Post on 21-Sep-2020
ECIC STRATEGIC PLAN 2019/20-2021/22 1
Export Credit Insurance Corporation of South Africa SOC Ltd (ECIC)
STRATEGIC PLAN 2019/20 – 2021/22
EXPORT CRED
IT INSURANCE CORPORATION OF SOUTH
AFR
ICA
SO
C LT
D
ESTABLISHED IN 2001
2 ECIC STRATEGIC PLAN 2019/20-2021/22
ACRONYMS AND ABBREVIATIONS
Basel IIIA comprehensive set of reform measures designed to improve the regulation,
supervision and risk management within the banking sector.
ATI Africa Trade Insurance Agency
B-BBEE Broad Based Black Economic Empowerment
Berne Union International Union of Credit and Investment Insurers
BRICS Countries of Brazil, Russia, India, China and South Africa
DBSA Development Bank of Southern Africa Limited
DFI Development Financial Institutions
ECA Export Credit Agency
EU European Union
FIIC Finance, Investment and Insurance Committee
FSCA Financial Sector Conduct Authority
Government The government of the Republic of South Africa
IASB International Accounting Standards Board
IBNR Incurred but not yet reported
IDC Industrial Development Corporation of South Africa Limited
IFRS International Financial Reporting Standards
IMU Interest Make-up
MIGA Multilateral Investment Guarantee Agency
NDP National Development Plan
OECD Organization for Economic Cooperation and Development
PA Prudential Authority
PFMA Public Finance Management Act
Prague Club Committee Prague Club Committee of the Berne Union
SAM Solvency Assessment and Management
SMART Principles Specific Measurable Achievable Realistic and Timebound
SOEs State Owned Entities
the dti The Department of Trade and Industry
USA United States of America
ECIC STRATEGIC PLAN 2019/20-2021/22 3
CONTENTS
1. CORPORATE STRUCTURE 6
2. OFFICIAL SIGN-OFF 7
3. FOREWORD BY THE MINISTER 8
4. FOREWORD BY THE CHAIRMAN 9
Part A: STRATEGIC OVERVIEW 10
5. VISION 10
6. MISSION 10
7. VALUES 10
8. STRATEGIC THEMES AND OBJECTIVES 11
8.1. Strategic Themes 11
8.2. Strategy Map 11
9. SITUATIONAL ANALYSIS 13
10. SWOT ANALYSIS Organizational Delivery Environment 17
11. ALIGNMENT TO GOVERNMENT’S PRIORITIES 20
12. Board OF DIRECTORS AND EXECUTIVE MANAGEMENT 21
12.1. Board of Directors 21
12.2. Executive Management 23
13. DESCRIPTION OF THE PLANNING PROCESS 25
14. FINANCIAL PLAN 26
14.1. Projections of revenue, expenditure and borrowings 26
14.2. Asset and liability management 27
14.3. Cash flow projections 28
14.4. Capital expenditure projects 29
14.5. Infrastructure plans 29
14.6. Dividend policies 29
14.7. Borrowing Plans 29
Part B: PROGRAMME PERFORMANCE 30
15. BUILD KNOWLEDGE AND SKILLS TO ENHANCE ORGANISATIONAL CAPACITY 30
15.1. Purpose 30
15.2. Description 30
15.3. Performance indicators and performance targets (Build knowledge and skills) 31
15.4. Quarterly milestones (Build knowledge and skills) 32
15.5. Financial Plan (Expenditure estimates for Building Knowledge and skills) 33
4 ECIC STRATEGIC PLAN 2019/20-2021/22
16. BUILD AND LEVERAGE STRATEGIC PARTNERSHIPS 34
16.1. Purpose 34
16.2. Description 34
16.3. Performance indicators and performance targets (Build And Leverage Strategic Partnerships) 35
16.4. Quarterly milestones (Build And Leverage Strategic Partnerships) 36
16.5. Financial Plan (Expenditure estimates for Increase (Build And Leverage Strategic Partnerships) 37
17. ENHANCE BUSINESS PROCESSES TO IMPROVE OPERATIONAL EFFICIENCY 38
17.1 Purpose 38
17.2 Description 38
17.3 Performance indicators and performance targets (Enhance Business Processes) 39
17.4 Quarterly milestones (Enhance Business Processes) 39
17.5 Financial Plan (Enhance Business Processes) 40
18. IMPROVE COMMUNICATION 41
18.1. Purpose 41
18.2. Description 41
18.3. Performance indicators and performance targets (Improve Communication) 42
18.4. Quarterly milestones (Improve Communication) 43
18.5. Financial Plan (Expenditure estimates for Improve Communication) 44
19. IMPROVE BUSINESS DEVELOPMENT 45
19.1. Purpose 45
19.2. Description 45
19.3. Performance indicators and performance targets (Improve Business Development) 46
19.4. Quarterly milestones (Improve Business Development) 46
19.5. Financial Plan (Expenditure estimates for Improve Business Development) 47
20. INCREASE COMMUNICATION TO CREATE BETTER AWARENESS AND UNDERSTANDING 48
20.1. Purpose 48
20.2. Description 48
20.3. Performance indicators and performance targets (Increase Communication) 49
20.4. Quarterly milestones (Increase Communication) 49
20.5. Financial Plan (Expenditure estimates for Increase Communication) 50
21. INCREASE CAPITAL BASE 51
21.1. Purpose 51
21.2. Description 51
21.3. Performance indicators and performance targets (Increase Captial Base) 52
21.4. Quarterly milestones (Increase Captial Base) 52
21.5. Financial Plan (Increase Captial Base) 53
ECIC STRATEGIC PLAN 2019/20-2021/22 5
22. INCREASE STAKEHOLDER/CUSTOMER SATISFACTION 54
22.1. Purpose 54
22.2. Description 54
22.3. Performance indicators and performance targets (Increase Stakeholder
/Customer Satisfaction) 55
22.4. Quarterly milestones (Increase Stakeholder/Customer Satisfaction) 55
22.5. Financial Plan (Expenditure estimates for Increase Stakeholder/Customer Satisfaction) 56
Part C: LINKS AND OTHER PLANS
23. Asset Management Plan 57
24. Information Technology and Communication Plan 58
25. Risk Management 59
24.1. Risk Management Plan (incl. risk strategy and process) 59
26. Fraud Prevention Plan 62
27. Risk Management – Risk register 64
28. Human Capital Strategic Plan 69
28.1. Introduction 69
28.2. HR Strategic Priorities 69
ANNEXURE A: DETERMINING THE MATERIALITY AND SIGNIFICANCE LEVELS 72
ANNEXURE B: INDICATOR PROFILES 79
6 ECIC STRATEGIC PLAN 2019/20-2021/22
1. CORPORATE STRUCTURE
Inve
stm
ent
BO
AR
DC
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IRP
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SO
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OA
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d: M
arke
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Mar
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ng &
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Act
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HR
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ager
Hum
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Po
litic
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ork
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ECIC STRATEGIC PLAN 2019/20-2021/22 7
2. OFFICIAL SIGN-OFF
It is hereby certified that this Strategic Plan was developed by the management of the Export Credit Insurance
Corporation of South Africa SOC Ltd (“ECIC”) under the guidance of the Board.
Accurately reflects the performance targets which ECIC will endeavour to achieve given the resources made available
in the budget for 2019/20 – 2021/22.
Noluthando Mkhathazo: ________________________
Chief Financial Officer
Kutoane Kutoane: _________________________
Chief Executive Officer
Recommended for approval by: _______________________
Dheven Dharmalingam
Accounting Authority
8 ECIC STRATEGIC PLAN 2019/20-2021/22
3. FOREWORD BY THE MINISTER
Recently, South Africa hosted the BRICS Summit against the backdrop
of a deteriorating global trade environment where we have observed
the implementation of unilateral measures that are not compatible with
the WTO rules.
In its Statement, the BRICS reaffirm their commitment to a rule based,
transparent, non-discriminatory, open and inclusive multilateral trading
system that promotes a predictable trade environment, the centrality
of the WTO and emphasized among others, that the development and
the provisions for special and differentiated treatment remain integral
in the work of the WTO.
The escalation of the trade wars and its severe negative economic
impact on emerging countries and their currencies, underscores
the importance of expanding trade between South Africa and the
rest of the continent to counterbalance some of the new constraints
emerging within the developed countries.
The USD1 billion SATIPP initiative entered into between ECIC and the Afreximbank to promote trade activities between
South Africa and the rest of the continent gives practical impetus to our efforts to promote intra- Africa trade on a
continental wide basis, with South Africa having signed up to the Continental Free Trade Agreement, which must still
be ratified by our Parliament.
ECIC’s export credit scheme is an important element in our industrial financing architecture, as we seek to attract
international investors to make long-term investment in the domestic economy which will also serve as a gateway
to expansion into the rest of the continent. Investors will be able to access the cross-border investment and export
facilitation products of ECIC to grow their exports and investment footprint into new markets and geographies across
the continent.
The role played by ECIC towards the Mozambique LNG project has the potential to generate at least USD600 million
value of South African content and create opportunities for South African based contractors to find work opportunities,
in a manner that contributes to the industrial development of Mozambique and the facilitation of long term trade
opportunities between the two countries. This is one of the important initiatives identified in the Jobs Summit Framework
Agreement, and we encourage ECIC to work closely with the dti and the rest of the export industry players to bring this
ground-breaking opportunity to fruition.
I wish the Corporation success and resilience at it sets out to execute this Strategic Plan.
Dr Rob Davies, MP
Minister of Trade and Industry
ECIC STRATEGIC PLAN 2019/20-2021/22 9
4. FOREWORD BY THE CHAIRMAN
I am delighted that after the intense three-day strategic planning
workshop, we have emerged with a new vision of building ECIC into
a world class export credit agency that will be placing South Africa at
the cutting edge of the ever-changing developments and practices in
global trade.
The nature of our business is long term and requires us to envision
developments beyond a 10-year horizon and start putting up the
required building blocks today for a better tomorrow.
The adoption of a distribution business model is one of the key
outcomes of this strategic plan, and we will utilize this model to
enhance our capacity to underwrite more business, and effectively
manage the residual risks retained in the balance sheet.
In an endeavour to enhance our risk management framework, we have adopted a net exposure limit per single risk
event which will be reviewed annually. In managing exposures in excess of this limit, we will utilize reinsurance from
the private market and also leverage the risk sharing arrangement with our strategic partner, Afreximbank. We expect
our partnership with Afreximbank to blossom further on the back of the USD1 billion SATIPP initiative to promote trade
between South Africa and the rest of the continent.
The lumpy and long-term nature of our portfolio of transactions requires us to build the right team of people and suitable
long-term incentives to drive high performance and staff retention for the long-term success of the Corporation.
The recent high-profile lapses in corporate governance in the private and public sector, demonstrate the importance
that we should not just build an inclusive organizational culture, but reinforce an ethical culture that draws from our
values of integrity and underpinned by ethical leadership.
Dheven DharmalingamChairman
10 ECIC STRATEGIC PLAN 2019/20-2021/22
5. VISION
To be a world class export credit agency in facilitating South African export trade and investment globally
Our Mission is to provide export credit and investment insurance solutions in support of South African capital goods
and services by applying best practice risk management principles.
The Corporation has five values being:
• Integrity - We strive to conduct every aspect of our business with honesty, integrity, and fairness.
• Accountability - We accept transparency and responsibility for our decisions and actions.
• Excellence - We are committed to the highest level of performance through continuous improvement of our skills
and business practices.
• Innovation - We encourage open-mindedness and support innovation and the development of new ideas and
processes for the continued improvement of our Corporation.
• Teamwork - We work together as a team internally and collaborate externally with our stakeholders and customers.
We appreciate that as a team, we can achieve much greater things than as individuals.
These values are reinforced by the Code of Ethics and Business conduct “the Code “and are also reflected in our
policies and procedures.
6. MISSION
7. VALUES
PART A:
Strategic Overview
ECIC STRATEGIC PLAN 2019/20-2021/22 11
8. STRATEGIC THEMES AND OBJECTIVES
8.1. Strategic Themes
• StrategicPartnerships
We will build and leverage a local and international network of Strategic Partnerships in the public and private
sectors with a view of advancing our business and our reach.
• GrowtheBusiness
We will increase market presence, customer-focused solutions, grow our customer base, expedited approval
process and competitive pricing. The purpose of growing the business is to facilitate high value of exports
and cross-border investments in order to fulfil our mandate and assist the government and the country to
pursue the investment led export promotion agenda and to contribute towards the achievement of the export
targets contained in the National Development Plan.
• OperationalExcellence
We will have effective and efficient integrated systems and processes (utilizing modern technology) to achieve
improved turnaround times and support new products. We will invest in our human capital, build knowledge
and skills and a culture of professionalism, innovation and team work to enhance organizational capacity and
operational excellence.
8.2. Strategy Map
ECIC Tier One Strategy Map
Cus
tom
er/
Sta
keho
lder
Fina
nce
Inte
rnal
P
roce
ssO
rgan
isat
iona
l C
apac
ity
Enhance Business
Processes
4.Increase Business
Development
5.
Increase Communication
6.
Improve knowledge and skills
1.
Advance Transformation
3.
Increase Capital Base
7.
Increase Stakeholder / Customer Satisfaction
8.
Build and Leverage Strategic
Partnerships
2.
12 ECIC STRATEGIC PLAN 2019/20-2021/22
To execute the strategy, ECIC has identified 8 key strategic objectives as follows:
i. ENHANCE KNOWLEDGE & SKILLS TO IMPROVE ORGANIZATIONAL CAPACITY
To develop a competent and competitive workforce that is able to deliver on the business strategy and the
achievement of ECIC objectives.
ii. BUILD AND LEVERAGE STRATEGIC PARTNERSHIPS TO ADVANCE THE BUSINESS
Enhance our business through collaboration and by leveraging our local and international network of stra-
tegic partners within the public and private sector with the view to advance our business and our reach.
iii. ADVANCE TRANSFORMATION TO BUILD AN INCLUSIVE ECONOMY
Improve BB-BEE and employment equity initiatives to advance the national transformation agenda towards
an inclusive economy.
iv. ENHANCE BUSINESS PROCESSES TO IMPROVE OPERATIONAL EFFICIENCY
Enhance business processes to improve operational efficiencies and achieve the required levels of cost to
income ratio that support the financial sustainability of the Corporation.
v. INCREASE BUSINESS DEVELOPMENT INITIATIVES TO GROW THE BUSINESS
Proactively attract business from new and existing customers to facilitate more exports and cross border
investments.
vi. INCREASE COMMUNICATION TO CREATE BETTER AWARENESS AND UNDERSTANDING OF
ECIC AND ITS ROLE
Create awareness and understanding of ECIC’s mandate, role, products, services and impact.
vii. INCREASE CAPITAL BASE TO UNDERWRITE MORE BUSINESS TO FULFIL ECIC’S MANDATE
Increase the capital base of ECIC in order to support the growth of the business on a sustainable basis in
order to fulfil ECIC mandate of facilitating export trade and cross-border investments.
viii. INCREASE STAKEHOLDER/CUSTOMER SATISFACTION
Achieve the desired levels of stakeholder and customer satifaction.
ECIC STRATEGIC PLAN 2019/20-2021/22 13
9. SITUATIONAL ANALYSIS
Global Highlights
The global economy experienced a broad-based cyclical upturn in 2016 and 2017 and seems on track to reach 3.9%
in 2018 and grow modest beyond, driven by rising trade conditions and a modest upswing in commodity demand (see
Figure 1). The global outlook is subject to substantial downside risks, including the possibility of sharp tightening in
financial conditions, growing trade tensions and increased protectionism, and rising geopolitical tensions.
Figure 1: GDP growth by region
Source: IMF
Global trade recovered strongly in 2017 after two years of weakness - driven mainly by consumption expenditure. The
upsurge was more pronounced in emerging markets, reflecting improved investment growth rates in formerly stressed
commodity exporters. While rising trade protectionism emanating from the US continues to dominate at present, this
belies a more general acceleration in progress towards free-trade agreements (FTAs) involving non-US states since
2016. For example, in Asia, Japan and the other ten Trans Pacific Partnership signatories continue to press ahead with
the pact. In Latin America, Mexico has increased its efforts to deepen and diversify its links with other Latin America
trading partners, prompted by uncertainty around the fate of NAFTA. In Africa, 44 nations have signed an agreement to
negotiate a continental FTA. Although these efforts may not have a significant near-term impact on economic activity,
they will likely set the stage for increased trade in the medium to the long term.
14 ECIC STRATEGIC PLAN 2019/20-2021/22
Figure 2: FDI inflows by region
Source: UNCTAD
In stark contrast to global growth and trade, global FDI flows continued to lose growth momentum in 2017, falling
by 23% to US$1.4 trillion (Figure 2). The wave of cross-border M&As and greenfield projects has showed signs of
decline, when compared to increases in 2015 & 2016. Fragile growth of 5% expected in 2018, reflecting cyclical global
growth and acceleration in world trade.
