1 2007/08 ANNUAL REPORT 06 November 2008 PRESENTATION TO THE PORTFOLIO COMMITTEE ON TRADE AND...

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2007/08 ANNUAL REPORT2007/08 ANNUAL REPORT06 November 2008

PRESENTATION TO THE PORTFOLIO PRESENTATION TO THE PORTFOLIO COMMITTEE ON TRADE AND INDUSTRYCOMMITTEE ON TRADE AND INDUSTRY

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PRESENTATION CONTENTPRESENTATION CONTENT

Economic ContextStrategic ObjectivesAchievements, Progress and ChallengesFive-Year Comparison of Budget vs ExpenditureAnalysis of 2007/08 Under ExpenditureAnalysis of current MTEFYTD Expenditure – 30 September 2008Conclusion

2007/08 ANNUAL REPORT2007/08 ANNUAL REPORT

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ECONOMIC CONTEXT

Year under review was characterised by a number of challenges:

Global slowdownElectricity emergencyIncreasing interest ratesIncreasing inflationIncreasing food and energy pricesDecreasing business and consumer confidenceCurrent account deficitFiscal Pressure


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ECONOMIC CONTEXT

The economy proved to be resilient in face of these challenges:Gross Domestic Product (GDP) continued to grow at 5.1% in 2007, and continues to grow in 2008Exports grew by 24% in 2007Investment (Gross Fixed Capital Formation ) increased to 21% in 2007Unemployment fell to 23% in September 2007Real income per capita increased at 4% per annumShift from consumer driven to investment driven growth

Resilience emphasizes the need to maintain existing policy direction through focus on stronger implementation of identified interventions and increased resourcing

The challenge is to identify & implement necessary measures to support the economy’s positive performance & respond to emerging challenges


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STRATEGIC OBJECTIVESSTRATEGIC OBJECTIVES

Promoting the coordinated implementation of the accelerated and shared growth initiative

Promoting direct investment and growth in the industrial and service economy, with particular focus on employment creation

Raising the level of exports and promote equitable global trade

Promoting broader participation, equity and redress in the economy; and

Contributing to Africa's development and regional integration within the NEPAD framework


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ACHIEVEMENTS,ACHIEVEMENTS, PROGRESS & CHALLENGES PROGRESS & CHALLENGES

The department is organising its work in terms of the following themes on which the annual report is based:-

Industrial developmentTrade, investment and exportBroadening participationRegulation andAdministration and co-ordination


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Progress the dti launched the National Industrial Policy Framework (NIPF), and

the Industrial Policy Action Plan (IPAP) in 2007 after extensive consultation and adoption by Cabinet in July 2007

Progress made in finalisation of sector summits with stakeholders in Chemicals & Metals & Engineering which identify key action plans.

On forestry, progress made on afforestation measures & downstream beneficiation and support in KZN & Eastern Cape. New interventions being developed for Mpumalanga & Limpopo

Stabilisation and upgrading measures developed for clothing & textiles & stakeholders being consulted

Considerable progress made in implementation of key interventions in ASGISA priority sectors of BPO&O & Tourism

Industrial Development

Purpose: Provide leadership in the development of policies and strategies that promote & foster competitiveness, enterprise development empowerment and equity in the economy

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2007/08 ANNUAL REPORT2007/08 ANNUAL REPORTIndustrial Development

First phase of Motor Industry Development Programme (MIDP) review complete. Second phase to redesign MIDP commenced

Key incentives have contributed to the manufacturing & services industries:

Small Medium Enterprise Development Program (SMEDP) - 11,309 projects approved from 2000 until program suspended with R12,7b in incentive value. During 2007/08 4 918 claims were paid with incentive value of R1,04b. Review of SMEDP completedFilm & TV production rebate scheme revised to effect support of both local & foreign productions. In 2007/08, 25 productions assisted to the value of R97,3mComprehensive BPO assistance launched in March ’07 resulted in commitment of at least 9 000 jobs by 11 international investors, with total investment of over R900m

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Incentives for co-operatives now operationalIDZ’s have made substantial progress in attracting investment; over R5b in new projects have been committedStrategic Industrial Projects (SIP) – 45 approved projects to July 2005 when scheme expired. Estimated value of investment by approved projects is R28,7b with estimated 8,446 direct & 104,545 indirect jobs being created. 22 of the approved projects already established with investment of R10b.Critical Infrastructure Programme (CIP) – 7 projects approved in 2007/08 with qualifying investment of R1.3b & infrastructure investment of R9,5b Revised Export & investment Assistance (EMIA) finalised to develop & increase potential exporters

