Investment Promotion & Inter – Departmental Clearing House · Investment Promotion & Inter –...
Transcript of Investment Promotion & Inter – Departmental Clearing House · Investment Promotion & Inter –...
Investment Promotion & Inter – Departmental Clearing House
Presentation to the Parliamentary Portfolio Committee
on Trade and Industry
Cape Town
22 July 2015
1. What is Investment Promotion • It involves several coordinated activities designed to attract, grow and retain new
foreign and mobile domestic investment. Broadly speaking, it also deals both with improving the investment climate (product development) and marketing the location’s potential to private investors.
• Investment promotion is a Government activity and most IPAs, national or subnational, are financed by the public sector.
• The establishment of a national IPA is a choice a national government can make when deciding on an investment promotion strategy.
2. Why is Investment Promotion Important? • Intense and increasing competition for foreign direct investment (FDI) • To compete for the FDI, governments need a national agency with specialized
promotional skills • Information for investors in decision making, as this is generally lacking and can
be appropriately provided and packaged by an agency
The Rationale for Investment Promotion Agencies
Source: World Bank
What is an Investment Promotion Agency (IPA)
DEFINITION The International Trade Centre (ITC) defines an IPA as an institution whose purpose is to attract investment to a country, region or city.
MAIN SERVICES
Source: ITC
4
Investment Promotion and Facilitation
Investment Promotion and Facilitation facilitates the
increase in the quality and quantity of foreign and domestic
direct investment by providing an investment recruitment,
problem-solving and information service in order to retain &
expand Investment in South Africa and into Africa. The sub-
programme is promoting South Africa as an investment
destination, with a target of R140 billion over the next three
years. The target for the investment pipeline for 2015/16 is
R 45 bn.
National Investment Promotion and Facilitation Strategy Phase 2
The objective of the project is as follows: • To develop an investment strategy and methodology for investment
promotion, facilitation, aftercare and policy advocacy. • To align IPICHs Investment Strategy with all Government programmes • To develop investment related products and service offerings • To design and develop a customised investor service and the
implementation of a one-stop-shop service for investors. • To develop sector specific promotional strategies by focusing activities and
initiatives to targeted markets. • To improve the investment climate. • To develop a 3-5 year operational plan to achieve the strategic objectives of
IPICH. • To develop a strategy for outward investment into Africa. (Phase3) • To develop a strategy for the African Gateway concept. (Phase 3)
Key Targets for Investment Promotion and Facilitation
• To make South Africa a Top Ten investment destination • To make IPICH a top five world class investment promotion agency • Seek to attract an investment pipeline of R140 billion within the next 3
years • Targeted and co-ordinated investment drive amongst all stakeholders.
Diversify and increase investment flows from emerging markets. Retain and expand investment flows from developed markets.
• Reduce the cost of doing business and administrative barriers. Improve SA investment climate and investment attraction.
• Common messaging and brand identity. Marketing and Facilitation support for the SEZ program & to host the Annual Africa Dialogue Conference
• Capacitate the unit to provide a dedicated investment promotion, facilitation and aftercare through a one stop shop service.
Investment Promotion and Facilitation Opportunities
• Investment and Export Opportunities are identified by the DTI’s Industrial Policy Framework and the resultant Industrial Policy Action Plan, the NGP and the NDP
• The above inter-alia has identified those sectors and industries which South Africa has a competitive or potential advantage in terms of economic sustainability.
• It follows that the identified sectors are the opportune areas for investment and that the products and services resulting there from have a propensity to be globally competitive.