Regional African Highlights
After lacklustre growth over the past 2 years, the growth outlook in the region is on an upward trajectory. Real output
growth is estimated to have increased by 3.6% in 2017, up from 2.2% in 2016, and to accelerate to 4.1% in 2018
and 2019. The growth reflects better global economic conditions; the recovery in commodity prices and sustained
domestic demand. Economic growth varied widely across countries and across Africa’s five subregions. East Africa
remained the fastest-growing subregion in Africa, followed by North Africa. Overall, economic growth has been faster
among non-resource - intensive economies.
Although current account and fiscal positions have improved (as per figure 3) across the Board, they are not sufficiently
robust. In recent times, some African governments have turned to international capital markets to finance the internal
and external deficits. The result has been a build-up of debt, much of it on commercial terms. This challenge has been
made more difficult by the decline in concessional financing that has occurred as major donor countries continue to
experience tight budget constraints.
ECIC STRATEGIC PLAN 2019/20-2021/22 15
Figure 3: Fiscal and current account deficit in Africa
Source: African Development Bank
With the possible financial tightening in developed economies, dollar interest rates are expected to edge up, bidding
up the cost of capital and increasing external debt ratios across the region. This will cast doubt on the ability of some
of the countries to meet long term obligations.
South African Highlights
After slipping into recession in the second quarter of 2018, Figure 4 shows that the South African growth outlook
looks tepid, hit by weak internal demand and persistently low international demand for South African commodities. A
constrained monetary policy environment and a pullback in government spending on subsidies, transfers and wage
hikes will temper the pace of private consumption growth in the years ahead. Fixed investment will remain relatively
subdued in the coming years in the face of lukewarm foreign and domestic investor sentiment. Export growth will remain
relatively subdued, reflecting weak demand for South African commodities and the deteriorating competitiveness levels
of South African exporters on the global stage.
16 ECIC STRATEGIC PLAN 2019/20-2021/22
Figure 4a: SA GDP growth Figure 4b: SA GDP by expenditure
Source: ECIC calculations based on BMI Research data
Scope for fiscal consolidation will remain limited in the foreseeable future as slow economic growth weighs down on
revenues and restrain appetite for spending cuts, particularly as the 2019 election approaches. Although the country
has a favourable government debt structure, with around 90% of the debt local currency-denominated, the evolution
of total debt as a share of GDP (as per Figure 5) is not sustainable, having doubled from 26% in 2008 to 53% in
2017. This is not sustainable. More concerning is the risks posed by South Africa’s large SOEs. Most state-owned
companies benefit from government guarantees. Calls on guarantees to, or bailouts for, SOEs would increase the
budget deficit, and government debt and borrowing costs.
Figure 5: SA total debt to GDP evolution
Source: ECIC calculations based on BMI Research data
In light of this backdrop, the future South African growth and trade prospects lie in Africa. The recently minted CFTA
provides market access to approximately 1.2 billion people, with a combined GDP of more than US$3.4 trillion. The
CFTA will be underpinned by robust infrastructure programmes designed to consolidate the regional market through
interconnectivity (facilitated for instance by transport and communications infrastructure) and to promote competitiveness
(for instance through adequate supplies of power). This will present export and investment opportunities for SA entities,
boost ebbing exports, generate revenue for government and positively impact local output.
ECIC STRATEGIC PLAN 2019/20-2021/22 17
10. SWOT ANALYSIS Organizational Delivery Environment
• Open to cover many countries in
Africa
• Flexibility in underwriting terms
(tenor, risk rating etc.)
• Established governance structures
• Skilled and competent workforce
• ECIC underwriting capacity has SA
Government backing
• Not leveraging technology
adequately
• Process inefficiency challenges
• Broadening of ECIC mandate by
revising enabling legislation
• Leveraging on strategic
partnerships with Afreximbank –
SATIPP initiative
• Establishment of SA Eximbank
• Leveraging on regional integration
and continental free trade
agreement
• Reinsurance
• Provide cover in alternative
currencies (i.e. Euros and other
local currencies)
• Increasing regulatory requirements
• SA credit downgrade to sub-
investment grade
• Uncertain macro-economic outlook
(trade wars contagion) & financial
market volatility
• Increasing competition from
international insurance market
• Limited diversification in the
investment space
• Inflexible content policy compared
to other ECAs
• Uncompetitive SA exporters
• Over indebtedness in target
countries
• Un-competitive pricing due to lack
of IMU
• Inability to control the supply value
chain
Str
engt
hs
Weakn
essesThreats
Oppor
tunit
ies
18 ECIC STRATEGIC PLAN 2019/20-2021/22
11. ALIGNMENT TO GOVERNMENT’S PRIORITIES
NDP
Objectives
NDP Target The dti Strategic
Outcomes-
Orientated Goals
ECIC Goal/
Outcome
ECIC
Initiative
Responsible
Programme
Economy and
Employment
Exports (as
measured in
volume terms)
should grow by
6% a year to 2030
with non-traditional
exports growing by
10% per year.
Facilitate
transformation of
the economy to
promote industrial
development,
investment,
competitiveness
and employment
creation.
Proactively attract
business from
new and existing
customers to
facilitate more
exports and cross
border investments.
Research and
identify new
Export and
investment
opportunities
Increase
business
development.
South Africa in
the region and
the World
Intra-regional trade
in South Africa
should increase
from 7% of trade
to 25% of trade by
2030.
Build mutually
beneficial regional
and global relations
to advance South
Africa’s trade,
industrial policy
and economic
development
objectives.
To access new
markets through
collaboration by
leveraging on
our partners’
resources and
knowledge base as
well as removing
constraints.
Improve and
implement
the business
development
plan
Build and
leverage
strategic
partnershipsSouth Africa’s
trade with regional
neighbors should
increase from 15%
of our trade to
30%.
ECIC STRATEGIC PLAN 2019/20-2021/22 19
NDP Objectives NDP Target
The dti Strategic
Outcomes-
Orientated Goals
ECIC Goal/
OutcomeECIC Initiative
Responsible
Programme
South Africa in
the region and
the World
Intra-regional
trade in South
Africa should
increase from 7%
of trade to 25% of
trade by 2030
Build mutually ben-
eficial regional and
global relations to
advance South Afri-
ca’s trade, industrial
policy and economic
development objec-
tives.
To create aware-
ness and under-
standing ECIC’s
mandate to unlock
business oppor-
tunities in line with
Government prior-
ities by communi-
cating effectively.
Develop targeted
marketing and
communication
initiatives for for-
eign buyers and
government
Improve com-
municationSouth Africa’s
trade with regional
neighbors should
increase from
15% of our trade
to 30%.
Building a capa-
ble state
A capable and
effective state,
able to enhance
economic oppor-
tunities, support
the development
of capabilities and
intervene to en-
sure a rising floor
of social rights for
the poor.
Promote a pro-
fessional, ethical,
dynamic, competitive
and customer- fo-
cused working envi-
ronment that ensures
effective and efficient
service delivery
To develop a
competent and
competitive
workforce that
is able to deliver
business strategy
and achievement of
ECIC’s objectives
Implementation
of annual training
plans
Enhance
knowledge &
skills
Building a capa-
ble state
A capable and
effective state,
able to enhance
economic oppor-
tunities, support
the development
of capabilities and
intervene to en-
sure a rising floor
of social rights for
the poor.
Promote a pro-
fessional, ethical,
dynamic, competitive
and customer- fo-
cused working envi-
ronment that ensures
effective and efficient
service delivery
To access new
markets through
collaboration by
leveraging on our
partners resources
and knowledge
base as well as re-
moving constraints
Leverage existing
partnerships to
generate knowl-
edge sharing
programmes
Build and
leverage stra-
tegic partner-
ships
Enhance business
processes to pro-
mote efficiencies in
delivery of services
and products cost
effectively
Leverage on
customer and
stakeholder feed-
back to enhance
business pro-
cesses
Enhance busi-
ness process-
es to improve
operational
efficiency
20 ECIC STRATEGIC PLAN 2019/20-2021/22
12. BOARD OF DIRECTORS AND EXECUTIVE MANAGEMENT
12.1. Board of directors
ECIC’s Board is responsible for determining the Corporation’s strategic direction and ensuring that the strategy is being
carried out in compliance with the law and relevant regulations. The directors serve at most two terms of three years
each. Five Board committees – all of which include representatives from the dti as the sole shareholder – help the
Board fulfil these roles.
Dheven DharmalingamChairperson
Qualifications: CA (S.A) Member of the Institute of Directors
Areas of expertise: Finance; taxation and Insurance; Strategy; Change management
and Organisational Redesign
Position on other Boards:
NED and chairman of the audit committee for HBZ Bank SA Limited
Executive Director of Companies with personal investments
Kutoane KutoaneExecutive Director
Qualifications: MA (econ), Advanced Management Programme (Harvard), Programme
on Investment Appraisal and Management, Advanced Credit and Trade Finance.
Areas of expertise: Project finance, international trade finance, economics and
investment management
Positions on other Boards:
None
Vuyelwa MatsilizaIndependent Non-Executive Director
Qualifications: MBL
Areas of expertise: Treasury management, project finance, corporate finance and
investment management
Position on other Boards:
Board member at Chris Hani Development Agency (CHDA)
ECIC STRATEGIC PLAN 2019/20-2021/22 21
Siobhain O’MahonyIndependent Non-Executive Director
Qualifications: BSc (Hons) (Actuarial Science), Fellow of the Actuarial Society of South
Africa, Fellow of the Institute and Faculty of Actuaries
Areas of expertise: Actuarial valuations, asset-liability matching, capital adequacy
requirements and calculations, analytics, pricing and profitability (banking), loyalty
programme design and modelling
Positions on other Boards:
None
Lefentse RadikelediNon-Independent Non-Executive Director (National Treasury)
Qualifications: MEcon (Economic Development), Executive Development Programme,
Secondary Education Diploma, Certificate in Mineral Economics, Certificate in Contract
Negotiations
Areas of expertise: Finance and regulation
Positions on other Boards:
None
Sisa MayekisoIndependent Non-Executive Director
Qualifications: Bcom Honours (Accounting), CA(SA), CFA
Areas of expertise: Accounting, Treasury, Investment & Risk Management.
Positions on other Boards:
RST Africa Pharmaceuticals (Pty) Ltd - Executive Director
Volantis Capital (Pty) Ltd - Executive Director
Mcobothi Trading CC - Executive Director
22 ECIC STRATEGIC PLAN 2019/20-2021/22
Lerato MothaeIndependent Non-Executive Director
Qualifications: CA(SA)
Areas of expertise: Auditing, Finance, Financial Management
Positions on other Boards:
None
Charles Jaarman KgoaleCompany Secretary
Qualifications: LLB, Advanced Certificate for Municipal Governance, Advanced
Diploma in Project Management, Management Development Programme,
Postgraduate Diploma in Programme and Project Management
Areas of expertise: Compliance and Corporate Governance and Project Management
Positions on other Boards:
Non- Executive Director (volunteer) Childhood Cancer Foundation (Non-remunerated)
Deshni SubbiahIndependent Non-Executive Director
Qualifications: BSc Actuarial Science (Cum Laude), Fellow of the Actuarial Society
of South Africa, Chartered Enterprise Risk Actuary (CERA), Post-Graduate Diploma
in General Management (Distinction), Masters in Business Administration (MBA),
Certificate in Investments from the Institute of Actuaries (UK)
Areas of expertise: Actuarial and Risk Management
Positions on other Boards: None
Lerato MatabogeIndependent Non-Executive Director
Qualifications: BA (Law and International Relations), Honours – International
Relations, Masters – International Political Economy (International Trade and Global
Finance), Certificates in trade negotiations, bilateral investment treaty negotiations and
project management. Executive Training in infrastructure project conceptualization and
preparation.
Areas of expertise: Trade and Investment
Positions on other Boards: None
ECIC STRATEGIC PLAN 2019/20-2021/22 23
12.2 Executive Management
The Chief Executive Officer (CEO) is responsible for ECIC’s day to day operations and is supported by the Chief
Operating Officer, the Chief Financial Officer, the Chief Risk Officer and General Counsel. Various units report to the CEO
and his executive team. With the exception of the CEO, who is on a three-year contract with three-month notice period,
all the executives are permanent employees who are required to give a month’s notice when resigning. Executives are
not bound by a restraint of trade agreement on leaving ECIC.
Kutoane KutoaneExecutive Director
Mandisi NkuhluChief Operations Officer
Qualifications: MA (econ), Advanced Management Programme (Harvard), Programme
on Investment Appraisal and Management, Advanced Credit and Trade Finance.
Areas of expertise: Project finance, international trade finance, economics and
investment management
Positions on other Boards:
None
Qualifications: Bachelor of Laws, Management Advanced Programme,
Executive Leadership Programme
Areas of expertise: Law and Finance
Positions on other Boards:
None
John Omollo Chief Risk Officer
Qualifications: Masters of Business Administration (MBA), Certified Public Accountant of Kenya (CPA II, III)
Areas of expertise: Risk Management, Project & Structured Finance, Banking and Credit Rating of Financial Institutions
Positions on other Boards: None
24 ECIC STRATEGIC PLAN 2019/20-2021/22
Qualifications: CA(SA), Management Advancement Programme
Areas of expertise: Finance, auditing and financial management
Positions on other Boards:
None
Noluthando MkhathazoChief Financial Officer
Ntshengedzeni Gilbert MaphulaGeneral Counsel
Qualifications: BPROC, LLB, LLM
Areas of expertise: Cross Boarder Financing, Export Credit Insurance, Political Risk,
International Trade and Foreign Investments Project Finance and Sovereign Lending
Positions on other Boards:
None
ECIC STRATEGIC PLAN 2019/20-2021/22 25
13. DESCRIPTION OF THE PLANNING PROCESS
In developing the strategic plan, the Corporation has taken into account the National Development Plan as the
overarching programme that guides the government priorities of the current administration. This is captured in the table
demonstrating the link between ECIC objectives/initiatives and the objectives and vision of the National Development
Plan.
Secondly, the priorities of the dti were taken into account, to ensure that there is alignment between ECIC objectives
and the dti priority areas. This alignment is captured in the table demonstrating the link between the dti priorities and
ECIC mandate and initiatives.
During a three-day workshop between management and the Board, it was agreed to revisit the current vision of the
Corporation. The strategic themes were maintained, and the description enhanced to link the growth objective to the
pursuit of ECIC mandate. The strategic objectives will guide the programmes to be implemented by the Corporation
for the next three years. These strategic themes and objectives are captured in the strategic map which is a visual
representation of how the strategy and the various themes and objectives work together on an integrated basis to
enable the Corporation to achieve the intended results.
This allowed management and the Board to take stock of the external operational and competitive environment to help
the Corporation to position itself better to address the current and impending challenges that are lurking on the horizon.
This process has enabled the Corporation to develop programmes, performance targets and measurements in line with
the SMART principles.
The overall risk appetite of the Corporation has been revisited to take stock of the new challenges in the competitive
landscape, changes in the regulatory framework, the internal control environment and the degree of oversight exercised
by the Board as a whole and through the Board committees. It was agreed to adopt a specific number which will serve
as the Board limit for a single risk event.
The different programmes of the Corporation are underpinned by a budget which is predicated on the ability of the
Corporation to write new business to fulfil its mandate in the first instance, whilst ensuring that we generate sufficient
levels of revenue to ensure financial sustainability of the Corporation as a going concern over the planning period
and beyond. The overall financial plan takes into account the asset management plan to ensure the Corporation has
adequate levels of capital and liquidity to meet the regulatory and operational requirements on a sustainable basis. The
increase of the capital base is being pursued because it enables the Corporation to have bigger underwriting capacity
towards the fulfilment of its mandate. The capital base will increase as a result of the growth in investment income and
the underwriting profits.
The Board convened and approved the draft Strategic Plan at its meeting of 30 October 2018. Pursuant to the review
of the draft strategic plan by the dti, the updated Strategic Plan was approved by Board on 29 January 2019.
