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CONCEPT DOCUMENT ON BUDGET REVIEW AND RECOMMENDATION REPORT (BRRR) PROCESS

This concept document outlines the legislative framework and purpose of the Budget Review & Recommendation Report (BRRR) process, focusing on the Department of Trade and Industry's strategic priorities, budget responses, and identified challenges.

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CONCEPT DOCUMENT ON BUDGET REVIEW AND RECOMMENDATION REPORT (BRRR) PROCESS

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  1. CONCEPT DOCUMENT ON BUDGET REVIEW AND RECOMMENDATION REPORT (BRRR) PROCESS PRESENTED BY: ZIBELE NGXISHE 29 JUNE 2011

  2. Contents of the presentation • Legislative underpinning of BRRR • Purpose of BRRR process & concept document • Dti’s budget response to strategic priorities • Assessment of Dti’s allocative efficiency • Targeted programmes for assessment • Methodology • Identified challenges

  3. LEGISLATIVE FRAMEWORK AND PURPOSE OF BRRR • S 5 of Money Bills Act of 2009 requires PC to assess Dti’s performance & recommend to the NA on service delivery and future allocation of resources • Allocative efficiency – describes purpose of budget as an instrument to achieve policy priorities of the Dti • BRRR – track if allocated budget enhance achievement of outputs against intended outcomes of 2010/11 and 2011/12

  4. BROAD STRATEGIC PRIORITIES OF THE DTI OVER MTEF • Harness skills & resources to industrialise and diversify the economy • Increase exports of value added products • Facilitate cross border trade and RI of Africa and improve trade infrastructure through SQAM • Enterprise growth and development

  5. SPECIFIC STRATEGIC OBJECTIVES 2011-2014 • Creation of decent employment through inclusive econ growth in line with NGP • Accelerate manufacturing thru the revised IPAP 2 and contribute to 5mil jobs of NGP over the next 10 years • Facilitate transformation of the economy • Promote industrial development • Increase investment and competitiveness

  6. OUTCOMES OF BRRR ALIGNED TO STRATEGIC PRIORITIES • Reduced cost production in the economy • Accelerated GDP growth • Increased competitiveness & job opportunities • Increased investments, trade and infrastructure underpinning industrial and broad based econ dev in Africa • Increased growth in SMMEs and Coops

  7. CONTINUE……… • Increased production of value added exports and tradable goods and services • Increased access to business development and market support • Increased firm level productivity

  8. BUDGET RESPONDS TO STRAT. PRIORITIES AND OUTCOMES • 2011/12 total budget for Dti R6.8 billion and 9.6% more to R6.2 bil. of last year promotes industrialisation thru incentives • 82.5% or R5.6 bil. taken by three programmes administering various incentive schemes and transfers & subsidies (TEO : R3.5 bil; IDD: R1.3 bil; EED: R839 million) • Total budget increased by 1.36 percent

  9. SELECTION OF PROGRAMMES TO BE EVALUATED BY BRRR • SA’s progressive and strategic trade policy informed by industrial policy renders RI in the form of tripartite FTA (SADC-EAC-COMESA); SACU-EU (EPAs); SQAM etc. • IDD:implementation of revised IPAP 2 and acceleration of manufacturing i.t.o. NGP • Transfer payment to IDC on CTPI R400 mil for 2010/11 and R600 mil for 2011/12

  10. CONTINUE…….. • SABS infrastructure R174 240 for 2010/11 and R93,18 mil in 2011/12 • IDD: Manufacturing Investment Programme (MIP) to support 390 enterprises (Q1) of 2011/12 • TEO: APDP current payment on production allowance R547 000 mil. in 2010/11 and R916 800 mil. for 2011/12 • TEO: SMEDP R577240 for 2010/11

  11. METHODOLOGY • Sources of information for BRRR analysis will include inter alia; • Analysis of 2011 budget in comparison with 2010 • 2011-2014 MTSF in relation to SONA • Quarterly reports for 3Qs of 2010/11and section 32 reports from NT • Operational Plan for 2011/12

  12. IDENTIFIED CHALLENGES TO BRRR PROCESS • Lack of standardised reporting on financial indicators by the Dti makes it difficult to compare 2011/12 and 2010/11 • On the trade front performance indicators do not explicitly indicate i.t.o. what trade arrangements will directly or indirectly contribute to national economic priorities • There is no clear cut performance indicators on how transformation policies

  13. CONTINUE…….. • Address issues of inequality and unemployment • The 2011/12 budget does not seem to be responding clearly to the implementation of NGP • The delays in accessing requested financial performance information from the Dti as the available data reports on non –financials

  14. Thank you

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