• Manufacturing: Automotive, Agro-processing, Capital equipment & transport • Advance Manufacturing: Pharmaceuticals, bio-technology, aerospace • Mining and mineral beneficiation • Services: BPO, Oil and Gas, Infrastructure • Green economy: Renewable energy, waste management, nuclear components
Priority Sectors For FDI
• Advanced Manufacturing • Metals • Mining & Beneficiation • Biofuels • Agribusiness • Automotives & Components • Capital Equipment & Rail • Precision engineering • Aerospace • Film production • Tourism • Oil & Gas • Boat Building
• ICT and electronics • BPO (Business Processing &
Outsourcing) and Call Centres • Chemicals • Plastics & Composites • Bio-pharmaceuticals • Leather and footwear • Forestry products & Furniture • Energy and Renewables • Infrastructure Development • Waste Management • Energy Efficiency & Cleaner
Technology
Analysis of Investment Trends
CONFIDENTIAL
Analysis of Investment Trends
CONFIDENTIAL 12
Investment Promotion and Inter-Departmental Clearing House
Financial Year: 2014/2015
R43.8 billion
Manufacturing Unilever R4bn over 4 years
Samsung (R228m) Advanced Manufacturing
Manufacturing Gestamp (R220m)
Investment pipeline for potential investors
Services CCI Call centres (R200m)
Services Four Seasons Hotel (R560m)
Services Vodafone (R220m)
Services Hunting Plc (R300m)
Manufacturing Toyota (R550m)
Source: www.doingbusiness.org
Source: www.doingbusiness.org
Source: www.doingbusiness.org
South Africa Tops the BRICS for Ease of Doing Business 2015
Source: The World Bank
19
Investment Promotion and Facilitation Strategy 20
Get the Product Right
• Use feedback from Aftercare and ranking studies to identify policy research agenda
• Research supports policy advocacy agenda
• Policy advocacy improves investment climate
Get the Message Out
• Use Value Proposition (not only cost, but quality factors that demonstrate South Africa's advantage)
• Marketing focussed on priority industry sectors
• Key Conferences/Events • Peer to Peer marketing
Proactive Prospecting
• Focus on target firms in priority industries
• Establish relationships
• Use sector experts and private sector champions to present compelling business cases to investors
Forge Investment Partnerships Focus on identifying priority industry experts
to build business case
How do we do it?
Aftercare Program
• Maintain leadership role in ensuring execution
• Provide pathfinding services to link foreign investors and domestic suppliers
• Identify policies that impede investment
Attract and Expand Investments in SA
Strategy Development and Implementation
Global Trends
Country offer
Potential 2. Map out your country’s offer
1. Understand Global Trends
3. Identify Internationally mobile projects
4. Develop selection criteria
5. Benchmark your offer
6. Make the final decision
Opportunity areas
7. Define goals and targets
8. Develop promotion/marketing strategies
9. Contact target firms
10. Evaluate the results
Investment leads
Origination Scoping Pre-feasibility
Bankable Feasibility
Pre Implement
ation Implement
ation Post
Investment
Objective/
Definition______
Project ideas and
applications are
classified as
Projects
• An initial desk-
top, techno-
economic study
of a specific
project idea or
application to
determine
interest to
pursue the
project further
• A limited study
to determine
the economic
and
commercial
viability of the
project under
different
scenarios/optio
ns.