26 ECIC STRATEGIC PLAN 2019/20-2021/22
14. FINANCIAL PLAN
14.1 Projections of revenue, expenditure and borrowings
2019 R’000
2020 R’000
2021 R’000
2022 R’000
FINANCIAL PERFORMANCE
Premiums Written 211 180 1 452 120 469 444 474 444
Reinsurance premiums (583 100)
Net Premiums 211 180 869 020 469 444 474 444
Change in Unearned premiums 461 054 (319 763) 2 781 3 708
Change in Concentration risk 205 080 - - -
Change in Unexpired risk (30 036) 5 139 4 761 4 240
Earned Premiums 847 278 554 396 476 987 482 392
Claims Incurred 170 503 (163 968) 58 658 7 428
Claims Paid (207 594) (10 332) - -
Salvages Rec 68 431 64 033 58 886 58 452
Change in OCR provision 309 666 (217 669) (229) (51 024)
Assessment fees 567 346 594 421
Reinsurance commission received - 200 1 562 2 968
Operating expenses (171 805) (184 092) (193 781) (205 420)
Commission Paid (230) (161) (164) (169)
Underwriting results (after bonus) 846 312 206 720 343 855 287 620
Investment Income 171 623 189 771 392 239 412 180
Investment management expense (18 413) (17 582) (19 372) (20 099)
IMU grant receipts 183 248 193 511 204 153 215 381
IMU expenses (69 353) (51 555) (39 576) (29 205)
Foreign Exchange gain/(Loss) 310 491 (49 958) (259 398) (9 005)
Interest expense (1) - - -
Profit Before Tax (before CSI) 1 423 907 470 907 621 902 856 872
Corporate Social Investment (17 169) (40 771) (11 810) (17 127)
Profit Before Tax 1 406 738 430 136 610 092 839 745
Taxation (387 460) (134 873) (181 907) (243 306)
Profit/(Loss) After Tax 1 019 278 295 262 428 185 596 439
ECIC STRATEGIC PLAN 2019/20-2021/22 27
14.2 Asset and liability management
2019 R’000
2020 R’000
2021 R’000
2022 R’000
FINANCIAL POSITION
ASSETS
Equipment and intangible assets 6 332 6 047 4 614 2 488
Investments 7 260 145 8 129 382 8 464 358 9 216 965
Loans and receivables 1 925 936 1 750 492 1 351 452 1 087 064
Reinsurance assets - 574 088 526 309 513 240
Cash and Cash Equivalent 46 580 45 786 42 517 42 429
Deferred tax 11 988 11 988 11 988 11 988
Total Assets 9 250 981 10 517 782 10 401 238 10 874 175
EQUITY AND LIABILITIES
Equity
Share Capital and Premium 316 051 316 051 316 051 316 051
Other OCI Reserves 27 578 27 578 27 578 27 578
Retained Income - Previous Years 3 687 654 4 706 932 5 002 194 5 430 379
- Current Year 1 019 278 295 262 428 185 596 439
Total Equity 5 050 560 5 345 823 5 774 007 6 370 446
Liabilities
Insurance contract liabilities 2 949 439 3 997 132 3 699 559 3 722 202
Provision for Outstanding Claims 292 403 500 897 465 216 515 103
Provision for Unearned Premiums Reserve 2 620 974 3 465 891 3 210 702 3 187 746
Provision for Unexpired Risk Reserve & Risk margin 36 062 30 343 23 640 19 353
Reinsurance deferred acquisition cost - 143 522 131 577 128 310
IMU liability 1 195 567 953 430 722 783 582 875
Trade and other payables 52 542 74 816 70 052 66 870
Provisions 2 874 3 060 3 259 3 471
Total Liabilities 4 200 421 5 171 960 4 627 231 4 503 729
Total Equity and Liabilities 9 250 981 10 517 782 10 401 238 10 874 175
28 ECIC STRATEGIC PLAN 2019/20-2021/22
14.3 Cash flow projections
2019 R’000
2020 R’000
2021 R’000
2022 R’000
CASHFLOW
Cash flows from operating activities
Cash generated by underwriting activities (53 457) 1 083 792 800 056 760 668
Interest received 161 768 85 360 176 314 185 272
Dividends received 20 445 8 044 16 634 17 481
IMU Grant received 183 248 193 511 204 153 215 381
IMU Claims Paid (283 848) (275 889) (213 379) (167 766)
Interest paid (1) - - -
Taxation paid (435 908) (134 873) (181 907) (243 306)
Net cash inflow from operating activities -407 753 959 945 801 871 767 730
Cash flows from investing activities
Acquisition of fixed assets (1 461) (2 810) (1 330) -
Net (acquisition)/disposal of investments 292 315 (957 127) (800 532) (767 722)
Net cash (outflow)/inflow from investing activities 290 854 (959 937) (801 862) (767 722)
Net increase in cash and cash equivalents (116 899) 8 9 8
Cash and cash equivalents at beginning of year 154 469 46 581 45 785 42 517
Unrealised foreign exchange gain/(loss) on cash and cash equivalents 9 010 (803) (3 277) (96)
Cash and cash equivalents at end of year 46 581 45 785 42 517 42 429
The above financial statements were prepared using these closing USD/ZAR exchange rates
14,25 14,00 12,98 12,95
ECIC STRATEGIC PLAN 2019/20-2021/22 29
14.4 Capital expenditure projects
The Corporation has plans to acquire computer systems to modernize its business processes. Improving business processes is one of the corporate objectives highlighted in the strategy. Total budgeted capital expenditure is per the table below:
2019 R’000
2020 R’000
2021 R’000
2022 R’000
Total capital expenditure 1,461 2,810 1,330 -
14.5 Infrastructure plans
The Corporation does not have infrastructure plans for the period 2018/19 – 2020/22.
14.6 Dividend policies
The Corporation has no dividend policy.
14.7 Borrowing Plans
The Corporation has no borrowing plans.
30 ECIC STRATEGIC PLAN 2019/20-2021/22
15. IMPROVE KNOWLEDGE AND SKILLS
PART B:
Programme Performance
15.1. Purpose
To develop a competent and competitive workforce that is able to deliver on the business strategy and the
achievement of ECIC’s objectives.
15.2. Description
In three years, we will have delivered on our strategy and achieved our objectives due to the improved levels of
knowledge and skill of our staff. This programme includes:
•Developinganappropriatetrainingplantoaddressidentifiedgapsandimprovetheknowledgeandskillof
our staff.
•DevelopaworkforceplanthatcanensurethatECICattractsandretainsacompetentworkforcetodeliver
on its strategy.
In the next three years the successful execution of this programme should result in improving key
performance measures such as:
•Therevenuegeneratedperemployee
ECIC STRATEGIC PLAN 2019/20-2021/22 31
15.3
. P
erfo
rman
ce in
dic
ato
rs a
nd p
erfo
rman
ce t
arg
ets
(Enh
ance
kno
wle
dg
e an
d s
kills
to
imp
rove
org
anis
atio
nal c
apac
ity)
Go
al/
Out
com
eO
utp
ut
Per
form
ance
Ind
icat
or/
mea
sure
Aud
ited
Act
ual P
erfo
rman
ceE
stim
ate
Per
form
ance
Med
ium
Ter
m T
arg
ets
To d
evel
op a
com
pete
nt a
nd
com
petit
ive
wor
kfor
ce
that
is a
ble
to d
eliv
er
on b
usin
ess
stra
tegy
and
the
achi
evem
ent o
f
obje
ctiv
es
Impl
emen
tatio
n
of a
nnua
l
trai
ning
pla
n
% o
f ann
ual
trai
ning
pla
n
impl
emen
ted
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2020
/21
2021
/22
100%
impl
emen
tatio
n
of tr
aini
ng p
lan
for
2015
/16
100%
impl
emen
tatio
n
of tr
aini
ng p
lan
for
2016
/17
90-
100%
impl
emen
tatio
n
of tr
aini
ng p
lan
for
2017
/18
90-
100%
impl
emen
tatio
n
of tr
aini
ng p
lan
for
2018
/19
80-
100%
impl
emen
tatio
n
of tr
aini
ng p
lan
for
2019
/20
80-
100%
impl
emen
tatio
n
of tr
aini
ng p
lan
for
2020
/21
80-
100%
impl
emen
tatio
n
of tr
aini
ng p
lan
for
2021
/22
32 ECIC STRATEGIC PLAN 2019/20-2021/22
15.4
. Q
uart
erly
mile
sto
nes
(Enh
ance
kno
wle
dg
e an
d s
kills
to
imp
rove
org
anis
atio
nal c
apac
ity)
Go
al/
Out
com
eO
utp
ut
Per
form
ance
Ind
icat
or/
mea
sure
Bas
elin
e20
19/2
0 A
nnua
l
Targ
etQ
uart
erly
mile
sto
nes
To d
evel
op a
com
pete
nt a
nd
com
petit
ive
wor
kfor
ce th
at
is a
ble
to d
eliv
er
on b
usin
ess
stra
tegy
and
the
achi
evem
ent o
f
obje
ctiv
es
Impl
emen
tatio
n
of a
nnua
l tra
inin
g
plan
% o
f ann
ual
trai
ning
pla
n
impl
emen
ted
90-
100%
impl
emen
tatio
n
of tr
aini
ng p
lan
for
2018
/19
80-
100%
impl
emen
tatio
n
of tr
aini
ng p
lan
for
2019
/20
1st Q
uart
er
2nd Q
uart
er3rd
Qua
rter
4th Q
uart
er
Trai
ning
pla
n
appr
oved
by
EXC
O
25%
impl
emen
tatio
n
of tr
aini
ng p
lan
50%
- 75
%
impl
emen
tatio
n
of tr
aini
ng p
lan
80%
- 10
0%
impl
emen
tatio
n
of tr
aini
ng p
lan
ECIC STRATEGIC PLAN 2019/20-2021/22 33
15.5
Fin
anci
al P
lan
(Exp
end
itur
e es
tim
ates
fo
r en
hanc
ing
kno
wle
dg
e an
d s
kills
to
imp
rove
org
anis
atio
nal c
apac
ity)
Pro
gram
me
Nam
e: Im
prov
e K
now
ledg
e an
d sk
ills
Eco
nom
ic c
lass
ifica
tion
Exp
endi
ture
out
com
eA
djus
ted
App
ropr
iatio
nM
ediu
m-T
erm
Exp
endi
ture
Est
imat
e
2015
/16
R ‘0
00
2016
/17
R ‘0
00
2017
/18
R ‘0
00
2018
/19
R ‘0
00
2019
/20
R ‘0
00
2019
/21
R ‘0
00
2021
/22
R ‘0
00
Cur
rent
pay
men
t
(2,7
22)
(6,4
82)
(4,1
65)
(13,
557)
(2,2
87)
(11,
211)
(3,2
93)
(15,
831)
(3,5
07)
(16,
208)
(3,7
35)
(16,
857)
(3,9
77)
(17,
794)
Com
pens
atio
n of
em
ploy
ees
Goo
ds &
ser
vice
s, e
tc.
Pay
men
ts o
f ca
pit
al a
sset
s
0 0
0 0
0 0
0 B
uild
ing
and
othe
r fix
ed s
truc
ture
Mac
hine
ry &
equ
ipm
ent
Oth
er c
lass
ifica
tio
ns
0
0
0
0
0
0
0
34 ECIC STRATEGIC PLAN 2019/20-2021/22
16. BUILD AND LEVERAGE STRATEGIC
PARTNERSHIPS TO ADVANCE BUSINESS
16.1. Purpose
To access new markets through collaboration by leveraging on our partner resources and knowledge base
as well as removing constraints.
16.2. Description
In three years, we will leverage our strategic partnerships, their resources and knowledge base to form
sustainable collaborations that will enable ECIC to access new markets and remove existing constraints.
This programme will include:
• Leveragingonexistingpartnershipstogenerateknowledgesharingprogrammeswhichmayinclude
training and secondment opportunities.
In the next three years the successful execution of this programme will be demonstrated in the following key
measures:
• Increaseinthenumberoftransactionsgeneratedfromcollaborationarrangements.
• Increaseinthenumberofexchangesinresourcesandknowledge.
• Increaseinthevolumeofbusinessgeneratedfromcollaborationwithstrategicpartners.
With our equity investment in Afreximbank the aim is to enhance our business by leveraging our local and international
network of strategic partners within the public and private sector. The decision to acquire a shareholding in Afreximbank
was informed by the desire to build a strategic partnership between ECIC and the bank, so that the relationship goes
beyond the shareholding arrangement and extends the collaboration to areas such as deal origination, risk sharing,
knowledge sharing and advocacy work in the promotion of intra-Africa trade.
As part of the collaboration on deal origination, a USD 1bn SATIPP initiative was launched last year jointly by ECIC and
Afreximbank. Through this initiative eligible transactions that seek to promote intra-Africa trade between South Africa
and the rest of the continent will be financed by Afreximbank and ECIC will provide its insurance products in line with
its mandate to support export trade from South Africa.
On the risk sharing side, Afreximbank has indicated its appetite to guarantee half of ECIC’s potential exposure in
the Anadarko sponsored LNG project in Mozambique. Through these risk sharing arrangements ECIC will be able
to release its underwriting capacity to support other projects, without reducing the level of South African exports
supported.
On knowledge sharing, ECIC plans to second some of its staff to Afreximbank to share knowledge in various areas of
trade finance and in undertaking joint research work on intra- Africa trade related matters. The joint research work will
be utilized to advance the advocacy work on intra-Africa trade matters.
ECIC STRATEGIC PLAN 2019/20-2021/22 35
16.3
. P
erfo
rman
ce in
dic
ato
rs a
nd p
erfo
rman
ce t
arg
ets
(Bui
ld a
nd le
vera
ge
stra
teg
ic p
artn
ersh
ips
to a
dva
nce
bus
ines
s)
Go
al/
Out
com
eO
utp
ut
Per
form
ance
Ind
icat
or/
mea
sure
Aud
ited
Act
ual P
erfo
rman
ceE
stim
ate
Per
form
ance
Med
ium
Ter
m T
arg
ets
Bui
ld a
nd le
ver-
age
stra
tegi
c
part
ners
hips
Str
ateg
ic p
art-
ners
hips
pla
n
impl
emen
ted
% o
f col
labo
-
ratio
n in
itiat
ives
impl
emen
ted
as
per
the
annu
al
stra
tegi
c pa
rtne
r-
ship
impl
emen
ta-
tion
plan
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2020
/21
2021
/22
No
base
line
No
base
line
No
base
line
No
base
line
80-
100%
im-
plem
enta
tion
of s
trat
egic
part
ners
hip
plan
80-
100%
im-
plem
enta
tion
of s
trat
egic
part
ners
hip
plan
80-
100%
im-
plem
enta
tion
of s
trat
egic
part
ners
hip
plan
36 ECIC STRATEGIC PLAN 2019/20-2021/22
16.4
. Q
uart
erly
mile
sto
nes
(Bui
ld a
nd le
vera
ge
stra
teg
ic p
artn
ersh
ips
to a
dva
nce
bus
ines
s)
Go
al/
Out
com
eO
utp
ut
Per
form
ance
Ind
icat
or/
mea
sure
Bas
elin
e
2019
/20
Ann
ual
Targ
et
Qua
rter
ly m
ilest
one
s
Bui
ld a
nd
leve
rage
stra
tegi
c
part
ners
hips
Str
ateg
ic
part
ners
hips
pla
n
impl
emen
ted
% o
f
colla
bora
tion
initi
ativ
es
impl
emen
ted
as p
er th
e
annu
al s
trat
egic
part
ners
hip
impl
emen
tatio
n
plan
No
base
line
80-
100%
impl
emen
tatio
n
of s
trat
egic
part
ners
hip
plan
1st Q
uart
er
2nd Q
uart
er3rd
Qua
rter
4th Q
uart
er
Str
ateg
ic
part
ners
hip
plan
appr
oved
by
EXC
O
25-
30%
of p
lan
impl
emen
ted
60-
80%
of p
lan
impl
emen
ted
80-
100%
of p
lan
impl
emen
ted
ECIC STRATEGIC PLAN 2019/20-2021/22 37
16.5
. Fi
nanc
ial P
lan
(Exp
end
itur
e es
tim
ates
fo
r B
uild
and
leve
rag
e st
rate
gic
par
tner
ship
s to
ad
vanc
e b
usin
ess)
Pro
gram
me
Nam
e:
Bui
ld a
nd le
vera
ge S
trat
egic
Par
tner
ship
Eco
nom
ic c
lass
ifica
tion
Exp
endi
ture
out
com
eA
djus
ted
App
ropr
iatio
nM
ediu
m-T
erm
Exp
endi
ture
Est
imat
e
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2019
/21
2021
/22
R ‘0
00R
‘000
R ‘0
00R
‘000
R ‘0
00R
‘000
R ‘0
00
Cur
rent
pay
men
t
Com
pens
atio
n of
em
ploy
ees
(4,7
63)
(2,0
30)
(2,3
15)
(2,6
38)
(2,8
09)
(2,9
92)
(3,1
86)
Goo
ds &
ser
vice
s, e
tc(1
03)
(489
)(5
66)
(1,0
57)
(699
)(7
84)
(828
)
Pay
men
ts o
f ca
pit
al a
sset
s 0
0
0
0
0
0
0 B
uild
ing
and
othe
r fix
ed s
truc
ture
Mac
hine
ry &
equ
ipm
ent
Oth
er c
lass
ifica
tio
ns
0 0
0 0
0 0
0
38 ECIC STRATEGIC PLAN 2019/20-2021/22
17. ADVANCE TRANSFORMATION TO BUILD AN INCLUSIVE ECONOMY
17.1. Purpose
To advance black economic empowerment and to be ultimately rated a B-BBEE level 1
contributor or performer.
17.2. Description
In the next three years we aim to implement the transformation strategy to ensure that:
- The Corporation’s employees are representative of the South African society and the Corporation
has equitable gender representation;
- there is substantial increase in levels of procurement of goods and services from black-owned,
and black-controlled companies, and wherever possible from black small and medium-
enterprises and the procurement policy is implemented in conformity with the Preferential
Procurement Regulations of 2017;
- the promotion and facilitation and the development of black enterprises by providing the
necessary financial support and training to enable them to be competent in providing goods
and services;
- the direct investment into socio - economic programmes to address needs of the vulnerable in a
sustainable manner, and to create opportunities for community and individual development; and
- there is mobilization of capital internally to meet the financing of black economic empowerment
objectives.
