DTI: MTEF Presentation
Appendices 2 to 16

Appendix 2
Vote 33: Department of Trade and Industry

New Programme Structure

Key Elements of Budget Shift
- Constant Real budget - implemented ABC
- Improved & increased technology utilization -more transactions by smaller staff complement
- Improved coordination of industrial sector policies, strategies and investment instruments
- Increased direct and indirect support to SMMEs
- Improved coordination of trade policy and trade facilitation instruments
- Removing of trade barriers
- Empowering of previous disadvantaged groups
- Increase in real allocation to technology enhancement and innovation
- Shift towards re-capitaIisation
- Creation of economic infrastructure

Appendix 3
Influence of the State President's Speech on the Department's strategies
AII Programmes
- Increase public sector capital expenditure
- Improvement in capital expenditure by public authorities
- Changes in DTI's expenditure patterns

Programme 1
- To replace entrenched corruption (Internal Audit component), rooting out corruption and theft
- Improvement of management skills in social sector and ensuring integrated, interdepartmental approach to service delivery (HR-component being reformed)

Programme 2
- Support for a sustainable economy by extending equitable benefits to all our people
- To achieve socio-economic transformation and macro-economic stability
- Address remaining impediments to investment and job creation
- Increase level of investment and savings ratio
- Promotion of public-private partnerships restructuring of State Assets - include the SDIs, the IDZs, cross-border initiatives, industrial participation programmes... as well as our overall export drive
- Priority to liquid fuels and petrochemical industry
-Development of small, medium and micro-enterprises remain a top priority of the DTI
- DTI will continue to give priority to the issue of job creation within its responsibility sphere

Programme 3
- An enabling environment to enhance our export drive

Programme 4
- National Lottery - implementation of policies and plans designed to direct revenues to the needy
- Fight against financial and economic crimes and, corruption and theft in the public sector through the effective operation of company, the improvement of these laws and through Enforcement of compliance through the operations of the National Inspectorate
- Increasing the level of investment and facilitating investment by the private sector through the effective and efficient operation of companies Office and the Patents and Trademarks Office
- Striving for equitable benefits to all our people through the development and implementation of good consumer protection laws, through the collection and distribution of good cause revenues from the national lottery, and through effective services to emerging business from the companies Office and the Patents and Trademarks Office

Appendix 4
Changes in Budget from MTEF allocation to MTEF request
2000 / 01 – 2002 / 03

Appendix 5
Programme 1: Administration
Policy Objective: To conduct the overall management of the Department

PoIicy Developments
- Implementation of CORE
- Building capacity for new PFMA
- Involvement of parastatals
- Restructuring of HR-component

Core Business and key focus areas
- Corporate / support services to DTI
- Management - strategic direction to DTI

Outputs / deliverables
- Renewal projects
- CIean Audit every year
- Achieve Business Objectives within Budget
- Raise Graduate & Post Graduate percentage of personneI (MTPF)
- Shifts on gender and demographic representivity
- Y2K Compliance
- Increased use of LAN for communication and business processes
- Policy Analysis

Consequences of a 4% Reduction
- Down-scaling of staff complement with influence on implementation of CORE, PFMA, services delivered to support DTI
- Lagging behind in terms of IT instead of leading eg support for BRAIN, EIectronic Billing system, e-commerce


Appendix 6
Programme 2: Trade, investment & Entrepreneurial Development and Promotion

Programme Overview
Main Functions
- Investment support through manufacturing development and investment promotion
- Sectoral Industrial Promotion
- Promotion of industrial standardisation and Environmental management in industry
- Entrepreneurial Promotion and Development
- Promotion of technology development in industry
- Export Promotion and Trade Facilitation
- Research into industrial development and equity

Appendix 7
Programme 2
Sub-programme: Investment Support (2.1)

Policy Objective:
Promotion of orderly global competitive and sustainable manufacturing activities
To promote investment through empowering pdp, cost showing grants, foreign investment promotion, obtain economic benefits through industrial participation and provincial support