• A detailed
study to
provide levels
of confidence in
the capital and
operating
expenditure
within
approximately
+/- 10% and to
assess the
viability to
move to the
pre-
implementation
• All activities
are conducted
that is required
for financial
closure
• Start with the
design and
basic
engineering
activities
• All activities
are conducted
that is required
for technical
completion
The project
development is
complete and the
Company now
awaits a return on
investment
Activities______
_
• Leads on E-
Room
• Initial
screening
• Initial due
diligence
• Submit
recommendatio
n
• Conduct a
scoping study
• •Write a
scoping report
• •Submit report
&
recommendatio
n (inclusive of
funding for
PFS)
• Set-up project
management
structures
(steering
committee)
• Conduct PFS
• Due diligence
on PFS
• •Write and
submit PFS
submission
report
(inclusive of
funding for
BFS)
• Conduct BFS
via project
management
structures
• Due diligence
on BFS
• •Write and
submit BFS
submission
report
(inclusive of
funding for
pre-
implementation
and/or actual
investment)
• Set-up final
project
structures with
required
policies and
procedures
• Fund raising &
finalisation of
funding
agreements
• Address all
conditions
precedent of
shareholders
and debt
agreements
• Start with basic
engineering
• Project
achieves
financial
closure
• Continue with
detailed
engineering
• Procurement of
capital items
• Construction
• Commissioning
/ Commercial
Operation
• Technical
completion
• Monitoring of
investment
Outcomes _____
• Request to
accept
application/idea
on IDC project
system
• Desk-top,
techno-
economic study
• •IDC Project
Scoping
Submission
• Pre-feasibility
study
• Project Pre-
feasibility
Submission
• Bankable
feasibility study
• Project
bankable
feasibility
submission
• Financial
closure =
project fully
funded +
unconditional
funding
agreements
(debt and
equity)
• Pre-
implementation
memo
• Technical
completion =
completion test
is met and
completion
guarantee
released
• Implementation
Memo
• Repayment of
IDC funding
• IDC exit
INVESTMENT DECISION
MAIN STEPS FOR THE PROCESS OF INVESTMENT DECISION MAKING
• Marketing Strategy • Management
strategy • Governance Strategy
Production Plan
Sales and Marketing Plan
Capital Plan
Human Resource Plan
Location Plan
Overall Strategy Plan
Defining the scope for investment
Feasibility Study
Formation of Business Plan
Judgement of Feasibility of Business Plan
Final Decision on Investment
Move to Executive Phase
Domestic Research
Reconfirm the items to be researched
Identification of Optimal Information Source
Field Research
Investment Environment Research
Ground-level Actual Hearing and Research
Formation of Entry -Strategy
Investment Marketing
& Promotion
5 Sector Units
*Advance Manufacturing
*Manufacturing
*Green Economy
*Resources
*Services
Investment Facilitation
(Visas & Work permits)
Investment Information
IPICH IPICH is the National Investment Promotion Agency within government
MANDATE To facilitate the increase in the quality and quantum of Foreign and Domestic Direct Investment by providing an efficient and effective investment recruitment, problem solving and information service in order to retain and expand investment in South Africa and into Africa.
Investment Unit of DTI – ideal platform to
be developed and serve as the inter-
governmental clearing house.
According to research by investment specialists, as much as 70% of new investments are re-investment/expansion of existing companies
– which means investor aftercare is paramount.
Investor Challenges alluded to in SONA 2015 Municipalities Licensing Zoning Permits Environmental Impact Assessments Electricity Water Home Affairs ITAC SARS CIPC Finance Incentives
Investors require a quick efficient service for registration, permits and licensing.
27
MANY LOCAL IPA & INSTITUTIONS
India ebiz portal India has a very complex business environment and is ranked 142 out of
180 countries in the World bank’s ease of doing business.
In order to improve the investment climate the Modi Government announced on the 2O February 2015, an ebiz portal , integrating 11 central government services, to facilitate faster clearances for businesses
Launching the portal, finance Minister Arun Jaitley, said that discretionary power would end with the portal.” India is committed to steps to foster business environment.
Ebiz is important as it will bring transparency and will improve efficiency, intergrate services and promote electronic delivery of services
The single window portal by the department of Industrial Policy and Promotion (DIPP) will provide all business and investment related clearance 24/7 with an intergrated payment gateway.
India has developed an IT platform as the single window clearance.
What is Proposed A central nodal operational structure needs to be established at national level to act as an implementing body and to serve as the convener for the Inter-Departmental Clearing House, to effectively service investors, local and foreign, coordinate the One Stop Shop’s in the SEZ’s and the work of the Provincial Investment Agencies and local authorities. The Inter-Departmental Clearing House would function through an Investment Council which is championed by the DG of the dti including the relevant DG’s of the economic cluster and operationalized by the DDG: Investment Promotion. The DDG: Investment Promotion will set up the Investment Council and serve as the secretariat. The policy matters regarding investment and business will be channelled via the Minister of Trade and Industry who is the chair of Outcome 4.