We further believe:
- that economic growth, development and empowerment are complementary processes and
fundamental to our business;
- in the economic empowerment and skills development of the broader society;
- that our economic empowerment and skills development activities must add value and
contribute to the transformation of our business and our society; and
- that ultimately, our performance, when measured against our stated commitments and the
Financial Sector Charter must ensure that we are rated as a B-BBEE Level 1 Contributor or
performer.
ECIC STRATEGIC PLAN 2019/20-2021/22 39
17.3
. P
erfo
rman
ce in
dic
ato
rs a
nd p
erfo
rman
ce t
arg
ets
(Ad
vanc
e tr
ansf
orm
atio
n to
bui
ld a
n in
clus
ive
eco
nom
y)
Go
al/
Out
com
eO
utp
ut
Per
form
ance
Ind
icat
or/
mea
sure
Aud
ited
Act
ual P
erfo
rman
ceE
stim
ate
Per
form
ance
Med
ium
Ter
m T
arg
ets
Adv
ance
tran
sfor
mat
ion
to b
uild
an
incl
usiv
e
econ
omy
Tran
sfor
mat
ion
stra
tegy
impl
emen
ted
B-B
BE
E s
core
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2020
/21
2021
/22
No
base
line
Leve
l 3
B-B
BE
E s
core
Leve
l 4
B-B
BE
E s
core
Leve
l 4
B-B
BE
E s
core
Ach
ieve
a le
vel
3 B
-BB
EE
scor
e
Ach
ieve
a le
vel 2
B-B
BE
E
scor
e
Ach
ieve
a le
vel
1 B
-BB
EE
scor
e
17.4
Qua
rter
ly m
ilest
one
s (A
dva
nce
tran
sfo
rmat
ion
to b
uild
an
incl
usiv
e ec
ono
my)
Go
al/
Out
com
eO
utp
ut
Per
form
ance
Ind
icat
or/
mea
sure
Bas
elin
e20
19/2
0 A
nnua
l
Targ
etQ
uart
erly
mile
sto
nes
Adv
ance
tran
sfor
mat
ion
to
impr
ove
B-B
BE
E
leve
l
Tran
sfor
mat
ion
stra
tegy
impl
emen
ted
B-B
BE
E s
core
No
base
line
Ach
ieve
a le
vel 3
B-B
BE
E s
core
1st Q
uart
er
2nd Q
uart
er3rd
Qua
rter
4th Q
uart
er
Ann
ual t
arge
t with
quar
terly
pro
gres
s
repo
rtin
g
Ann
ual t
arge
t with
quar
terly
pro
gres
s
repo
rtin
g
Ann
ual t
arge
t with
quar
terly
pro
gres
s
repo
rtin
g
Ann
ual t
arge
t with
quar
terly
pro
gres
s
repo
rtin
g
40 ECIC STRATEGIC PLAN 2019/20-2021/22
17.5
. Fin
anci
al P
lan
(Exp
end
itur
e es
tim
ates
fo
r A
dva
nce
tran
sfo
rmat
ion
to b
uild
an
incl
usiv
e ec
ono
my)
Pro
gra
mm
e N
ame:
Ad
vanc
e tr
ansf
orm
atio
n to
bui
ld a
n in
clus
ive
eco
nom
y
Eco
nom
ic c
lass
ifica
tio
n
Exp
end
itur
e o
utco
me
Ad
just
ed
Ap
pro
pri
atio
nM
ediu
m-T
erm
Exp
end
itur
e E
stim
ate
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2019
/21
2021
/22
R ‘0
00R
‘000
R ‘0
00R
‘000
R ‘0
00R
‘000
R ‘0
00
Cur
rent
pay
men
t
Com
pens
atio
n of
em
ploy
ees
(1
,308
) (4
,982
)(6
,506
)(6
,928
)(7
,378
)(7
,857
)
Goo
ds &
ser
vice
s, e
tc.
(1
3,92
6)
(16,
341)
(17,
369)
(40,
839)
(11,
883)
(17,
205)
Pay
men
ts o
f ca
pit
al a
sset
s
Bui
ldin
g an
d ot
her
fixed
str
uctu
re
0
0 0
0 0
Mac
hine
ry &
equ
ipm
ent
Oth
er c
lass
ifica
tio
ns
0 0
0 0
0
ECIC STRATEGIC PLAN 2019/20-2021/22 41
18. ENHANCE BUSINESS PROCESSES TO IMPROVE OPERATIONAL EFFICIENCY
18.1. Purpose
To enhance business processes to improve operational efficiency.
18.2. Description
In three (3) years we endeavor to significantly enhance ECIC processes and improve efficiency
in the delivery of key services and products. This programme will include:
• Providing active business intelligence and reporting on key performance indicators as well
as highlight bottlenecks, resource constraints and other inefficiencies.
• Providing a mechanism for benchmarking processes and tracking the business value of
re-engineered processes.
• This programme will also drive a number of change management initiatives geared
towards automation of workflow processes and adoption of the MIS and system
ownership by the business.
• Maintain an acceptable cost to revenue ratio that is consistent with industry bench
markers and specific objectives of ECIC.
In the next three years the successful execution of this programme will be demonstrated in the
following key measures:
• Holistic level overview of organizational processes and tasks.
• Reduction in turnaround times through real time view of bottlenecks and other issues.
• Improvement in the cost effectiveness of business processes through benchmarking.
• Improvement in the quality and efficiency of reports generated improving decision making.
• Leverage technology to provide a competitive advantage.
• Cost to income ratio calculated as current operating costs excluding investment related
costs as a ratio of 3-year average income (earned premium, assessment fees and
commission received).
42 ECIC STRATEGIC PLAN 2019/20-2021/22
18.3
Per
form
ance
ind
icat
ors
and
per
form
ance
tar
get
s (E
nhan
ce b
usin
ess
pro
cess
es t
o im
pro
ve o
per
atio
nal e
ffici
ency
)
Go
al/
Out
com
eO
utp
utP
erfo
rman
ce
Ind
icat
or/
mea
sure
Aud
ited
Act
ual P
erfo
rman
ceE
stim
ate
Per
form
ance
Med
ium
Ter
m T
arg
ets
Enh
ance
bus
ines
s
pro
cess
es
to im
pro
ve
op
erat
iona
l
effi
cien
cy
Dev
elop
app
ropr
iate
repo
rt to
trac
k co
st to
inco
me
ratio
on
a pe
riodi
c ba
sis
· M
anag
emen
t
acco
unts
· B
udge
t var
ianc
e
repo
rts
Cos
t to
inco
me
ratio
calc
ulat
ed a
s cu
rren
t
oper
atin
g co
sts
excl
udin
g in
vest
men
t
rela
ted
cost
s as
a
ratio
of 3
-yea
r av
erag
e
inco
me
(ear
ned
prem
ium
, ass
essm
ent
fees
and
com
mis
sion
rece
ived
).
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2020
/21
2021
/22
40%
- 3
5%
cost
to
inco
me
ratio
35%
- 3
0%
cost
to
inco
me
ratio
Cos
t to
inco
me
ratio
of 2
0.77
%
Cos
t to
inco
me
ratio
not
exce
edin
g
35%
Cos
t to
inco
me
ratio
not e
xcee
ding
32%
Cos
t to
inco
me
ratio
not
exce
edin
g
32%
Cos
t to
inco
me
ratio
not
exce
edin
g
32%
Go
al/
Out
com
eO
utp
ut
Per
form
ance
Ind
icat
or/
mea
sure
Aud
ited
Act
ual P
erfo
rman
ceE
stim
ate
Per
form
ance
Med
ium
Ter
m T
arg
ets
Enh
ance
bus
ines
s
pro
cess
es
to im
pro
ve
op
erat
iona
l
effi
cien
cy
Bus
ines
s pr
oces
s
impr
ovem
ent p
lan
impl
emen
ted.
% o
f bus
ines
s
proc
ess
impr
ovem
ent
plan
impl
emen
ted
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2020
/21
2021
/22
No
base
line
No
base
line
No
base
line
50 –
60%
of b
usin
ess
proc
ess
impr
ovem
ent
plan
impl
emen
ted
60 –
80%
of b
usin
ess
proc
ess
impr
ovem
ent
plan
impl
emen
ted
80 –
100
%
of b
usin
ess
proc
ess
impr
ovem
ent
plan
impl
emen
ted
Rev
iew
busi
ness
proc
ess
impr
ovem
ent
plan
ECIC STRATEGIC PLAN 2019/20-2021/22 43
18.4
Qua
rter
ly m
ilest
one
s (E
nhan
ce b
usin
ess
pro
cess
es t
o im
pro
ve o
per
atio
nal e
ffici
ency
)
Go
al/
Out
com
eO
utp
ut
Per
form
ance
Ind
icat
or/
mea
sure
Bas
elin
e20
19/2
0 A
nnua
l
Targ
etQ
uart
erly
mile
sto
nes
Enh
ance
busi
ness
proc
esse
s
to im
prov
e
oper
atio
nal
effic
ienc
y
Dev
elop
app
ropr
iate
repo
rt to
trac
k co
st
to in
com
e ra
tio o
n a
perio
dic
basi
s
· M
anag
emen
t
acco
unts
· B
udge
t
varia
nce
repo
rts
Cos
t to
inco
me
ratio
cal
cula
ted
as
curr
ent o
pera
ting
cost
s ex
clud
ing
inve
stm
ent
rela
ted
cost
s as
a ra
tio o
f 3-y
ear
aver
age
inco
me
(ear
ned
prem
ium
,
asse
ssm
ent f
ees
and
com
mis
sion
rece
ived
).
Cos
t to
inco
me
ratio
not
exce
edin
g 35
%
Cos
t to
inco
me
ratio
(as
defin
ed)
32%
1st Q
uart
er
2nd Q
uart
er3rd
Qua
rter
4th Q
uart
er
Ann
ual t
arge
t with
quar
terly
pro
gres
s
repo
rtin
g
Ann
ual t
arge
t with
quar
terly
pro
gres
s
repo
rtin
g
Ann
ual t
arge
t with
quar
terly
pro
gres
s
repo
rtin
g
Ann
ual t
arge
t with
quar
terly
pro
gres
s
repo
rtin
g
Bus
ines
s pr
oces
s
impr
ovem
ent p
lan
impl
emen
ted.
% b
usin
ess
proc
ess
impr
ovem
ent p
lan
impl
emen
ted
50 –
60%
of
busi
ness
pro
cess
impr
ovem
ent p
lan
impl
emen
ted
60 –
80%
of
busi
ness
pro
cess
impr
ovem
ent p
lan
impl
emen
ted
Ann
ual t
arge
t with
quar
terly
pro
gres
s
repo
rtin
g
Ann
ual t
arge
t with
quar
terly
pro
gres
s
repo
rtin
g
Ann
ual t
arge
t with
quar
terly
pro
gres
s
repo
rtin
g
Ann
ual t
arge
t with
quar
terly
pro
gres
s
repo
rtin
g
44 ECIC STRATEGIC PLAN 2019/20-2021/22
18.5
. Fin
anci
al P
lan
(Exp
end
itur
e es
tim
ates
fo
r en
hanc
ing
bus
ines
s p
roce
sses
to
imp
rove
op
erat
iona
l effi
cien
cy)
Pro
gra
mm
e N
ame:
Enh
ance
bus
ines
s p
roce
sses
to
imp
rove
op
erat
iona
l effi
cien
cy
Eco
nom
ic c
lass
ifica
tio
n
Exp
end
itur
e o
utco
me
Ad
just
ed
Ap
pro
pri
atio
nM
ediu
m-T
erm
Exp
end
itur
e E
stim
ate
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2020
/21
2021
/22
R ‘0
00R
‘000
R ‘0
00R
‘000
R ‘0
00R
‘000
R ‘0
00
Cur
rent
pay
men
t
Com
pens
atio
n of
em
ploy
ees
(13,
608)
(2,8
39)
(3,7
85)
(7,6
90)
(8,1
89)
(8,7
20)
(9,2
86)
Goo
ds &
ser
vice
s, e
tc(3
4,34
8)(2
1,91
6)(1
9,74
7)(2
6,91
9)(3
2,22
8)(3
3,61
4)(3
6,21
3)
Pay
men
ts o
f ca
pit
al a
sset
s
Bui
ldin
g an
d ot
her
fixed
str
uctu
re
Mac
hine
ry &
equ
ipm
ent
(4,7
36)
0 (1
,145
)(1
,461
)(2
,810
)(1
,330
)0
Oth
er c
lass
ifica
tio
ns
(358
,940
)(2
,609
)(2
,712
)(2
,808
)(3
,096
)(2
,762
)(2
,126
)
ECIC STRATEGIC PLAN 2019/20-2021/22 45
19. INCREASE BUSINESS DEVELOPMENT INITIATIVES TO GROW THE BUSINESS
19.1. Purpose
To proactively attract business from new and existing customers to facilitate more exports and
cross border investments.
19.2. Description
In three years, we will proactively attract business from new and existing customers to facilitate
more exports and cross border investments. This programme will include:
• We proactively conduct research in various countries and sectors to identify trade and
investment opportunities for South African companies with the aim for ECIC to match
relevant players to those opportunities.
• Implementing a customer engagement plan which will include; the articulation of ECIC’s
value proposition; relationship management strategy that will seek to retain and increase
the value of business from existing and new customers; improve the quality of service pro-
vided by ECIC to its customers.
• Implementing a business development plan that will seek to establish customer focused
initiatives along regional, geographic and sector segments; develop initiative to leverage on
local presence and our strategic partners.
In the next three years the successful execution of this programme will be demonstrated in the
following key measures:
• Increase in the value of new projects approved.
• Increase in ECIC customer base.
46 ECIC STRATEGIC PLAN 2019/20-2021/22
19.3
Per
form
ance
ind
icat
ors
and
per
form
ance
tar
get
s (In
crea
se b
usin
ess
dev
elo
pm
ent
init
iati
ves
to g
row
the
bus
ines
s)
Go
al/
Out
com
eO
utp
ut
Per
form
ance
Ind
icat
or/
mea
sure
Aud
ited
Act
ual P
erfo
rman
ceE
stim
ate
Per
form
ance
Med
ium
Ter
m T
arg
ets
Incr
ease
bus
ines
s
deve
lopm
ent
initi
ativ
es to
gro
w
the
busi
ness
Incr
ease
busi
ness
deve
lopm
ent
initi
ativ
es
to g
row
the
busi
ness
Valu
e of
appr
oved
tran
sact
ions
.
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2020
/21
2021
/22
US
D 3
77m
US
D 4
79m
US
D 4
96m
US
D 4
50m
-
US
D 5
50m
US
D 5
50m
-
US
D 5
75m
US
D 5
00m
-
US
D 6
00m
US
D 6
00m
-
US
D 6
25m
Res
earc
h
and
iden
tify
new
oppo
rtun
ities
Num
ber
of
rese
arch
repo
rts
to
iden
tify
new
oppo
rtun
ities
2 re
sear
ch
repo
rts
to
iden
tify
new
oppo
rtun
ities
2 re
sear
ch
repo
rts
to
iden
tify
new
oppo
rtun
ities
3 re
sear
ch
repo
rts
to
iden
tify
new
oppo
rtun
ities
2 re
sear
ch
repo
rts
to
iden
tify
new
oppo
rtun
ities
3 re
sear
ch
repo
rts
to
iden
tify
new
oppo
rtun
ities
3 re
sear
ch
repo
rts
to
iden
tify
new
oppo
rtun
ities
3 re
sear
ch
repo
rts
to
iden
tify
new
oppo
rtun
ities
19.4
Qua
rter
ly m
ilest
one
s (In
crea
se b
usin
ess
dev
elo
pm
ent
init
iati
ves
to g
row
the
bus
ines
s)
Go
al/
Out
com
eO
utp
utP
erfo
rman
ce
Ind
icat
or/
mea
sure
Bas
elin
e20
19/2
0
Ann
ual T
arg
etQ
uart
erly
mile
sto
nes
Incr
ease
busi
ness
deve
lopm
ent
initi
ativ
es to
gro
w
the
busi
ness
Incr
ease
bus
ines
s
deve
lopm
ent
initi
ativ
es to
gro
w
the
busi
ness
Valu
e of
app
rove
d
tran
sact
ions
.