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2007/08 ANNUAL REPORT2007/08 ANNUAL REPORTIndustrial Development Support for technology, innovation and technical infrastructure:-

Support Programme for Industrial Innovation (SPII) – 74 projects endorsed to the value of R306 m (18% female & 34% BEE)Technology & Human Resources for Industry Prgramme (THRIP) – assisted 680 researchers; 2 054 students & 395 industry partners (38% female & 54% BEE)The South African National Accreditation System (SANAS), the South African Bureau of Standards & the National Metrology Institute of SA are also major contributors to the area of standards, metrology & accreditation

Centres of Excellence established to increase manufacturing skills (i.e. Aerospace, Clothing & Textiles, Advanced Eng., etc.)

Launched a cluster initiative for the development of the aerospace industry (eg. aerospace village)

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IDC Funding approvals amounted to record value of R8,5b R2,1b for develop. in rest of Africa – significantly more than previous yr Funding activities will assist in creation & retention of more than 33 600

direct jobs in SA and 1 900 in rest of Africa More than 40% of jobs created in South African rural areas R5,2b approved for black empowered enterprises (61% of total) Regional representation in seven provinces New Industries & Development

Renewable energy: funding for 100% black owned energy co. in photo thermal solar panels, solar geysers & water tanks to hot water usersAlternative energy: funding approved for 1st invest in bio-ethanol plant in Eastern Cape

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IDC New Industries & Development – cont.

Composite materials: funding approved for wood composite project in LimpopoBiomass: Investment approved for the manufacturing of biomass fuel pellets in Mpumalanga

Sectoral DiversityBiotechnology: The Biovac Institute – est. to restructure state vaccine assets & create new vaccine production facilities, with exports to rest of Africa.Aerospace: South african aviation components manufacturing co. in GautengAgri-tourism: Environmentally responsible agri-tourism project in Mpumalanga with significant development impact & meaningful community involvement with export potential

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IDC Sectoral Diversity – cont.

Geotextiles: funding for the implementation of a project for the production of non-woven fabrics with industrial applications, mainly geotextiles

Regional DiversificationNorthern Cape: Project to commercialise goat industry & funded a citrus project in a new black-spot free cultivation areaEastern Cape: Rural bus transport project to provide safe, reliable & affordable bus transport in the former TranskeiKwaZulu-Natal: Facility to produce thin gauge coated and painted steel sheets for roofing & non-roofing application & funding for sub-acute hospital group with branches in KZN and the Eastern Cape with a primary focus area on post surgical recovery, psychiatry, nutrition, occupational care and wound care management

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IDC Regional Diversification – cont.

Limpopo: Project to dry and package mangoesFree State: Project to recycle waste oil

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Progress Effective participation in WTO Doha Round and leadership on industrial

tariff negotiations Lead SA participation in aligning SA-EU Free Trade Agreement (FTA)

(TDCA) with SADC-EU EPA European Free Trade Agreement (EFTA) preparation for entry into force

by May 2008 SACU-Mercusor Preferential Trade Agreement (PTA) technical

negotiations concluded

Trade, Investment and Exports

Purpose: To promote economic development by working to build an equitable multilateral trading system that facilitates development; strengthening trade and investment links with key economies; and by fostering African development including through regional and continental integration and development co-operation in line with NEPAD

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2007/08 ANNUAL REPORT2007/08 ANNUAL REPORTTrade, Investment and Exports.

African and regional economic integration: Ongoing rollout of infrastructure development through Spatial

Development Initiatives: Mozambique, Angola, Namibia, Tanzania, DRC Bilateral Investment Treaties (4) Cooperation Agreements ready for signature (15) Intensified engagement on SACU future Achieved SADC FTA, and participation in Ministerial Task Team on

programme for deeper SADC integration Co-hosted CAMI conference on African industrialisation Technical support to NEPAD Secretariat for Africa-wide SDIs Published “South Africa in Africa – a business guide”

Key Bilaterals: Clothing and textile quotas against import surges from China instituted

to provide relief to local manufacturers

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2007/08 ANNUAL REPORT2007/08 ANNUAL REPORTTrade, Investment and Exports