Challenges that cannot be resolved will be escalated. Policy and reforms will be tabled in Outcome 4 and upon approval will be implemented council. The Ministerial Committee will be escalated authority to unblock and fast track issues of the clearing house
INTER-DEPARTMENTAL CLEARING HOUSE
• Inter-Departmental Clearing House is an investment facilitation or a “single-window” mechanism where relevant government agencies are brought to single cohesive structure that coordinates and streamlines processes to provide prompt, efficient and transparent services to investors;
• It shortens and simplifies administrative procedures and guidelines for issuance of business approvals, permits and licenses, thereby removing bottlenecks faced by investors in establishing and running businesses.
• Inter- Departmental Clearing House for Investors will provide: Facilitation of the entire investment value chain; Will provide specialist advisory services to investors; Co-ordination between the various line ministries; Communication of these services to potential investors; and Be the single-window clearance for registration, licensing and
permits.
dti
• HO • TISA • IDAD • ITED • IDD • CIPC • NEF • NCR • NRCS • ECIC • BPD • CCRD • FOREIGN
OFFICES • SABS
dha
• HO • FOREIGN
OFFICES • VFS • CIVICS
DIRCO
• HEAD OF MISSIONS
• FOREIGN OFFICES
• SUPPORT OF VISAS
COGTA
• HO • MUNICIPAL
& LOCAL GOVERNMENT
• INFRA-STRUCTURE DELIVERY
TREASURY
• HO • DBSA • PIC • SARS • CUSTOMS • SARB
EDD
• HO • ITAC • IDC • COMPETITION
COMMISSION • PICC
DOC
• HO • BROADBAND
INFRACO • SENTECH • ICASA • TELKOM
DMR
• HO • REGIONAL
OFFICES • STATE
DIAMOND TRADER
• STATE MINING COMPANY
• PROSPECTING & MINING
DEA
• HO • REGIONAL
OFFICES • EIA
WATER & SANITATION
• HO • REGIONAL
OFFICES • TCTA • WATER
BOARDS • LICENSES
DAFF
• HO • REGIONAL
OFFICES • FOREIGN
OFFICERS • LAND
BANK • PERMITS
DRDLR
• HO • PROVINCIAL
OFFICES • TRANSFER &
ZONING OF LAND
DOH
• HO • MCC/SAHPRA
DOL
• HO • EMPLOYMENT
SERVICES • UIF
DST
• HO • TIA • CSIR • NRF • SANERI • SKA
DOE
• HO • REIPP • NERSA • NECSA • LICENSING
DPE
• ESKOM • TRANSNET
DOT
• HO • LICENSING • INFRA-
STRUCTURE • PRASA
NATIONAL GOVERNMENT DEPARTMENTS COORDINATION
SA has 18 government departments involved in policy regulatory, registration permits and licensing
What will the Inter-Departmental Clearing House do?
• Setup an Inter-Governmental Structure that will serve as the Inter-Departmental Clearing House.
• It will firstly it will coordinate the relevant government departments involved in regulatory, registration, permits and licensing.
• Reduce the silo mentality, turnaround times , red tape and improve service delivery
• Improve the Investment Climate and ease of doing business by identifying bottlenecks, administrative barriers and have a plan of action to improve service delivery.
How will it be setup? • The Inter-Governmental Structure will be setup and championed by the DG of the
dti for the Inter-Departmental Clearing House ( IDCH). The will be operationalised by the DDG of Investment within the dti, that will also be the secretariat. Each department would identify a DDG that will serve on the secretariat. The role of the DDG will be to coordinate the Government units within their respective departments and serve as “trouble-shooters” and facilitate and fast track matters of the clearing house.
• The DDGs would meet monthly but would fast track matters on a daily basis as required.
• The DG Forum would serve as the investment council and would include the CEOs of SOEs and SEZs. Investment planning , roll out, monitoring and evaluation and investment climate will be discussed and these will be operationalised by the clearing house. The DG Forum will meet on a bi – monthly basis.
• The Ministerial Committee will serve as the authority for escalated clearing house issues .
• Issues of policy and regulatory will be discussed at Outcome 4, Chaired by the Minister of Trade and Industry.
