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Economic Development Department Annual Report 2011/12

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Title: Economic Development Department Annual Report 2011/12


1
Economic Development DepartmentAnnual Report
2011/12
  • Presentation to the
  • Select Committee
  • v1
  • November 2012

2
Presentation Outline
  • Mission
  • Context
  • Challenges Going Forward
  • Significant Developments
  • Highlights Some Case Studies
  • Key Performance Indicators
  • Corporate Services

3
Vision and Mission
  • Vision
  • Decent work through meaningful economic
    transformation and inclusive growth
  • Mission - EDD aims to
  • Coordinate the contributions of government
    departments, state entities and civil society on
    economic development
  • Contribute to efforts that ensure alignment
    between the economic policies and plans of the
    state and its agencies and governments political
    objectives and mandate and
  • Promote governments goals of advancing economic
    development with decent work opportunities.

3
4
Success indicators
  • Outcomes to be measured against the targets of
    the New Growth Path and Outcome 4
  • Main indicators
  • Employment creation
  • 300 000 new employment opportunities created in
    2011/12
  • Above target, but disproportionately in the
    public sector
  • Most evidence suggests inequality has not
    improved
  • The economy grew by 2,8 in the 2011 fiscal year
    compared to the 2010 fiscal year

5
Context
  • EDD is 3 years old
  • Focus on implementation
  • National Infrastructure Plan
  • Alignment within the state
  • Refocusing of the IDC
  • Accords (social partners unblock projects)
  • Consolidation of programmes and internal systems

6
From policy development to implementation
2009 Establishment of a Ministry for policy
integration work
2009-2010 Establish a functioning Department
with strong governance systems
2009-2010 Coordinate response to
recession/global economic crisis that started in
2008
2010 Transfer six public entities to EDD and
begin process of mandate alignment on jobs
2010 Finalisation of the New Growth Path (NGP)
2011-2012 Work with other departments and
spheres of government to align economic policy
around the NGP and refocusing of the IDC
2011-2012 Dialogue to develop social accords on
key NGP areas
2011-2012 Support development and implementation
of National Infrastructure Plan
2011-2012 Reform of small business entities
7
Challenges going forward
  • External
  • Slow economy in 2011/12, with a threat now of
    downturn in Europe and possibly the US and China
  • Pressure appearing especially in terms of exports
    and financing for the infrastructure plan
  • In South Africa Persistent inequalities lead to
    conflict (workplace and outside)
  • Internal (within EDD)
  • Shortage of high-level personnel reflected in
    staffing challenges
  • Establishing new systems
  • We have mitigation strategies for all of these
  • The Portfolio Committee can play a key role in
    coordinating parliamentary inputs across
    ministries and departments

8
IMPORTANT DEVELOPMENTS2011/12
9
The National Infrastructure Plan
  • Support for the Secretariat to the PICC in the
    development and coordinated implementation of the
    National Infrastructure Plan

10
Funding development
  • Alignment of the IDCs activities with the New
    Growth Path and a major increase in its
    resourcing of development projects
  • The consolidation of samaf, Khula, and the small
    business lending operations of the IDC into sefa
  • Doubling of the resources available
  • Expansion in kinds of funding provided and the
    provincial footprint of activities

11
Support for investment and employment
  • Engagements around the takeover of Massmart by
    Walmart ensuring sensitivity to employment
  • Kansai intervention led to job guarantees and
    commitment for additional industrial capacity

12
Social Accords
  • The National Skills Accord (13 July 2011) sets
    targets for government, SOEs and the private
    sector to expand training and internships and to
    support SETAs and the FET sector.
  • The Basic Education Accord (13 July 2011)
    provides for stakeholders to support individual
    schools in poor communities in line with agreed
    guidelines.
  • The Local Procurement Accord (31 October 2011)
    commits government, state-owned enterprises and
    the private sector to expanding procurement of
    locally produced goods and services so as to
    maximise employment creation and deepen
    industrial capacity, with a target of 75 local
    procurement.
  • The Green Economy Accord (17 November 2011)
    promotes the greening of the economy, including
    increased production of renewable energy, the
    installation of solar water heaters on a mass
    scale and energy efficiency, through appropriate
    regulations, investments and collective action by
    the stakeholders.

