group 488
STANDARD BANK IN AFRICA
Angola Malawi Swaziland
Botswana Mauritius Tanzania
DRC Mozambique Uganda
Ghana Namibia Zambia
Kenya Nigeria Zimbabwe
Lesotho
E&Y 2013 Attractiveness Survey found that South
Africa has created almost 46 000
cumulative jobs through foreign direct investment in African
since 2003
SA initiative - Guidelines for Good Business Practice for SA companies operating on the continent
EDD agencies IDC Investments Rand Millions, 2015
1. Mozambique R 4 540
2. Ghana R 1 569
3. Uganda R 1 503
4. Zimbabwe R 1 172
5. Namibia R 1 134
6. Zambia R 1 052
7. Kenya R 897
8. Senegal R 691
9. Tanzania R 638
10. Nigeria R 577
11. Togo R 411
12. Sudan R 361
13. Ethiopia R 299
14. Botswana R 231
15. Mali R 190
16. Congo R 168
17. Ivory Coast R 154
18. Malawi R 136
19. Rwanda R 96
20. Lesotho R 2
TOTAL R 15 824 9
Selected IDC projects on the continent Cement plants in Namibia, Ethiopia and Mozambique
Airport and port in Senegal Energy in Angola, Ghana and Zimbabwe
Hotels in Mozambique, Zimbabwe, Uganda, Nigeria. SEE MAP ON NEXT PAGE.
Competition Commission on the continent - Member of the African Competition Forum
- Support for Namibia with Walmart transaction - MoUs with Kenya, Namibia and Mauritius
ITAC manages tariffs on behalf of Botswana, Namibia, Lesotho and Swaziland. ITAC provides trade policy support
and capacity building to other African countries, which recently included week-long sessions on the trade legal framework and instruments in Zimbabwe and Ghana
MOZAMBIQUE • Mining & Beneficiation • Agro-processing • Energy • Forestry • Transport equipment • Tourism • Cement
NIGERIA • ICT • Cement • Media • Hotel
GHANA • Energy • Hotels &
Accommodation • ICT
TOGO • Financial services •Transport
NAMIBIA • Agric. / agro-processing • Mining •Metal products •Financial services • Cement •Energy
BOTSWANA • Hotel &
Accommodation
MALAWI • Food and
Agriculture • Franchising
(Tool Hire)
SUDAN • Infrastructure (Water)
KENYA • Energy (Wind) • Sugar • Financial
services
UGANDA • Hotels &
Accommodation
• Infrastructure
TANZANIA • Sugar
MAURITIUS • Communications
ZAMBIA • Storage
and warehousing
• Healthcare • Energy • Mining • Metal
products • Chemicals
SWAZILAND • Basic chemicals • Wood products • Agro-processing • Financial services
D.R. CONGO • Mining • Franchise
(Fast Foods)
LESOTHO • Energy
ANGOLA • Energy
ETHIOPIA • Agro-
processing • Cement
ZIMBABWE • Mining • Telecommunication
s • Energy • Financial services • Healthcare • Metal products • Plastic products
Sierra Leone • Bio-Energy
SENEGAL • Airport • Port
development
Côte d’Ivoire • Financial
services
MALI • Wood
products
RWANDA • Wood and
wood products
The IDC’s rest of Africa portfolio (as at July 2016)
Over the last 15 years, Africa grew faster than the world economy. But now it has slowed sharply, below global averages.
Real GDP % Change, 2000-2015, World and Sub-Saharan Africa
The most recent forecast has revised Sub-Saharan growth downward for 2016 to 1.4%, significantly lower than the global 2016 rate of 3.1%. For 2017 and 2018, growth forecasts are also lowered, at 2.9% and 3.6%. The 2016 result will in all likelihood be the lowest growth in 2 decades.
Africa: fast growth sharply down…
11
-2
-1
0
1
2
3
4
5
6
7
8
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
South Africa
World
Sub-Saharan Africa
12
Our top 5 export destinations: Have all had growth forecasts cut for 2016 Are all expected to have higher rates of growth in 2017, except Zimbabwe Forecast growth
Country 2016 2017
Namibia 4.2 5.3
Botswana 3.1 4.0
Zambia 3.0 4.0
Mozambique 4.5 5.5
Zimbabwe - 0.3 - 2.5
Biggest economies struggle Nigeria: projected to be in recession in 2016, followed by slow growth (0,7%) next year Angola: growth expected to be zero this year, and 1,5% next year Egypt: currency has been devalued on 4 November and is now roughly 50% of its previous level. Country went to IMF for a $12bn loan.
The continent needs to break from reliance on oil, mineral and agricultural exports. This requires a new growth path based on deepening manufacturing, more processing of raw materials (mining and agriculture), stronger domestic and regional markets and larger, more productive services sectors.
Opportunities:
- World’s fastest urbanisation: cities as engines of growth, productivity and consumption
- Youthful population and workforce projected larger than China and India by 2034*
- Regional integration: build larger markets for local manufacturers and industrialisation
- Cross-border infrastructure investment
- Coordinated tourism campaigns
- Agricultural productivity gaps that can be closed
- Action against corruption, illegal financial flows offshore and tax evasion can generate resources for investment and social services
- Technology can support rapid development, improved connectivity, increased access
- Action to address social inclusion is a source of growth
Africa’s new growth path…
13
• Angola is a potential market for increased SA manufacturing exports
• SA generally has a large negative trade balance with Angola: exports are limited, whilst we import large amounts of crude oil from Angola
• For example:
– We make up only 4.5% of Angola’s imports of cars
– We make up only 15% of Angola’s imports of trucks
14
2013 2014 2015
Trade Balance (Rands Bn)
- 9.2 - 10.5 - 7.8
Crude Imports (Rands Bn)
18.6 21.7 15.3
-20
-15
-10
-5
0
5
10
15
20
25
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Bill
ion
s
South Africa's Trade with Angola in ZAR 2006-2015
Trade balance Total exports Total imports
Case-study: Angola and SA
Trade Balance and Crude Imports:
Angola-SA, 2013-2015
Trucks ZAR 000 (2015)
1. China 368 439
2. South Africa 241 373
3. Qatar 151 863
4. Portugal 133 053
5. Brazil 99 707
Angola imports car from:
ZAR 000s (2015)
1. Korea 275 873
2. USA 272 283
3. Qatar 245 216
4. China 219 450
5. India 180 199
9. South Africa
94 444
0
500
1000
1500
2000
2500
Portugal Brazil SA
US
$m
illo
n
Imports and exports to and from Angola by SA, Portugal & Brazil, 2015
Exports to Angola
Imports from Angola
These statistics show that Angola continues to have a stronger trade relationship with Portugal than with
South Africa, particularly on the import side, with larger value of Portuguese-made products finding their way
into Angolan markets. This represents an opportunity for South African exporters given our location advantage.