Key Bilaterals - cont.:- SACU – US => concluded Trade, Investment & Development

Cooperation Agreement (TIDCA) SACU-India PTA negotiations launched in Oct 2007 Hosted first IBSA Trilateral Trade Arrangement consultations between

SACU-Mercosur-India in Oct 2007 China Partnership for Growth and Development: Leading preparation

and negotiation Progress on trade and investment policy reviews

Ongoing export promotion activities on the basis of a revamped export strategy, including trade missions & national pavilions, identification & dissemination of trade leads & financial assistance to exhibitors & market researchers

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2007/08 ANNUAL REPORT2007/08 ANNUAL REPORTTrade, Investment and Exports Greater alignment and efficiency in the dti’s network of foreign offices to

more effectively attract investment and promote exports through more rigorous training for foreign economic representatives (FERs) as well as market prioritization and targeting.

International Trade Administration Commission (ITAC) New five-year strategy completed and approved New anti-dumping regulations approved Proactive investigations launched for the review of tariff structure of

major industrial inputs. One of them completed (aluminium) & submitted for approval

16 applications to reduce duties finalised 20 rebate applications finalised (12 approved, 6 rejected & 2 withdrawn)

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2007/08 ANNUAL REPORT2007/08 ANNUAL REPORTTrade, Investment and Exports

Export Credit Insurance Corporation (ECIC) New exporters premium methodology developed & implemented.

Enables export contractors to cover their precise requirements @ each drawdown of export credit loans, paying premiums on their actual exposure instead on total contract value

Comprehensive review of the ECIC Insurance Policy terminology and conditions undertaken to make it basel II compliant.

Increase in insurance capacity from R20b to R30b – reason being that total assets doubled from approx. R1b to more than R2,7b

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Progress Continued to implement integrated small business development strategy

focusing on access to financial & non financial support via NEF, Khula, SAMAF and SEDA

Implementation of Codes of Good Practice for B-BBEE and gazetting of transformation charters (Agri-BEE, Forestry and Tourism).

Isivande Womens Fund established to support women empowerment and access to finance of women owned enterprise

Cooperative legislation developed and support to cooperatives provided – 4 large projects totaling R9m & 16 small projects totaling R3,78m

Annual small business summit Products for targeted procurement from SME’s by government depts

identified & preparation for implementation of the scheme underway

Broadening Participation

Purpose: Lead in the development of policies and strategies that promote enterprise growth, empowerment and equity in the economy

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2007/08 ANNUAL REPORT2007/08 ANNUAL REPORTBroadening Participation Publications, road shows and imbizo’s to promote awareness of the dti’s

services and offerings

NEF In 2007/08 26 transactions worth R352m approved, whilst 31 transactions

worth R203m disbursed. Launched Asonge Share scheme

Resulted in half of 1,5% portfolio held in MTN offered to black public @ 20% discount10 640 000 MTN shares, worth R1,14b, were offered plus one bonus share for every 10 held after 24 months. Further 1 376 058 shares worth R147m were allocated to accommodate oversubscriptions Over 87 000 applications received. Value of allocations = R890m vs R1,3bn market valueExperience here resulted Sasol engaging NEF to advise on their share scheme

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2007/08 ANNUAL REPORT2007/08 ANNUAL REPORTBroadening Participation

NEF Total approvals since inception = 124 transactions worth R932m & 117

transactions worth R699m disbursed. Post investment monitoring activities strengthened to include participating

in board activities, reviewing financial reports, etc. Major develop at NEF was the adoption and investments in three

innovative “bulk financing” facilities to provide for broader access & participation:-

1st was the Daimler Chrysler Financial Services (DCFS) Broad Based BEE transport scheme. R30m committed in R330m facility.The other two financing schemes are with Nando’s and Primi Piatti food franchise schemes.

Strategic Project’s Fund established to secure BEE participation in suitable strategic projects. First strategic project for R37m in new solar energy panels approved.

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NEF Interventions to address under investments in identified provinces ie.

