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Delve into the quarterly performance & expenditure of the 2013/14 financial year, showcasing key achievements against set targets. Explore progress in growth sectors, localisation efforts, skills development plans, & financial performance per programme and classification.
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Economic Development Performance Information 26-August-2014
Presentation outline • Background to quarterly performance for 2013/14 financial year • Quarter 1 2013/14 Performance and Expenditure • Quarter 2 2013/14 Performance and Expenditure • Quarter 3 2013/14 Performance and Expenditure • Quarter 4 2013/14 Performance and Expenditure
Key highlights for Q1 • EDD produced a report on employment, GDP growth, and investment in relation to jobs drivers of the NGP covering the 1st Quarter of 2013, was submitted to Cabinet. The following investment initiatives were unblocked, Innowind Wind Energy Projects, the Chinese Mamba Cement Factory, Sunrise Energy LPG Importation and Storage Terminal, Saldanha Bay, Western Cape, among others which resulted in this business being able to operate and also access funding. • Progress reviews on 18 Strategic Integrated Projects were completed for Cabinet. These reports covered spending, construction and localisation efforts. • The presentation of a draft skills plan for infrastructure projects on 14 June 2013 to the HRC Council laid the basis for fast tracking infrastructure projects going forward and ensured the availability of required skills at the appropriate time.
Key highlights for Q1 • IDC Targeted growth sectors:R1 645.1million • Targeted growth sectors include: (a) Agriculture and agro-processing; (b) Forestry, wood, pulp and paper; (c) Mining; (d) Textiles and clothing; (e) Chemicals, rubber, plastics and non-metallic minerals; (f) Basic metals; fabricated metals; (g) Machinery and equipment; (h) Motor vehicles, transport equipment, parts and accessories; (i) Renewable energy, energy efficiency and components; (j) Tourism, trade and catering; (k) Transport and logistics; (l) Other. • IDC Distressed Fund: R21.4 million was approved to 3 companies, one in clothing and textile, one in fabricated metal and the other in vehicle component manufacturing
Key highlights for Q1 continue • An agency agreement was established with a Saudi company to market LODOX medical scanners, manufactured in South Africa, in Saudi Arabia. Engagements are on-going between LODOX and the Saudi Ministry of Health. • Work was done by the EDD PICC Unit with the localisation unit of the IDC to identify opportunities for localisation at both Transnet and Eskom which includes transmission lines, cables and conductors, grinding elements, metering, pumps and valves for Eskom and locomotives • The Youth Employment Accord was signed at the Hector Pietersen Memorial Museum in Soweto on Thursday, 18 April 2013. The Accord outlines social partners’ commitment to raising youth employment, training and skills development and to support self-employment opportunities for youth.
Key highlights for Q1 continue • Discussions with Ford resulted in the temporary suspension of a decision to retrench 164 workers. • Two District Capacity Building workshops with social partners were held in the John TaoloGaetsewe District Municipality on 8-9 May and in the Dr. Ruth SegomotsiMompati District Municipality on 23-24 May 2013, to enable social partners to engage with opportunities for economic development and finance agencies (to catalyse economic activities in the most under-resourced municipalities).
Q1 Financial Performance : Introduction • The Department has spent R192 298 000 which is 95% of its quarterly budget allocation of R201 799 000.
Q1 Financial Performance Variance explanation per programme • Administration- increases in office accommodation costs, travel and subsistence costs as well as improvements to conditions of employment costs effected in May 2013. Insufficient baseline allocation on the 2013/14 ENE: Compensation of Employment & office space. • Economic Policy Development- slow spending on goods and services in the BBBEE and Second Economy sub-programmes; low spending on compensation of employment due to vacancies in the Branch • Economic Planning and Coordination- slow spending on goods and services in the Econ Dev, Financing and Procurement, and Green Economy sub-programmes; low spending on compensation of employment due to vacancies in the Branch. • Socio Economic Development and Dialogue- sub programme spending pattern has improved slightly as compared to last financial year.
