2005/6 Annual Report to the Portfolio Committee on Trade and Industry

1. 2005/6 Annual Report to the Portfolio Committee on Trade and Industry 1 By: Director General, Tshediso Matona November 2006

2. CONTENTS 2005/6 ANNUAL REPORT • Economic Context • dti Strategic objectives • Summary of Key Outputs 2005/06 • Spending trends • Breakdown of the budget • Proposed interventions

3. ECONOMIC CONTEXT Conditions created for a more robust industrial policy • Increased manufacturing confidence (BER report), underpinned by: • A increase in domestic investment • A increase in foreign investment • Strong performance in key industrial sectors:autos production up 11.6% = Growth in manufacturing 4.1% • Employment growth of 540 000 in past year = Challenge: Trade deficit : strong currency has resulted in widening trade deficit – challenge is to increase value added exports. 3

4. STRATEGIC OBJECTIVES 2006-2009 • Promote co-coordinated implementation of accelerated & shared growth initiative • Raise the level of exports and promote equitable global trade • Promote direct investment and growth in the industrial and services economy, with particular focus on employment creation • Contribute towards the development and regional integration of the African Continent within the NEPAD Framework • Promote broader participation, equity and redress in the economy

5. KEY OUTPUTS IN 2005/06 2005/6 ANNUAL REPORT • This section will cover high level outputs in the following areas: • Enterprise & industry support & development which will encompass:- • Policy & Strategy • Financial support • International Trade & Economic Development • Legislation & Regulation • HR & Governance

6. KEY OUTPUTS IN 2005/06 2005/6 ANNUAL REPORT • ENTERPRISE & INDUSTRY SUPPORT & DEVELOPMENT • Policy & Strategy • ASGISA – contributed to framework & leads key interventions eg. Sectors (BPO), Small Business, etc. • National Industrial Policy Framework – undertook consultations & research towards draft policy • Other Sector Policy initiatives - Clothing & Textiles, Chemicals, Metals, Agro-processing, automotives, Forestry & Wood, Pulp & Paper, Film and Services • Integrated Small Business Strategy & Co-ops strategy finalised & SEDA roll out launched • Regional Industrial Development Strategy - undertook consultations & research towards draft policy

7. KEY OUTPUTS IN 2005/06 2005/6 ANNUAL REPORT • ENTERPRISE & INDUSTRY SUPPORT & DEVELOPMENT • Policy & Strategy • Broad Based Black Economic Empowerment – finalised phase 1 & launched phase 2 of codes • Import Parity Pricing policy finalised • Policy Reviews • Incentives, incl. IDZ’s • Competition Policy • Export & Investment Strategies • Draft strategic framework on Gender & Women’s Economic Empowerment completed

8. KEY OUTPUTS IN 2005/06 2005/6 ANNUAL REPORT • ENTERPRISE & INDUSTRY SUPPORT & DEVELOPMENT Financial support • 9 Strategic Infrastructure Programs (SIP) approved with projected 778 direct & 31 481 indirect jobs • 10 new infrastructure projects (CIP) were approved with project investment of R8,5b • 1 924 SMEDP incentives were approved with expected investment of R14,7b & the creation of 41 873 jobs. R733m claims paid during the period. • Assisted 577 firms (900 applications) through the BBSDP scheme to the value of R29m • 10 Film incentives were approved, productions of which will result in investment of R360m

9. KEY OUTPUTS IN 2005/06 2005/6 ANNUAL REPORT • ENTERPRISE & INDUSTRY SUPPORT & DEVELOPMENT • Financial support – cont. • EMIA assisted 267 companies to exhibit at foreign national pavilions, 547 firms (882 applied) for other export initiatives & 86 companies participated in local pavilions & 41 outward-bound trade missions to 23 countries, with expected export sales of R5,6b • NEF financed 66 deals with a total value of R467m • Khula approved R462m worth of transactions and disbursed R316m, whilst approving 334 business plans. 56% went to financing black businesses, 32% to women & 35% to poorer provinces • Co-operatives Support - Developed Incentives & obtained donor funding

10. KEY OUTPUTS IN 2005/06 2005/6 ANNUAL REPORT • INTERNATIONAL TRADE & ECONOMIC DEVELOPMENT • Negotiations – WTO, EU, US, EFTA • Implementing – SACU, EU, Mercosur • Other Trade Initiatives – China, IBSA, Trade & Investment Protection Agreements • Africa/NEPAD – APRM, Trade & Technical Co-operation missions

11. KEY OUTPUTS IN 2005/06 2005/6 ANNUAL REPORT • LEGISLATION & REGULATIONS Finalised Bills: • Co-operatives Bill • National Credit Bill • Close Corporations Amendment Bill • Patents Amendment Bill • Interim Companies Amendment Bill Outstanding Bills • Consumer Protection Bill, Enterprise Development Bill, Intellectual Property Amendment Bills, Sugar Bill

12. HR & Governance 2005/6 ANNUAL REPORT

13. HR & Governance Appointment of CEO’s and DG • IDC • NEF • CIPRO Appointment of Board of Directors • NEF • Khula • IDC • ECIC • SEDA

14. HR & Governance Audits & Reports • Unqualified Audits for the dti & all COTII agencies except one • All COTII agencies tabled annual reports, incl. Programs such THRIP & NIPP

15. 7 YEAR EXPENDITURE TRENDS 2005/6 ANNUAL REPORT

16. ANALYSIS OF MTEF 2005/6 ANNUAL REPORT

17. BREAKDOWN OF BUDGET 2005/6 ANNUAL REPORT • On average the structure of the budget allocation over the MTEF period is: • 40% to agencies of the dti • 40% to incentive payments • 13% to compensation after deduction to agencies (8% of total budget) • 12% to goods & services, of which 8% is overhead commitments, leaving only 4% to fund projects/new initiatives MTEF Preliminary Outcome • Requested additional R8b over MTEF period but got allocated R1,3b

18. CONCLUSION 2005/6 ANNUAL REPORT • Overall we have achieved our targets for the reporting period • Could do more with additional financial resources • Some challenges remain in respect of: • Institutional development • Skills & Training • Inter-departmental/cluster co-ordination

19. THANK YOU