Free State, Mpumalanga, KZN & Limpopo and no investments in North West & Northern Cape:

Deployed capacity to understand funding challenges & needsEmbarked on an aggressive relationship building exercise with provincial governments and Development Fund Institutions to source pre-packaged fundable deals.Co-hosted three round table discussions with govt. representatives from Nothern Cape, North West, and Limpopo

Khula Disbursements increased by 29% from R343m to R443m 72% of disbursements to small businesses requiring R250k or less &

39% of disbursements to women owned entrepreneurs Remained sustainable with profit of R53m after tax

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SAMAF Increased Financial Intermediaries Network to 38 to all nine provinces

with funding commitments of R86m Disbursements for loans and grant support increased to R44, 4m for 37

intermediaries ( R19, 8m to 31 Intermediaries in 2006/7) Borrowers (enterprising & working poor) increased to 17 554 (4 346 in

2006/7) Loan repayments increased to 70% (14% in 2006/07)

SEDA Establishment of four new branches – total of 43 branches Launch of Trade Point Programme (in association with the World Trade

Point Federation) Increased use of partnerships for enhancing both the geographic reach

and service offerings – total 53 partnerships Increase in citizens accessing Seda to 186 195 (140 779 in 2006/07)

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Progress Reform process completed on 5 new Bills

Competition Amendment Bill, the Consumer Protection Bill the Companies Bill, the National Gambling Amendment Bill, and Intellectual Property Amendment BillProcessed FIFA request for trademark protectionStronger enforcement on consumer complains , anti-competitive practices and Intellectual property protection

Legislation passed:Measurement Units & Measurements Standards Act (Act 18 of 2006)Accreditation for Conformity Assessment, Calibration & Good Laboratory Practice Act (Act 19 of 2006)Amendments to the Close Corporations Act, 1984

Regulation

Purpose: Develop and implement coherent, predictable and transparent regulatory solutions that facilitate easy access to redress and efficient regulatory services for economic citizens

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2007/08 ANNUAL REPORT2007/08 ANNUAL REPORTRegulation Subordinate legislation introduced:

Regulations under the Cooperatives Act, 2005Regulations under the National Credit Act, 2006Amendments to regulations made under Legal Metrology Act 1973

Work undertaken in the following areas for possible legislation to be introduced in 2008/09 – 2009/10

The National Lotteries legislationEstate Agents legislation

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2007/08 ANNUAL REPORT2007/08 ANNUAL REPORTRegulation

South African Bureau of Standards (SABS) SABS Commercial attained ISO17021 accreditation for certification

services. SABS is one of the first certified bodies worldwide to change to the new standard. Leading role in harmonising 72 SADC standards

460 technical committees & subcommittees to produce standards were administered & 991 new standards were developed.

The Regulatory department performed 63 209 inspection in 2008 (50 749 in 2007)

South African National Accreditation System (SANAS) The Accreditation of Conformity Assessment, Calibration & Good

Laboratory Practice Act, was promulgated in May 2007, changing SANAS’ legal status from a section 21 Co. to a statutory body & establishing SANAS as the sole accreditation body for South Africa

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South African National Accreditation System (SANAS) – cont. SANAS was assessed by a multi-national assessment team representing

the International Accreditation Forum (IAF), the International Laboratory Accreditation Cooperation (ILAC) & the European Accreditation Cooperation (EA)

The project to create a regional accreditation body for SADC has received further impetus with the granting of SADC subsidiary status to the accreditation body. SANAS currently holds the secretariat for this body, which is responsible for the implementation of a regional accreditation infrastructure

NMISA The NMISA successfully maintained all Gazetted National Measurement

Standards.

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NMISA – cont. To prove international measurement equivalence, the NMISA participated

in 26 international comparisons and were successful to prove competence and establish measurement equivalence with all major trading partners.

Specific highlight was the establishment of the Intra African Metrology System (AFRIMETS) with aim to harmonize metrology activities across the African continent. Currently, 40 African countries have become members.

On a technical level, the NMISA expanded its high level measurement assistance to the Automotive component manufacturers in support of competitiveness & specifically assisted SMEs to meet the stringent requirements of modern manufacturing

A bio analysis capability was also established to assist the food industry with traceability for bio chemical analysis.

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NMISA – cont. Substantially improved its capability in metrology in chemistry to provide

reference materials to analytical laboratories performing water, other environmental and food health analysis.