13
Spatial Development
  • Work with the DRDLR and other departments to
    identify key projects in the worst-served 23
    municipal districts
  • Work with the DRDLR to develop a coherent,
    integrated spatial approach to development
  • Training programme on economic development
    established for officials from municipalities and
    provinces

14
Conferences and platforms
  • In May 2011, a Conference on the New Growth Path,
    bringing together Cabinet Ministers and Members
    of Parliament with high-level experts, officials
    and stakeholders to reflect on, and debate about,
    a number of key issues in the NGP
  • Draft discussion document on Inequality formed
    the basis for a high-level platform held in May
    2012 addressed by the Minister, Deborah
    Hargreaves of the UK High Pay Commission,
    Zwelinzima Vavi of COSATU and Bobby Godsell of
    BUSA
  • Conference on Assets and Inequality held in
    conjunction with Studies in Poverty and
    Inequality Institute

15
Examples of achievements
  • Over 262 000 solar water heaters rolled out
  • The IDC created 45 900 jobs from investments and
    loans
  • The IDC supported Innowind which won bids for 3
    wind farms to be implemented in the former
    Transkei and Ciskei
  • The EDD supported RiseUp Cooperative Bakeries in
    the Western Cape, contributing to empowerment,
    food security and jobs

16
KEY PERFORMANCE INDICATORS FROM THE APP
17
Main challenges
  • A challenge for EDD is that the targets in the
    APP often do not adequately reflect new tasks
    that arise as conditions change during the year
  • Work on the PICC in particular was not foreseen
    in the APP for 2010/11, due to Cabinet resolving
    on the matter in July 2011
  • The audited outcomes in this years report
    therefore somewhat understate our achievements

18
Programme Structure
Taskteam to support the PICC
19
Support for the PICC
20
The PICC and the APP
  • The PICC is critical for implementation of the
    NGP
  • But the PICC was only established in the second
    half of 2011, as a result of work on
    implementation of the NGP
  • It is therefore not included as a separate
    programme in the APP or the budget
  • Some PICC achievements are included as part of
    Branch work, but here provide a more holistic
    overview

21
Support for the PICC
  • Based on EDD proposals, PICC established in 2011
    President heads the Commission and members are
    relevant Ministers
  • Minister of Economic Development chairs the
    Secretariat, which consists of Ministers and
    Deputy Ministers
  • Technical secretariat of experts from SOEs and
    departments
  • EDD staff provide various key supports
  • Assist with conceptualisation and planning
  • Logistics and co-ordination
  • Monitoring and evaluation
  • Staff are both employed directly for the PICC
    work and seconded full time or part time from
    branches

22
Key achievements
  • Work with PICC structures to develop the National
    Infrastructure Plan, which was adopted in the
    first quarter of 2012
  • Development of an integrated needs assessment
  • Identification of existing projects as well as
    gaps and potential for synergy and ways to
    increase developmental impact
  • Process required intensive collaboration across
    spheres and departments
  • EDD helped to co-ordinate expertise from relevant
    functions across the state
  • EDD work resulted in
  • 17 SIPs being identified
  • More than 150 projects identified and documented
    in an infrastructure book
  • Costing of key programmes
  • Skills audit on engineers and other scarce skills
    in the public sector

23
Key achievements (2)
  • Initiation of work on financing and skills plans
    to implement the National Infrastructure Plan
  • Management and launch models developed for SIPs,
    leading to launches through the first half of the
    2012 fiscal year
  • Development of monitoring and evaluation
    framework to track progress on SIPs

24
Economic Policy Development
  • Purpose To strengthen the economic development
    policy capacity of government

25
APP objectives and measures
  • Monitor implementation of the NGP and produce
    quarterly reports
  • Issue policy papers
  • Convene policy platforms
  • Provide analytical data on the real economy
  • Establish an economic development index
  • Develop BBBEE policy frameworks
  • Establish Economic Development Institute
  • Develop, implement, monitor and evaluate
    strategies for youth employment, gender and the
    second economy

25
26
Policy AchievementsMonitor NGP progress
  • Regular analyses of key economic trends, risks
    and opportunities provided as part of the Outcome
    4 quarterly reports, in collaboration with the
    National Treasury and the dti
  • Detailed assessment of progress on the New Growth
    Path supplied for the July 2011 Cabinet
    lekgotla, which contributed to the adoption of
    critical interventions by Cabinet, including the
    establishment of the PICC

