Economic Development Department 1st Quarterly Report 2012/13

Presentation to the Portfolio Committee on Economic

Development

18 September 2012

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Presentation

• 1st Quarter performance– Economic Policy Development– Economic Planning and Coordination– Economic Development and Social Dialogue

• Progress against ENE targets

• Human Resources

• Financial Performance

• Concluding remarks

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Economic Policy Development (1)• EDD Conference held on 19th April 2012• Theme of infrastructure and development – opportunity to present National

Infrastructure Plan• High-level participation from government, business, labour, academia and

communities, including Chair of the Portfolio Committee• Keynote by Professor Joseph Stiglitz• Proceedings being developed as a booklet

• Regulatory impact process reviewed to align with NGP• Development of guidelines for a socio-economic impact assessment system

(SEIAS)• Should help focus attention on employment creation, equity and growth.• Collaboration in coming months to develop expertise and best-practice

approach• Linked to broader effort to sensitise departments to employment and

economic impacts

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Economic Policy Development (2)• Outcome 4 quarterly report completed with National Treasury and DTI and

submitted to Cabinet– Satisfactory progress on employment creation– But risks arising increasingly out of global slowdown– Need to do more to manage administered, input and food prices

• Policy Platforms• Launch of the financialisation project with the UN-DESA and the CSID

– Participation by leading national and international experts– Major findings relate to unusually high level of portfolio capital inflows compared to other

middle-income economies and very rapid growth in financial sector with limited employment creation

• Support for International Economics Association meeting on industrial policy in Africa, led by Professor Stiglitz and the World Bank’s Justin Lin, with local and international experts

• Platform held with Social Dialogue branch on the role of government policy in promoting SMMEs with speakers from NPC, SAntrepreneur and SALGA

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Economic Policy Development (3)• Other outputs• Support provided for engagements at NEDLAC on multi-pronged

youth employment strategy– Key initiatives proposed include public employment schemes

with youth brigades; expanded apprenticeships and internships; targets for new entrants in Jobs Drivers; explore subsidies to employment creators and employees

• Briefing notes on the financialisation of the South African economy• Draft discussion paper on inequality developed – to be finalised by

end September 2012• Inputs for major speech on women and the New Growth Path• Submission on proposed amendments to the BBBEE Code to

Minister

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Economic Planning and Co-ordination (1)

• Spatial planning• Holistic process with DRDLR and CSIR to identify

functional regions as basis for improving spatial integration

• Identify key value chains and other opportunities for linking historically marginalised regions into core economy

• Basis for planning for infrastructure, SEZs and provincial growth and development strategies

• Work on 23 districts with DRDLR and PICC – central to

improving opportunities in former so-called “homelands”6

Economic Planning and Co-ordination (2)• Growing the Green Economy• 287 084 solar water heaters installed in collaboration with DOE and

Eskom; of these, 50 000 low pressure SWH that are affordable for low-income households; working toward local production of panels

• Support for Red Cap, Innowind and Phytoenergy – projects to provide clean energy that, if successful, can support growth and employment in the Eastern Cape

• Participation in inter-departmental processes to ensure coherent implementation of green economy strategies in ways that support employment creation and SMMEs, and to improve modelling of the transition to a lower-emissions economy

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Economic Planning and Co-ordination (3)

• Promote investment for economic development• Support for catalytic projects including Rise Up co-op bakeries• SEFA launched in April 2012

– Doubling of resources available for SMMEs– Both direct lending and through intermediaries– Targeted support for micro and survivalist enterprise as well as small

and medium enterprise• Business hub and training with SA Institute of Chartered Accountants to

improve employment opportunities for young accountants while supporting SMMEs

• Continued work with IDC to support employment-creating growth aligned with New Growth Path and IPAP

• Quarterly meeting chaired by the Acting DG held with the entities on 5 June 2012, including heads of ITAC and Competition Tribunal

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Economic Planning and Coordination (4)• Special financing by the IDC• A total of R165.8million was disbursed during this quarter to 8

companies:– 426 jobs saved and/or created at a cost of R389 202 per job– IDC Distress fund: R4,981 billion to 128 companies– Transfers to IDC for SEFA: R42,245 million– Transfers to IDC: R36 million

• Leveraging state expenditure and procurement• Engagement with the Department of Energy on the appliance

standard and labelling project• Procurement - National Treasury signed 5 instruction notes on the

designated sectors

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Economic Planning and Coordination (5)• Implementation of the National Infrastructure Plan• Seven SIPs launched at Intergovernmental Forums• Aim of launches:

