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the dti Presentation on the Annual Report 2013/14

the dti Presentation on the Annual Report 2013/14. Mr Shabeer Khan Chief Financial Officer 29 October 2014. Presentation Outline. Economic Context Strategic Goals The structure of the dti’s work Annual Performance 2013/14 Key achievements Summary of achievement of targets

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the dti Presentation on the Annual Report 2013/14

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  1. the dtiPresentation on the Annual Report 2013/14 MrShabeer Khan Chief Financial Officer 29 October 2014

  2. Presentation Outline Economic Context Strategic Goals The structure of the dti’s work Annual Performance 2013/14 Key achievements Summary of achievement of targets Financial Management Challenges 2

  3. Economic context 3

  4. Global Economy January – March 2014 (Q1 2014) Global gross domestic product (GDP) growth slowed from an annualised quarter-on-quarter rate of 3.4% in the fourth quarter of 2013 to 2.1% in the first quarter of 2014. This was primarily due to a 2.1% contraction of GDP in the United States (US) and slowing growth in China and the European Union (EU). April – June 2014 (Q2 2014) Global GDP growth likely recovered slightly in the second quarter as the US economy rebounded strongly and grew by 4% on an annualised quarter-on-quarter basis Economic conditions in the EU worsened however with Germany surprisingly contracting 4

  5. Global Economy Source: International Monetary Fund IMF 5

  6. Global Economy International Monetary Fund (IMF) expects world output growth to rebound in the second quarter of 2014 and firmer in 2015 and 2016. The IMF further projects that imports by advanced economies will increase from 1.4% per annum in 2013 to 4.6% per annum in 2015. Overall, the economic growth outlook remains weak with significant downside risks. 6

  7. Domestic Economy Real GDP grew by an annualised quarter-on-quarter rate of 0.6% in the second quarter of 2014. South Africa’s growth performance was led by the tertiary sector, mainly: Government services, Finance, real estate and business services, and Transport, storage and communication services. The Manufacturing sector contracted by 2.1% in the second quarter of 2014 due to low production in autos, chemical products, rubber and plastics, glass and non-metallic mineral products. The contraction in Manufacturing was primarily due to the slow pick up in the mining sector after the prolonged strike in the platinum sector. 7

  8. Domestic Economy Source: Statssa 8

  9. Domestic Economy SA exports and imports to the world declined in the second quarter of 2014. Imports declined particularly significantly leading to an improvement in SA’s trade deficit. SA exports to Africa increased from R70.2bn to R71.9 bn resulting in a trade surplus of R39.5 bn with the continent. SA trade with the world and BRICS were affected by poor growth in the EU and the US. Demand for commodities and commodity prices remain relatively flat as China’s policymakers attempt to re-balance the economy. SA trade with Africa consequently remains a priority focus for the dti. 9

  10. Domestic Economy Source: the dti 10

  11. Strategic Goals the dti’s strategic goals for the period under review were: • Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation. • Build mutually beneficial regional and global relations to advance South Africa’s trade, industrial policy and economic development objectives. • Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth. • Create a fair regulatory environment that enables investment, trade and enterprise development in an equitable and socially responsible manner. • Promote a professional, ethical, dynamic, competitive and customer-focused working environment that ensures effective and efficient service delivery.

  12. The structure of the dti’s work the dti’s work is organised in terms of the following clusters: Industrial development; Trade, Investment and Exports; Broadening participation; Regulation, and Administration and co-ordination 12

  13. Key achievements against planned targets for 2013/14 Financial Year

  14. Key Achievements Industrial Development 14

  15. Key Achievements Industrial Development 15

  16. Key Achievements Industrial Development 16

  17. Key Achievements Industrial Development 17

  18. Key Achievements Industrial Development 18

  19. Key Achievements Industrial Development 19

  20. Limpopo: BBSDP: 208 CIS: 74 EIP: 20 ISP: 3 Gauteng: BBSDP: 339 CIS: 48 EIP: 128 ISP: 7 North West: BBSDP: 32 CIS: 10 EIP: 12 ISP: R 1 Mpumalanga: BBSDP:54 CIS: 6 EIP: 12 ISP: 4 Northern Cape: BBSDP: 6 CIS: 10 EIP: 0 ISP: R 3 Kwa Zulu Natal: BBSDP: 221 CIS: 15 EIP: 0 ISP:1 Free State: BBSDP: 23 CIS: 7 EIP: 8 ISP: 2 Western Cape: BBSDP: 53 CIS: 11 EIP: 80 ISP: 7 Eastern Cape: BBSDP: 130 CIS: 62 EIP: 38 ISP: 0 Provincial Spread: Broadening Participation Incentives