Primary Activities: R’ 000
- SMMDP (2.6) R 89 010
- ESF (2.15) R 100 000
- Competitiveness F (2.18) R 20 000
- Investment Progr.Sup (2.26) R 21 463
- NEF (2.35) R 5 000
- Tax Holiday Sch. (2.37) R 50 000
- PIDP (4th Sched) (2.39) R 417 186
- Remaining activities R 8 774

Influence of President's Speech
Programmes in terms of GEAR to:
- Raise fixed investment in manufacturing
- Restructure domestic manufacturing towards international competitiveness
- Facilitate higher degree of labour absorption
- Encourage small- and medium sized manufacturing

lndustrial Participation programmes:
- Leverage economic benefits and support development - through Government Procurement to promote local content, job creation & small businesses

Government Procurement:
- Apply purchasing power of broad public sector to promote technology and industrial development

Sector Partnership
- Financial assistance to partnerships to support sustainable economic growth and job creation

Competitiveness fund
- Assist manufacturing sector to become globally competitive

Policy developments
- Tax Holiday Scheme - evaluation
- StreamIining SMMDP
- Considering programme for small sector of manufacturing

Key Focus Areas & Core Business
- Promotion of investment in new competitive and sustainable manufacturing activities

Outputs I Deliverables

Steps to ensure Quality
- Programmes are evaluated on continuous basis private sector consultants

Consequences of a 4% Reduction
- Will lead to breach of contractual obligations
- Negative effect on foreign direct investment
- Local investment in manufacturing sector will slow down - decreasing opportunities for the creation of new jobs

Appendix 8
Environmental Support Fund
Importance for the fund
- To foster compliance with new national environmental regulations by
SMMEs, eg NEMA 1998
- Increase SA’s global competitive advantage – environmental considerations featuring in WTO trade forums
- Encourage adoption of environmental friendly technologies and raise level of technology in SA
- Attract environmentally sensitive investments – number of investor enquiring
- Provide incentives for new projects to maintain environmental integrity of locality

Economic Benefits of the Fund
- Better linkages between SMME sector and environmental sensitive multinationals
- Growth in SA’s environmental sector. Globally the sector is worth $450b pa. The potential growth of the sector in Africa is estimated to be around 10% within the next 2 – 3 years
- Improve business viability in SMME sector. Environment / Cleaner production methods are resource efficient, resulting in lower production costs
- Lower risks of environment based countervailing action by SA’s trading partners regarding SA produce

Appendix 9
Programme 2 Sub-programme: Industry Development and Promotion (2.2a)
Function: Sectoral Industrial Promotion
Policy Objective: To plan, arrange and promote industrial development

Primary Activities: R’ 000
- Sectoral Partnership Fnd (2.14) R 11750
- Industry Strategies (2.8) R 24 158
- Work Place Challenge (2.20) R 12000
- Taxi Scrapping All (2.21) R790 000
- Industrial Investment Tfr (2.32) R 10000
- Remaining activities R 20 895

Influence of State President's Speech
- EmphasIs on policies for key-industries

Policy developments
- Taxi Scrapping Allowance
- Strategies for key-industries

Key focus areas
- Formulation & implementation of strategies to develop different industries -sectoral approach
- Investigation of customs tariffs and measure against unfair competition

Outputs I deliverables
- Emphasis shift from formulation to implementation of strategies for key industries in each sector
- Focussed Sector Strategies
- Substantial progress regarding industrial policy harmonization in SACU and SADC
- Harmonisation of Tariff Policy with Sector Strategies
- Enhance Management / Worker cooperation on Shop Floor to increase competitiveness (Workplace Challenge)
- 42 different strategies are currently (1999/2000) in process

Board on Tariffs and Trade
- 200 tariff applications to be considered, 242 received in 1998/99
- 80 full investigations with reports
- 2 500 rebate permits to be considered, 2 195 applications handled in 1998/99
- 17 anti-dumping investigations and reports, 19 in 1998/99 with 6 petitions in an advanced stage

Steps taken to ensure quality
- Monitoring of compatibility of policy with economic objectives
- Monitoring of the extent to which plans resolve problems, create growth and development
- Monitoring of private sector involvement
- Policy review of Industrial Participation, internal control committees