– Bring together stakeholders within the state to ensure co-ordination around the SIPs

– Identify lead agency that will co-ordinate SIP and drive implementation

• These engagements were attended by the President, Deputy President, Ministers, Deputy Ministers, Premiers, Executive Mayors, representatives of SALGA, heads of SOEs and other stakeholders

• Two engagements held with social partners• Presentation of Plan to stakeholders and experts at EDD Development

Conference• Monitoring system established to provide quarterly reports on progress

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Economic Planning andCoordination (6)• African regional economic development/strategic trade

policy• EDD participated in consultative fora on 15th March 2012 and 13th

June 2012 as preparation for Rio+20 Summit. Discussions centred on South Africa’s inputs to the Summit

• Participated in preparation for the 5th Forum on China - Africa Cooperation (FOCAC). Process clarified South Africa’s position in preparation for the Forum

• EDD collaborated with National Treasury, the dti and DIRCO in compiling a BRICS country strategy for South Africa. Focused on issues that inform elements of South Africa’s economic strategy towards BRIC countries

• EDD collaborated with the dti, DIRCO, DBSA, DPE in 6 meetings regarding the North South Corridor infrastructure work. Meetings took place in February, May and June 2012

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Economic Developmentand Social Dialogue (1)• Social dialogue and capacity building engagements• Task team meeting on 29 June with social partners to update the meeting on the

development of the National Skills Accord

• Meeting with Proudly South Africa at Nedlac House on 31 May to outline and ratify the implementation plan of the local procurement accord as it is relates to PSA and its implementing bodies

• Information sessions with regional businesses in Mpumalanga, Western Cape 19 - 20May and Kwa-Zulu Natal 24 May on local procurement and the accord

• Presentation to SANCO and the Women’s Coalition, on the Local Procurement Accord and their constituencies’ role in marketing and implementing the Accord

• Presentation to SA Council of Churches and Diakonia, on the Local Procurement Accord and the churches’ role in implementing commitments

• Policy platform on infrastructure addressed by business, labour and government leaders

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Economic Developmentand Social Dialogue (2)• Organised labour and other social partners capacity building

• Capacity building programme on the New Growth Path and the Social Accord: 3 workshops

• Interventions to create or save jobs• 30 Day Payment Campaign rolled out across the country with provincial

and national departments. Objective is to sensitise departments to the effects of late payments to service providers & SMMEs

• Agreement between shoe manufacturing co-op, Ujima Bakwena, and suppliers, Mossop Western Leathers & United Farm Suppliers will assist the co-op by supplying raw materials at a discounted price and assisting with machine parts

• Partnered with Proudly SA to present mini-exhibitions and “Buy local” marketing events across the country

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Economic Developmentand Social Dialogue (3)• Knowledge networks• Two 2 knowledge network sessions

– The Role of Government Policy in Promoting Small Businesses in South Africa; and

– Planning in South Africa as a Tool for Public Investment Decisions

• Economic Development Agreements• Steering committee meeting with the Western Cape Furniture Initiative

on 27 March to discuss development of an agreement with the Furniture Industry

• Signed agreement with Bantex, committing the company to discount its prices of locally made folders

• Signed agreement with Proudly SA to implement the buy local programme in terms of the Local Procurement Accord

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Economic Developmentand Social Dialogue (4)

• Presentation to Portfolio Committee on objectives, content and implementation of Local Procurement Accord

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ENE targets for 2012/13 (1 of 2)

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Indicator 1st Q target

1st Q actual

Annual target

Number of Regulatory Impact Assessment on key NGP outcomes per year 1 1 1

Number of sector strategies produced, reviewed or monitored per year - - 2

Number of interventions promoting economic development through leveraging off state expenditure and procurement per year

2 2 12

Total value of special financing facilitated for small businesses, targeted growth sectors and companies in distress

R1.25bn R165.8m R5bn

Number of spatial plans produced or reviewed 2 4 15

ENE targets for 2012/13(2 of 2)

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Indicator 1st Q target

1st Q actual

Annual target

Number of reports on the implementation of the green economy strategy - - 2

Number of interventions to save or create new jobs per year 1 14 4

Number of social dialogue and capacity building engagements per year 2 5 10

Number of economic development agreements (sectoral, workplace and national) facilitated with social partners per year

1 3 10

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Employment Equity Statistics(30/06/2012)

DesignationWhite Black Disability Sub-Total Total

M F M F M F M F

SMS 6 2 16 10 0 0 22 12 34

MMS 1 2 9 17 0 0 10 19 29

Level 9-100 0 6 8 0 0 6 8 14

Level 1-8 0 0 11 25 0 0 11 25 36

Sub-Total 7 4 42 60 0 49 64 113

TOTAL 11 102 0 113

%

10% 90% 0 43% 57%

Summary Statistics (30/06/2012)

All Staff Male Female Total %

TOTAL 49 64 113 100%

% 43% 57%

PERSONS WITH DISABILITY = 0% - the person with disabilities resigned in May. The post was advertised and an appointment was made. The incumbent commenced duties on 1 July 2012.