Angola’s main imports from Portugal 1. Wine 2. Medicine 3. Furniture 4. Sausages 5. Beer 6. Industrial structures
16
EDD and agency interventions: • Ministerial oversight visit to construction of one of the
largest gas storage facilities in Africa, in Saldanha (funded by IDC)
• Progress with market inquiry into Liquid Petroleum Gas (LPG) looking at structural features of the market; limited usage of LPG at household level
• Facilitated investment for a woman entrepreneur to develop a high technology LPG Cylinder Plant
Background: • A major supply source of SA gas is the oil refineries which are
aging infrastructure. SA is also dependent on gas imports • Gas is used increasing in industry, synthetic fuels and households • Bottlenecks to increasing supply include: import and storage
facilities, refinery shutdowns, and wholesale licence requirements and price monitoring and review of methodology
Product Initiative to secure gas supply by developing storage facilities for imported gas in Saldanha
14 700 tons gas cylinders imported 2015
Estimated to be 1 600 000 cylinders imported 2015
2,9 million tons gas imported in 2015
26% increase in gas imported (by tons) in 5 years
560 200 households use gas for cooking
Focus 2: infrastructure Gas pipeline and storage
The LP Gas Value Chain
17
Refinery
Logistics
Gas Bottle Manufacturing
Gas Bottling Plant
Bottled Gas Distribution
Cooking Heating
Imports
Depot/ Bulk Storage
SUPPLIER/ INDUSTRY SIDE
WHOLESALERS/ RETAILERS
18
Product
Ministerial visit to gas pipeline and new infrastructure
The SIP 5 Coordinator held an alignment session with the Western Cape government to review the SIP 5 Business Plan, on 24 August 2016
Product
Initiatives or meetings facilitated on SIP 5 What else to add?
Sunrise LPG Gas Terminal Project
South Africa is constructing one of the
largest gas terminals facilities in Africa.
This new infrastructure contributes to our:
• Security of energy supply
• Developmental agenda
• Environmental concerns
• Regional integration
Number of households able to benefit:
– 785 700 in phase 1
– 2 357 000 when complete
20
Product
Initiatives or meetings facilitated on SIP 5
The Competition Market Inquiry
completed its preliminary report
and during the quarter engaged
stakeholders. A copy of the
preliminary findings were
published. A summary of some
key findings is contained in the
next slide. Further details will be
provided in the next quarter.
SA is using more gas . We used:
• 132 million Gigajoules in 2010
• 170 million Gigajoules in 2013
• 120 million Gigajoules used by
Sasol each year making synfuel
21
Preliminary Findings and Recommendations of the LPG Market Enquiry The Market Enquiry made preliminary findings and recommendations in 4 areas with a request for submissions on them and how they could be implemented. Below are highlights and examples of recommendations
1. Long term supply agreements Finding: Wholesalers with long term supply agreements from refineries have a competitive advantage Recommendation: Reduce the length of supply agreements or cancel automatic renewal clauses in long-term supply agreements
3. Sale of LPG through cylinders Finding: Cylinder exchange practice may lead to anticompetitive behaviour and is open to abuse Recommendation: Abolish cylinder exchange programme amongst wholesalers (in its current form); customers fill at LPG filling sites – number to be expanded
2. High cost of switching Finding: switching by bulk users is not seamless e.g. problems in relation to the existing supplier removing equipment Recommendation: Have clear and transparent agreements on the cost and use of LPG equipment and another agreement on the supply of LPG
4. Regulatory environment and limited domestic supply Finding: Refinery shutdowns exacerbate limited domestic supply Recommendation: Competition Commission requested input on how shutdowns can be better managed to ensure supply & whether it is feasible to create a strategic reserve of LPG
22
Product
Initiatives or meetings facilitated on SIP 5
Sunrise LPG Gas Terminal Project
Constructing the LPG Gas Terminal • Pipes are welded together into lengths of 156m.
The pipes are large – 300 mm in diameter. • Once welded together, a barge pulls them out to
sea. The pipe is covered in concrete to weigh it down and stop it from floating.
• Once it is in its final position in the sea it will be covered with a rock filling
• The total length of the pipe in the sea will be 3,2km
• Total pipe length overland is 2,1km • All pipes are constructed locally – about R200
million – creating jobs and stabilising the steel value chain
• 400 people are employed during the construction phase and approximately 95% are from the local area
Key facts: • Allows for importing 17,500 tons
of LPG per month • Storage capacity: 5 500 tons • Project cost: R1 bn • Phase 1 complete date: 2017 • Build is modular – additions can
be made to respond to growth in demand
• Ultimate throughput capacity: 52 000 tons per month
• Ultimate storage capacity: 16 000 tons
•
Shareholders: • Mining Oil and Gas Services
(subsidiary to Royal Bafokeng) 60%
• IDC 31% • Ilitha Group Holdings (IGH) 9%
Case study: Investing in localisation
• Government support has re-
established South Africa‟s cylinder
manufacturing
• SA had lost its capacity to make
cylinders with closure of the last major
plant in 1990
• Manana Bogatsu, a black women
industrialist, has an IDC-loan to build
an advanced LPG cylinder
manufacturing plant in Coega, Eastern
Cape.
• The plant will at peak produce 500 000
to 1,5m cylinders per year
• The project partnered with a Turkish
cylinder manufacturer for access to
best technology
23
R170 million
IDC funding
approved in 2015
174 permanent
jobs will be created
• Local Film industry contributed R3.5 billion to GDP and created the
equivalent of more than 25 000 full time jobs
• Encompassed over 2 500 direct service providers
• South African Film Industry has an economic multiplier of 2.89 Source: SA Film Industry economic baseline study, 2013. NFVF
24
Developed the film value chain:
• Pre-production / development
• Production
• Post-Production
• Marketing and distribution
• Plus for SA: localisation & procurement
Focus 3: Film industry
Government has supported a thriving film industry that:
- creates local jobs and earns export revenues,
- helps South Africa to tell our own stories,
- renews urban areas and
- develops and showcases our talent and country to promote tourism.
25
Key government measures supporting investment in
the film industry:
1. IDC: funding for producing feature films, television
shows, animation and documentaries as well as
focus on emerging black filmmakers and studios
2. DTI incentives:
• Foreign Film and Television Production and
Post-Production Incentive: attract foreign-
based film productions to shoot in SA
• South African Film and Television Production
and Co-Production Incentive: assist local film
producers in producing local content
3. National Film and Video Foundation, agency of
the DAC, funds film & documentary production
4. Tax incentive – Section 24 F of the Income Tax
Act, grants a deduction of the production cost of a
film to the film owner
Provincial and local government
initiatives:
• Gauteng Film Commission
• Western Cape Destination Marketing,
Investment and Trade Promotion
Agency
• KZN Film Commission
• Eastern Cape Film Office
Investment in the film industry
• EDD gave strategic direction to the IDC, mobilising
the funding for new industries
• Since 2001, the IDC has approved funding of R1.2
billion to produce 83 films
• 37 of these films were produced and/or directed by
Black Filmmakers
• The IDC launched the Emerging Black Filmmakers
Transformation Fund (EBFTF) in July 2014, with the
dti and the National Film and Video Foundation
• This Fund specifically targets new local black entrants
to the film and production industry
IDC Investment in the film industry IDC total
approvals for
media and motion
pictures 2015/16
6 films funded
5 black directors
5 black
producers
R45.8m disbursed
3 youth
shareholding
SECTION BREAK HEADER
27
IDC Funded Films Films made in South Africa
28
In October 2016, the Minister officially launched a
new film studio in Joburg – Sky Rink Studios. It is
located at the top of the Carlton Centre. The
development helps to advance a number of goals
• Job creation: 150 permanent new jobs and 450
part-time jobs
• Telling our stories: it expand the film-
infrastructure for local film-makers.