Consequences of a 4% reduction
- Monitoring of projects and quality of business plans will suffer - lndustr. Participation as well as assistance to local tenderers and local production
- Professional services will be under pressure and will have influence on strategies I policies
- Less funding for taxi-scrapping allowance - 4%

Industrial Participation
Future Projections

Government Procurement
Future Projections

Taxi Scrapping Allowance
Budget Breakdown

Appendix 10
Programme 2 Sub-programme: Industry Development and Promotion (2.2b)
Function: Spatial Development Initiatives
Policy Objective: Support and promote development of economical viable
structures in strategic areas

Influence of State President's Speech
Major investment projects included in
- SDIs (Maputo Development, Lubombo Initiative, Wild Coast, Fish River SDI, Platinum, Phalaborwa, etc)
- IDZs (Coega, East London, Saldanha, Richards Bay, etc)
- Cross border initiatives
- Industrial participation programmes

Key focus areas
- Inward investment
- Export-oriented growth
- Strategically leveraging of private sector investment
- Capacity building

Outputs I deliverables
- 674 investment projects valued at R23.4b
- Potential jobs - 67 101

Spatial Development Initiatives (SDIs)
Progress update – September 1999

Appendix 11
Programme 2 Sub-programme: Industry Development and Promotion (2.2c)
Function: Promotion of Industrial Standards and environmental management
in industry
Policy Objective: To create an enabling environment for SA industry to
conform with global quality, standard and environmental
legislation by removing technical barriers to trade and
enhancing SA products and services

Primary Activities: R’ 000
- Small Business Techn (2.22) R 2 802
- contr SABS (2.43) R 7 086
- SANAS (2.44) R 4 000
- Contr. NMS (CSIR) (2.45) R 29 000
- Remaining activities R 2 648

Influence of State President's Speech
- Local implementation of Agenda 21
- Competitiveness through sound environmental management in industry is supported
- Promotion of standards (SQAM) aimed at economic growth and job creation - increased prosperity for all South Africans by increase exports and industrial competitiveness

Policy Developments
- In-depth review of SQAM system
- Policy for Environmental Support Programme
- Study for Sustainable Development Policy with legal review and recommendations for sectoral policies

Key Focus Areas
- Metrology development
- Adoption of international standards
- Environmental challenges - policies & to maintain feasibility of compliance

Outputs I deliverables 1999/2000
- Commerce research project - national policy
- Excellence model for SMMEs
- Quality Infrastructure Development Initiative & supply side programme for SMMEs - - Policy and implementation guidelines for ESF
- Study report on existing environmental industry and market opportunities profiIes
- Internet Centre
- Chemical metrology facility at NML
- Long-term standards & Conformance strategy
- SADC standards
- Negotiate MRA's
- Sustainable Production study policy
- Environmental Management Programme
- Continuation of setting-up of Chemical facility in NML

Steps taken to ensure quality
- MOU's with SANAS and NML
- Conformance of strategy
- Adherence to international and national standards

Consequences of a 4% Reduction
- lmpact severely on personnel & consequently capacity to advise -currently only persons
- Standards and conformance activities will cease function effectively
- NML & SANAS particular at risk - metrology equipment is outdated -DTI can currently fund only 65% of requirements

Appendix 12
Environmental Support Fund
Importance for the fund
- To foster compliance with new national environmental regulations by
SMMEs, eg NEMA 1998
- Increase SA’s global competitive advantage – environmental considerations featuring in WTO trade forums
- Encourage adoption of environmental friendly technologies and raise level of technology in SA
- Attract environmentally sensitive investments – number of investor enquiring
- Provide incentives for new projects to maintain environmental integrity of locality

Economic Benefits of the Fund
- Better linkages between SMME sector and environmental sensitive multinationals
- Growth in SA’s environmental sector. Globally the sector is worth $450b pa. The potential growth of the sector in Africa is estimated to be around 10% within the next 2 – 3 years
- Improve business viability in SMME sector. Environment / Cleaner production methods are resource efficient, resulting in lower production costs
- Lower risks of environment based countervailing action by SA’s trading partners regarding SA produce

Programme 2 Sub-programme: Technology Enhancement in Industry (2.3)
Function: Promote technology development in industry
Policy Objective: To promote industrial development by enhancing technology
in RSA industry through facilitating technology transfer and
supporting innovation in industry