27
Policy Achievements Monitor NGP progress
  • Two surveys conducted on the impact on employment
    of state activity by all national and provincial
    departments, in collaboration with the DPME
  • Surveys were backed up by a detailed research
    paper commissioned from the Development Policy
    Research Unit of the University of Cape Town on
    the role of the state in employment creation
  • Reports were made to Cabinet makgotla on findings

28
Policy AchievementsPolicy inputs and analyses
  • Sector inputs amongst others on iron and steel
    the Eastern Cape auto industry scrap metals the
    retail industry infrastructure inputs elements
    of the mining value chain in the Eastern Cape,
    Limpopo and the Northern Cape the production of
    rolling stock and the dairy industry
  • Assessment of the Broad-based BEE Codes from the
    standpoint of the NGP leading to specific
    proposals for strengthening incentives for
    employment creation, enterprise development and
    local procurement
  • Research commissioned on the impact of the BEE
    Codes on listed companies

29
Policy Achievements Policy inputs and analyses
(2)
  • Draft document on a multi-pronged strategy for
    youth employment discussed in the Cluster at the
    end of 2011 and tabled in NEDLAC for preliminary
    discussions with stakeholders early in 2012
  • Data analyses finalised on gender and the NGP and
    on inequality, with several presentations to
    stakeholders inside and outside of government
  • Initial study towards the establishment of an
    Economic Development Index by staff members and
    TIPS

30
Policy Achievements Policy inputs and analyses
(3)
  • Development of guidelines for socio-economic
    impact assessment system (SEIAS) with Presidency
    and Treasury
  • Terms of reference developed for an
    organisational study of the Economic Development
    Institute

31
Policy AchievementsPlatforms
  • First Annual Development Conference held in May
    2011, on the New Growth Path
  • Preparations for second Annual Development
    Conference, on the National Infrastructure Plan,
    from late 2011 Conference was held in April
    2012
  • Conference on Inequality and Asset Ownership held
    jointly with SPII

32
Policy Achievements Provincial and Local
Engagements
33
Policy Achievements Provincial and Local
Engagements
34
Economic Planning and Coordination
  • Purpose To develop economic planning proposals
    and the green economy, as well as provide
    oversight over DFIs and ERBs

35
APP objectives and measures
  • Submit proposals to the National Planning
    Commission, Cabinet and the provinces
  • Coordinate and develop sector plans for key
    sectors
  • Develop proposals for harmonising national,
    provincial and local economic development plans
  • Develop spatial economic development action plans
  • Exercise policy, strategy and budgetary oversight
    over DFIs and ERBs
  • Develop a strategy to enhance investment for
    economic development

35
36
APP objectives and measures (2)
  • Develop papers on leveraging procurement and
    expenditure to enhance governments developmental
    priorities
  • Promote South Africas international relations
    strategy and economic development by engaging
    with regional and international agencies and
    multilateral institutions
  • Grow the Green Economy through coordinating
    government and private sector players, including
    by establishing a dedicated fund
  • Grow the agro-processing sector by coordinating
    government and private sector players, including
    by establishing a dedicated fund to support
    enhanced competitiveness

36
37
Planning Achievements Development finance and
SMME support
  • Establishment of Business Hub for SMMEs with
    SAICA
  • Meetings with the dti and Treasury and workshops
    with departments on 30-day payment deadline for
    SMMEs
  • Initial meetings with the PIC on targeted support
    for developmental investments

38
Planning Achievements Development finance and
SMME support (2)
  • Quarterly meetings with entities overseen by EDD
    and targeted meetings with the IDC
  • Establishment of sefa (samaf, Khula and IDC small
    business lending unit)
  • Workshops and documentation (overview, business
    case, due diligence, risk assessment report)
  • Available resources doubled, thus more kinds of
    funding provided to SMMEs, and the provincial
    footprint expanded

39
Planning Achievements Special Financing
  • IDC
  • Approvals increased from R11,5 billion in FY2010
    to R18,8 billion in FY2012
  • Disbursement increased from R6,5 billion to R8,5
    billion
  • Created or saved 45 000 jobs
  • Transfers to samaf and Khula R223 million
  • UIF/IDC bond for companies in distress R343
    million
  • Raised jobs bond of R2 billion