• Urban renewal: it helps to develop the Joburg
inner-city and is part of a wider city rejuvenation
plan.
• Building African infrastructure: the facility can
also be used for television shows for other
African countries and discussions are taking
place with Kenya and Rwanda TV stations
Launch of new Sky Rink Studios in Johannesburg
The idea was developed by Mr
Frank Mohapi – to address
shortage of studio filming
facilities in Gauteng
EDD introduced him to City Of
Joburg to include the Sky Rink
project in their inner city
development plan. IDC
approved R 187 million
Minister at launch
• R1,6 bn attracted in
2015/16 by City of
Johannesburg’s
tax incentives for
urban renewal
• 52 buildings will
benefit
• R14 billion attracted since
2004
• Carlton Centre currently
attracting
investment
Johannesburg inner-city urban renewal
SECTION BREAK HEADER
IDC investments helped to build critical film
making infrastructure in Cape Town and Gauteng
Cape Town Film Studio
• R70 million to construct a flexible,
double stage for TV and feature film
production
• R14 million to construct the water tank
facility
• Highlight of achievements:
• Successfully hosting the adventure
drama series “Black Sails”.
• Attracting large productions such as
• Safe House
• Mad Max: Fury Road
• Long Walk to Freedom
• Judge Dredd
Benefits of support for the film
industry:
• Job creation
• Cape Town Film Studios created
77 500 temporary jobs (Black
Sails TV series and 19 film
productions job opportunities)
• Youth jobs (a third of those
employed are youth)
• Showcases SA tourism
• Establishes SA as a destination
for film making
• Helps reclaim our culture and our
stories
• Helps reclaim our cities
• Spurs innovation & job creation in
other sectors
Long Walk to Freedom created 294
temporary crew jobs and 11 974 cast and
extras temporary jobs
Film funding: some examples the dti funding: 2011/12 to 2015/16
• Total investment approved R2.8
billion
• Number of productions 478
the dti FY 2015/16
• Investment approved R839 million
• Number of productions 115
NFVF has invested R527 million
between 2010 to 2013
73 NVFV projects approved in
2015/16 for filmmaker support -
63% blacks and 41% female
R27 million by NVFV in 2015/16
created:
Direct employment 884
Indirect employment 443
NFVF funded Ayanda in
2015/16 – female producer,
directed and produced by
young black team.
“Of Kings and Prophets”
KZN film commission • KwaZulu-Natal Film Fund, launched
in 2014 has approved 85 projects
• The fund secured 3 local major
productions that shot in the province
in 2015 and 2016 - Beyond The
River, The Number, and Keeping
Up with the Kandasamys.
Qhude Manikiniki is a
13-part reality series that
exposes the
undiscovered world of
Maskandi super-star
artists; their power,
influence and larger than
life characters.
Known as the King of the
Zulu guitar, Madala
Kunene, the documentary
follows Madala's journey
from KZN, living through
forced removals and the
atrocities of the apartheid
regime, to being booed off
stage at an ANC youth rally
by commercially hungry
youths.
DRAFT PRESENTATION: NOT FOR QUOTING OR DISTRIBUTION
34
Product
Fast tracking and unblocking of investment in the
auto sector
Planting the seeds
2009 : Global economic crisis New Growth Path
2010: State visit to China
2014: IDC started exploratory talks with BAIC – testing appetite
2015: China state visit to SA
Agreement signed by President of BAIC & IDC
August 2016: Sod turning BAIC Automotive Assembly plant in the Coega IDZ
Commitment to partner to
industrialise SA & expand China’s investment in manufacturing
1st new light
passenger vehicle
assembly plant
built in SA in more
than 40 years
26 agreements
signed valued at
R94 billion
Focus 4: Auto investment
BAIC sod-turning event
KPI 4 1st phase of BAIC investment
• R4.3 billion will be invested in the
first phase
• 2 500 jobs will be created in the
construction of the plant
• 784 permanent jobs will be created
during the first phase of the project
2nd phase
• R6.7 billion invested in the second
phase
• 2 500 jobs will be created by 2023
• At full capacity the plant will
produce 100 000 vehicles per year.
40% of these will be for the
domestic market and the rest will
be exported
Significance of BAIC investment Initiative: Marks a move
away from export of raw materials to China, to inward
investment into SA.
R4,3 bn investment
37
Product
Fast tracking and unblocking of investment in the auto
sector KPI 4
Case study: Coega IDZ promotes SMME
development in the promotion of the auto
sector
• Site preparation was needed before
building could begin for BAIC investment
• This included – clearing the land and
preparing it for construction
• Instead of one large contractor, the project
was split into six contracts worth R3
million in total. Workers clearing the land for construction
The Automotive Production and Development Programme
(APDP) is a government’s programmes to support and
develop SA’s automotive industry.
It consists of 4 pillars:
1. Stable import tariffs
2. Vehicle assembly allowance
3. Production Incentive
4. Automotive Investment Scheme (AIS)
Current developments:
discussion with
component
manufacturers on
sourcing locally.
Construction may start
as early as mid-January
2017 if no delays occur
38
Sutherland: A small town with two divergent stories:
Home to advanced scientific work:
• Location of the largest telescope in the southern
hemisphere
• Conducts research in astronomy and astrophysics
• Part of the National Astrophysics and Space Science
Programme – developing South African astronomers
• 4 PhD students (2 female and 2 black males), 2
Postdocs employed, further 6 postdoc positions
Place of social exclusion
• 62% of households have a monthly income of R3 183
or less (2011)
• Over 60% of households use pit toilets
• 28% use wood as main source of energy for heat
• 28% use candles as main source of light
• 80% of households have no access to internet Ouma Blaauw
with Councillor
Anthony Meitas
Pit latrine – emptied by
hand – that Ouma Blaauw
is afraid to use
Focus 5: Local economic
development
39
Product
Local economic development KPI 16 Intervention – Ministerial visit to support investment in local and
township economies
The Minister undertook a site visit on 15 July 2016 and did an evaluation of
local economic development in Sutherland. The following was undertaken
as a result:
1. 52 people attended an EDD organised Economic Roadshow in
Sutherland on 28 September 2016.