US
D 4
79m
US
D 5
50m
-
US
D 5
75m
1st Q
uart
er
2nd Q
uart
er3rd
Qua
rter
4th Q
uart
er
Ann
ual t
arge
t
with
qua
rter
ly
prog
ress
repo
rtin
g
Ann
ual t
arge
t
with
qua
rter
ly
prog
ress
repo
rtin
g
Ann
ual t
arge
t
with
qua
rter
ly
prog
ress
repo
rtin
g
Ann
ual t
arge
t
with
qua
rter
ly
prog
ress
repo
rtin
g
Res
earc
h an
d
iden
tify
new
oppo
rtun
ities
Num
ber
of re
sear
ch
repo
rts
to id
entif
y
new
opp
ortu
nitie
s
3 re
sear
ch re
port
s
to id
entif
y ne
w
oppo
rtun
ities
3 re
sear
ch
repo
rts
to
iden
tify
new
oppo
rtun
ities
Res
earc
h
prop
osal
pres
ente
d to
EXC
O
Firs
t res
earc
h
repo
rt
pres
ente
d to
EXC
O
Sec
ond
rese
arch
repo
rt
pres
ente
d to
EXC
O
Third
rese
arch
repo
rt
pres
ente
d to
EXC
O
ECIC STRATEGIC PLAN 2019/20-2021/22 47
19.5
Fin
anci
al P
lan
(Exp
end
itur
e es
tim
ates
fo
r in
crea
se b
usin
ess
dev
elo
pm
ent
init
iati
ves
to g
row
the
bus
ines
s)
Pro
gra
mm
e N
ame:
Incr
ease
bus
ines
s d
evel
op
men
t in
itia
tive
s to
gro
w t
he b
usin
ess
Eco
nom
ic c
lass
ifica
tio
n
Exp
end
itur
e o
utco
me
Ad
just
ed
Ap
pro
pri
atio
nM
ediu
m-T
erm
Exp
end
itur
e E
stim
ate
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2019
/21
2021
/22
R ‘0
00R
‘000
R ‘0
00R
‘000
R ‘0
00R
‘000
R ‘0
00
Cur
rent
pay
men
t
Com
pens
atio
n of
em
ploy
ees
(4,0
82)
(7,5
09)
(7,3
55)
(7,4
82)
(7,9
68)
(8,4
86)
(9,0
37)
Goo
ds &
ser
vice
s, e
tc.
(402
)(5
,041
)(3
,766
)(3
,874
)(3
,205
)(3
,389
)(3
,533
)
Pay
men
ts o
f ca
pit
al a
sset
s
Bui
ldin
g an
d ot
her
fixed
str
uctu
re
Mac
hine
ry &
equ
ipm
ent
0 0
0 0
0 0
0
Oth
er c
lass
ifica
tio
ns
0 0
0 0
0 0
0
48 ECIC STRATEGIC PLAN 2019/20-2021/22
20.1 Purpose
To increase communication and brand awareness
20.2. Description
ECIC will create awareness and understanding of its mandate with the aim of unlocking
business opportunities by initiating the following programme:
• To develop and implement targeted marketing and communication campaigns;
• To initiate key local and international media initiatives to raise the level of awareness
and understanding of ECIC mandate.
The successful execution of this programme will be demonstrated in the following
key measures:
• ECIC had increased its communication and brand visibility in the market place;
• ECIC media footprint increased both locally and internationally.
20. INCREASE COMMUNICATION TO CREATE BETTER AWARENESS AND UNDERSTANDING OF ECIC
ECIC STRATEGIC PLAN 2019/20-2021/22 49
20.3
Per
form
ance
ind
icat
ors
and
per
form
ance
tar
get
s (In
crea
se c
om
mun
icat
ion
to c
reat
e b
ette
r aw
aren
ess
and
und
erst
and
ing
of
EC
IC)
Go
al/
Out
com
eO
utp
ut
Per
form
ance
Ind
icat
or/
mea
sure
Aud
ited
Act
ual P
erfo
rman
ceE
stim
ate
Per
form
ance
Med
ium
Ter
m T
arg
ets
Incr
ease
com
mun
icat
ion
to c
reat
e be
tter
awar
enes
s an
d
unde
rsta
ndin
g of
EC
IC a
nd it
s ro
le
Impr
ove
com
mun
icat
ion
and
stak
ehol
der
rela
tions
Num
ber
of
mar
ketin
g an
d
com
mun
icat
ions
cam
paig
ns
impl
emen
ted
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2020
/21
2021
/22
Con
duct
cust
omer
sur
vey
Bas
elin
e to
be
dete
rmin
ed b
y
surv
ey
Impl
emen
t
80-
100%
of 2
016/
17
mar
ketin
g an
d
com
mun
icat
ions
cam
paig
ns
Impl
emen
t
80-
100%
of 2
017/
18
mar
ketin
g an
d
com
mun
icat
ions
cam
paig
ns
Con
duct
cust
omer
sur
vey
Impl
emen
t 2
mar
ketin
g an
d
com
mun
icat
ions
cam
paig
ns.
Impl
emen
t 2
mar
ketin
g an
d
com
mun
icat
ions
cam
paig
ns.
Impl
emen
t 2
mar
ketin
g an
d
com
mun
icat
ions
cam
paig
ns.
20.4
Qua
rter
ly m
ilest
one
s (In
crea
se c
om
mun
icat
ion
to c
reat
e b
ette
r aw
aren
ess
and
und
erst
and
ing
of
EC
IC)
Go
al/
Out
com
eO
utp
ut
Per
form
ance
Ind
icat
or/
mea
sure
Bas
elin
e20
19/2
0 A
nnua
l
Targ
etQ
uart
erly
mile
sto
nes
Incr
ease
com
mun
icat
ion
to c
reat
e be
tter
awar
enes
s an
d
unde
rsta
ndin
g of
EC
IC a
nd it
s ro
le
Incr
ease
com
mun
icat
ion
and
bran
d
awar
enes
s
Num
ber
of
mar
ketin
g an
d
com
mun
icat
ions
cam
paig
ns
impl
emen
ted
Impl
emen
t
80-
100%
of 2
019/
20
mar
ketin
g pl
an
Impl
emen
t 2
mar
ketin
g an
d
com
mun
icat
ions
cam
paig
ns fo
r
2018
/19
1st Q
uart
er
2nd Q
uart
er3rd
Qua
rter
4th Q
uart
er
Mar
ketin
g an
d
Com
mun
icat
ions
plan
app
rove
d. Q
1
plan
ned
initi
ativ
es
for
cam
paig
ns
impl
emen
ted
Q2
plan
ned
initi
ativ
es fo
r
cam
paig
ns
impl
emen
ted
Q3
plan
ned
initi
ativ
es fo
r
cam
paig
n
impl
emen
ted
Q4
plan
ned
initi
ativ
es fo
r
cam
paig
n
impl
emen
ted
50 ECIC STRATEGIC PLAN 2019/20-2021/22
20.5
Fin
anci
al P
lan
(Exp
end
itur
e es
tim
ates
fo
r In
crea
se c
om
mun
icat
ion
to c
reat
e b
ette
r aw
aren
ess
and
und
erst
and
ing
of
EC
IC)
Pro
gra
mm
e N
ame:
Imp
rove
co
mm
unic
atio
n to
cre
ate
bet
ter
awar
enes
s an
d u
nder
stan
din
g o
f E
CIC
Eco
nom
ic c
lass
ifica
tio
n
Exp
end
itur
e o
utco
me
Ad
just
ed
Ap
pro
pri
atio
nM
ediu
m-T
erm
Exp
end
itur
e E
stim
ate
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2019
/21
2021
/22
R ‘0
00R
‘000
R ‘0
00R
‘000
R ‘0
00R
‘000
R ‘0
00
Cur
rent
pay
men
t
Com
pens
atio
n of
em
ploy
ees
(2,0
41)
(5,1
10)
(4,2
83)
(4,7
12)
(5,0
17)
(5,3
43)
(5,6
90)
Goo
ds &
ser
vice
s, e
tc(7
,812
)(1
0,12
7)(1
0,36
1)(5
,829
)(3
,858
)(4
,313
)(4
,783
)
Pay
men
ts o
f ca
pit
al a
sset
s
Bui
ldin
g an
d ot
her
fixed
str
uctu
re0
0 0
0 0
0 0
Mac
hine
ry &
equ
ipm
ent
Oth
er c
lass
ifica
tio
ns
0 0
0 0
0 0
0
ECIC STRATEGIC PLAN 2019/20-2021/22 51
21. INCREASE CAPITAL BASE TO UNDERWRITE MORE BUSINESS TO FULFIL ECIC’S MANDATE
21.1. Purpose
To increase the capital base of ECIC to support the growth and sustainability of the business.
21.2. Description
In three years, we will seek to increase the capital base of ECIC to support the growth and sustainability
of the business. The growth will be achieved through underwriting profits and investment returns.
ECIC will also continue to fulfill its insurance regulatory requirements in maintaining sufficient Own
Funds and undertaking an annual Own Risk Solvency Assessment (ORSA).
In the next three years the successful execution of this programme will be demonstrated in the
increase in ECIC basic own funds or equity
52 ECIC STRATEGIC PLAN 2019/20-2021/22
21.3
Per
form
ance
ind
icat
ors
and
per
form
ance
tar
get
s (In
crea
se c
apit
al b
ase
to u
nder
wri
te m
ore
bus
ines
s to
ful
fil E
CIC
’S m
and
ate)
Go
al/
Out
com
eO
utp
ut
Per
form
ance
Ind
icat
or/
mea
sure
Aud
ited
Act
ual P
erfo
rman
ceE
stim
ate
Per
form
ance
Med
ium
Ter
m T
arg
ets
Incr
ease
capi
tal b
ase
to
unde
rwrit
e m
ore
busi
ness
to fu
lfil
EC
IC’S
man
date
Incr
ease
in
capi
tal b
ase
% in
crea
se in
basi
c ow
n fu
nds
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2020
/21
2021
/22
R 5
.3bn
32%
decr
ease
in
basi
c ow
n
fund
s/ e
quity
1% in
crea
se in
equi
ty
14.2
4%
incr
ease
in
equi
ty
5-10
% in
crea
se
in e
quity
5-10
%
incr
ease
in
equi
ty
5-10
% in
crea
se
in e
quity
21.4
Qua
rter
ly m
ilest
one
s (In
crea
se c
apit
al b
ase
to u
nder
wri
te m
ore
bus
ines
s to
ful
fil E
CIC
’S m
and
ate)
Go
al/
Out
com
eO
utp
ut
Per
form
ance
Ind
icat
or/
mea
sure
Bas
elin
e20
19/2
0 A
nnua
l
Targ
etQ
uart
erly
mile
sto
nes
Incr
ease
capi
tal b
ase
to u
nder
writ
e
mor
e bu
sine
ss
to fu
lfil E
CIC
’S
man
date
Incr
ease
in c
apita
l
base
% in
crea
se in
equi
ty10
% in
crea
se in
equi
ty
5-10
% in
crea
se in
equi
ty
1st Q
uart
er
2nd Q
uart
er3rd
Qua
rter
4th Q
uart
er
1%-
2% in
crea
se
in e
quity
2%-
4% in
crea
se
in e
quity
cum
ula-
tivel
y
4%-
5% in
crea
se in
equi
ty c
umul
ativ
ely
5-10
% in
crea
se
in e
quity
cum
ula-
tivel
y
ECIC STRATEGIC PLAN 2019/20-2021/22 53
21.5
Fin
anci
al P
lan
(Exp
end
itur
e es
tim
ates
fo
r in
crea
se c
apit
al b
ase
to u
nder
wri
te m
ore
bus
ines
s to
ful
fil E
CIC
’s m
and
ate)
Pro
gra
mm
e N
ame:
Incr
ease
cap
ital
bas
e
Eco
nom
ic c
lass
ifica
tio
n
Exp
end
itur
e o
utco
me
Ad
just
ed
Ap
pro
pri
atio
nM
ediu
m-T
erm
Exp
end
itur
e E
stim
ate
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2019
/21
2021
/22
R ‘0
00R
‘000
R ‘0
00R
‘000
R ‘0
00R
‘000
R ‘0
00
Cur
rent
pay
men
t
Com
pens
atio
n of
em
ploy
ees
(17,
691)
(52,
642)
(54,
493)
(65,
394)
(69,
662)
(74,
201)
(79,
037)
Goo
ds &
ser
vice
s, e
tc(4
3,08
3)13
6,46
3 (4
42,2
89)
(76,
691)
(574
,425
)(2
8,41
0)(8
0,14
4)
Pay
men
ts o
f ca
pit
al a
sset
s
Bui
ldin
g an
d ot
her
fixed
str
uctu
re
Mac
hine
ry &
equ
ipm
ent
0 0
0 0
0 0
0
Oth
er c
lass
ifica
tio
ns
0 (3
20,6
38)
(333
,178
)(3
87,4
60)
(184
,831
)(4
41,3
05)
(252
,311
)
54 ECIC STRATEGIC PLAN 2019/20-2021/22
22. INCREASE STAKEHOLDER CUSTOMER SATISFACTION
22.1. Purpose
To increase stakeholder and customer satisfaction.
22.2. Description
In three years, we will seek to increase stakeholder and customer satisfaction.
This programme will include the development and execution of various external stakeholder
customer surveys.
In the next three years the successful execution of this programme will be demonstrated in either
the maintenance or improvement of the required level of stakeholder and customer satisfaction.
ECIC STRATEGIC PLAN 2019/20-2021/22 55
22.3
Per
form
ance
ind
icat
ors
and
per
form
ance
tar
get
s (In
crea
se s
take
hold
er/
cust
om
er s
atis
fact
ion)
Go
al/
Out
com
eO
utp
utP
erfo
rman
ce
Ind
icat
or/
mea
sure
Aud
ited
Act
ual P
erfo
rman
ceE
stim
ate
Per
form
ance
Med
ium
Ter
m T
arg
ets
Incr
ease
stak
ehol
der/
cust
omer
satis
fact
ion
Incr
ease
d
stak
ehol
der
and
cust
omer
satis
fact
ion
% im
plem
enta
tion
of th
e an
nual
stak
ehol
der
and
cust
omer
enga
gem
ent p
lan
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2020
/21
2021
/22
Bas
elin
e
to b
e
dete
rmin
ed
by s
urve
y
Impl
emen
t
80%
sur
vey
findi
ngs
Impl
emen
t 90-
100%
sur
vey
findi
ngs
Con
duct
cust
omer
satis
fact
ion
surv
ey
Impl
emen
t 80-
100%
of a
nnua
l
stak
ehol
der
and
cust
omer
enga
gem
ent
plan
.
Impl
emen
t
80-
100%
of a
nnua
l
stak
ehol
der
and
cust
omer
enga
gem
ent
plan
.
Impl
emen
t
80-
100%
of a
nnua
l
stak
ehol
der
and
cust
omer
enga
gem
ent
plan
.
22.4
Qua
rter
ly m
ilest
one
s (In
crea
se s
take
hold
er/
cust
om
er s
atis
fact
ion)
Go
al/
Out
com
eO
utp
ut
Per
form
ance
Ind
icat
or/
mea
sure
Bas
elin
e20
19/2
0 A
nnua
l
Targ
etQ
uart
erly
mile
sto
nes
Incr
ease
stak
ehol
der/
cust
omer
satis
fact
ion
Incr
ease
d
stak
ehol
der
and
cust
omer
satis
fact
ion
%
impl
emen
tatio
n
of th
e an
nual
stak
ehol
der
and
cust
omer
enga
gem
ent
plan
Con
duct
sur
vey
Impl
emen
t 80-
100%
of a
nnua
l
stak
ehol
der
and
cust
omer
enga
gem
ent p
lan.
1st Q
uart
er
2nd Q
uart
er3rd
Qua
rter
4th Q
uart
er
Sta
keho
lder
and
cust
omer
enga
gem
ent p
lan
appr
oved
25-
30%
of
stak
ehol
der
and
cust
omer
enga
gem
ent p
lan
impl
emen
ted
60-
80%
of p
lan
impl
emen
ted
and
cust
omer
enga
gem
ent p
lan
impl
emen
ted
80-
100%
of p
lan
impl
emen
ted
and
cust
omer
enga
gem
ent p
lan
impl
emen
ted
56 ECIC STRATEGIC PLAN 2019/20-2021/22
22.5
Fin
anci
al P
lan
(Exp
end
itur
e es
tim
ates
fo
r in
crea
se s
take
hold
er/c
usto
mer
sat
isfa
ctio
n
Pro
gra
mm
e N
ame:
Incr
ease
Sta
keho
lder
/ C
usto
mer
Sat
isfa
ctio
n
Eco
nom
ic c
lass
ifica
tio
n
Exp
end
itur
e o
utco
me
Ad
just
ed
Ap
pro
pri
atio
nM
ediu
m-T
erm
Exp
end
itur
e E
stim
ate
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2019
/21
2021
/22
R ‘0
00R
‘000
R ‘0
00R
‘000
R ‘0
00R
‘000
R ‘0
00
Cur
rent
pay
men
t
Com
pens
atio
n of
em
ploy
ees
(2,0
41)
(9,2
87)
(9,1
77)
(10,
109)
(10,
765)
(11,
464)
(12,
209)
Goo
ds &
ser
vice
s, e
tc.
(44)
(701
)(8
46)
(1,3
87)
(948
)(1
,010
)(9
64)
Pay
men
ts o
f ca
pit
al a
sset
s
Bui
ldin
g an
d ot
her
fixed
str
uctu
re
Mac
hine
ry &
equ
ipm
ent
0 0
0 0
0 0
0
Oth
er c
lass
ifica
tio
ns
0 (2
,032
,446
)(3
8,90
4)(6
9,35
3)(5
1,55
5)(3
9,57
6)(2
9,20
5)
ECIC STRATEGIC PLAN 2019/20-2021/22 57
23. ASSET MANAGEMENT PLAN
PART C:
LINKS AND OTHER PLANS
The Corporation’s investment strategy is set by considering its assets in relation to liabilities. In doing so it undertakes
an asset-liability-matching (ALM) exercise: a comprehensive simulation approach that integrates multiple asset and
liability variables. The results of the exercise demonstrate which asset class combinations are expected to be efficient
considering the timing and amount of the liabilities. It guides the Corporation in setting an optimal strategic asset
allocation (SAA) within the limitations of capital allocated to its investment activities and regulatory requirements. The
Corporation implements the investment strategy by appointing suitable external fund managers and setting appropriate
investment guidelines for the management of the various asset classes. Relevant market index benchmarks are
allocated to each fund manager and performance and risk is measured, reported and monitored regularly.
