the dti

the dti

Striving for a growing economy that benefits all : Presentation to Portfolio Committee October 2005

INDEX

Page No

Part One: The economic & strategic context 1 - 3

Part Two: Summary of Progress per Objective 4 - 11

Part Three: Spending of 2004/05 allocated funds 12 - 14

Part Four: Key proposed policy initiatives 15 - 17

Part Five: Reports per sub-programme 18 - 31

The economic and strategic context

The 2004/05 Annual Report of the dti is contextualized by the department's medium term strategy, which addresses the following challenges:

The need for accelerated and shared economic growth, and for job creation

The need for increased levels of investment and exports ~ Economic marginalisation manifested by the second economy

Increasing the contribution of SME's in the economy

The promotion of a conducive environment for industry & enterprise development

The need for expanded and effective access to the dti products and services

Key objectives

The annual report reflects progress on the following key objectives for

2004105:-

Increase the contribution of small enterprises

Significantly advance broad-based black economic empowerment
Increase the level of direct investment in manufacturing & services
Increase market access opportunities for, and export of, South African goods & services
Contribute towards building skills, technology & infrastructure platforms for enterprises
Reposition the economy in higher value-added segments of manufacturing and services
Provide accessible, transparent and efficient access to redress for economic citizens

Part two

Summary of progress per objective

Increasing the contribution of small enterprises to the economy

The Small Enterprise Development Agency established & being rolled out

Initiated Annual Review of Small Business Preparing for launch of Small Business Advisory

Council Established the Alternative Exchange (Altex) for listing of small & medium enterprises

The draft SMME Strategy was finalised and is ready for Cabinet approval

Participating in study on regulatory impact on SMME's

Significantly progress broad-based black economic empowerment

Implemented the BEE strategy, including release of the scorecard and codes

Supporting development of sector charters

Black Business Supplier Development Programme supported 6I4 small, black-owned enterprises

Re-launched NEF in May 2004 with new products and R150m capital injection

Undertaking measures to support women economic empowerment including support for SAWEN, TWIB & a proposal for women empowerment incentive scheme

Raising the level of investment & exports - Key achievements

Facilitated investments of R2,3bn, incl. in metals, auto, and agro-processing

Facilitated export sales of R3,6bn

IPP facilitated investments & sales of US$2bn from 125 active projects

Assisted 1 232 firms through EMIA

Approved 2,801 SMEDP & 8 FIG applications with R14bn invest. value & 65,430 projected jobs

Approved 22 SIP projects in infrastructure, SME support & job creation

Initiated Film & TV rebate scheme & approved 10 applications with incentive value of R73m

Initiated reviews of investment & export promotion strategies & incentive schemes

Increasing market access opportunities

Concluded Mercusor-SACU trade agreement

Continued to participate in the WTO Doha Round

Initiated negotiation with India & China

Initiated review of the SA/EU agreement, including the accession of 10 new EU members

Implementing the new SACU agreement

Undertook 20 technical and trade missions in Africa

Continuing negotiations to conclude the US-SACU trade agreement

Launched the Permanent Trade Forum

Concluded economic co-operation & investment protection agreements with various African countries

Increasing competitiveness & lowering cost structure

Supported innovation projects to the value of R251m

Contributed to National Skills Development Strategy & assisted 100 firms through Workplace

Challenge Programme Working on the development of a Beneficiation Incentive Strategy with DME

Initiated policy response to import parity pricing to be submitted to Cabinet & negotiations with the steel sector on a developmental price

Working on repositioning the Aerospace Industry as a future priority sector, including a possible Aerospace Industry Support Initiative

Initiated the development of an Industrial Policy Framework

Convened an international conference on competitiveness

Accessible, transparent & efficient access to redress for economic citizens

This objective is supported by the whole of the dti and its agencies, but the following is highlighted:-

Development of consumer policy and the Credit: Bill is at an advanced stage

Consumer help line being implemented and complaints resolution significantly expedited

Awareness of the dti & its services are promoted via advertisements and periodical publications, including electronic and the customer care centre

Progress being achieved in expediting unfair trade investigations

Other activities

In 2004105 measures have been taken to focus on the second economy', in particular:-

Legislation & strategy for co-operatives finalised

Apex Fund established

A total of 44 CPPP projects were launched with I 000 full time jobs created

Part Three

Spending of the 2004105 allocated funds

Overview of expenditure

Expenditure pattern over 7 years indicates consistency in last three years

Unqualified Audit report indicates significant progress in maintaining good financial management