  21. Limpopo: 12I: 0 AIS: 0 CIP: 2 ADEP 2 Gauteng: 12I: 2 AIS: 4 incl 1 P-AIS CIP: 5 ADEP 2 North West: 12I: 0 AIS: 1 CIP: 0 ADEP 1 Mpumalanga: 12I: 1 AIS: 0 CIP: 0 ADEP 1 Northern Cape: 12I: 0 AIS: 0 CIP 1 ADEP 0 Kwa Zulu Natal: 12I: 3 AIS: 8 incl 1 P-AIS CIP 0 ADEP 1 Free State: 12I: 0 AIS: 0 CIP 0 ADEP 0 Western Cape: 12I: 2 AIS: 1 CIP: 0 ADEP 11 Eastern Cape: 12I: 5 AIS: 24 CIP: 0 ADEP 2 Provincial Spread: Manufacturing Incentives

  22. MCEP Provincial Performance: 2012/13 & 2013/14 LIMPOPO 2012/13: 3 Approvals (2%) R11.2 m (1%) 2013/14: 4 Approvals (1.1%) R 7.3 m (0.3%) MPUMALANGA 2012/13: 5 Approvals (3%) R14.9 m (2%) 2013/14: 7 Approvals (2%) R25.9 m (0.9%) GAUTENG 2012/13: 73 Approvals (37%) R431.5 m (44%) 2013/14: 139 Approvals (38.1%) R1.7 b (63.3%) NORTH WEST 2012/13: 1 Approval (0.5%) R4.5 m (0.5%) 2013/14: 6 Approvals (1.6%) R35.3 m (1.3%) FREE STATE 2012/13: 2 Approvals (1%) R1.6 m (1%) 2013/14: 15 Approvals (4.1%) R63.1 m (2.3%) KWAZULU-NATAL 2012/13: 29 Approvals (14%) R81.9 m (8%) 2013/14: 54 Approvals (14.8%) R301.7 m (10.6%) NORTHERN CAPE 2012/13: 1 Approval (0.5%) R 5.5 m (0.5%) 2013/14: 2 Approvals (0.5%) R5.7 m (0.2%) EASTERN CAPE 2012/13: 17 Approvals (8%) R70.6 m (7%) 2013/14: 32 Approvals (8.8%) R101.1 m (3.6%) WESTERN CAPE 2012/13: 66 Approvals (37%) R363 m (36%) 2013/14: 106 Approvals (29%) R497.8 m (17.5%)

  23. BBSDP Applications Approved in 2013/14 per province

  24. CIS Applications Approved In 2013/14

  25. CPFP Assistance Across Countries For 2013-14 Guinea •Iron Ore Mine •Bel Air BauxiteMine Senegal •Railway Development Ethiopia •Development of the Beef Abattoir Cameroon •Development of the Student Housing Tanzania •20 000 Housing Development •East Africa Dry Port Sierra Leone •Marampa Iron Ore Mine •Marampa Renewable energy Ghana •Housing Development •Sugar Cane Fields Development Malawi •Solid Waste to Energy project Mozambique •Mineral Sand Deposits •Picoco III Housing Development •Alluvial Gold Mine Angola •Development of the Hotel Chain Namibia •Logistics Activity Precinct •Omitiomire Oxide Project Madagascar •Molo Graphite Mine Zimbabwe •Establishment of the Dark Fibre Infrastructure •Development of the Musami Dam project Burundi •Mule Hydropower development •Jiji Hydropower Development Zambia •Chingola Railway Line •Ndola Gold project •Solid waste to Energy project