Q1 Financial Performance Variance explanation per economic classification: • Compensation of Employees – vacancies in sub-programmes and senior management level. • Goods and Services - inactivity within some sub-programmes and the lower costs of goods and services. • Transfers and Subsidies – spending is in line with the planned spending as per the payment schedule. • Payments of Capital Assets - attributable to the cyclical nature of acquiring capital assets.
Key highlights for Q2 • The second quarter Outcome 4 cycle report to Cabinet summarised key developments, risks and opportunities, including table showing progress on main indicators for inclusive growth, employment, GDP growth, investment and income equality. • Proposals to fast-track interventions were developed and finalized with other Outcome 4 departments for submission to the Cabinet Lekgotla, held in August 2013, which adopted them with amendments .
Key highlights for Q2 • The policy platform on the Framework for Assessing the Impact of BBBEE on the NGP was held on 9 July 2013 • Four economic development initiatives were facilitated and unblocked during the quarter. • 18 Strategic Integrated Projects construction progress were reviewed. • Facilitation of unblocking of municipal spending through the PICC. • MANCO of 1 July 2013 recommended engaging SALGA; DPME; and the DPSA, as well as National Treasury on funding flows to overcome under- spending patterns and to identify conditional links to special grants that are negatively impacting on municipal spends. • Accelerating build programmes: De Hoop Dam: Mbuge Extension Primary School. • sefa conducted 7 road shows to shows market their products and services.
Key highlights for Q2 • Assisted the Barnes Group with applications to purchase Hall Longmore (HL) which belonged to Murray and Roberts, who wanted to sell and relocate to Nigeria (the plant was sold in SA) • SA-UK Social Dialogue hosted by EDD in support of the Youth Employment Accord, was held on 10 September 2013 in Cape Town . The engagement coincided with the 10th meeting of the SA-UK Bilateral Forum.
Key highlights for Q2 • EDD participated concerning in Local Procurement Conference hosted by COSATU in Cape Town on 09 September 2013 (COSATU is a key social partner of the Local Procurement Accord) • EDD hosted a Spatial Development Knowledge Network, on Secondary Cities and their Role- in the case of the City of Rustenburg, on 17 September 2013. An EDD Knowledge Network Session was hosted under the African Development theme on 25 September 2013, on "Aquaculture Farming: Key Policy and Market Lessons."
Q2: Financial Performance: Introduction • The Department has spent R184 113 000 which is 93% of its quarterly budget allocation of R197 058 000.
Q2 Financial Performance Variance explanation per programme • Administration- Insufficient baseline allocation on the 2013/14 ENE for Compensation of employees and Office accommodation. The budget is to be realigned during the adjusted estimate. • Economic Policy Development- slow spending on goods and services in the BBBEE and Second Economy sub-programmes; low spending on compensation of employment due to vacancies in the Branch • Economic Planning and Coordination- slow spending on goods and services in the Econ Dev, Financing and Procurement, and Green Economy sub-programmes; low spending on compensation of employment due to vacancies in the Branch. • Socio Economic Development and Dialogue- sub programme spending pattern has improved slightly as compared to last financial year.
Q2 Financial Performance Variance explanation per economic classification: • Compensation of Employees – vacancies in sub-programmes and senior management level. Budget is to be realigned during the AENE budget process. • Goods and Services - inactivity within some sub-programmes as well commitments and accruals. Planned to undertake an African Industrialisation research project at an estimated R3.5 million. Legal services related to the CC work. • Transfers and Subsidies – spending is in line with the planned spending as per the payment schedule. • Payments of Capital Assets – spending expected to improve from the third quarter. ILO commissioned to develop a DySam software for data analysis at R1.1 mil & Video conferencing facility
Key highlights for Q3 • The financialisation conference was held in October 2013, together with the UN-DESA. • A workshop on employment impact of DFI’s was held with sefa and NYDA senior officials on the 23rd October 2013. • EDD participated in the process with the dti, Department of International Relations & Cooperation and National Treasury together with the Office of the State Law Adviser to finalize the Draft Promotion and Protection of Investment Bill. A briefing document was prepared for the Economic Sectors and Employment Cluster meeting on the Bill. • A platform held with multi-lateral stakeholders, mining sector, national government departments, Global Green Growth Institute (GGGi), among others on the impact of energy price increases on the competitiveness of selected mining sector and smelting value chains in South Africa. • Review of impact of minimum wage on farm workers conducted as part of 20-year review of labour market. • 20 year review on labour market institutions included report on progress in implementing the skills strategy.