95,6 % of the total R3,6 billion allocation was spent

79 % of allocation went to public entities and incentive support

5% unspent represents delays in executing infrastructure programs and merger of NTSIKA and NAMAC into SEDA

[PMG NOTE : A Graph for Seven year overview on spending trends: Not Included]

Key proposed policy initiatives

National Small Business Advisory Council

Establish in terms of the National Small Business Amendment Act, 2003
Serves as advocacy structure for small business

Services Sector Framework

To guide policy and support measures for the sector

BEE Advisory Council

Establish in terms of the Broad Based Black Economic Empowerment Act to provide guidance and overall monitoring of BBBEEE progress

Co-operative Fund

Incentive for co-operatives to attain competitiveness and long term sustainability

SME Women Private Equity Fund

To empower women particularly black women in business. inclusive of women entrepreneurs women employees and broad based women's groupings

National Credit Register

National Credit Bill provides for a National Credit Register on consumers debt data

Women Owned Business Incentive

Ring fence incentives to promote targeted resources towards entrepreneur development and funding for women owned businesses

Investment Incentive

To increase investment in the economy
Promote the reduction of unemployment

Part Five

Reports per sub-prograrnme

INTERNATIONAL TRADE

OBJECTIVE	PROGRESS
Conclude free trade agreements within timeframe first quarter 2005 to end 200e with us, EFTA, Mercosur, India, China, Egypt. Nigeria, Kenya . WTO Doha Round negotiations by 2006	MERCOSUR and EFTA negotiations were concluded. Talks with US ongoing but delayed. Mandate for India and China finalised and formal talks to start soon. Selection of African trade partner by end 2005. Participation on trick in Doha round.
Conduce at least 10 agreements with key countries during 2004/05	Concluded and signed 10 agreements. Economic co-operation agreement its concluded with DRC and still awaiting signing with Angola and Mozambique
Undertake at least 10 technical & business missions	26 technical and business missions undertaken into Africa, Europe and Asia
Protection of SACU from unfair trade practices Improve competitiveness of vehicle and component mfg Sector	Conduct 24 demand driven applications Issued 705 eligible export certificates against target of 300

OBJECTIVE	PROGRESS
Establish 4 technology incubators	3 satellite incubators established for Furntech in Durban, Cape Town & Umzimkhulu
Project support-R160 million by SPII &R270 million by TRIP	SPII support 30 innovation projects with a total value of R184 million and THRIP supported projects with a total value of R259 million
Support 875 researchers,2 200 students, & 353 enterprises	Supported 1 049 researchers,2 125 students, & 351 enterprises
Establish Technology Transfer Center	Center established and fully operational at CSIR
Establish Technology Venture Capital Fund	Agreement reached with CSIR to invest in South African Intellectual Property Fund

OBJECTIVE	PROGRESS
Tabling of Franchising Bill	Bill not table yet. Waiting for Franchising Association of SA to complete Charter on Franchising
Establish a chair of Entrepreneurship	Framework designed . Programme moved to SEDA for implementation
Establish Small Business Advisory Council	Framework established & nominations for Council Received
Establish Small Business Agency	SEDA established in Dec. 2004
Publication of women’s economic empowerment strategy	First draft of the Strategic Framework on Gender and Women’s Economic Empowerment released

OBJECTIVE	PROGRESS
Tabling of Co-operatives legislation, establish Advisory Board & publication of revised strategy	Bill tabled at all key Parliamentary committees & approved by President. Regulation ready to be tabled in Parliament & implementation of Act will commence end October 2005. Co-operatives Advisory Board establishment has commenced.
Published of regulations and codes of good practices	On 8 December 2004 the 1^st phase of the Codes of Good Practice were released for public comments. Phase 1 of the codes was approved for publication by cabinet on 12 October 2005 & will be published within next 2 weeks accompanied by dummy’s guide to the codes. Phase 2 ready to be released for public comment
Rolling out of South African Women’s Entrepreneurship Network	Rolled out to 8 provinces