Primary Activities: R' 000
- THRIP (2.2) R120 000
- P11 (2.3) R 35 269
- SPII (2.10) R 55 000
- FRIDGE (2.11) R 15 000
- Technology Incubators (2.28) R 18 339
- Research Contr CSlR (2.40) R 16 000
- Remaining activities R 4 489

Influence of President's Speech
- Partnerships with Gov - THRIP, SPII and proposed PII - matching grants to develop industry and human resources
- Approval of licence agreements - job creation
- Investment by Private Sector - THRIP & SPII
- SMMEs - THRIP & SPII
- Skills development - THRIP directly for industry

Policy Developments
- P11 to be launched within DTI
- Technology transfer facility piloted in DTI before creating facility outside DTI
- Possible support for venture capital for new technology start-ups
- Drafting of Technology Transfer Bill

Core Business & Key Focus Areas
- Stimulate involvement of and investment by industrial and public sectors in R&D
- GEAR objectives: enhancing of industrial innovation support programmes, eg SPII & THRIP
- Development and implementation of technology transfer policy

Outputs I deliverables
- THRIP outputs
- SPII outputs
- P11 outputs
- Technology Transfer outputs

Steps taken to ensure quality
- DTI on adjudicating pane¹ls of THRIP and SPII -alternatively P11 will be managed within DTI
- Technology Transfer Facility to be piloted by DT first

Shifting expenditure from consumption to development
- All projects are geared to technology enhancement arid human resource development for industry

Consequences of a 4% Reduction
- Technology Incubators - negative impact on technology development, SMME support and technology transfer funding and services
- THRIP - approx 15 less grants, 9 less SMMEs with corresponding neg impact on technology development
- SPII - 4 less applications - loss of R 1m in tax, R 10m loss in sales and RI ,5m in exports
- P11 - 12,5% less applications with corresponding loss in tax, sales and exports
- Personnel - 1 out of 11 persons will be lost with influence on services

Level of Y2K Readiness
- IDC, CSIR and NRF have indicated that they have measures in place to prepare

Technology and Human Resources for Industry Programme (THRIP)
During 1997/98 the following figures were realised for THRIP
- Programme Contribution R47m
- Industry Contribution from 347
companies including SMMEs R65m
- Number of University / Technikon
projects 399
- Number of students 1 589
- Number of Technikons 9
- Number of Universities 14

The following results are available for 1998/99:
- Funds budgeted R75,2m
- Committed for projects R72m
- Administration cost 2,2% of budget

(Due to tightening of conditions under which a THRIP project qualifies as a multi-company project)

Technology and Human Resources for Industry Programme (THRIP)
Future Projections

Support Programme for Industrial Innovation (SPII)
Statistics in respect of 1997/98

The following results are available for 1998/99
- Total sales R 178m (local R121m + R57m export)
- Jobs provided 1245
- Budget R 75,6m
- Administration cost 7,6% of budget
- Completed projects 35
- Amount for completed projects R15,5m
-

Support Programme for Industrial Innovation (SPII)
Future Projections

Support Technology Transfer
Actual 1998/99 and future projections: Royalty Agreements for Technology Transfer

Partnership in Industrial Innovation (PII)
Future Projections

Appendix 13
Programme 2 Sub-programme: Entrepreneurial Promotion and Development
Function: Small Business Promotion and Development
Policy Objective: To provide wholesale financial and non-financial support, to
represent, advise and promote the interest of SMME Sector

Primary Activities: R' 000
- Khula Enterprise Finance (2.5) R 20 000
- Centre for Small Bus. (2.12) R 23 665
- NEPA (Ntsika) (2.13) R 50 000
- Franchising support (2.16) R 8 000
- Small Business Voice (2.25) R 5 000

Influence of President's Speech
- Mid-term review - possible adjustments
- FaciIitate establishment of cooperatives for Local economic Development

Policy Developments
- Mid-term strategy reviews
- Establishment of Regulatory Review unit
- Strategy document for roll-out of Manufacturing Advisory Centres (MACs)
- Monitoring and Evaluation system