Investigated the measurement traceability needs in all sectors as mentioned in the NIPF and IPAP

National Credit Regulator RegistrationRegistration: 2,535 credit providers (with 27,139 branches), 11 credit : 2,535 credit providers (with 27,139 branches), 11 credit

bureaus and 336 debt counselors registeredbureaus and 336 debt counselors registered Debt CounselingDebt Counseling: Developed & implemented training programme for debt : Developed & implemented training programme for debt

counselorscounselors InvestigationsInvestigations: 91 Compliance investigations. Successful intervention to : 91 Compliance investigations. Successful intervention to

stop activities of a high profile illegal lending operation (Rudco Finance)stop activities of a high profile illegal lending operation (Rudco Finance) Credit bureausCredit bureaus: Positive impact on more than 6 million consumer’s credit : Positive impact on more than 6 million consumer’s credit

bureau records as a result of data cleansingbureau records as a result of data cleansing

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Regulation

National Credit Regulator – cont. AwarenessAwareness: A high level of national awareness was created on National : A high level of national awareness was created on National

Credit Act which included 400 workshops with industry & consumer Credit Act which included 400 workshops with industry & consumer groups, 300 radio programmes & ongoing exposure in the print media.groups, 300 radio programmes & ongoing exposure in the print media.

National Consumer Tribunal The establishment of the National Consumer Tribunal in terms of offices

and infrastructure and the recruitment of staff The Rules of the Tribunal were finalized and published on 28 August ‘07 Great emphasis on capacity building initiatives to ensure that both

Tribunal members & staff properly equipped to deliver on the mandate 11 case records were filed with the Tribunal, 3 of which were within 5

weeks of publication of the Rules. Of these 7 were filed as valid applications and referrals, 3 were declined as ultra vires and 1 was not pursued by the applicant. 1 referral and 1 application was finalised

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National Lotteries Board Start up of new Lottery Operations after the legal action suspended the

lottery for 6 months Complete re-engineering of grant-making process and support systems Disbursement of R972.9 million of good cause funds Successfully defended and terminated high profile illegal lotteries (FNB

million-a-month, Vodacom win-a-car) Assisted other Lotteries in SADC (Namibia, Nigeria, Tanzania etc)

National Gambling Board Inspections were conducted on 28 (out of 36) casinos & no significant

non compliance were detected. To enhance the status of compliance minimum internal controls were dev. for implementation by the industry

NGB assisted North West to master a break through and closed down NGB assisted North West to master a break through and closed down some illegal operators. Assets to the value of R22 million forfeitedsome illegal operators. Assets to the value of R22 million forfeited

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National Gambling Board – cont. The workshops were conducted for the Horseracing Industry to ensure

understanding of FICA requirements, and smooth implementation of the systems. By year end, 44 inspections were successfully conducted

The Self Exclusion Register is ready to be established & the industry is braced for implementation. To give full effect of the system, National Gambling Board registered a Trust Deed to administer illegal winnings that would emanate from Self Excluded Persons then ultimately forfeited to the state

The betting rules for the entire industry were revised and adopted by all nine Provincial Regulators

Further the anomaly within the sports tax structure was addressed, and as of 1 July 2008 Gauteng and Western Cape does not levy tax on sport winnings but rather on Gross Gaming Revenue as in all other gambling modes. The other 7 Provinces will implement this system in the new year

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National Gambling Board – cont. The NGB launched the following three research reports:The NGB launched the following three research reports:

Gender EquityGender EquityRegular Gamblers’ perception on BingoRegular Gamblers’ perception on BingoRegular Gamblers’ perception of measures to promote responsible Regular Gamblers’ perception of measures to promote responsible gamblinggambling

During the 2007/2008 year Ghana requested the National Gambling During the 2007/2008 year Ghana requested the National Gambling Board to permit our agency (Zonke Monitoring Systems) to install similar Board to permit our agency (Zonke Monitoring Systems) to install similar system within their gambling industrysystem within their gambling industry

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Competition Commission Key sectors identified & prioritised on the basis of their significance for

employment creation, poor consumers, & their role in lowering the costs of doing business. Sectors include financial services, food & agro-processing, infrastructure & construction & intermediate industrial products. Number of important cases finalised which are described in more detail in the annual report.

The Commission followed the cue of international competition authorities by devoting considerable time & attention to the identification & shutting down of cartels. The Commission’s effective application of its corporate leniency policy (CLP) that resulted in successful prosecutions. Many of these cases, notably in the bread and milk industries, which are of particular concern to consumers, made national headlines.

During the year under review, the Commission reviewed the CLP to make it a more effective instrument and to offer business greater legal certainty as to when an applicant qualifies for leniency.

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Competition Commission – cont. Significant increase in the number of non-governmental and consumer

protection organisations which made submissions at Competition Tribunal hearings. which meant that many South Africans, for the first time, became aware of the Commission and it’s purpose

The work of the public enquiry into bank charges & access to the national payments system continued during the year under review. The report of the banking enquiry was released by the Commission in July 2008.