• Clearing House matters will be on the agenda and monitoring and evaluation reports will be tabled in Outcome 4
• The Government Technical Assistance Centre (GTAC) and MPAT will support the capacity building of officials and process improvement to improve service delivery
• One stop shop pilot done with GGDA, at Gauteng Investment Centre (GIC),
• VFS Centre, introduced at GIC, on 1 June by Minister Gigaba, for corporate and business permits.
• Long term, Expedited Visas beyond BRICS Countries in pipeline to be introduced.
• Facilitated energy connection for TEGA Industries with Ekurhuleni Municipality allowing them to expand a second plant.
• Municipal facilitation and energy constraints been addressed at Nestle plants in Harrismith, Babelegei, Estcourt and East London.
• Community and Municipal facilitation for Unilever at Lords View
• Facilitation with DOL and community for Rayal Trading at Bronkorspruit.
• Facilitation for Samsung with NRCS for Letters of Authority (LOA) and SARS on customs
INTER-DEPARTMENTAL CLEARING HOUSE PROGRESS
Inter-Governmental Clearing House
Structure
Presidency
Outcome 4
Minister dti -
Chair
DG - Forum
DDG – Clearing
House
Policy & Regulatory Permits & Licensing Infrastructure Finance & Incentives
Investment Policy
Investment Climate
Escalated Clearing House
Matters MinMec
Technical
MinMec
SOEs
SEZs and
PIPAs
dpme, dti, Treasury,
dha, DOL, DPME,
Water & Sanitation,
DEA, COGTA, Rural
Development & Land
Reform, DOE, DAFF,
dst, DOH, dpe, EDD,
dot, dtps
dti, dha, DMR,
COGTA, dea, Rural
Development & Land
Reform, Water &
Sanitation, DOL,
dirco, DAFF, DOH,
EDD, DOE, dpe, dot,
dtps
EDD, dti, dpe,
COGTA, Water &
Sanitation, dot, dtps
dti, Treasury, DOE,
DAFF, dst, EDD
Economic Sector
Employment &
Infrastructure
Development (ESEID)
Technical Cluster
Secretariat &
Operational Cluster
Investment
Council
Energy War
Room
Inter-Departmental Clearing House
Secretariat
IDCH – Contact Centre
Investor Service & Aftercare
Sta
kehold
er
Managem
ent
Due D
ilig
ence,
Incenti
ve
Facilit
ati
on,
Fundin
g &
Fin
ance
Inte
r-
Govern
menta
l Facilit
ati
on
Investor Information
Imm
igra
tion,
Labour
& T
ale
nt
Lic
ensi
ng,
Perm
its
& R
egis
trati
ons
Marketing, Communication,
Operations , Legal & Financial Management
IT and CRM
Regulatory &
Compliance
Monitoring & Evaluation
Envir
onm
enta
l Im
pact
Ass
ess
ment
37
INTER-DEPARTMENTAL COORDINATION
dti TISA IDAD IDD CCRD BPD ITED
dha Immigration Permits Corporate Account Civics
DOL Employer Services
Cross Border IDD CCRD
Each DDG is to internally coordinate in their respective departments, be the focal point and the “trouble-shooter” for the Inter-Governmental Clearing House.