40
Planning AchievementsSpatial development
  • Support for the PICC
  • Assistance with co-ordination of SIPs 6 and 11
  • Work with DRDLR and CSIR on defining and
    operationalising economic regions
  • Work with DRDLR on identifying priority projects
    in the 23 worst-served districts

41
Planning AchievementsSpatial development (2)
  • Reviews of the Socio-Economic Development
    Strategy of the King Sabata Dalindyebo
    Presidential Initiative the Northern Cape
    Provincial Growth and Development Strategy and
    the Integrated Development Plan of the
    Renosterberg Local Municipality in the Northern
    Cape.
  • Review of the Standerton (Lekwa Municipality)
    area, with the view to facilitate
    the establishment of a soy bean and sunseed
    oil crushing plant by a private investor in that
    municipality.
  • Support for the spatial action plan for the
    Doringbaai-Matzikama Municipality
  • Support for RiseUp Bakery cooperatives on the
    West Coast
  • Draft framework for the revitalisation of
    Atlantis

42
Planning AchievementsThe Economic Development
MinMEC
  • At 25 July 2011 Technical MinMEC, DBSA presented
    on the Jobs Fund.
  • At the 18-19 August 2011 Technical MinMEC, key
    national departments highlighted actions taken to
    eliminate provincial blockages.
  • MinMEC on 12 September 2011 adopted a detailed
    work programme aimed at aligning provincial work
    programme to the 12 action plans adopted at the
    2011 July Cabinet Lekgotla as well as unlocking
    blockages projects.
  • MinMECs were also held as follows
  • Technical MinMECs on 17 May, 21 June (on the
    employment impact survey) and 17 October
    (response to blockages) in 2011
  • MinMECs on 10 June and 1 July 2011

43
Planning AchievementsLocal procurement
  • Engagement with the dti and Treasury leading to
    adoption of regulations to support local
    procurement and first-round designations
  • Industry forum on 22 September 2011 to discuss
    the designation process and the type of
    commitments required by the different sectors
  • Meetings with SABS leading to development of a
    technical standard, SATS 1286, for local 
    content, which was published for comment on 23
    November 2011.
  • Agreement with Proudly South African (PSA) to
    expand its efforts
  • Increased local procurement of stationery by EDD

44
Planning AchievementsThe green economy
  • The Director-General led a government-wide
    steering committee to ensure implementation of
    the target of installing one million solar water
    heaters by 2014
  • Work with the IDC to support business financing
    for renewable energy generation in terms of the
    targets set in the Integrated Resource Plan
  • Collaboration with the IDC and the DBSA on the
    publication of the Green Jobs Report in November
    2011.
  • Work with the government team at COP17 in late
    2011.
  • Workshops with Western Cape and Gauteng agencies
    on the green economy
  • Inputs and comments on the Autocatalytic
    Converters and Diesel Particulate Filters
    Implementation Plan
  • EDD convened several inter-departmental meetings
    on the Green Economy with the Department of
    Environmental Affairs, the dti, the Department of
    Energy and others.

45
Planning Achievements African regional
development
  • Support for the Tripartite Summit between the
    regional economic communities of the Southern
    African Development Community (SADC), the East
    African Community (EAC) and the Common Market for
    Eastern and Southern Africa (COMESA) from 8 to 12
    June 2011 aiming to establish a Tripartite Free
    Trade Agreement (FTA)
  • Minister Patel acted as programme director at the
    launch of the Free Trade Agreement (FTA) talks
  • Participation in development of infrastructure
    within the North-South Corridor, a regional
    initiative chaired by President Zuma

46
Planning Achievements Provincial and Local
Engagements
47
Planning Achievements Provincial and Local
Engagements
48
Planning Achievements Provincial and Local
Engagements
49
Planning Achievements Provincial and Local
Engagements
50
Economic Development and Dialogue
  • Purpose To promote social dialogue and build
    capacity among social partners, as well as
    implement strategic frameworks (accords)

51
APP objectives and measures
  • Convene national social dialogue forums
  • Facilitate social pacts at the national level in
    the workplace and within sectors.
  • Facilitate, monitor and report on the
    implementation of framework agreements and social
    pacts
  • Host learning events for economic development
    learning networks
  • Host an annual Economic Development Conference
    (with Policy Branch)
  • Convene the Economic Advisory Panel