2. Support received from:
SARS, sefa, seda, South
African Astronomic
Observatory, Municipality,
EDD and Department of Environmental Affairs
40
Product
Local economic development KPI 16
Outcomes of the Economic
Roadshow included:
1. Two Black Owned Bed and
Breakfast (B&B) now:
registered with CIPC, EDD
and Department of Tourism -
assists with Tourism Grading
Advertising in NRF
Newsletter
2. Two women-owned co-
operatives will participate in the
Working for Water Invasive
Plants Programme
EDD organised Economic Roadshow
focus areas:
• Development of business plans
• Assistance completing funding
applications
• Assist with tax compliance
• Identifying & facilitating mentorship
requirements • Assisting with business registration
41
Product
Local economic development KPI 16
3.SARS assisted 57 taxpayers (including walk-ins):
• 14 tax clearance certificates issued
• 41 tax returns submitted
• 2 new tax registrations
4.seda registered a woodcutting and farming
business Companies and Intellectual Property
Commission (CIPC), and is working on business
expansion plans
5.sefa conducted site visit to the woodcutting and
farming business after the roadshow
6.The Municipality registered its first supplier from
this initiative on its supplier database to do routine
maintenance work on municipal vehicles
42
Product
Local economic development
7. SAAO (NRF) – fixed, for free the Community Health Centre washing
machine and drier
8. MEC Health – delivered surgical gloves following Ministry enquiries.
The Community Health Care Centre did not have surgical gloves
9. Economic Development Ministry collected 100 books and donated it
to Sutherland Community Centre
Key Performance Indicator
1. Unqualified audit report
2. Measured improvement in support services to Strategic
Objectives 2,3,4,5 & 6 and the Ministry, as quantified by
users
Programme 1: Administration
43
Strategic Objective 1: Provide strategic guidance to the Department; and
technical and administrative support to the Ministry and the Department to
achieve strategic objectives 2, 3, 4, 5 and 6
• 2015/2016 Annual Report finalised and tabled on 26 September
2016
• An Unqualified Audit Opinion was received.
• Audit findings are included in a “Heat Map” for resolution and
implementation. The “Heat Map” is reviewed fortnightly.
• Repeat audit findings were reduced by 80% (10 to 2) compared to
previous financial year (2014/15).
• Audit Committee meetings held on 25 July 2016 and 25 August 2016.
44
Key Performance Indicator
1. Unqualified audit report
2. Measured improvement in support services to Strategic Objectives 2,3,4,5
& 6 and the Ministry, as quantified by users
Programme 1: Administration
• AGSA requested an change in reporting on predetermined
objectives & evidence collection. Workshop held with AGSA on 21
September 2016 to clarify findings and on SMART KPI‟s for
2017/18 APP.
• Preparation for 2017/18 APP started
• Responses to internal survey evaluating support functions
analysed. Improvement plans are being developed for
implementation in Q3
Key Performance Indicators
3. Number of reports and reviews on NGP framework, integration into economic
policy and infrastructure programmes; and public policy advocacy on jobs and
inclusive growth
4. Number of strategic support provided for the implementation of jobs drivers of
the NGP
5. Number of initiatives to support the green economy and the implementation of
the green economy accord
6. Number of interventions/reports on black women and youth with access to
employment and entrepreneurship opportunities
7. Number of spatial, local and provincial initiatives to promote socio-economic
development
Programme 2: Growth Path and Social Dialogue
45
Strategic Objective 2: Coordinate jobs drivers and implementation of the New
Growth Path economic strategy in support of the National Development Plan
46
Product: reviews and engagements
Report on public policy advocacy on jobs and inclusive growth KPI 3
The NGP provides requires the management of opportunities and risks
which requires tight coordination and regular review Activity: Engagement
with business and labour leaders on jobs and inclusive growth
Minister engaged the following public policy forums on jobs, investments
and social partnerships:
1. Johannesburg Chamber of Commerce and Industry (August 2016) –
discussion on constraints to growth, public infrastructure and potential
partnerships
2. Atlantis Business Forum (August 2016) – outline of key government
interventions, what agencies can assist with development and what is
expected from potential and current entrepreneurs
3. SACTWU Congress (September 2016) – review of impact of
government incentives in the sector as well as the political economy
factors that impact on growth and jobs.
• The Progressive Business Forum Construction Summit was held on the 7th of
July 2016 in Johannesburg.
• The Summit provided the opportunity for the Minister to hold discussions with
various stakeholders from business, government, Chambers, Financial
Institutions, and Regulatory authorities
47
Product
Public advocacy on jobs and investment/infrastructure
investments
KPI 3
KPI 11
Key themes
• Government infrastructure spend (3-5 year
view) and the enhancement of Public Private
Partnerships
• Construction finance, new building technologies
and other private enterprise initiatives
• Human Settlements and construction industry
regulatory matters, including legislative roadmap
issues of transformation in the economy
Product: Initiative One: automobiles
Fast tracking and unblocking of investment in the auto
sector
KPI 4
Initiative 1: Report on BAIC investment in auto-industry
in the Eastern Cape is contained on slides 35 to 37
KPI 4
• Following a Ministerial visit to a Saturday Produce Market, the Philippi Horticultural Area approached EDD to address the rezoning of the land and the loss of agriculture and jobs as a result
• The area has become contested as developers try to gain access to the land for housing and community groups and farmers try to retain the land for agriculture
• EDD investigated and became aware of a letter/directive sent by the delegated authority of the Minister of Agriculture Forestry and Fisheries to the City of Cape Town, rejecting permission for the City to change the land use in Philippi from agricultural use to „urban development‟
• EDD collected information and referred the matter and issues to the Minister of Agriculture. As a consequence the Minister of Agriculture referred the matter to a court to complete due process
49
Product: Initiative Two: urban farming
Support strategic implementation of NGP jobs driver –
agriculture and agro-processing.
Background on Philippi Horticulture Project
• Half of 3 000 hectares of a rural area in the Cape Flats called the Philippi Horticultural Area is owned by farmers and leased to small farmers
• Nearly 4 000 workers are employed on the land
• Emerging farmers are working approximately 100 hectares and growing vegetables
• The Philipi farm area produces approximately 150 000 tonnes of vegetables and flowers a year. It supplies the majority of Cape Town‟s vegetables
• The land was zoned for agricultural use, however, the City of Cape Town considered rezoning for normal urban use
50
Product: Initiative Three: Agro-processing
Support strategic implementation of NGP jobs driver – agriculture
and agro-processing KPI 4 Activity: Engagement with labour leaders providing support to the
implementation of the support of the agriculture and agro-processing jobs
driver: On the 23rd August 2016 the Minister met with union leadership from
the Food & Allied Workers Union in the sector – representing both regional
and national level
The engagement covered:
- Information on key interventions by government on jobs, including
competition, trade and investment initiatives
- critical infrastructure interventions to support agriculture and agro-
processing
- Review of employment numbers in the sector
- Discussion on a social compact on wages, investment and jobs.
Significance of initiative: It helps to mobilise labour to implement the NGP. It also helps the
department evaluate the NGP based on the feedback from labour
51
Product: Initiative Four: clothing industry
Support strategic implementation of NGP jobs driver –
manufacturing (IPAP)
Activity: Review of government incentives in the clothing industry
The Minister and EDD met with management and worker representatives
over 6 occasions including 4 factory visits at Luomo, Ahlesa Blankets,
Braitex and Seagulls
Key feedback on government‟s support of the clothing industry includes:
• Beginning of 1996 sector employed 266 000 clothing, textile, footwear
& leather workers
• By 2011 there were 100 000 formal sector workers
• 2009 government stepped up efforts to assist the industry (see boxes
on next page)
• Employment stabilised due to government intervention, mainly a
Production Incentive (PI) and new competitiveness programme.
KPI 4
52
Product: four factory visits
Support strategic implementation of NGP jobs driver –
manufacturing (IPAP) KPI 4 Seagulls
Company employs 121 workers and
manufactures rainwear and windbreakers.