The main principles underlying the Corporation’s investment strategy, process and associated investment decisions
is captured in ECIC’s Investment Policy Statement (IPS). The IPS establishes appropriate investment guidelines and
specifies measures to actively monitor the achievement of investment objectives. It furthermore references investment
decisions within the risk management and solvency framework of the Corporation, and the mitigation and monitoring
of other investment related risks.
Portfolio Structure
ECIC manages and maintains two currency investment portfolios in Rand and in US Dollars. The Rand portfolio
is primarily managed to back Rand denominated liabilities and absorb all operational expenses of the Corporation.
It is a diversified moderate risk portfolio which invests in Rand-denominated Equities, Listed Property, Government
Bonds, Corporate Bonds and Cash. The US Dollar portfolio is primarily managed to back the US Dollar denominated
liabilities and IMU payments. ECIC has approval to retain its US Dollar premium income in its US Dollar portfolio. It is
a conservative risk portfolio which is more concentrated and invests in US Dollar-denominated Government Bonds,
Corporate Bonds and Cash.
Authorised Investment Universe
Since its inception ECIC has undertaken several extensive reviews of its investment strategy in line with the growth,
changes and evolution of the business, industry and regulations. Previous reviews limited the investment universe
to those asset classes which were authorized by the department of Trade and Industry (“the dti”). Recognizing the
need to improve the portfolio structure and efficiency of changes made to the investment strategy, a request was
made to the dti to adopt a more diversified, flexible and efficient approach. This comprehensive strategy aims to be
adaptable and accommodative to different market environments and absorb changes in the liability profile, while not
restricting itself to any asset class or instruments that may not be optimal in all market environments. In February 2018
the dti authorized the requested changes, recommending that the Board exercise oversight in management of the
risks associated with the revised strategy. The dti requested that the new strategy should be shared with the dti and
National Treasury (NT) for noting. Although the use of derivatives for efficient portfolio management was also approved,
the Corporation is currently in discussions with NT on its use. Any strategy changes requiring the use of derivatives
have consequently been placed on hold.
58 ECIC STRATEGIC PLAN 2019/20-2021/22
24. INFORMATION TECHNOLOGY AND COMMUNICATION (ICT) PLAN
ECIC recognizes Information Communication and Technology (ICT) as a pivotal enabler in achieving its strategic
objectives. ECIC will develop a three (3) year ICT strategy with its key focus on process automation, driving technology
adoption for better efficiency and improved turnaround times, business intelligence and business agility. While driving
adoption of technology to create optimal ICT services, cybersecurity remains a threat.
25. RISK MANAGEMENT
25.1. Risk Management Plan (incl. risk strategy and process)
Risk management is critical to ensure the Corporation achieves its mandate in a prudent and sustainable manner.
The quest to achieve sound risk management principles and practices has seen the Corporation continually re-
evaluate the effectiveness of the risk management function as well as incorporate international best practice into the
risk management strategy. This inter alia includes benchmarking with other financial sector players locally, and Export
Credit Agencies internationally.
Risk management is an integral part of the Corporation’s operations and decision making. Managing risk within the
Corporation’s risk appetite is important. In this regard, limiting potential losses from insured events and avoiding
investment positions in less quantifiable risks are essential elements of risk management and the control framework
that serve to protect the Corporation’s reputation and business.
The Board is the apex body within the Corporation’s risk management hierarchy. However, accountability for risk
management resides with each individual within their role or area of responsibility. The Board has delegated the
responsibility of reviewing the effectiveness of the risk management system to the Risk Committee.
The three lines-of-defence principle
At the forefront are the business units whose day to day activities give rise to varied types of risk. Typically, the first line
of defence consist of the operational and support areas of the business and are responsible for managing own risks
from their processes. The risk management process is a continuous iteration that include establishment of context,
identification, measurement, treatment, and reporting of risk.
The next level of defence consist of the control functions that include Risk, Compliance and Actuarial Control. The
primary responsibility of the risk function is to establish and maintain the risk management framework, standards and
supporting policies, as well as for providing risk oversight and independent reporting of risk to executive management,
Board-level committees and the Board.
ECIC STRATEGIC PLAN 2019/20-2021/22 59
The audit function is responsible for provision of assurance and is the third line of defence. It provides an independent
assessment of the adequacy and effectiveness of ECIC’s overall system of internal controls and risk governance
structures. The audit function reports independently to the Audit and Risk Committees of the Board and ultimately to
the Board.
Risk management framework, policies and procedures
The Corporation’s Risk Management Framework consist of risk mitigating policies for major risks. The policies set out
minimum control measures that ensures alignment and consistency in treatment of major risks that include identification,
measurement, treatment and reporting. Implementation of the risk management policies is the responsibility of the
executive and business unit managers. Compliance with risk policies is monitored through self-assessments and
independent reviews by the internal audit function.
After preparing for the introduction of the new insurance regime, the prudential authority announced the effective date
as July 1st, 2018, and the Corporation has put in place commensurate controls, processes and procedures to ensure
compliance. The calculation of the Solvency Capital Required (SCR) using the standard formula has been found to be
inadequate to accurately quantify the Corporation’s risk due to the heterogeneity and lumpiness of the portfolio. As a
result, the Corporation is in the process of developing its own view of risk to compliment the standard formula.
Risk appetite
The Corporation has expressed its risk appetite quantitatively and qualitatively. The quantitative measure is currently
formulated in the form of Solvency Capital Required (“SCR”) cover, whilst the qualitative measures are captured as
enumerated below:
• ECIC’s risk exposures should be capable of being reduced to acceptable levels within its balance sheet capacity
so as to remain financially sustainable on a stand-alone basis;
• Given its National Interest role, ECIC’s reputation and brand in the market is critical in providing confidence to
the Government as well as its customers that ECIC has the right people and resources to ensure delivery of its
mandate and services to its customers;
• The portfolio distribution and quality shall be managed in a manner that does not create undue concentration risk
to the Corporation;
• The Corporation shall target an investment strategy that limits portfolio volatility to remain within the capital
allocated, while still targeting capital preservation, taking into account ‘real return’ in its investment portfolio as
measured on a rolling 3-year basis;
• The Corporation shall strive for systems integration in its drive to embrace technology as a business enabler and
risk mitigation tool.
60 ECIC STRATEGIC PLAN 2019/20-2021/22
These principles have then been translated into the following Risk Appetite Statement:
Core principle Risk appetite statement Risk tolerance
Become self-sustaining on a stand-
alone basis
ECIC will grow its business by main-
taining a SCR cover ratio of between
130% and 200%
The SCR cover ratio will remain
between 115% and 300%
Protect brand and reputation ECIC will manage or avoid situations/
actions that could harm its reputation
and/or brand
No breaches of ECIC code of
ethics
Limit portfolio concentration The portfolio concentration shall be
managed to avoid undue concen-
tration:
Country limit
Obligor exposure
Industry exposure
≤ 40% of insurance portfolio
≤ 35% of country exposure
≤ 50% of commercial exposure
Preserve capital and reduce volatility
in investment portfolio
The investment portfolio will be man-
aged to reduce volatility to remain
within allocated capital, taking into
account real return on a three-year
rolling basis
Volatility: 20%-40% of risk
budget
Technology integration Improve business processes by
acquiring systems that integrate into
existing infrastructure
N/a
Risk Budget
The Corporation has allocated capital to three items, namely, underwriting, investments and currency. Whilst the first two
reflect the Corporation’s business, the third item is a default US dollar currency position by virtue of the Corporation’s
business model. The split in capital utilization between these business areas is 70/20/10. The fourth item that attracts
capital but in very modest measures is the operational activities. Given the insignificant amount of capital attributable to
operations this is subsumed in the two major business components.
The currency risk is premised on US dollar-based exposure to the Corporation. Historically, there were South African
Rand exposures, but those are tapering off. As a result, the Corporation strives to hold US dollar assets in sufficient
quantities and duration to account for the US dollar liabilities. However, for every excess US dollar asset that ECIC
holds, the regulatory solvency calculation imposes a penalty, thus attracting capital, purely from the fact that US dollar
assets exceed US dollar liabilities. This is premised on the argument that a strong rand would impair the US dollar
assets if converted to meet rand liabilities. This is counterintuitive because a strong rand would affect both US dollar
assets and US dollar liabilities.
ECIC STRATEGIC PLAN 2019/20-2021/22 61
Risk initiatives over the Strategic Planning period 2019/20 – 21/22
Solvency Assessment and Management (SAM)
The new insurance law went live on July 1st, 2018. The Corporation is preparing to submit the first ORSA under the
new insurance laws.
Enterprise Risk Management (ERM)
Following the completion of the ERM pilot run, the risk unit in liaison with operational areas have identified key
processes and developed Key Risk Indicators (“KRI”) for forward risk measurement. This was coupled with training of
risk champions and holding ERM workshops across the Corporation and at Board. The reporting phase of ERM went
live, albeit some changes were recommended that will be incorporated.
Risk Appetite Review
The current quantitative measure of Risk Appetite is pitched at balance sheet level and, a statistically derived ratio of
SCR as stipulated in the standard formula by the Regulator to equity. As an Export Credit Agency (ECA) in the medium
to long term (MLT) business, the exposure type tends to be lumpy and heterogenous. As a result, an SCR cover
measure that is premised on a 1 in 200-year event (99.5% confidence interval) is inadequate to accurately measure the
inherent risk in such a portfolio. Stress tests performed on the portfolio show that a claim of US$225 million will result
in a solvency breach even though the current SCR cover is in the 2X range. This incongruence calls for a review of the
quantitative risk appetite measure in order to formulate a risk appetite measure that both accurately captures the risk
as well as lends itself to being cascaded down to the various business units.
Emerging Risks
The global environmental scan conducted on a continuous basis flags emerging risks that the Corporation could be
susceptible to. These risks are incorporated in the Corporation’s risk management strategy and reported through the
governance structure of the Corporation.
Risk Based Approach
The Corporation employs a comparatively small size team of risk professionals that have to ensure the sustainability
of the business model in very challenging economic times and locations. For the risk professionals to deploy their
talent to sufficiently inoculate the Corporation from untoward events and incidents, there is need to establish risk event
thresholds that will trigger risk management focus. An example of the risk based approach has been adopted in the
formulation of leading economic indicators where focus is on countries with exposures of a billion rand and more.
62 ECIC STRATEGIC PLAN 2019/20-2021/22
26. FRAUD PREVENTION PLAN
The Board of Directors is responsible for ensuring that the Corporation has an effective, efficient and transparent
system of controls for financial, risk management and internal control. Fraud and corruption remain a threat to public
trust and confidence, it is therefore essential to recognize fraud prevention as an integral part of strategic management.
It is imperative for the Board to set the right tone at the top in so far as the prevention and management of fraud in the
Corporation is concerned. At a country level, reports by watchdog organisations such as Transparency International
assess and rate countries on various parameters that include fraud and corruption amongst others. Such reports are
key especially when used by foreign investors to make decisions on destinations of their foreign direct investment.
The Government has zero tolerance for the malaise of fraud and corruption in the public sector and has made it
mandatory for public entities to develop fraud prevention plans as stipulated in the Treasury Regulations. Fraud
prevention invariably referred to as fraud risk management embodies the whole system of processes and procedures
designed and implemented to ensure that vulnerabilities that could arise from fraudulent conduct are curtailed and
eliminated altogether. The system is intended to prevent, deter and detect fraud.
ECIC Fraud Prevention Policy and Plan covers all acts of dishonesty including fraud, corruption and theft. The success
of any fraud prevention initiative or fraud prevention plan inevitably depends on the buy-in and co-operation of the
management and staff. The risk management philosophy at ECIC that also covers fraud and corruption is that everyone
in their roles is responsible for risks that emanate or impact their area of responsibility.
The Fraud Prevention Policy and Plan inter alia embodies the following:
• Defines, sets control procedures to prevent, identify and deter fraud;
• Assigns appropriate responsibilities for ensuring key controls are complied with;
• Provides for the procedure for investigating all incidences of actual, attempted or suspected fraud, and all instances
of major control breakdowns;
• Encourages staff and other key stakeholders to be vigilant and raise fraud-awareness at all levels and in all
arrangements with the Corporation;
• Provides staff and key stakeholders with effective confidential reporting mechanisms and encourages their use;
• Co-operation with law enforcement and other appropriate authorities in the investigation and prosecution of those
suspected of fraud or perpetrating fraud against the Corporation.
ECIC STRATEGIC PLAN 2019/20-2021/22 63
ECIC’s fraud prevention plan promotes fraud prevention as stipulated below:
• Ensure the Corporation’s Code of Ethics and Business Conduct is reviewed to reflect the values and standards of
the Corporation, as well as ensure that staff and stakeholders receive appropriate training and awareness on the
Code and other applicable ethics policies such as the Conflict of Interest and Gift Policy;
• Ensure regular fraud and corruption training and awareness campaigns throughout the Corporation, with a focus
on recent cases, legislation and relevant trends;
• Promote continuous training by Management to raise appropriate awareness of internal processes and policies
aimed at fraud and corruption prevention;
• Encourage use of “Tip Offs” reporting hotline or management of any fraudulent, unethical or corrupt activities in line
with the Whistle-Blowing Policy of the Corporation.
The fraud communication and awareness initiatives are reviewed annually with the assistance of independent service
providers where applicable to incorporate emerging risks and embed international best practice.
The tip-offs report as well as progress on the achievements under the fraud plan are tabled at meetings of the Audit
Committee. In the event of any member of the Board of Directors, or staff being implicated in fraud, corruption or gross
negligence, the matter is also reported to the shareholder, external auditor, the Auditor-General and the Financial Sector
Conduct Authority.
The Fraud Prevention Plan is a live document that is updated on a continuous basis to ensure the Corporation remains
abreast of emerging trends to effectively promote ethical behaviour, entrench sound values as well as fight fraud and
corruption.
64 ECIC STRATEGIC PLAN 2019/20-2021/22
27. RISK MANAGEMENT - RISK REGISTER
Ris
k T
itle
Ris
k C
ateg
ory
Ris
k D
escr
ip-
tio
nS
trat
egic
O
bje
ctiv
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Eff
ect
of
Ris
kIn
here
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Imp
act
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rent
Lik
e-lih
oo
dC
urre
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ctio
nA
ctio
n E
ffec
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vene
ssR
esid
ual R
isk
Str
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ic
Act
ion
Pla
n R
esp
ons
ible
P
erso
nS
tart
Dat
e
Unc
erta
in
mac
ro-e
co-
nom
ic
out
loo
k
Str
ateg
ic R
isk
Bus
ines
s pr
ojec
tions
an
d in
vest
men
t as
sum
ptio
n m
ay
be s
igni
fican
tly
impa
cted
by
an u
ncer
tain
m
acro
-eco
nom
-ic
out
look
Incr
ease
cap
ital
base
Cur
tailm
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n pr
ojec
t pip
elin
e re
sulti
ng in
re-
duce
d pr
emiu
m
inco
me
Maj
or (4
)Li
kely
(4)
Pro
activ
e de
al
orig
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Effe
ctiv
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,4E
mbe
d th
e de
al o
rigin
atio
n in
itiat
ive
CO
OO
n-go
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Def
ault
risk
from
ov
er-in
debt
ed
coun
trie
s du
e to
in
crea
sed
Eur
o bo
nd is
suan
ces
by s
over
eign
s an
d ca
ll fo
r IM
F su
ppor
t
Maj
or (4
)P
ossi
ble
(3)
Dire
ct s
over
eign
co
ver
for
over
-inde
bted
co
untr
ies
is c
ur-
rent
ly d
one
on
a ca
se b
y ca
se
basi
s (i.
e. s
tra-
tegi
c pr
ojec
ts to
na
tiona
l eco
n-om
y, p
roje
cts
with
rin
g-fe
nced
pr
ocee
ds/r
eve-
nue)
as
wel
l as
look
ing
at d
ebt
sust
aina
bilit
y le
vels
Effe
ctiv
e7,
8
Dev
elop
th
resh
old
for
sove
reig
n de
bt
acce
ptan
ce
crite
ria
CO
OJa
nuar
y 31
, 20
19
Mar
ket R
isk
Incr
ease
d vo
latil
-ity
resu
lting
in
capi
tal l
oss
in
inve
stm
ents
Maj
or (4
)Li
kely
(4)
Div
ersi
ficat
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of in
vest
men
t po
rtfo
lioW
eak
12,8
Div
ersi
ficat
ion
into
oth
er a
sset
cl
asse
s w
ith
min
imal
cor
rela
-tio
n to
bon
ds
Hea
d: In
vest
-m
ent
On-
goin
g
ECIC STRATEGIC PLAN 2019/20-2021/22 65
Ris
k T
itle
Ris
k C
ateg
ory
Ris
k D
escr
ip-
tio
nS
trat
egic
O
bje
ctiv
e(s)
Eff
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of
Ris
kIn
here
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Imp
act
Inhe
rent
Lik
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oo
dC
urre
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ctio
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ctio
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ffec
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ssR
esid
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isk
Str
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ic
Act
ion
Pla
n R
esp
ons
ible
P
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nS
tart
Dat
e
Co
mp
eti-
tio
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trat
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Ris
k
Incr
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d co
m-
petit
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from
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her
EC
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Incr
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S
take
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& C
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tisfa
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Loss
of b
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due
to m
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cons
trai
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Maj
or (4
)Li
kely
(4)
(1) L
imit
cove
r to
ach
ieve
d co
nten
t ‘(2
) Bla
cklis
ting
of o
ffend
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Inef
fect
ive
16
See
k co
nten
t al
ignm
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to s
ecto
ral
com
petit
iven
ess
as w
ell a
s ut
ilize
rein
sura
nce
for
the
cont
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efi-
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CO
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n-go
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Unc
ompe
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A e
xpor
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Inab
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to w
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inte
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l bi
ds a
nd
incr
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d
Maj
or (4
)Li
kely
(4)
EC
IC is
co
nstr
aine
d by
un
com
petit
ive
SA
con
trac
tors
Wea
k12
,8
Par
t of t
he
inte
rven
tion
is
for
SA
exp
orte
rs
to fo
rm J
Vs
or p
artn
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ship
s w
ith
expe
rienc
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inte
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iona
l co
ntra
ctor
s in
lim
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expe
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ctor
s su
ch a
s G
as, P
ower
etc
.