  26. EMIA Provincial Performance: 2012/13 & 2013/14 LIMPOPO 2012/13: 6 Approvals (1%) R436 516 (1%) 2013/14; 6 Approvals (1%) R379 316 (1%) NORTH WEST 2012/13: 13 approvals (1%) R832 003 (1%) 2013/14: 9 Approvals (1%) R829 654 (1%) MPUMALANGA 2012/13: 40 Approvals (4%) R3 275 095 (5%) 2013/14: 50 Approvals (5%) R4 832 511 (6%) GAUTENG 2012/13: 488 Approvals (47%) R35 630 177 (50%) 2013/14: 526 Approvals (51%) R42 152 950 (54%) FREE STATE 2012/2013: 5 Approvals (1%) R192 142 (1%) 2013/14: 6 Approvals (1%) R322 384 (1%) NORTHERN CAPE 2012/13: 0 approvals (0%) R0 (0%) 2013/14: 0 Approvals (0%) R0 (0%) KWAZULU-NATAL 2012/2013: 67 approvals (7%) R4 279 120 (6%) 2013/14: 74 Approvals (7%) R5 011 653 (7%) EASTERN CAPE 2012/2013: 26 approvals (2%) R1 982 895 (3%) 2013/14: 28 Approvals (3%) R2 004 402 (3%) WESTERN CAPE 2012/13: 373 approvals (37%) R23 253 853 (33%) 2013/14: 318 Approvals (31%) R21 602 258 (27%)

  27. BPS & FILM Achievements 2013/14 Investment: R2,633m Incentive: R72,000 Jobs: 285 Investment: R 66,723m Incentive: R 4,952m Jobs: 788 Investment: R 13,2m Incentive: R 18,667 Jobs: 93 Investment: R 325m Incentive: R 8,4m Jobs: 750

  28. Trade, Investment and Exports

  29. Trade, Investment and Exports

  30. Trade, Investment and Exports

  31. Trade, Investment and Exports

  32. Trade, Investment and Exports

  33. Trade, Investment and Exports

  34. Trade, Investment and Exports

  35. AIS & 12I achievements 2013/14 Mercedes Benz SA InvestmentL R5,4bn Incentive: R1,6bn Jobs: 254 Investment: R 301m Incentive: R 90,4m Jobs: 73 Johnson Controls Automotive South Africa (Pty) Ltd - W205 C-Class Mercedes Interior Project Investment: R257,6m Incentive: R64,4m Jobs: 190 Investment: R1b Allowance: R 496m Jobs: 1112 Investment: R 569m Allowance: R 202m

  36. Broadening Participation

  37. Broadening Participation

  38. Regulation

  39. Administration

  40. Summary of achievement of targets for 2013/14 FY Targets not achieved include partially achieved targets. Significant progress has been made on all partially achieved targets.

  41. Financial management

  42. Overview of the expenditure for the 2013/14 financial year The expenditure based on the final appropriation of R9,516 billion is 98.6% or R9,380 billion, implying an under-spending of R135 million (1.4%) Overview of expenditure per programme:

  43. Overview of the expenditure for the 2013/14 financial year Overview of expenditure per economic classification:

  44. Audit outcome for 2013/14 Financial Year and interventions to address the Auditor-General’s findings

  45. Audit outcomes the dti has received a financially unqualified audit opinion from the Auditor-General South Africa (AGSA) for the 2013/14 financial year,

  46. Interventions to address AGSA’s Audit Findings

  47. Challenges • Poorer manufacturing performance due to slow global growth and strikes in the mining industry • Industrial sectors supported by dti incentives show growth, while other sectors like plastics, steel and metal fabrication lagging • Credit fuelled consumption driven demand is running out of steam • Electricity and water supply shutdowns impacted on manufacturing • Sharply escalating administered prices where municipal premiums and pricing anomalies within and in between municipalities • Higher rail freight and port charges • Need to build partnerships between government and business to secure much greater progress in upstream mining supply chains and downstream beneficiation

  48. Ke ya leboga Ke a leboha Ke a leboga Ngiyabonga Ndiyabulela Ngiyathokoza Ngiyabonga Inkomu Ndi khou livhuha Dankie Thank you

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