SMS Members Male Female Total

%of total staff

TOTAL 22 12 34 100%

% of SMS Members

65% 35%

Recruitment• Progress on recruitment plan in 1st quarter

• Total staff complement: 113

• 10 appointments made during this period

• 2 terminations (1x resignation,1x contract expiry)

• 11 x interns were appointed and placed as follows:

– 1 x Economic Policy Development (Female – B Com(Hons) in development theory & policy)

– 2 x Social Dialogue (Males –Diploma :Economic Management)

– 2 x Economic Planning and Coordination (Male and Female -B Com: Economics)

– 2 x Internal Audit (Males –National Diploma: Internal Audit)

– 1 x Office of the DG (Female –BA Public Administration)

– 1 x Human Resource Management (Male –Diploma: Human Resource)

– 1 x Legal Services (Female –LLB)

– 1 x Finance (Female – National Diploma: Administrative Management Finance)

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Financial Performance

• 2011/12 Audit and AFS• Successfully completed external Audit process and AFS for 2011/12

• Overview of Expenditure• The information based on June 2012 IYM reports or section 40(4)of

PFMA reports– Signed by the Accounting Officer and sent to National Treasury

– Total budget of R 672.7 million for 2012/13 financial year

– Expenditure for the 1st quarter of 2012/13 is R 164.3 million or 24% of the main appropriation of R 672.7 million

– Expenditure excluding transfers for the 1st quarter of 2012/13 is R 23.1 million or 15% of the main appropriation of R 149.3 million

– Commitments as at 30 June 2012 amounts to R 2.8 million

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Financial Performance

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Total Economic Development Department      

YTD EXPENDITURE

  Act Act 2012/13

Per Programme QUARTER 1 % Spent Main Appropriation

R'000 % R'000

ADMINISTRATION 11,173 19% 60,065

ECONOMIC POLICY DEVELOPMENT 3,915 13% 29,056

ECONOMIC PLANNING AND CO-ORDINATION 145,841 26% 565,462

ECONOMIC DEVELOPMENT AND DIALOGUE 3,400 19% 18,149

TOTAL INCL. TRANSFERS 164,329 24% 672,732

TOTAL EXCL. TRANSFERS 23,054 15% 149,275

       

Per Item Classification R'000 % R'000

COMPESATION OF EMPLOYEES 13,628 15% 91,616

GOODS AND SERVICES 8,832 18% 50,153

DEPARTMENTAL AGENCIES AND ACCOUNTS 141,275 27% 523,457

PAYMENT OF CAPITAL ASSETS 593 8% 7,506

TOTAL INCL. TRANSFERS 164,329 24% 672,732

TOTAL EXCL. TRANSFERS 23,054 15% 149,275

Financial Performance

Overview of Revenue• Revenue collection for the 1st quarter of 2012/13 is R 54.9 million or

9% of budgeted revenue of R 631.5 million• Main revenue generator is fines from penalties from Competition

Commission and dividends from IDC

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Departmental Receipts

Act Act 2012/13Departmental Receipts QUARTER 1 % of Main App Main Appropriation

R'000 % R'000Sale of goods and Services 4                         0% -                           Fines, penalties and forfeits 53,891                10% 530,369Interest, dividends and rent on land 1                         0% 101,124Financial transactions in assets and liabilities 969                     0% -                           TOTAL 54,864 9% 631,493

ACTUAL RECEIPTS 2012/13

Concluding Remarks

• Governance & Administration• Conclude 2011/12 Audit and Annual Report processes• First draft submissions for 2012/13 MTEF budget and planning

processes• Focused implementation of recruitment plan• Identify measures to ensure improved departmental expenditure

• Policy and implementation • Support for National Infrastructure Plan• Spatial strategy and catalytic projects• Second round of local procurement designations• Policy development: finalise inequality discussion paper; drafts

completed on financialisation, gender, youth, SMMEs• Finalise proposed amendments to BBBEE Codes and Competition Act

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Siyabonga

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