39
IPICH
Investment
Promotion One Stop Shop
Investment
Climate &
Policy
Advocacy
•Incentives
Sector and Skills
Development
Promotion
•Image Building
•Branding
•Lead Generation
Investor Servicing
•Development Package
preparation & delivery
•Aftercare
ONE STOP SHOP
Policy
Input
Investment
Climate
Systematic
Feedback
Aftercare
Investment
facilitation
Detailed
information
Investor
interest
Image
building
& branding
Key Features of a OSS
... Planning & coordination
Regulatory documentation
Utilities
Shared services
Information dissemination
Licensing & permits
Information search
One Stop Shop
Establish an Inter-Departmental Clearing House
Upgrade current Investment Unit into division IP & IDCH X X X
Operationalise IDCH and Secretariat X XOperationalise DG Forum XMonthly meetings of IDCH X X XBi-monthly meetings of DG Forum X X XEscalated Input into ESEID & Outcome 4 X X XAppoint specialist staff X X XOffice Space for IGCH X XMap out process and SLAs with Government departments X X Institutionalise IDCH X X XSOPs & training of staff X X XDevelop call centre hotline X XMarket services of IDCH X X XMonitoring & Evaluation X X X
Investment Climate and Policy AdvocacyBenchmarking of service levels &surveys X X XAutomation of some government services into single window X XProcurement of IT Platform X XRole out of IT Platform X XDevelop One Stop Shop Model and Strategy X XRole out and implement One Stop Shop X X XMarketing of One Stop Shop Services X X XSupport the marketing of Special Economic Zones (SEZ's) X X XMonitoring & Evaluation X X X
YEAR 1 YEAR 2 YEAR 3
PLAN OF ACTION
Investment Promotion and Facilitation Service Offerings
Investment Recruitment • Promotion of investment opportunities • Marketing of investment projects • Guidance with plant/site locations – Industrial Development Zones &
Special Economic Zones • Packaged Investment projects • Input into policy formulation Investment Information • Information on the local economy and various investment opportunities
within SA sectors and industries. • Information on incentive packages • Information on regulatory and legal environment • Publications viz, investment opportunities, SA Fact Sheet and Investors
Handbook • Information of South Africa’s trade and investment policy. • Information on government policy in strategic sectors
Investment Promotion Facilitations Service Offerings
Facilitation • Facilitation of investment missions, including travel itineraries • Introduction of investors to key stakeholders in private and public
sectors • Introduction of investors to potential joint venture partners and black
economic partnerships • Facilitation of finance and incentives • Assistance with applications, company registration, EIA, etc • Recommendations: Immigration Act – Business & Corporate Permit
applications • Fast Tracking regulatory, zoning, licensing & municipal connections for
investors • Logistical support for relocation Aftercare • Aftercare Forums , Workshops & investor surveys • Aftercare Meetings & Site visits to retain & expand investments
44
South Africa’s Current Global Footprint
Europe: Brussels,
Geneva, London,
Milan, Moscow,
Stockholm, The
Hague, Berlin,
Madrid, Munich,
Paris, Bern & Vienna
Asia: Beijing, Hong
Kong, Seoul,
Shanghai, Tokyo,
Bangkok, Jakarta,
Kuala Lumpur,
Mumbai, New Delhi &
Singapore
North America:
Chicago, New York,
Washington &
Toronto
Australia:
Canberra
INVESTING IN SOUTH AFRICA Coega IDZ East London IDZ Richards Bay IDZ OR Tambo International Airport (licensed) Dube trade Port IDZ Saldanha Bay IDZ
Contact:
Letta Kaseke
Assistant Director: Investment Information
Tel: +27 12 394 5935
Email: [email protected]
REASONS TO INVEST IN SOUTH AFRICA – WORLD COMPETITIVENESS RANKINGS 2015
# 1 - Strength of auditing and reporting standards
#1 – Regulation of securities exchange
#2 – Protection of minority shareholders’ interests
#3 – Efficacy of corporate boards
#3 – Financing through local equity market
#6 – Availability of financial services
#6 – Soundness of Banks
#10 - Strength of investor protection
#11 – Quality of air transport infrastructure
#56 Overall ranking out of 144 countries and #1 in Ease of doing business among BRICS countries in 2015
Top Investors
Trade and Investment South Africa (TISA) is the National investment promotion agency of South Africa offering a one-stop-shop approach to investing in South
Africa
2014 UNCTAD winner for excellence in promoting Foreign Direct investment (FDI) projects to advance sustainable development
South Africa was ranked third in the world for investment in clean energy, according to Climatscope 2014 report released by Bloomberg New Energy finance
SA was voted overall winner for Africa by the Financial Times for the best destination for 2013 and 2014
In May 2013, AIM award for facilitating the second-best investment project (pharmaceutical sector)
2014 – Winner at AIM for sustainable development
46
Thank You