Visit identified benefits of PI and challenges
with local sourcing by a municipality.
New machinery were bought for their
clothing range from the PI support.
The company diversified into imports of
plastic and outdoor products to survive
Braitex/Tensilon
Company employs 280 people, making
tapes and narrow-fabric.
A new boiler was purchased, using the
government PI incentive.
Company runs a training college for local
unemployed persons.
Luomo
Company employs 140 persons, making
Brentwood and Dickies trousers for the
local market.
The company has not utilised the PI and
following the visit, the company has now
applied to join the competitiveness
programme.
Ahlesa Blankets
Company employs 207 workers, making
blankets.
Discussions focussed on market feedback
on imports. The company is affected by
increasing imports of mink blankets from
China. The previous anti-dumping duty
does not assist with the new product.
A new reference price is in place to address
illegal imports.
53
Product
Support strategic implementation of NGP jobs driver –
manufacturing (IPAP) KPI 4
Government industrial policy
supporting CTFL from 2009:
1. Stronger tariff protection
2. New clothing competitiveness
fund
3. New co-investment by the IDC
with investors in the sector
4. Crackdown of smuggling and
shoes in the country
5. Local procurement by
government
6. Greater partnership between
government, business and
trade unions
Examples of support in practice:
• R4,1bn committed by the
competitiveness fund in last 5
years
• 500 factories supported by this
programme
• R3,5 bn as loans/ working capital/
shareholding by the IDC in the last
5 years
• IDC funding created or saved
24 000 jobs
• Total of R7bn in funding &
100 thousand jobs supported by these 2 measures
54
Product: Green economy Accord
Report completed on support for and outcomes of the green
economy and opportunities for local production KPI 5
Key Successes: Rollout of
Renewable Energy
1. 6 379 MW of Renewable Energy
Procured
2. R196 billion of Private Investment
attracted
3. 26 246 fulltime jobs created Key Successes: National Cleaner
Production Centre’s Industrial
Energy Efficiency Program
• 1.8GWh of energy saved
(equivalent to powering 280 000
homes for a year)
• 1.7 Mt of CO2 emissions reduction
• Cost savings of R 1.54b
• 5 700 direct and indirect jobs created and preserved
Product: EDD produced an
initial Report on the Green
economy.
Data in this section draws
from the Report.
Green Economy: Key Successes
55
Retrofitting
1. From 2005 to August 2016, 63
million incandescent residential
light bulbs have been replaced
with energy saving lights.
2. Temporary opportunities created
from the programme: 13 494
fieldworkers
IDC investment
• By October 2016 the IDC had invested
R18.7 billion in the green energy sectors • Total investment in these projects
amounted to R 37 billion
• Total permanent direct jobs created:
10 2790
Greening of Colleges Initiative
• 16 TVET Colleges have taken part in developing green profiles and integrating
green issues into training programmes, college policies and strategic plans. Colleges are: Boland, Buffalo City, Capricorn, Ekurhuleni East, Ekurhuleni West, False Bay, Lephalale, Letaba, Lovedale, Majuba, Mopani South East, Northern Cape Urban, Port Elizabeth, Sekhukhune, Vuselela and West Coast
Product
Report identifying support for the green economy and
opportunities for local production KPI 5
Green Economy: Procurement Update
• R30 billion - actual local content spend reported for IPPs that have started construction (Bid Window 1, Bid Window 2 and Bid Window 3).
• R65.7 billion - actual local content commitments for all bid windows in REIPPP by March 2016. This represents 45% of total project spend of R145.2 billion.
Designation for solar water heater components :
• 1st Collectors and storage tanks with a minimum threshold of 70%.
• 2nd Amended to include South African steel
Success of the designation demonstrated by current exports of PV panels: on regional basis 58% for 2014 and 2015 were destined for Europe, 35% to North America, and 5% to rest of Africa. Total export revenues have shown marked increase from under R50 million in 2014 to over R300 million by Q1 2016.
56
Product
Report identifying support for the green economy and
opportunities for local production KPI 5
Green Economy Highlighting 3 Opportunities: 1. Local manufacturing of energy efficient LED lamps
Eskom plans to procure 3 million over next 2 years.
2. Local manufacturing of components for Solar Water Heaters (SWH) (Collectors for energy, tanks and steel structures are designated at 70 % local content)
3. Local professional services and skills development the dti, through the National Cleaner Production Centre
(NCPC-SA) developed 2 professional qualifications on energy efficiency:
– Energy Audit Technician
– Energy Management Advisor
57
Product
Report identifying support for the green economy and
opportunities for local production KPI 5
58
Innovating partnerships and building opportunity
Given challenges in relating to skills development and shortages of
skills the Deputy Minister has led a new initiative in Mpumalanga
called Adopt – a- TVET
• He has worked with the TVET colleges, SETAs and captains of
industry in the province to find common ground, develop
linkages, and improve responsiveness and quality of training
• As a result of the engagements the parties signed an MOU
aiming to:
• Produce high quality skills needed by the industry
• Facilitate the absorption of TVET college graduates into in-
dustry through formalised apprenticeships and learner-ships
• Provide lecture exposure programmes aimed at lectures
Product
Intervention to empower youth and enhance their access to the
labour market/ employment opportunities KPI 6
59
Innovating partnerships and building opportunity
Product
Intervention to empower youth and enhance their access to the
labour market/ employment opportunities
MOU in Action: RCL – Mpumalanga
As a result of the negotiations & MOU, RCL
Sugar & Milling has taken 65 students
through work exposure programme.
Students were trained in civil trades,
electrical, agricultural production,
automotive sector and office administration.
MOU in Action: SABC
In Q2, RCL partnership triggered the
partnership with SABC where SABC
is:
• rolling out a learnership
programme in sound technology
• a new venture creation
programme on teaching people
how to run their businesses.
Currently 10 students from the
college are scheduled to start the
programme with the SABC later this
year.
KPI 6
Significance of the work: To produce learners that are ready
for employment and provide young people with skills, work
exposure and learnerships
60
Product
Secretariat support provided to Minmec KPI 7
60
National government provided more
youth job opportunities than provincial
government but its performance has
slowed over the last 3 years.
Highlights on Work Exposure: National
Total Youth Employed in the
National Government
2013/14 2014/15 2015/16
Total
Youth
Jobs
132 400 128 922 124 773
Youth %
of
national
govt jobs
35% 33% 31%
Economic Development Technical
MinMec
EDD convened a Technical MinMec on 23
June 2016 in preparation MinMec in Q3.
HODs from Eastern Cape, Mpumalanga,
Gauteng, Limpopo and Western Cape
attended. Others sent representatives.
Key issues on the agenda included:
1. Progress reports on funding for
Black Industrialists
2. Progress reports on SEZs
3. Highlights from the Youth
Employment Accord and a case
study of Jozi@work
Key Performance Indicator
9. Number of quarterly Cabinet-level progress reports of infrastructure Strategic
Integrated projects (SIPs)
10. Number of infrastructure projects unblocked, fast-tracked or facilitated
11. Number of Cabinet and PICC strategic decisions on infrastructure implemented
12. Number of PICC meetings held and facilitated
13. Drive implementation of Strategic Integrated Project (SIP) 5 of the National
Infrastructure Plan
14. Support programmes to drive localisation in the infrastructure programme, including
through the PPPFA, and local supplier development initiatives
Programme 3: Investment, Competition & Trade
61
Strategic Objective 4: Coordinate infrastructure development and strengthen its
positive impact on the economy and citizens
KPI 9 Work Completed: Cabinet Level Reports
18 Construction Update Reports were prepared for
Cabinet which provided information on financial,
employment, localisation and construction activities; and
identified progress and actions that Cabinet needed to
consider to ensure the infrastructure build programme was
implemented and able to boost jobs and growth.