Key Focus Areas
- Emphasis on market segmentation, eg sectoral, size, geographic location, gender, HDI's, etc in terms of accessibility (markets technology, etc)

Outputs I Deliverables
- NTSIKA

KHULA

Implications of a 4% Reduction
- Some activities already funded with donor funding - a further reduction will imply downscaling on HR-component of CSBP which is already not adequate to full its mandate - also limiting execution of additional tasks ito Presidents speech


Appendix 14
Programme 2 Sub-programme: Trade Facilitation (2.5)
Function: Export Promotion and Trade Facilitation
Policy Objective: To promote South African trade with other countries to
stimulate growth and to maximise foreign exchange earnings

Primary Activities: R' 000
- EMIA (2.17) R 420 854
- Export Dev Offices (2.19) R 160 616
- GElS (2.36) R 24 237
- Remaining activities R 10 577

Policy Developments: R’ 000
- Export Councils
- CGIC - assisting to expand in Africa
- Help desk
- EMIA - in demand
- GElS terminated
- Expanding foreign offices
- Relationship with Foreign Affairs

Outputs I Deliverables:
- EMIA assistance: April 98 January 99
- Report backs 1 362
- Export sales R657m
- Average sales R 348 000
- Estimated sales for 6 months R I 863m
- Jobs created through assist. 6 078
- Total EMIA cost assistance R45m
- Ratio export achieved & total cost 55.16
- Status of firms
- Big businesses 454
- PDI and woman owned 343
- SMME 1 098
- Organise 18 pavilions in 14 countries in 1999

- CGIC - Interest subsidies
- 300 guarantees issued since inception
Committed projects R190m - consisting of 75 projects which were not yet approved by Ministers and also awarded - various countries in Africa and rest of the world

Appendix 15
Programme 3: Trade Policy and Global Repositioning
Main Function: Export Promotion and Trade Facilitation
Policy Objective: To promote trade relations, set trade policy and RSA's global
repositioning by entering and maintaining trade relations and
agreements

Primary Activities: R' 000
- SA Integration (3.1) R 6 102
- Multilateral Relations (3.2) R 6 531
- Bilateral Relations (3.3) R10 428
- Non-proliferation (3.4) R 7 433

Outputs I deliverables
- ELI-agreement implemented
- SADC agreement
- Bilateral engagements
- ASIA 1 & 2
- America
- Europe
- Africa
- Non-proliferation
- Compliance to international Treaties and agreements

RSA – EU Negotiations – Conclusion of Agreement
- Agreement signed in SA on 11/10/99 – approved on 24/3/99 by European Council of Ministers in Berlin
- Implementation Date: 1 January 2000 – phasing in of agreement
- Overall results:
- Political dialogue
- Provisions for a Free Trade Area
- Trade related issues
- Economic co-operation
- Financial Assistance and Development Co-operation
- Social and Cultural co-operation
- Coverage :
- 90% of SA/EU trade
- Full liberalisation of 95% of imports over 10yrs
- Full liberalisation of 86% of imports over 12yrs
- Support for SACU
- Industrial Sector
- 86% of SA’s total exports to EU
- Establish relative advantage for SA exporters
- Agricultural sector
- Agricultural safeguard clause
- Tariff quotas
- Position re subsidies
- Reserve list to be revisited
- Other trade principles
- Customs Union and FTAs
- Anti-dumping and Countervailing measures
- Safeguards
- Used goods
- Impact on economy
- Process of repositioning within global economy
- Jobs more sustainable over the long term
- Cost structures in SA to be lower after agreement – improved efficiency
- Exports to gain significantly – esp areas where SA has competitive
advantage

Appendix 16
Programme 4: Business Regulation and Consumer Services
Main function: Competitive, orderly and Fair internal trade
Policy objective: To promote efficient, competitive and fair business through
business regulation and registration and effective consumer
protection

Primary Activities
- SA companies Registration (4.4) R 29 612
- Competition Comm & Tribunal (4.6) R 83 689
- Trade Regulation (4.7) R 9 853
- Consumer Affairs (4.8) R 10 209
- Admin, Lotteries & Gambling Boards R 11 443
(Activities (4.10-4.12)
- Anti-dumping (4.15) R 7 571
- Other Activities R 24 177