The Commission assessed pricing trends of key products such as bricks, steel products, cement, concrete and plaster. A review of the PPI data revealed that over recent years, prices of many input products to the infrastructure programme have been increasing at rates substantially in excess of producer and consumer inflation. Formal investigations are now underway on possible anti-competitive conduct in these markets

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Regulation

Competition Commission – cont. Intermediate industrial products, comprised mainly of basic chemicals &

metal products such as polymers, steel, aluminium & fertiliser, are inputs into manufacturing have been prioritised by the Commission for investigation into possible anti-competitive behaviour. Two mergers in this sector were also prohibited on the basis that they would substantially prevent or lessen competition.

The telecommunications sector is characterised by high prices & lack of competition and remains an area of focus because of its importance to growth and development in South Africa & the cost of doing business. The Commission has 11 complaints concerning telecommunications matters.

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Regulation

Competition Commission – cont. The healthcare industry is complex & the Commission has therefore been

in regular contact with relevant regulators and studied private healthcare to determine what competition concerns exist within the industry & investigated a number of cases

Competition Tribunal 146 cases heard & 109 reasons for decisions issued 100 large merger cases heard and decisions issued on 98 Total value of administrative penalties imposed exceeded R781m

Estate Agency Affairs Board Improved compliance to the Act through increased prosecutions &

disciplinary hearings

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Estate Agency Affairs Board – cont. National Imbizo Roadshows, radio and TV interviews, newspaper

releases & the internet were utilised to create awareness amongst stakeholders

Huge strides made in improving institutional arrangements with appoint of new board and appropriately skilled staff

CIPRO Registered more than 36 000 new companies, 250 000 close

corporations & more than 450 000 amendments performed New Act on co-operatives rolled out Commenced process of decentralising Cipro services Obtained ISO 9001:2000 certification Commenced with a transition program with reviewing adequacy of

organisational structure and investments on new & updated IT equipment & software

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Progress Strengthened capacity through filling of senior management & key positions 160 vacancies were filled out of 329 in the year to 31 March 2008, & the

vacancy rate stood at 25,2% - reduced to 18,6% as at 30 September. 83% procurement went to SMME`s, 70% supporting HDI`s & 39% of orders

to women owned business Significant progress on promoting equity and people with disabilities Robust management efforts to improve turnaround times and reduce fraud Strong Corporate Governance maintained

Unqualified dti audits over several years & unqualified COTII audits in 2007/08, except for two agenciesAll COTII agencies tabled annual reports timeously

Administration & Co-ordination

Purpose: Ensure efficient and effective coordination and systems within the dti and with stakeholders & partners

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Representivity by Race and Gender

White/ Other Female 11%

Asian Male 2%

Coloured Male 2%

Asian Female 4%

Coloured Female 3%

White/ Other Male 7%

African Female 41%

African Male 30%

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Compliance with Equity in the DTI

CategoryNational Targets

DTI

VarianceBlack White Totals %

% Women in Senior Management

50%54 17 71 41% -9%

% People living with disability

2 % by 2010 (dti) 9 out of 1006 staff

members 0.9% -1.1%

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Representivity by Salary Level

Black WhiteTotalHeadCount

% Black%

Variance

Level 1 - 2 (Lower Skilled) 11 0 11 100 25

Level 3 - 5 (Skilled) 49 5 54 90.7 15.7

Level 6 - 8 (Highly Skilled) 265 60 325 81.5 6.5

Level 9 - 12 (Highly Skilled Supervisory) 368 75 443 83 8

Level 13 - 16+ (Senior Management) 131 42 173 75.7 0.7

Total Head Count 824 182 1 006 81.9 6.9

Variance measured from target of 75% Blacks: Target exceeded at all levels

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2007/08 ANNUAL REPORT2007/08 ANNUAL REPORTAdministration & Co-ordination Other Initiatives

Introduction of University Research Network and Research Panel to improve capacity to generate knowledge and boost internal capacityImplementation of the dti internal cluster system initiatedInitiated monitoring and evaluation frameworkGreater alignment and coordination with external stakeholders including NEDLAC TIC, Industry Forum, etcEffective chairing of the Economic Cluster of departments