Note: implementation of the projects and operational
responsibility remains with the relevant line
Departments.
KPI 9
62
Product
Progress reports to Cabinet on the 18 Strategic Integrated
projects (SIPs)
One infrastructure project was unblocked – Water Use Licence
Approval (WULA) for the Olien Karats 132kv transmission line
• The PICC was requested to assist with unblocking the Olien Karats Water
Use Licence (WULA)
• The project includes the construction of a 20 km overhead power line from
Olien substation to Karats substation
• These activities cross several watercourses based and thus require
WULAs for 22 water use areas
• This project forms part of Eskom's commitment to strengthening the
existing electricity supply to the area
KPI 10
63
Product
Infrastructure unblocking's and/ or fast tracked KPI 10
64
Northern Cape province, in
Kgatelopele Local Municipality (8) Impact of the unblocking:
1. Network will be more reliable
2. Improved voltage levels
3. Four projects depend on this
project:
• Strengthening the Sekgame
Switching Station
• Upgrading supply to 3 large
customers
• Kolomela 20 MVA transformer
(direct customer project)
4. This project will increase the
capacity at Karats Substation for
future IPP connections
The power line is situated between
Kimberly and Lime Acres in the
Northern Cape province, in
Kgatelopele Local Municipality
KPI 10 Product
Infrastructure unblocking's and/ or fast tracked
KPI 11
65
The PICC tabled the Cabinet Memo
on the 7 Water Projects:
28th September 2016
• This forms part of the 6 weekly
Cabinet reporting programme as
directed by Cabinet in August
2016 .
• This is the first of 5 sector
specific reports for Cabinets
attention, on the 20 Mega
Projects acceleration
programme.
Product
Implementation of cabinet and PICC strategic decisions
on infrastructure
Work was done on the development of additional capacity in the state, including adjustment to budget structures and the creation of a
technical project management capacity at a cross-cutting level in the state.
Ministerial level engagements took place with the following portfolios:
- Energy - Water and Sanitation
- Transport - National Treasury
During the quarter, EDD provided technical, secretariat and coordinating
support for the hosting of PICC structures. These structures prepared and
finalized the submissions discussed by PICC Secretariat, PICC Manco and
Cabinet. Seven meetings were supported by the EDD
KPI 12
66
Work completed: PICC meetings held and facilitated:
• PICC MANCO(s) [7]: 29th,28th,26th,21st,15th,8th September
and 12th August 2016.
• The PICC delivered notable presentations and insights on
the National Infrastructure Plan to the Cabinet Lekgotla on
the 17th and 19th August 2016.
Product
Number of PICC meetings held and facilitated
67
Product: Saldanha gas pipeline and gas
infrastructure
Initiatives or meetings facilitated on SIP 5
KPI 13
Initiative on Sunrise Gas Terminal reported on slides 16 -23
Key Performance Indicators
15. Number of investment initiatives facilitated, fast tracked and/or unblocked
16. Establish and monitor industrial funding targets for identified jobs drivers
in township economies
17. Number of reports on the level and impact of industrial finance available
from IDC and departments
18. Number of strategic engagements with IDC
19. Connect infrastructure with productive investment and growth, including
where appropriate through off-take agreements
Programme 3: Investment, Competition & Trade
68
Strategic Objective 5: Promote productive investment, industrial financing and
entrepreneurship for jobs and inclusive growth
69
Investment is a key driver of jobs and growth in the economy. During the quarter,
EDD work included the following:
1. Meeting with investors with and through their representative associations, and at
company level. For example, meetings were held with the Atlantis Chamber of
Business on economic development in the area, as well as a CEO meeting organised
by the Johannesburg Chamber of Commerce and Industry
2. Meeting on investment climate took place with Moody‟s rating agency
3. Site-visit and sod turning of the BAIC launch which involves investment worth R11
billion by the company in Nelson Mandela Bay (see details in the next slides)
4. Social dialogue with business and labour (see KPI 8)
5. Clothing industry review of government incentives: 6 meetings took place
including 4 factory visits to meet with workers and management in the review of
government incentives for the sector (see KPI 4)
6. Unblocking obstacles to maintain or increase levels of investment in the economy or
at enterprise level (see examples that follow)
Product
Fast tracking and unblocking of investment initiatives KPI 15
70
Product: Initiatives on film, food and energy
Fast tracking and unblocking of investment initiatives KPI 15
Initiative 1: the film industry – reported on slides 24 to 34
Initiative 2: Broadway Sweets
• EDD facilitated for Broadway Sweets to get a local supply of sugar to ensuring local sugar supply instead of importing.
• Drought has affected sugar producing area
• Broadway Sweets received notice from their supplier that they were unable to meet Broadways sugar needs
• This would have resulted in Broadway importing sugar for manufacturing
• EDD, through the Impala Water Uses Association, requested a local sugar miller to make arrangement to supply Broadway Sweets
• This resulted in Broadway Sweets getting sugar from domestic producers instead of importing
Significance of Work: Secure input raw materials and sustainability of production facilities
Initiative 3: Solar plant
• Unblock land lease for 250 m2 for R 10
billion concentrated solar park by
Karoshek Solar 1 Ltd. Lease
agreement approved by Northern Cape
Department of Public Works.
• Deeds office refused to register lease
until they received a certificate copy of
deeds document from National
Department (DRDLR).
• EDD intervened to ensure all original
document were found on which
certified copies were prepared and
signed
Significance of Work:
Secure R 10 billion investment which will
enable the 100 MW solar concentrated plant in Upington to be constructed.
KPI 15 Product: initiative Four – cooking stove
Fast tracking and unblocking of investment initiatives
71
Initiative Four – facilitate market access for a small business Arivi
• Arivi is a small business operating in Pretoria
• In 2012, the IDC approved R1.5 million to Arivi for the development of the
Arivi Paraffin stove
• Arivi produces a paraffin stove that is safer to use than normal paraffin
stoves which has been a cause for many shack fires.
• The stove produces less pollution
• The stove is manufactured and assembled locally. 90% of the product
components such as plastic and the shell are sourced locally
• The stoves are currently sold in:
• Johannesburg at Jumbo Crown
Mines, Market Cash and Carry, as
well as Africa Cash and Carry
• Pretoria at Mamelodi and
Marabastad
• They are also sold through individual
re-sellers and via the internet
• However, the company needed to
increase sales to expand production
and increase employment
• In July 2016, an EDD intervention
resulted in Massmart placing initial
order of 200 stoves for their 10
Builders Warehouses stores and 8
Superstores
Product
Fast tracking and unblocking of investment initiatives
Significance of Work: Increase
sales through retail sector 72
73
Product: Sutherland and Gauteng
Initiatives for industrial funding for jobs drivers evaluated and
improved for township economies KPI 16
Intervention 1 – To evaluate and support local economic development through
activities in Sutherland – reported on slides 38 to 42 as well as additional
activities reported below.