Main Functions
- Consumer protection through National Consumer Affairs Office (NCAO), the Competition Commission and the National Inspectorate
- Creation of a sound legal environment for business through the South African Patents and Trademark Office (SAPTO)
- Regulating gambling, lotteries and liquor affairs in order to protect patrons and communities, to encourage economic development and empowerment, and to address poverty and inequality through good cause funds
- Combatting theft, corruption and fraud through consumer programmes, through effective company law, through the Competition Commission and through the investigative powers of the National Inspectorate

Influence of the State President's Speech
- Launch of the National Lotteries to promote development and social equality through its good cause funds
- Strengthen the fight against financial and economic crimes and against theft and corruption in the public sector through the planned improvement in company law and its effective implementation, and through the investigative work of the National Inspectorate
- Increasing the level of investment and facilitating investment by the private senior through the effective and efficient operation of SACRO, SAPTO and the Competition Commission
- Striving for equitable benefits for all our people though better consumer protection, through the effective distribution of the good cause funds of the Lottery, and through effective services from S!\CRO and SAPTO to emerging business

Policy Developments
- New consumer credit policy is planned
- New general consumer protection policy is planned
- Major corporate law reform programme will be initiated before the end of 1999

Outputs I Deliverables
- Changes in the quality of consumer protection through regular surveys
- SACRO effectiveness measured by number of companies and close corporations registered, length of back-log and revenue generated.
- Launch new regulatory system for micro-lenders
- Automation of company registration system
- Annual registrations is growing from 15% to 20% pa
- Backlog feel from 8 weeks in 1998 to less than 1 week in 1999; revenue exceeds Cost by R2Om, ie 2:1 ratio and revenue is growing faster than Cost
- SAPTO - application growth of 10% pa - backlog is high priority target
- Number of investigations and prosecutions in terms of the National Inspectorate - in 1998/99 58 investigations with a potential of RI 04m recovery identified. Recovery of between 6% to 10% of GElS payments (Nat Inspectorate) -about R1 b recovered since 1993
- New laws and policies for gambling, liquor & lotteries
- Launch full service web-site in March 2000
- Launch Gambling Board & casino licences Launch Lotteries Board and National Lottery Contracts
- Passing of Liquor Act & implementation
- New generation electronic data management system for patents
- Renewed effort to reduce backlogs in trademark processing
- Establishment of Commission and Tribunal in1999
- Launch new pro-active competition policy – Sept 1999

Steps taken to ensure Quality
- Market surveys on consumer protection as feedback for NCAO
- Automation of SACRO - huge improvements in performance -reducing backlogs and increasing turnover, while reducing and multi-skilling staff
- SAPTO's key innovation - introduction of data management system, called Ptolerny as from late 1999 - address Y2K
- Expanding National Inspectorate and providing training programmes to meet new challenges

Consequences of a 4% Reduction
- Backlogs will emerge in SACRO and the Competition Commission, and will not be reduced in SAPTO
- The development of better consumer and company law will be seriously delayed.

Competition Commission / Tribunal
- Two juristic persons – each with its own Acc. Officer to replace the Competition Board
- Objectives:
- Provide opportunity for equal participation in economy
- Achieve a more effective/ efficient economy
- Provide for markets where consumers have freedom of choice iro quality
/ variety of goods and services
- Create greater capacity and provide an environment for effective
competition in international markets
- Restrain particular trade practices which undermine a competitive
economy
- Regulate the transfer of economic ownership in keeping with public
interest
- To give effect to international law obligations of SA
- Competition Board was an advisory body whereas the Comp Commission / Tribunal have authority to:
- authorise mergers or prohibit a merger
- Prohibit contraventions of restrictive practices and abuse of dominant
positions
- Adjudicate in relation to prohibited conducts in the Act whether prohibited
conduct has occurred and if so, to impose remedy
- In-depth investigations to be undertaken – much larger staff complement needed compared to Competition Board
- Competition Board did not have same interventionist mission – this implies a high level of litigation that is reelected in a mush larger budget for legal costs
- Research Centre for investigations is required – to give effect to international law obligations
- Proper independence of the Competition Commission & Tribunal necessitated separate office blocks