Key Boards of Directors & CEO appointments madeEstate Agency Affairs Board (EAAB)Small Enterprise Development Agency (SEDA)South African Bureau of Standards (SABS)SABS Trade Metrology Advisory Committee (TMAC)National Credit Regulator (NCR)International Trade Administration Commission of SA (ITAC)

Effective & efficient use of allocated funds

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Five year comparison ofFive year comparison ofbudget vs expenditurebudget vs expenditure


0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

R'0

00

Budget

Expenditure

Unspent

% Unspent

Budget 2,796,350 3,623,291 3,907,420 3,942,028 5,479,433

Expenditure 2,659,342 3,424,138 3,631,304 3,804,720 5,295,351

Unspent 137,008 199,153 276,116 137,308 184,082

% Unspent 5% 5% 7% 3% 3%

2003/04 2004/05 2005/06 2006/07 2007/08

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ANALYSIS 2007/08ANALYSIS 2007/08UNDER EXPENDITUREUNDER EXPENDITURE

Under-expenditure in 2007/08 occurred in mainly in the following areas for which roll-overs have been approved:


R'000

BPO 74,400

BBSDP 3,800

Co-operatives Incentive Scheme 14,129

Disaster Recovery 2,900 Critical Infrastructure Programme 6,212

Total 101,441

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ANALYSIS OFANALYSIS OFCURRENT MTEFCURRENT MTEF

On average, the allocation of the current budget over the MTEF period is as follows:

47% to transfer payments made up of:-Agencies - 24%IDZ’s - 15%Other - 8%

34% to incentive payments 7% to the compensation of employees 12% for goods and services, of which 9% is already committed.


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YTD ExpenditureYTD Expenditure30 September 200830 September 2008


Annual AvailableProgramme Budget Budget Actual Variance % Var Budget

Administration 393,010 159,481 147,722 11,759 7% 245,288 International Trade & Economic Development 150,967 58,375 57,539 836 1% 93,428 Enterprise & Industry Development 1,606,578 775,237 764,494 10,743 1% 842,084 Consumer & Corporate Regulation 188,019 45,092 38,991 6,101 14% 149,028 The Enterprise Organisation 2,412,293 1,268,539 1,234,356 34,183 3% 1,177,937 Trade & Investment South Africa 300,431 125,473 125,250 223 0% 175,181 Marketing 73,831 43,974 48,933 (4,959) -11% 24,898 Thefts & Losses – – – - -

Total 5,125,129 2,476,171 2,417,285 58,886 2% 2,707,844

R'thousandsYear to Date

• Expenditure to 30 September = 48% of total budget vs straight line projections which would have been 50%

• Only 2% under spent against projections

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CONCLUSIONCONCLUSION

In conclusion2007/08 ANNUAL REPORT2007/08 ANNUAL REPORT

Overall targets for the reporting period were achieved

Challenges: To enhance impact through:-

Ensuring effective programme & project performance Stronger strategic & operational managementGreater coordination & integration of work, including with agencies

Inadequate financial resources for operations and capitalisation HR challenge of recruitment, retention and development Impact of electricity challenge on production & investments Too much exposure in few countries increases risk (ECIC) Increased participation of leading international export credit agencies

in Africa – ECIC need to change approach Intensified integration in SADC requires determining a common

external tariff & joint tariff & trade remedy mechanism (ITAC) Poor quality of funding applications received by DFI’s

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Challenges – cont.: Impact of economic conditions on investment & repayment of loans Constraints of wholesale model (Khula) Inability of financial intermediaries to quickly learn & implement financial

reporting systems & regulatory compliance (SAMAF) Constant change to board and management structures at intermediaries

coupled with internal conflicts constrain delivery of service (SAMAF) SABS ageing building infrastructure poses significant challenges to

maintain essential services to the laboratories To meet projected accredited Verification Agency targets for BBBEE

(SANAS) Advancement of technology within the industry. Growth of internet Advancement of technology within the industry. Growth of internet

based gambling (NGB).based gambling (NGB).

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Challenges – cont.: Ensuring accessible, value added, efficient & effective service delivery

(CIPRO) Transformation of & compliance with the act by industry (EAAB) Improved inter-governmental co-ordination

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THANK YOU


1 2007/08 ANNUAL REPORT 06 November 2008 PRESENTATION TO THE PORTFOLIO COMMITTEE ON TRADE AND...

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Transcript of 1 2007/08 ANNUAL REPORT 06 November 2008 PRESENTATION TO THE PORTFOLIO COMMITTEE ON TRADE AND...