CONSUMER & CORPORATE REGULATION

OBJECTIVE	PROGRESS
Publish credit policy and bill for public comment & introduce bill into Parliament	During September 2004, the Bill was published in the Government Gazette for comments. 12 information sessions held to explain the Bill . Public comments awaited . Policy was submitted to NEDLAC for comments.
Publish Policy framework for comment & Guidelines for legislation drafted by December 2004	The policy was published for public comment in government gazette on 24 June 2004
Conclude 7 service level agreements with regulatory agencies	7 Business plans and 4 service level Agreements concluded
Establish new liquor authority & consumer protection and credit agencies	National Liquor Authority established. Institutional arrangements completed for Credit regulator to become operational
Establish Technology Venture Capital Fund	Agreement reached with CSIR to invest in South African Intellectual Property Fund
Publish Consumer policy for comment by April 2004 & Consumer Bill published for comment by March 2005	Policy was published in the government gazette on the 9 September opening the document to public comments until the 9 November. Credit Bill to be reviewed on the basis of the information emanating from the Credit law consultation process & thereafter commence drafting the Consumer Bill
Launch National consumer help-line	Phase 2 of Consumer Help- Line was launched during September 2004. Study tour to benchmark Consumer Help-Line(CHL) in UK was conducted and report with recommendations submitted.
Improvement in turnaround time for consumer complaints	Complains resolution turnaround time reduced by 600% from 90 days to between one and 3 days

THE ENTERPRISE ORGANISATION

OBJECTIVE	PROGRESS
Implement business development programmes (24 Foreign Investment Grant (FIG),6 Critical infrastructure Programmes (CIP), 400 Black Business Supplier Development Programme (BBSDP) and 1 500 Export Marketing and Investment Assistance programme (EMIA)	Supported 8 FIG projects to the value of R14,4 billion; 4 CIP projects to the value of R153,4m ; 453 successful BBDSP applications ; EMIA – 253 National Pavilions, 504 Missions, 253 Individual Exhibitions, 30 Primary Market Research, 1 040
Approved 6 000 SMEDP applications	2 801 enterprises assisted
Call –center operational for incentives applications	Partially achieved-feedback is given to telephonic enquiries within 48 hours and most of the enquiries are resolved almost immediately
Leverage R2 billion investment in South Africa	Leverage 2.2b investment with 20 107 direct and indirect jobs created, R101m infrastructure expenditure & R122m support for SMME
Table Enterprise Development Act, publish new regulation , & rationalise adjudication structures, 50 partnership agreements with service provides	Draft Act, draft memo and submissions for repeal have been completed & to be considered by management structures. 1 Memorandum of understanding was signed with services providers and 5 were in process

TRADE AND INVESTMENT SA

OBJECTIVE	PROGRESS
6 ministerial missions, & 32 sector-specific missions	3 ministerial missions . 1 inward investment mission financed through EMIA. 81 missions facilitated by foreign economic offices (41 planned & 40 unplanned)
8 sector-specific investment seminars and exhibitions	3 investment seminars delivered .94 facilitated by foreign economic offices
Reduce turnaround processing time for investment queries to 84 hours	678 investors were assisted & 89 site visits were facilitated , the large majority of which was resolved in 48 hours
Memoranda of understanding with provincial investment promotion agencies(PIPA)	Co-ordination done through CEO’s forum. MOU’s not finalised as decision taken to have this done through PIPA CEO’s forum.
Publish National Export Development Strategy	Finalised but not published
Assist 90 new exporters	Advised 232 new exporters , trained 15 cosmetic exporters for the Canadian market and informed 20 more through workshops
Quarterly publication on market opportunities	Six market opportunities publications were published
Quarterly reports from foreign offices regions	Foreign offices have commenced reporting on a quarterly basis
40 missions over 36 months to foreign offices regions	15 outward missions and 24 inward missions financed by EMIA
6 internal and 6 industry working groups by second quarter of 2004/05	More than 6 industry working groups are in operation. 2 internal working groups established

MARKETING

OBJECTIVE	PROGRESS
Reach 10 000 economic citizens through the dti Business Express	Initiative postponed
Reach 4,7 million economic citizens through advertising	27 million people were reached through local and international advertisement
Distribute Quarterly and monthly publications to subscribers	70 print &electronic publications with a total of 130 000 copies distributed
1 foreign language publication per year	2 French language publications were produced and distributed
98% of all call answered with 30 seconds	91.6% of calls answered within 30 seconds
100% of queries responded to within 48 hours	85% of queries responded to within 48 hours

Thank You