Key highlights for Q3 continue • 17 SIPs for the quarter to June 2013 were reviewed by November 2013. Assisted Makana Local Municipality to provide water to Grahamstown which was previously experiencing water disruptions. • Total approved R12 420.8 million by the DFI’s, number of 2924 jobs were saved / created by the IDC, and a total of 624 jobs were created or saved by sefa • Mediterranean Clothing went insolvent; thus EDD supported it together with its equity partner to approach the IDC for restructuring of clothing manufacturing section of the business, resulting in IDC’s approval of partial restructuring of the loan, 130 jobs saved as a result, and target to increase staff to 250 in the short to medium term • Two interventions on growing the green economy • Finalisation of blending and pricing regulations in respect of bio ethanol • Rolling out of phase one of the Solar Water heater Program.
Key highlights to Q3 • EDD held a Public Service Internship Programme workshop with National and Provincial Government Departments on 17 October 2013. The purpose of the workshop was to determine options to scale up the number of public service interns to 60 000 in 2014/15. • EDD held a Competition Knowledge Session on the 29October 2013. The theme of the session was “The development of competition policy in South Africa: Policy Development and Implementation Challenges”. • Small Business Knowledge Network session was also held on 3rd December 2013 in Durban, KZN. The title of the event was ‘’Unlocking the Economic Potential of Townships: Perspectives in KZN”. • A District Capacity Building workshop was conducted in the West Rand District Municipality, Gauteng Province on 03 and 04 October 2013 for social partners- (Local government officials, Entrepreneurs, Youth, Cooperatives, Labour and the Women’s Sectors) on the NGP. • EDD facilitated a process to fund a Youth Steel Manufacturing Businessinitiative- Umzungulu Steel in Pietermaritzburg, KwaZulu-Natal from the NYDA by the IDC to the tune of 5 million.
Q3 Financial Performance: Introduction • The Department has spent R200 306 000 which is 96% of its quarterly budget allocation of R207 700 000.
Q3 Financial Performance Variance explanation per programme • Administration– There has been an improvement in spending due to the adjustments effected during the AENE budget process. • Economic Policy Development– spending has improved due to the realignment of budget during the AENE budget process. • Economic Planning and Coordination– spending is according to the revised cash flow projections. • Socio Economic Development and Dialogue- programme spending pattern has improved due to budget alignment during the adjusted estimate.
Q3 Financial Performance Variance explanation per economic classification: • Compensation of Employees – Compensation of employees spending has improved due to the realignment of the budget during the AENE • Goods and Services – spending on goods and services has increased to the adjustments effected during the adjusted estimate process. • Transfers and Subsidies – spending is in line with the planned spending as per the payment schedule. • Payments of Capital Assets - capital assets spending expected to increase during the fourth quarter. The ILO is developing an analytical tool that will be finalised before the end of the financial year.
Key highlights to Q4 • Makhathini Agribusiness Development Conference took place on the 17th and the 18th of February 2014. The purpose of the conference was to bring together farmers as well as key officials from the Great North (UMkhanyakude, UThungulu and Zululand). • Final report completed on, Impact of Electricity Price Increases on the Competitiveness of Selected Mining Sector and Smelting Value Chains. The AFGRI agreement signed and sent to tribunal. • Conducted a research paper on the impact of BBBEE policy on the New Growth Path with a specific focus on agricultural sector (smallholder farmer). • Through EDD’s intervention the Mamba Cement Company was granted a water use licence to abstract water from the Crocodile River for industrial use in its cement production facility situated in the area of the Thabazimbi Local Municipality.
Key highlights of Q4 continue • A draft Intervention Framework in collaboration with the IDC and Greater Alexander Chamber of Commerce was developed. On the 05 February 2014, EDD participated in the discussion around realisation of the initiatives concerning the Alexandra Township. • Draft action plan developed for the Vhembe district municipality skills development initiative. • EDD participation towards revitalisation of Distressed Mining Communities is on-going. • Needs analysis for the co-operatives at the Makgologeng and Diyatalawa Presidential Initiatives was completed. • The Spatial Economic perspective (Functional Economic Regions) was finalised in March 2014. • 18 SIPs for the quarter to September 2013 were reviewed and finalised by February 2014.