51
52
Dialogue AchievementsNational Accords
  • Four social accords under auspices of NEDLAC,
    with negotiations led by a team of Ministers
    convened by Minister of Economic Development
  • EDD Officials supported the negotiations through
    secretariat services and developed implementation
    frameworks
  • Parties to the National Skills Accord reported on
    implementation in a workshop with the Department
    of Higher Education and Training on 29 February
    2012 with a report on progress and proposals for
    addressing blockages

53
Dialogue AchievementsNational Accords (2)
  • Participation in the Port Elizabeth Factory Tour
    in July 2011
  • Report to Minister Patel in September 2011 on
    implementation of the National Response to the
    Global Economic Crisis
  • Presentation at ILO/Labour Jobs Pact Workshop on
    10 December 2011
  • Training Layoff Scheme Task Team meeting held on
    3 May 2011

54
Dialogue Achievements Capacity building
  • Workshops on the NGP and social accords were
    conducted with business, labour and community
    representatives in seven provinces in February
    and March 2012
  • Four capacity building workshops on the Social
    Accords for labour were held in four provinces
    between October and November 2011
  • Participation in a panel on jobs at the FEDUSA
    Congress in November 2011.
  • Initial work was undertaken on setting up
    knowledge networks for the EDD

55
Dialogue AchievementsSectoral and workplace
  • Support for the Western Cape Furniture Industry
    Pilot Project
  • Meetings with Western Cape provincial
    representatives and stakeholders on ways to
    support the clothing industry in the second half
    of 2011
  • Support for the Isithebe Plan to set up a garment
    factory in KwaZulu-Natal
  • A social dialogue and capacity building
    engagement workshop with the Metals and
    Engineering Industry Bargaining Council (MEIBC)

56
Dialogue AchievementsSectoral and workplace (2)
  • Support for the Dimbaza Foundry, which is one of
    the few remaining factories at the industrial
    site, including obtaining funding for a
    feasibility study and engagements with relevant
    officials and stakeholders
  • An intervention to save jobs at a major company
    in the forestry value chain, where initially more
    than 1200 jobs were at risk of being shed,
    involved meetings with the CCMA, stakeholders and
    officials and saved half the jobs at risk
  • An intervention was also undertaken that secured
    more affordable leather for a cooperative that
    manufactures school shoes for needy children

57
Dialogue Achievements Productivity
  • Draft productivity concept document developed
  • MOU signed with Productivity SA on 21 September
    2011 to strengthen collaboration and cooperation
    so as to fast track governments productivity
    initiatives.
  • Six sessions held with NEDLAC constituencies to
    ascertain their views on productivity
  • Workshop on 21 October 2011 with the
    International Labour Organisation (ILO), Proudly
    South African, organised labour and community to
    follow-up the initial sessions

58
Planning Achievements Provincial and Local
Engagements
59
Planning Achievements Provincial and Local
Engagements
60
CORPORATE SERVICES
61
Corporate governance
  • All reporting requirements met
  • Good audit results
  • Regular meetings of Manco, Exco and internal
    audit committee
  • Continued development of corporate governance
    systems and policies, including on human
    resources, fruitless and wasteful expenditure,
    entertainment, the use of mobile phones and
    communication devices, petty cash, subsistence
    and travel allowance and facilities management
  • Workshops held for strategic planning, risk
    management and fraud control

62
Human resources
  • As of 31 March 2012,
  • 107 officials had been appointed
  • 8 had accepted offers of employment
  • Vacancy rates
  • The overall vacancy rate was 13,2
  • Representivity
  • 60 of senior managers and three quarters of
    senior professionals and middle management were
    African
  • 28 of senior managers and 45 of senior
    professionals and middle management were women
  • The department had one disabled employee (1 of
    total)

63
Staff complement as at 31 March 2012
By the 31 March 2012, 107 officials had been
appointed and a further 8 had accepted offers of
employment from EDD (start date 1 April 2012)
64
Representivity
65
Conclusion
  • Employment creation and growth were on track in
    the last fiscal year, but new risks have emerged
    internationally and locally
  • EDDs activities contributed to core achievements
    by government
  • In 2012/13, we will accelerate efforts
  • To respond to the global crisis especially
    through the National Infrastructure Plan and
    regional development
  • To address inequality especially in the workplace
    as well as through employment creation
  • EDDs focus will continue to shift from policy
    development to supporting and coordinating
    implementation
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