Intervention 2 – Support investment in township economies by developing Spaza
Shops
Pre-Launch of the My-Spaza Township Enterprise Development Project: On the 28 July 2016 the EDD held a pre-launch engagement with the private sector wholesalers in the retail industry in Gauteng. The purpose of the pre-launch workshop and site visit was to introduce the wholesalers to the 28 operators who are part of MySpaza Township Enterprise Development Project. Through this workshop, wholesalers were requested to partner with a township spaza shop and provide funding for structural/ infrastructure upgrades of the spaza shop. 42 wholesalers attended the workshop and site visit.
Significance of Work: To increase economic activity in townships.
74
75
Product: Initiative in Katlehong
Initiatives for industrial funding for jobs drivers evaluated and
improved for township economies KPI 16
Outcome:
• 26 women owned
businesses were
registered on the day
from the 70 participants
• EDD received 2
referrals for unblocking
Significance of Work:
To increase economic
activity in townships and access to funding.
Township exhibition in Katlehong for women
to promote industrial funding and develop
township economies as part women’s month
• EDD facilitated an event on 27 August 2016 in
Katlehong to promote women in business
• It targeted 20 women owned business in a
range of sectors including:
• Beauty and healthcare
• Clothing and fashion
• Jewellery
• Catering Services
• Presentations were made by EDD and the
Ekurhuleni metro, focused on business
support services – including funding, business
registration, by-law enforcement.
76
Product
Report on increase in industrial finance available from
DFIs and its impact on job creation KPI 17 Report on IDC funding EDD prepared a report on industrial funding, with a summary set out below
IDC funding Q2 only 2015/16
Value of funds approved R 2.7 billion
Value of funds disbursed R 2.6 billion
Jobs created and saved by IDC – 5 008
Eastern Cape 1 722
Gauteng 1 983
KwaZulu Natal 489
Limpopo 413
Mpumalanga 302
Northern Cape 61
Western Cape 38
IDC funding Q2 only 2016/17
Value of funds approved R 3.3 billion
Value of funds disbursed R 2.5 billion
Distribution of jobs per sector
Agro Processing and Agriculture (21)
Automotive and Transport equipment 1 513
Basic Metals and Mining 853
Chemical products and Pharmaceuticals 356
Clothing and Textiles 299
Heavy Manufacturing 1 896
Industrial infrastructure (2)
Light Manufacturing and Tourism 16
Machinery and Equipment 81
New Industries 17
2016 / 17 to date (Q1 and Q2)
Approvals total: R4 billion
Disbursements total: R5 billion
Jobs created or saved total: 5 449
77
Approvals by SBU, Q2 2016/17
Product
Report on increase in industrial finance available from
DFIs and its impact on job creation KPI 17
SBU R million
Automotive & Transport Equipment 1 499.8
Basic Metals and Mining 918.0
Heavy Manufacturing 287.6
Basic & Speciality Chemicals 231.0
Chemical Products and Pharmaceuticals 137.8
Clothing & Textiles 108.3
Machinery & Equipment 81.7
Light Manufacturing & Tourism 78.2
New Industries 52.6
Other -2.5
Agro-Processing and Agriculture -30.7
Industrial Infrastructure -71.8
TOTAL 3 290. 1
During the quarter the Minister engaged the
IDC on a strategic level through:
• The IDC strategic planning session on 29
September 2016
• The board committee meetings during the
quarter on the IDC remuneration and
related policies
• Reviewing and contributing to the IDC
2015/16 Annual Report
• The Fitch Rating interviews on the IDC
• Delivering a speech at the release of the
IDC 2015/16 Financial Results
KPI 19
78
Product
Strategic engagement with the IDC to improve its
performance KPI 18 Strategic guidance by Minister on: 1. Employment 2. Organisational
efficiencies 3. Investment
mandate 4. BEE Status
Fitch affirmed IDC at AA+ with Stable Outlook – 27 Sept 2016
IDC’s status as a BEE facilitator was
approved by the Minister of Trade &
Industry
Impact on Sedibeng Water unblocking
U
79
Case study of electricity rollout impact
on households
Product
Report on initiative linking infrastructure with growth KPI 19
• Rollout of infrastructure boosts growth
and consumption at all levels
• EDD and the PICC started an impact
analysis on the rollout of electricity
• 2 sites have been visited:
• A small area in Kliptown with recently
built houses that were electrified in
September 2016
• Senqu in the Eastern Cape that is in
the process of being electrified
(visited in October 2016)
• Last year we reported on an
unblocking at Sedibeng Water
• EDD‟s intervention resulted in
the tender being changed to
require the use of locally
produced pipes
• This year we evaluated the
impact of the intervention and
can report:
• As a result of the contract 120
workers at Hall Longmore,
who had been working a 3 day
week are now working 5 days
a week
EDD completed Report on Electrification in Kliptown and Senqu looking at impact on communities EDD case studies highlight the impact of the rollout of infrastructure
Case study: Daniel Kumalu in Kliptown • Runs a small shop from his house • Currently uses paraffin and candles – paying about R1 200 per
month for energy • For Daniel getting electricity means that he will now be able to
expand what he sells in his shop • He will also save money – electricity will cost him about R420 a
month • He plans to sell cold drinks and ice cream in the hot summer
months ahead
KPI 19
80
Product
Report on initiative linking infrastructure with growth KPI 19
Case Study : Babalwa Gungunthwa in Senqu
• Ms Gungunthwa is a young woman living in her parents home
with her 3 siblings
• Before getting electricity her family used gas and paraffin as
sources of energy. A 9kg of gas would last them a month and 2
liters of lamp paraffin would last 2 weeks
• After getting electricity the family has bought a kettle, stove,
radio and television and a fridge
• Access to infrastructure raise household productivity
and households to deploy power-assisted tools.
Key Performance Indicators
20. Number of strategic engagements to support and strengthen economic
regulators
21. Number of initiatives on mergers and acquisitions and market enquiries
or reports on compliance with conditions of mergers and acquisitions
22. Number of initiatives to ensure that trade authorities and policies support
industrialisation, employment and other national development objectives
23. Number of engagements with trade and competition authorities to
increase administrative efficiencies
Programme 3: Investment, Competition & Trade
81
Strategic Objective 6: Promote competition, trade and economic regulation in
support of job creation, industrialisation and economic inclusion
Massmart Supplier Development Fund (SDF)
• EDD‟s continued active role in oversight of Massmart‟s Supplier
Development Fund has helped ensure the development and expansion of
new productive capacity.
• This quarter the Massmart SDF provided a pump filter company funding of
R560 000.
• The company needed funding to expand as a result of increased orders for
pumps. It also wanted to do development to improve its sand pool sand filter
extractor pump.
• Funding from Massmart SDF enabled the company to get into full production
and the products will be available in Builders Warehouse stores from
September 2016.
Government follow-ups on AB InBev public interest commitments
An inter-Departmental structure has been set up as a strategic intervention to
combine the efforts of different parts of government to support and monitor the
public interest commitments made by AB InBev.