Key highlights of Q4 continue • Water crisis was resolved in Makana, then focus shifted to general systems problems – as part of greater focus on service delivery systems in municipalities. • The IDC approved a total of R 5 534.1 million to save or create jobs. A number of about 20 000 jobs were targeted to be saved or created by the IDC. In Q4 the IDC created / saved 13 705 jobs . Through the distressed fund 2 574 jobs were created/ saved, and sefa created or saved 1 794 jobs. • The Grand Inga Hydroelectricity Project is earmarked to bring to South Africa 4800 MW from the Democratic Republic of Congo and the role of EDD is oversight and reporting to SIP 17 of the PICC • EDD in collaboration with The Presidency and National Youth Development Agency hosted the Presidential Youth Indaba on the 28 February to 2 March 2014 at the Birchwood Conference Centre. • Quarterly Report on implementation of the Youth Accord was submitted to highlight implementation across the state, business, labour and youth.
Q4: Financial Performance: Introduction • The Department has spent R194 796 000 which is 118% of its quarterly budget allocation of R164 909 000, slow spending in personnel and generated savings in goods and services were utilised augment the deficit.
Q4 Financial Performance Variance explanation per programme • Administration– spending increased in this quarter particularly due to the marketing and communication strategy payments. • Economic Policy Development- 100 per cent of the budget spent during this quarter due to shifting of funds from generated savings to augment the reduced sefa economic competitiveness and support package allocation by R50 million. • Economic Planning and Coordination- 100 per cent of the budget spent during this quarterdue legal costs and the shifting of funds from generated savings. • Socio Economic Development and Dialogue- 100 per cent of the budget spent during this quarter due to shifting of funds from generated savings .
Q4 Financial Performance Variance explanation per economic classification: • Compensation of Employees – spending in line with planned spending as aligned during AENE process. • Goods and Services – spending on goods and services increased in this quarter due to the CSIR accounting for an advance issued in the 3rd quarter to research alternative building technologies and the development of Spatial mapping tool and the PICC publicity campaign. • Transfers and Subsidies – spending is in line with the planned spending as per the payment schedule including the approved transfer of R15 million to sefa. • Payments of Capital Assets – spending increased due to the completion of the DySam analytical tool (ILO), video conferencing facility.
Summary: Human Resource Strategy for 2013/14 • At inception of EDD in 2009, 265 posts were approved – for filling on incremental basis over MTEF • Human Resource Planning Strategy to fill 166 funded posts over the MTSF period was developed • Annual targets for funded posts in 2011/12 was 129 and 142 in 2012/13 • By 31 March 2013, 139 funded posts were filled • Funded posts for remaining MTEF period was expanded to 166 posts • EDD recruitment strategy was prioritised to enable the delivery of targets forecast in Strategic Plan and APP
Human Resource Strategy and Action Plan 2013/14 • In 2012/13, recruitment of appropriate staff decreased vacancy rate to 2.1% by year end . • Difficulties were encountered around recruitment of staff with specialised and critical skills, as well as women in senior management positions. • EDD achieved 45% of women employed in senior management posts. • EDD achieved the national target of 2% for people with disabilities. • Core staff complement ranges from 20 to 35 years.
Human Resource Strategy and Action Plan 2013/14 • An Employee Assistance Programme was implemented to render a 24hr service to staff and their families, as well as a Health Promotion Programme to provide HIV/ AIDS counselling and testing in partnership with GEMS • Performance Management and Development system was implemented in 2012/13 • In 2012/13, 14 governance policies were developed internally and approved
Human Resource Strategy and Action Plan 2013/14 • Rationalisation and alignment of structure • Head hunt strategic posts, specialists & senior levels • Prioritise recruitment and selection processes – e.g. CD: CM, PLO, D: HR, D: Strategic Management, D: Communications, DD: Planning and Reporting, DD: Security • Monthly Human Resource reports – constant monitoring and reporting to improve performance data