CO
OO
n-go
ing
ICT
Ris
k
Str
ateg
ic R
isk
Ris
k of
ICT
infra
-st
ruct
ure
brea
ch
givi
ng r
ise
to
unau
thor
ised
ac
cess
to E
CIC
sy
stem
s
Impr
ove
Bus
i-ne
ss P
roce
sses
Una
utho
rised
ac
cess
of
EC
IC n
etw
ork
resu
lting
in
unau
thor
ized
ac
tiviti
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Maj
or (4
)U
nlik
ely
(2)
Fire
wal
ls a
re
curr
ently
in
plac
e an
d us
e of
out
sour
ced
host
ing
serv
ices
Effe
ctiv
e5,
2
Per
form
a
pene
trat
ion
test
on
the
EC
IC
ecos
yste
m
Ope
ratio
nal R
isk
Insu
ffici
ent u
se
of te
chno
logy
an
d da
ta a
naly
t-ic
s in
bus
ines
s pr
oces
ses
and
deci
sion
mak
ing
resp
ectiv
ely
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lead
tim
es
and
erro
r pr
one
proc
esse
s &
in
cons
iste
nt d
e-ci
sion
mak
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Maj
or (4
)Li
kely
(4)
ER
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ple-
men
tatio
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optio
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ffice
365
Wea
k12
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plet
ion
of
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hase
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inte
grat
ion
of
budg
et to
ol &
in
crea
sed
use
of O
ffice
365
fu
nctio
nalit
ies
CFO
On-
goin
g
Ope
ratio
nal R
isk
Poo
r sc
opin
g an
d im
plem
en-
tatio
n of
ICT
syst
ems
Pro
cure
d IC
T so
lutio
ns ta
ke
too
long
to
impl
emen
t &
perfo
rms
belo
w
expe
ctat
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Maj
or (4
)Li
kely
(4)
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use
r de
ter-
min
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men
t of
all s
yste
ms
mus
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mot
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to E
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and
co
rrec
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and
proj
ect
man
agem
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tech
niqu
es u
sed
to a
void
del
ays
and
scop
e cr
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CFO
On-
goin
g
66 ECIC STRATEGIC PLAN 2019/20-2021/22
Ris
k T
itle
Ris
k C
ateg
ory
Ris
k D
escr
ip-
tio
nS
trat
egic
O
bje
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of
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act
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rent
Lik
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n R
esp
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P
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tart
Dat
e
Dam
age
to
rep
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ion
or
bra
nd
Rep
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isk
Adv
erse
med
ia
repo
rt im
pact
ing
EC
IC’s
repu
ta-
tion
& b
rand
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ove
Com
-m
unic
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iona
l da
mag
e or
di
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ltly
in
incr
easi
ng E
CIC
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rand
pro
file
Mod
erat
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(3)
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emen
tatio
n of
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ketin
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lan
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ctiv
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win
g th
e bo
ard’
s su
gges
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n to
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ry o
ut
mor
e fre
quen
t su
rvey
s, a
pr
opos
al w
ill be
m
ade
to d
o th
is
bien
nial
ly fr
om
the
hith
erto
tr
ienn
ial.
Hea
d: M
arke
ting
& C
omm
uni-
catio
nO
n-go
ing
Reg
ulat
ory
/
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isla
tive
ch
ang
es
Reg
ulat
ory
Ris
kIn
crea
sed
risk
of
non-
com
plia
nce
Incr
ease
Cap
ital
Bas
e
Ris
k of
loss
of
licen
se in
cas
e of
bre
ach
of
solv
ency
Maj
or (4
)P
ossi
ble
(3)
SC
R is
use
d to
det
erm
ine
unde
rwrit
ing
capa
city
Wea
k9,
6
Nee
d to
agr
ee
an u
nder
writ
ing
capa
city
with
th
e m
inis
ter
to
allo
w E
CIC
to
writ
e bu
sine
ss
on a
mor
e de
ter-
min
ate
basi
s
CO
O &
Hea
d:
Act
uaria
lO
n-go
ing
Une
ven
rate
o
f tr
ansf
or-
mat
ion
Str
ateg
ic R
isk
Reg
ulat
ory
Ris
k
Slo
w r
ate
of
tran
sfor
mat
ion
resu
lting
in
stag
nant
or
dow
ngra
de o
f B
-BB
EE
sco
re
Incr
ease
Tra
ns-
form
atio
n
Sta
gnan
t or
dow
ngra
de o
f B
BB
EE
sco
reM
ajor
(4)
Like
ly (4
)
Incr
emen
tal
proc
urem
ent i
s di
rect
ed to
war
ds
high
ly r
ated
BB
-B
EE
sup
plie
rs
Effe
ctiv
e10
,4
Dev
elop
a
tran
sfor
mat
ion
plan
on
asse
t m
anag
ers
to
achi
eve
blac
k ow
ners
hip
of
fund
man
ager
s in
3 y
ears
. The
pl
an s
houl
d be
su
bmitt
ed to
B
oard
in 4
th
quar
ter
2019
CFO
& H
ead:
P
rocu
rem
ent
Uni
tO
n-go
ing
ECIC STRATEGIC PLAN 2019/20-2021/22 67
Ris
k T
itle
Ris
k C
ateg
ory
Ris
k D
escr
ip-
tio
nS
trat
egic
O
bje
ctiv
e(s)
Eff
ect
of
Ris
kIn
here
nt
Imp
act
Inhe
rent
Lik
e-lih
oo
dC
urre
nt A
ctio
nA
ctio
n E
ffec
-ti
vene
ssR
esid
ual R
isk
Str
ateg
ic
Act
ion
Pla
n R
esp
ons
ible
P
erso
nS
tart
Dat
e
Rec
essi
on
in t
he U
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arke
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the
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alue
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revi
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CIC
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vest
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ow
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ford
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bank
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l rel
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asel
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ease
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orig
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bed
the
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ness
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velo
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le w
ithin
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pora
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CO
OO
n-go
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it th
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go
vern
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nds
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ond
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Incr
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base
Inst
itutio
nal
inve
stor
s w
ould
ex
it S
A g
ov-
ernm
ent b
onds
re
sulti
ng in
hig
h-er
yie
lds,
with
a
rippl
e ef
fect
on
equi
ties
Maj
or (4
)P
ossi
ble
(3)
Div
ersi
ficat
ion
of in
vest
men
t po
rtfo
lioW
eak
9,6
Con
side
r tr
ansf
er o
f ZA
R
asse
ts to
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D
to m
inim
ise
cur-
renc
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ism
atch
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redi
t ra
ting
conc
en-
trat
ion
risk.
CFO
& H
ead:
In
vest
men
tO
n-go
ing
68 ECIC STRATEGIC PLAN 2019/20-2021/22
INH
ER
EN
T IM
PAC
T
Insi
gnifi
cant
(1)
1B
rief l
ocal
inco
nven
ienc
e or
loss
of a
n as
set w
ith m
inor
or
no im
pact
on
the
busi
ness
/ in
sign
ifica
nt fi
nanc
ial l
oss
Min
or (2
)2
Dis
rupt
ion
in b
usin
ess
last
ing
betw
een
8 an
d 24
hou
rs /
Min
or im
pact
on
cost
s of
less
than
5%
. Min
or im
pact
on
unde
rwrit
ing
resu
lt of
less
than
2%
Mod
erat
e (3
)3
Dis
rupt
ion
in b
usin
ess
last
ing
betw
een
24 a
nd 3
6 ho
urs
/ M
oder
ate
impa
ct o
n co
sts
betw
een
5% a
nd 1
0% o
f app
licab
le b
udge
t. M
oder
ate
impa
ct o
n un
derw
ritin
g re
sult
of b
etw
een
2% to
5%
Maj
or (4
)4
Red
uctio
n in
con
tinui
ty o
f bus
ines
s fo
r a
perio
d of
bet
wee
n 36
and
48
hour
s /
Cos
t ove
rrun
of b
etw
een
10%
and
20%
of a
pplic
able
bud
get.
Affe
ct u
nder
writ
ing
resu
lt of
bet
wee
n 5%
and
10%
Cat
astr
ophi
c (5
)5
Ris
k ev
ent w
ill re
sult
in w
ide
spre
ad a
nd le
ngth
y re
duct
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in c
ontin
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of b
usin
ess
last
ing
mor
e th
an 4
8 ho
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/C
ost o
verr
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f > 2
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f
appl
icab
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udge
t. A
ffect
und
erw
ritin
g re
sults
of >
10%
INH
ER
EN
T L
IKE
LIH
OO
D
Rar
e (1
)1
The
risk
has
neve
r oc
curr
ed b
efor
e an
d is
unl
ikel
y to
occ
ur
Unl
ikel
y (2
)2
The
risk
is u
nlik
ely
to o
ccur
Pos
sibl
e (3
)3
The
risk
has
occu
rred
bef
ore
and
ther
e is
a p
ossi
bilit
y th
at it
may
reoc
cur
Like
ly (4
)4
The
risk
has
occu
rred
bef
ore
and
is li
kely
to o
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aga
in
Alm
ost C
erta
in (5
)5
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risk
is a
lmos
t cer
tain
to o
ccur
in th
e cu
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t circ
umst
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s
CO
NT
RO
L E
FFE
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IVE
NE
SS
Ris
k re
duce
d si
gnifi
cant
ly20
%R
isk
is to
tally
avo
ided
Very
effe
ctiv
e40
%R
isk
is s
igni
fican
tly tr
ansf
erre
d
Effe
ctiv
e65
%E
ffect
ive
in m
anag
ing
the
risk
or r
isk
is m
oder
atel
y tr
ansf
erre
d
Wea
k80
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ontr
ols
are
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ctiv
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miti
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risk
but r
equi
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onito
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fect
ive
100%
Con
trol
s ar
e in
effe
ctiv
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e ris
k
RIS
K C
AT
EG
OR
YR
ISK
SU
B-C
AT
EG
OR
Y
Ope
ratio
nal R
isk
•Peo
ple•Con
trols•Systems•Proce
ss
Str
ateg
y R
isk
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isk
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ulat
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Ris
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egul
ator
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isk
Rep
utat
iona
l Ris
kR
eput
atio
nal R
isk
ECIC STRATEGIC PLAN 2019/20-2021/22 69
28. HUMAN CAPITAL
28.1 Introduction
The Strategic Human Capital Plan (SHCP) sets forth the framework for managing the Corporation’s human
capital system through 2021/2022. This Plan, which replaces the 2018/19-2020/2021 SHCP, aligns with
the Corporation’s 2019/20 to 2021/22 Strategic Plan. The plan identifies three strategic human capital
goals relating to attracting, motivating and retaining diverse talent, building capacity and having engaged
employees.
28.2. HR Strategic Priorities
28.2.1 Human Capital Goals (2019/2020 – 2021/2022)
The 2022 SHCP focuses on three strategic human capital goals relating to attracting,
motivating and retaining diverse talent, building capacity and having engaged employees.
The human capital goals are discussed in detail below.
28.2.2 Human Capital Goal 1 – Attract, motivate and retain diverse talent
The Corporation seeks to improve each year the speed, quality and diversity of hiring.
Detailed below are the objectives and initiatives to be implemented:
Human Capital
Objective
Human Capital
InitiativeRationale 2020 Target
Improve workforce
planning
Improve the talent
database
Proactive planning for
organizational capabilities
Improve the implemented
talent database
Improve the quality of our
hires
Review our selection
criteria
The organization requires
top talent to achieve its
strategy
Selection Criteria reviewed
Improve remuneration &
recognition practices
Conduct salary market
benchmarking
Remuneration &
recognition are key
drivers of motivation and
retention.
Salary market benchmark
conducted and pay scales
reviewed.
Maintain retention levels Achieve 85% retention Retention is a key driver
of productivity.
85% retention of
employees
Improve talent diversity Employment Equity Plan Talented people we
attract to ECIC need to
reflect the diversity of
South Africa’s population;
Implementation of the
Employment Equity plan
70 ECIC STRATEGIC PLAN 2019/20-2021/22
28.2.3 Human Capital Goal 2 – Build Capacity
The Corporation seeks to improve the effectiveness of employee skills assessments, training
curricula, delivery methods and close skills gaps with this goal. Indicated below are the
objectives and initiatives to be implemented:
Human Capital
Objective
Human Capital
Initiative
Rationale 2020 Target
Improve knowledge and
skills
Compile and implement a
competency framework
Compile and implement
an annual training plan
Implement knowledge
sharing initiatives with
other ECAs or DFIs
Blend learning and
development by
using both e-learning
and classroom
learning
Competency development
Targeted learning
initiatives
Continuous learning
and development and
staying abreast of industry
developments
Improve efficiency within
learning and development
Competency framework
implemented
Implementation of the
annual training plan
Implementation of
Knowledge sharing
initiatives/secondments
30% of our offerings to be
through E- learning
Improve performance
management
Review of the
performance
management system
Performance
management plays a key
role in the achievement of
the business strategy
Implementation of the
reviewed Performance
Management system
Implement succession
planning programme
Succession plans
included in the individual
employees’ PDP
Availability of key skills is a
threat to business growth
Succession plans for key
positions
ECIC STRATEGIC PLAN 2019/20-2021/22 71
28.2.4 Human Capital Goal 3 – Engaged Employees
The Corporation seeks to improve employee engagement, employee wellness and organizational
culture with this goal. Detailed below are the objectives and initiatives linked to this goal:
Human Capital
Objective
Human Capital
Initiative
Rationale 2020 Target
Improve employee
engagement levels
Compile and implement
an engagement plan
Action Plan to respond
to the outcomes of the
survey
Engagement plan
compiled
Improve the wellness of
our employees
Compile and implement
wellness plan
Respond to emerging
occupational health and
wellness issues
Employee wellness plan
implemented
Define and design
organizational culture
which will enable
achievement of strategy
Organizational Culture
Project
Corporation to build
a customer centric,
performance-driven and
innovative culture;
Organizational culture
workshops inclusive of
ethical culture conducted
28.2.5 Defining and measuring success
The ultimate measure of success for the 2019/20-2021/22 SHCP will be its overall impact on the
Corporation’s business strategy results and employees’ ability to achieve that strategy.
28.2.6 Reporting
Status reports on the implementation of the SHCP will be tabled to the Human Resources &
Remunerations Committee for monitoring.
28.2.7 Conclusion
The Human Capital strategies and objectives as reflected in this SHCP are flexible and will continuously be
realigned to the business and organizational requirements as reflected in the Corporate Strategic Plan.
72 ECIC STRATEGIC PLAN 2019/20-2021/22
ANNEXURE A: MATERIALITY AND SIGNIGICANCE FRAMEWORK
1. SCOPE
The Board of ECIC is responsible for developing a Materiality and Significance Framework that must be updated
annually before the start of the financial year. The Materiality and Significance Framework must be incorporated
into the Strategic Plan of ECIC and the annual report should detail the framework applied during the year.
2. LEGISLATIVE REQUIREMENTS
Section 54(2) of the Public Finance Management Act (Act no. 1 of 1999) (PFMA) requires that the accounting
authority (Board of ECIC) must inform the relevant treasury and submit relevant particulars to its executive authority
for approval in respect of any of the following qualifying transactions:
· participation in a significant partnership, trust, unincorporated joint venture or similar arrangements [section
54(2)(b)];
· acquisition or disposal of a significant shareholding in a company [section 54(2)(c)];
· acquisition or disposal of a significant asset [section 54(2)(d)];
· commencement of cessation of a significant business activity [section 54(2)(e)]; and
· a significant change in the nature or extent of its interest in a significant partnership, trust, unincorporated
joint venture or similar arrangement [section 54(2) (f)].