82
Product
Report on strategic action on competition and public interest KPI 21
Assessment of action on cartel or dominant player – the case of ArcelorMittal
South Africa (AMSA) Competition Settlement
• EDD coordinated actions to address cartels in the steel industry.
• This entailed meeting the company, downstream players, industry experts and
conducting research
• The Ministers of EDD and the dti convened meetings with the companies, industry
associations and unions. They provided strategic guidance to the team working
on the pricing model, in a number of meetings
• AMSA admitted to certain contraventions of the Competition Act and agreed a
remedy for flat steel products including:
• Limits of the EBIT margin to 10% for a period of 5 years
• Investment of R4.6 billion in AMSA‟s plant to enhance their competitiveness
• Will continue to provide rebate to value added exporters of AMSA‟s products
• Will participate in a steel panel convened by ITAC to monitor AMSA‟s pricing
• Pay a fine of R1.5 billion over 5 years
83
Product
Report on strategic action on competition and public interest KPI 21
Significance of the work: Competitive steel pricing for
downstream users
The Department and the Ministry engaged the
economic regulators to improve efficiencies and
impact. This also included reviewing the annual
reports:
1. Competition Commission
2. Competition Tribunal
3. ITAC.
84
Product
Increase administrative efficiencies - engagements with
regulators KPI 23
Additional work undertaken in the quarter included:
- IMC on Public Employment Programmes
- IMC on BRICS Summit
- IMC on small business development
- Joint work on Outcomes (jobs/infrastructure)
- Tourism initiative with Bo-Kaap community
- Legal briefing on scrap metal case
- CEO-level engagement with oil companies
- - Launch of first results of SKA in Carvarvon
- Massmart/Walmart meeting on localisation
- Competition advocacy and stakeholder engagement: Conference at UCT.
85
EDD HUMAN RESOURCES MOVEMENTS 2nd Quarter 2016/17
86
Q1 Q2
Number of funded posts 140 140
Number of funded posts filled 117 119
Personnel additional to establishment 2 2
Number posts filled including additional to establishment 119 121
Staff contracted through a Memorandum of Understanding with Wits 2 4
Staff working for PICC Technical Unit from IDC 10 10
Total staff resources available to Department including Wits and PICC 131 135
Vacancy rate with all staff available to EDD 6% 3 %
Vacancy rate less Wits and PICC specialists 15% 13 %
Vacancy Rates
87
The intent is that University staff be placed on the payroll of EDD in accordance with
Ministerial Framework previously presented to the Portfolio Committee.
2. Addressing Vacancies and Acting Appointments
88
Recruitment Process Pipeline Recruitment process pipeline – 30 September 2016
Page Name Offered
Advertised and
in Recruitment
Process
Not
advertised
1 Political 0 2 5
2 Director General 0 2 1
3 Economic Policy Development 0 2 0
4 Economic Policy Development 0 0 0
5 Economic Planning & Coordination 0 2 0
6 Economic Planning & Coordination 0 2 0
7 Social Dialogue 0 0 0
8 Social Dialogue 0 1 0
9 Spatial/PICC 0 1 0
10 Spatial/PICC 0 0 1
11 Corporate Management 0 0 0
12 Facilities 0 0 0
13 Human Resources 0 0 0
14 CFO 0 2 0
Total 0 14 7
Executive Positions
A specialist in Executive Search was contracted on 24 June 2016 to assist the Ministry with the recruitment of:
• Director General
• Deputy Director General: Economic Planning and Social Dialogue
• Deputy Director General: Economic Policy Development
Recruitment contract extended to end of March 2017 to allow additional candidates to be screened
89
Recruitment of Executives
90
Progress on Structure
1. Proposed structure submitted to the DPSA for technical evaluation;
2. DPSA suggested a mandate analysis workshop;
3. Workshop to be facilitated by the DPSA, attended by EDD, the dti, Small Business, DPME, Treasury;
4. Internal consultations to start after this workshop.
Proposed Project Plan
EDD FINANCIALS 2nd Quarter 2016/17
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As at 30 September 2016 the department has spent R341.3m out of an allocation of R674.7m i.e. 51% of the total allocated budget.
As at 30 September 2016 expenditure excluding transfers amounts to R73.5m out of an allocated budget of R145.9m i.e. 50% of the baseline allocation.
For the quarter the Department spent R177.4m made up of transfers of R133.9m to entities and R43.5m spent directly by the Department .
Total expenditure is 106% of the quarterly allocation of R167.8m
The following tables reflect the expenditure against the budget per programme and per economic classification.
92
Summary of Expenditure for Q2
Financial Performance per Programme as at 30 September 2016
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Programmes 2016/17
Budget
YTD
actual
Expenditure Variance Spent
R‟000 R‟000 R‟000 %
Administration 79 208 51 708 27 500 65
Growth Path and Social Dialogue 36 008 13 461 22 547 37
Investment, Competition and Trade-
excluding transfers to entities 30 664 8 348 22 316 27
Investment, Competition and Trade
Transfers to entities only 528 781 267 743 261 038 51
Total including Transfers 674 661 341 260 333 401 51
Total excluding Transfers 145 880 73 517 72 363 50
Expenditure per
Economic Classification Projected
Budget
Actual
Expenditure Variance Spent
‟000 R‟000 R‟000 %
Compensation of Employees 93 995 41 405 52 590 44
Goods and Services 48 974 30 594 18 380 62
Transfers to Entities 528 781 267 743 261 038 51
Payment of Capital Assets 2 911 1 518 1 393 52
Total including Transfers 674 661 341 260 333 401 51
Total excluding transfers to
entities 145 880 73 517 72 363 50
94
Financial Performance per Econ Classification as at 30
September 2016
Q2 Financial Performance per Programme
95
Programmes
Q2
Projected
Budget
Actual
Expenditure Variance Spent
R‟000 R‟000 R‟000 %
Administration 18 804 32 175 -13 371 171
Growth Path and Social Dialogue 8 346 6 308 2 038 76
Investment, Competition and Trade 6 752 5 077 1 675 75
Total including Transfers 167 773 177 431 9 658 106
Total excluding Transfers 33 902 43 560 9 658 128
Expenditure per Economic Classification
Q2
Projected
Budget
Actual Expenditure
Variance Spent
R’000 R’000 R’000 %
Compensation of Employees 23 546 21 551 1 995 91
Goods and Services 9 757 21 130 -11 373 216
Transfers 133 871 133 871 0 100
Payment of Capital Assets 599 879 -280 147
Total including Transfers 167 773 177 431 9 658 106
Total excluding Transfers 33 902 43 560 9 658 128
96
Q2 Financial Performance per Econ
Classification
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Q2 Financial Performance: Reasons for Variances
Compensation of employees: A process is in place to fill
the vacant critical posts in line with the Strategic Plan and
Annual Performance Plan.
Goods and services: Main cost driver - Legal costs from
Office of the State Attorney. Shifts to be effected during
adjusted estimate process (AENE).
Transfers and Subsidies – Spending is in line with the
planned spending.
Capital assets – The variance relates to the new software
and servers.
98
In case we need further motivation to go to the
Eastern Cape.
SIYABONGA
REA LEBOHA!