Section 55(2) (b) (i) of the PFMA requires the annual report and financial statements of a public entity to “include
particulars of any material losses through criminal conduct and any irregular and fruitless and wasteful expenditure
that occurred during the financial year”.
Note: The National Treasury, however, indicated that the intention was for the materiality measurement to also be
applicable to irregular expenditure and fruitless and wasteful expenditure. In anticipation of the effective change
in the legislation, it will be interpreted accordingly in this framework.
In terms of section 55(1) (d) of the PFMA the annual report and financial statements of ECIC must be submitted to
the National Treasury. Based on the submitted information, the National Treasury may decide to conduct further
investigations into the activities of ECIC. As a result, it is important for ECIC to set the materiality and significance
figures at an appropriate level to ensure that the correct information is included in the annual report and financial
statements and communicated to the National Treasury for approval.
ECIC STRATEGIC PLAN 2019/20-2021/22 73
The Treasury Regulations regarding materiality and significance as amended in May 2002 include the following:
· TR 28.1.5 – “for purposes of material (sections 50(1), 55(2) and 66(1) of the PFMA) and significant (section
54(2) of the PFMA), the Board must develop and agree a framework of acceptable levels of materiality and
significance with National Treasury in consultation with the external auditors.”
· TR 28.2.1 – “The annual report of public entities shall detail the materiality / significance framework applied
during the financial year.”
· TR 29.1.1(f) - “The corporate plan must include” ….” A materiality / significance framework.”
· TR 301.3(e) – The strategic plan must include the materiality / significance framework.’
3. DEFINING “MATERIALITY” AND “SIGNIFICANCE”
3.1 Materiality
Materiality is defined in the Handbook of International Auditing, Assurance, and Ethics Pronouncements (2005
edition) as follows:
“Information is material if its omission or misstatement could influence the economic decisions of users taken on
the basis of the financial statements. Materiality depends on the size of the item or error judged in the particular
circumstances of its omission or misstatement. Thus, materiality provides a threshold or cutoff point rather than
being a primary qualitative characteristic which information must have if it is to be useful.”
The materiality of losses through criminal conduct, irregular expenditure and fruitless and wasteful expenditure
should be evaluated both individually and in aggregate.
3.2 Significance
Significant is defined as “extensive or important enough to merit attention” and may, therefore, be interpreted as
of relative importance to ECIC as a whole. Thus, a transaction will be significant if conducting the transaction
is vitally important in order to fulfill ECIC’s mandate and for it to operate effectively. These types of transactions
could include a major re-structuring of the balance sheet through changes in financing or accounting policies, etc.
As with “material” there is no set rule for calculating a “significant monetary value”. ECIC should consider the
importance of the transaction, that is, the impact of the transaction on ECIC as a whole.
From the interpretations above, it can be seen that there is a difference between “material” and “significant”.
Significant is larger than material, as a significant transaction impacts on ECIC as a whole. An occurrence may be
material but not necessarily significant, whereas any occurrence that is significant will be material.
The materiality figure calculated by ECIC should not exceed the figure used (reviewed annually) by the external
auditors, because it could indicate a difference of opinion regarding the materiality of misstatements.
74 ECIC STRATEGIC PLAN 2019/20-2021/22
4. DETERMINING THE MATERIALTY / SIGNIFICANCE LEVELS
Factors to consider in determining the materiality and significance levels for ECIC include, but are not limited to:
4.1 Nature of ECIC business
ECIC should be guided by its accountability and the sensitivity of its accounts, activities and functions regarding
its regulatory duties. ECIC should also consider the impact that its materiality and significance framework, and
therefore the information reported to the National Treasury, could have on decisions and actions taken by the
National Treasury.
4.2 Statutory requirements
Materiality and significance levels may be influenced by considerations such as the legal impact of those Acts
with which ECIC is required to comply. ECIC should consider all pertinent statutory requirements in formulating its
materiality and significance framework.
4.3 Risks
There is an inverse relationship between materiality / significance and the level of risk; that is, the lower the risk,
the higher the materiality / significance level, and vice versa. For example, where the internal controls preventing
/ detecting irregular, fruitless or wasteful expenditure are insufficient, the control risk is high and the materiality
needs to be set at a lower level. ECIC should look at risk management limits set for transactions of an operational
nature.
4.4 Quantitative and qualitative factors
ECIC should take both quantitative (amount) and qualitative (nature) factors into consideration. Although
significance may contain quantitative elements, it may require more qualitative considerations in comparison to
materiality. This in turn requires professional judgment and particular regard for the specific transaction in the
context of ECIC as a whole. Due to the fact that the decision as to which qualitative factors should be considered
in setting the significance level requires notably more professional judgment, the Board should consider this
decision.
4.5 Nature of the transaction
In setting a monetary value for significance, it may be practicable to differentiate between the following two types
of transactions:
· transactions that are operational in nature, that is, part of ECIC’s normal, everyday business of regulating
financial institutions; and
· transactions that are strategic in nature, that is, outside ECIC’s normal, everyday business or transactions that
are non-routine or that would impact on the business or financial position of ECIC as a whole.
ECIC STRATEGIC PLAN 2019/20-2021/22 75
Losses resulting from criminal conduct may be seen as material based on the public accountability of ECIC,
regardless of the monetary value of the amount.
Refer to Annexure A for the materiality / significance factors that have been taken into account in arriving at the
Materiality and Significance Level for ECIC.
5. COMPLIANCE
To ensure compliance to the PMA, the following steps will be taken:
DETAILPERSON
RESPONSIBLEDATE
1Review materiality and significance framework in consultation
with external auditorCFO
As per
Treasury
guidelines
2 Approval of framework BoardAnnual -
March
3 Include framework in corporate plan and strategic plan CFOAnnual –
March
4 Include framework in annual report CFO Annual - July
5
Include particulars of any losses through criminal conduct,
irregular expenditure and fruitless and wasteful expenditure
that occurred during the financial year in annual report
CFO Annual - July
6
Maintain a register on all irregular expenditure and fruitless
and wasteful expenditure that occurred during the financial
year
Head of
ProcurementOngoing
7 Report all material / significant items to Board ManagementAs and when
they occur
76 ECIC STRATEGIC PLAN 2019/20-2021/22
SUB-ANNEXURE A
DETERMINING THE MATERIALITY AND SIGNIFICANCE LEVELS
1. APPROACH
To determine the materiality and significance levels, the following principles will be applied:
1.1 Main factor to determine material amount
The operating requirements of ECIC are to ensure that all its expenses are recovered through insurance premiums and
investment income. ECIC also has legislative requirements to hold a minimum amount of capital to reduce the risk of
insolvency from paying claims.
1.2 Percentage to be used
The percentage used will be calculated by using the following factors as a guideline:
•percentageusedinprioryear;
•percentageusedbyexternalauditorindeterminingtheexternalauditmaterialityamount;and
•comparisonwithpossibleexternalentities.
The percentage will be adjusted taking qualitative factors into consideration.
With regard to the information to be presented to National Treasury in terms of the Section 54(2) of the PFMA to the
following quantitative factors will be considered:
• Qualifyingtransactionsofanoperationalnature:1%ofTotalAssets
• Qualifyingtransactionsofastrategicnature:1%ofEquity
• Regardlessofthemonetaryvaluethereofalldirectequityinvestments:
o greater than 20% require formal information to the Executive Authority; or
o greater than 50% require approval by the Executive Authority.
• S54(d)Exceptwithregardsforsalvagingpurposesinrespectofunderwritingactivities,anyasset
that comprises 30% of Total Assets.
• S54(e)Iftheactivitycomprisesacapitaloutlayof,orwillrequireanupfrontcapitaloutlayof,30%
of Total Assets.
• S54(f)WherethechangeisnotcoveredbythemandateofECIC.
A qualifying transaction may also be considered significant based on considerations other than financial when, in the
opinion of the Board, it is considered to be significant for the application of section 54. The decision on which non-fi-
nancial issues may be considered rests with the Board as representative body of the shareholder. As an example,
the Board may consider a qualifying transaction as significant when it could impact significantly on a mandate of the
Minister.
ECIC STRATEGIC PLAN 2019/20-2021/22 77
The following range of percentages is generally used by the audit profession to determine materiality:
•0.25%to1%ofgrossrevenue;
•0.5%to2%oftotalassets;
•1%to2%ofgrossprofit;
•2%to5%ofshareholders’equity;
•2.5%to10%ofpre-taxprofit.
2. PARAMETERS TO USE FOR MATERIALITY FACTOR
2.1 Quantitative bases for consideration
Revenue2017/18
R’000
2016/17
R’000
2015/16
R’000
Net Insurance Premium Revenue 525 036 475 955 621 103
Claims Incurred 5 828 246 342 76 167
Assessment Fees 222 3 316 14 030
Net Investment Income 259 570 135 374 254 300
Other income 808 142 21
Total revenue 791 464 861 129 965 621
Assets 2017/18
R’000
2016/17
R’000
2015/16
R’000
Total Assets 8 539 519 8 560 482 9 432 312
Shareholders’ Equity 2017/18
R’000
2016/17
R’000
2015/16
R’000
Shareholders’ Equity 1 121 942 (1 104 078) 345 557
2.2 Quantitative ranges for consideration
Minimum 2017/18 2016/17 2015/16
0.25% of Revenue 1 978 660 2 152 823 2 414 053
0.5% of Assets 42 697 595 42 802 410 47 161 560
2% of Shareholders’Equity 80 600 900 71 397 520 104 957 120
2.5% of Profit before tax 28 048 550 27 601 950 8 638 925
Maximum 2017/18 2016/17 2015/16
1% of Revenue 7 914 640 8 611 290 9 656 210
2% of Assets 170 790 380 171 209 640 188 646 240
5% of Shareholders’ Equity 201 502 250 178 493 800 262 392 800
10% of Profit before tax 112 194 200 110 407 800 34 555 700
78 ECIC STRATEGIC PLAN 2019/20-2021/22
2.3 Basis percentage to be used
As stated in the framework the materiality amount should not be more than the materiality amount used for external
audit purposes. The materiality amount that was used by the external auditors for the 2017/18 audit was based on
Total Assets. The norm in the audit industry is to use Profit before tax but due to the volatile nature of this base (as can
be seen in 2.1 and 2.2 above) the external auditors chose to use Total Assets due to its stability.
It is therefore recommended that 0.5% of the 2017/18 Total Assets be used for reporting to EXCO, Board and inclusion
in the Annual Report.
3. CALCULATION OF MATERIALITY AMOUNT
Income Statement 2017/18 2016/17 2015/16
Revenue 791 464 000 861 129 000 965 621 000
Percentage used 0.50% 0.50% 0.50%
Materiality amount 42 697 595 42 802 410 47 161 560
4. REASONABLENESS REVIEW
The materiality for the 2017/18 audit as determined by the external auditors was R85 000 000 as per the calculation
detailed in 2.3 above.
The materiality for 2016/17 as determined by the external auditors was R45 000 000.
5. CONCLUSION
The materiality amount recommended for ECIC for the financial year 2018/19 is R43 000 000.
ECIC STRATEGIC PLAN 2019/20-2021/22 79
1. Enhance knowledge and skills to improve organisational capacity
1. Indicator title Percentage of annual training plan implemented
2. Short definition % of annual training plan implemented
3. Purpose/importanceTo develop a competent and competitive workforce that is able to deliver on the
business strategy and the achievement of ECIC’s objectives
4. Source/collection of dataHR report on training submitted to the Human Resource and Remuneration
Committee
5. Method of calculation Percentage number of training attended by staff to annual training plan
6. Data limitations None
7. Type of indicator Leading
8. Calculation type Count
9. Reporting cycle Quarterly
10. Desired performance Achievement of agreed milestone
11. Indicator responsibility Head: HR
ANNEXURE B: INDICATOR PROFILES
80 ECIC STRATEGIC PLAN 2019/20-2021/22
2. Build and leverage strategic partnerships to advance business
1. Indicator title% of collaboration initiatives implemented as per the annual strategic partner-
ship implementation plan
2. Short definition Collaboration initiatives
3. Purpose/importanceTo access new markets through collaboration by leveraging on our partner
resources and knowledge base as well as removing constraints
4. Source/collection of data Project progress report
5. Method of calculationPercentage number of collaboration initiatives as per the annual strategic part-
nership implementation plan.
6. Data limitations None
1. Type of indicator Leading
1. Calculation typeActual collaboration initiatives implemented against strategic partnership imple-
mentation plans
2. Reporting cycle Quarterly
10. New indicator
11. Desired performance Achievement of agreed milestones
12. Indicator responsibility Head: HR
ECIC STRATEGIC PLAN 2019/20-2021/22 81
3. Advance transformation to build and inclusive economy
1. Indicator title B-BBEE score
2. Short definition B-BBEE score
3. Purpose/importance Improve B-BBEE and employment equity initiatives to enhance the national
transformation agenda towards an inclusive economy
4. Source/collection of data B-BBEE Scorecard
5. Method of calculation As per the B-BBEE scorecard
6. Data limitations None
7. Type of indicator Leading
8. Calculation type Assessment of actual project status against agreed milestones
9. Reporting cycle Quarterly
10. New indicator
11. Desired performance Achievement of agreed milestones
12. Indicator responsibility General Counsel
82 ECIC STRATEGIC PLAN 2019/20-2021/22
4. Enhance business processes to improve operational efficiency
1. Indicator title Cost to income ratio calculated as
current operating costs excluding
investment related costs as a ratio
of 3-year average income (earned
premium, assessment fees and
commission received).
% of business process improvement
plan implemented
2. Short definition Cost to income ratio Implementation of business process
improvement plan
3. Purpose/importance Enhance business processes to
improve operational efficiency
Enhance business processes to
improve operational efficiency
4. Source/collection of data Financial report Business process improvement plan
5. Method of calculation Cost to income ratio calculated as
current operating costs excluding
investment related costs as a ratio
of 3-year average income (earned
premium, assessment fees and
commission received).
Percentage number of business
process improvement plan targets
achieved
6. Data limitations None None
7. Type of indicator Leading Leading
8. Calculation type Count Count
9. Reporting cycle Quarterly Quarterly
10. New indicator
11. Desired performance Target Target
12. Indicator responsibility CFO HR Manager
ECIC STRATEGIC PLAN 2019/20-2021/22 83
5. Increase business development initiatives to grow the business
1. Indicator titleNumber of research reports to
identify new opportunitiesValue of approved transactions
2. Short definitionResearch reports for trade oppor-
tunitiesValue of approved transactions
3. Purpose/importanceTo support the implementation of
the business development plan
To increase revenue generating capacity
4. Source/collection of dataProject progress report submitted
to EXCO
Minutes of Projects EXCO, Finance,
Investment and Insurance Committee as
well as Board
5. Method of calculation Progress against agreed milestonesSum the value of insurance applications
approved per 4 above
6. Data limitations None None
7. Type of indicator Leading Leading
8. Calculation typeAssessment of actual project status
against agreed milestonesCalculated
9. Reporting cycle Quarterly Quarterly
10. New indicator
11. Desired performance Achieve set targets Achieve set targets
12. Indicator responsibility COO COO
84 ECIC STRATEGIC PLAN 2019/20-2021/22
6. Increase communication to create better awareness and understanding of ECIC and its role
1. Indicator title Number of marketing and communication campaigns implemented
2. Short definition Number of campaigns implemented
3. Purpose/importance To increase communication and brand awareness
4. Source/collection of data Marketing and communication plan
5. Method of calculationNumber of campaigns implemented of the 2019/20 marketing and com-
munication plan
6. Data limitations None
7. Type of indicator Marketing and communication plan
8. Calculation type Counting
9. Reporting cycle Quarterly
10. New indicator
11. Desired performance Target
12. Indicator responsibility Head: Marketing & Communications
ECIC STRATEGIC PLAN 2019/20-2021/22 85
7. Increase capital base to underwrite more business to fulfil ECIC’s mandate
1. Indicator title Percentage increase in basic own funds
2. Short definition Percentage increase in basic own funds
3. Purpose/importanceIncrease capital base of ECIC to support the growth and
sustainability of the business
4. Source/collection of data Financial reports
5. Method of calculation Actual
6. Data limitations None
7. Type of indicator Lagging
8. Calculation type Manual
9. Reporting cycle Quarterly
10. New indicator
11. Desired performance Achieve set targets
12. Indicator responsibility CFO
86 ECIC STRATEGIC PLAN 2019/20-2021/22
8. Increase stakeholder/customer satisfaction
1. Indicator titlePercentage implementation of annual stakeholder and customer engagement
plans
2. Short definitionPercentage implementation of annual stakeholder and customer engagement
plans
3. Purpose/importance To achieve the required levels of stakeholder and customer satisfaction
4. Source/collection of data Quarterly reports to EXCO
5. Method of calculationPercentage implementation of annual stakeholder and customer engagement
plan
6. Data limitations None
7. Type of indicator Lagging
8. Calculation type Manual
9. Reporting cycle Quarterly
10. New indicator
11. Desired performance Achieve set targets
12. Indicator responsibility COO & Head: Marketing & Communications