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Presentation to the Portfolio Committee on Trade and Industry

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Title: Presentation to the Portfolio Committee on Trade and Industry


1
Presentation to the Portfolio Committee on Trade
and Industry the dtis 2012/13 Annual Report
and the Second Quarter Report
  • Date 20 September 2013
  • Director-General
  • Mr Lionel October

2
Members of the Delegation
  • Jodi Scholtz Group COO.
  • Zodwa Ntuli DDG CCRD.
  • Garth Strachan Acting DDG Industrial
    Development.
  • Shabeer Khan CFO.
  • Tumelo Chipfupa DDG Incentive Administration.

3
Presentation Outline
  • Economic Context
  • Strategic Goals
  • Achievements against planned targets
  • Industrial Development
  • Trade, Investment Exports
  • Broadening Participation
  • Regulation
  • Administration Co-ordination
  • Targets Partially Achieved
  • Financial Management
  • Adjustment Estimates
  • MTEF Budget
  • Second Quarter Report - highlights
  • Challenges
  • Annexures

3
4
Economic Trends
  • Global Economic Developments
  • The 2012 global economic recovery has been led
    by emerging economies in Asia, Africa and Latin
    America.
  • The emerging economies contributed 6,3 to
    global growth in 2011 and 5,1 in 2012 compared
    to 1,6 and 1,3 by the advanced economies over
    the same period.
  • The International Monetary Fund (IMF) expected
    global growth to accelerate modestly from 3,2 in
    2012 to 3,5 in 2013. The IMF also projected that
    emerging economies would grow by a healthy 5,5
    in 2013, but did not expect growth to rebound to
    2010/11 levels due to the continued weakness of
    the advanced economies which was dampening
    demand.

4
5
Economic Trends
  • SA Gross Domestic Product Trends
  • The economy grew by an annualised rate of 2,1 in
    the fourth quarter of 2012, almost double the
    rate of 1,2 recorded in the third quarter.
  • The main sources of growth included
    manufacturing finance, real-estate and business
    services general government services
    agriculture, forestry and fishing wholesale,
    retail and motor trade catering and
    accommodation and the transport, storage and
    communication industry.

5
6
Economic Trends
Figure 1 Quarter-on-quarter growth 2006-2012
Source South African Reserve Bank
6
7
Economic Trends
  • Real output growth increased from 1,2 in the
    third quarter to 5,0 in the fourth quarter of
    2012.
  • This made the manufacturing sector the biggest
    contributor to the 2,1 GDP growth in the fourth
    quarter.
  • Manufacturing production grew by 5,6 between
    2010 and 2012 (underpinned by the following
    sectors petroleum, chemical products, rubber and
    plastics, which grew by 5,2 motor vehicles,
    parts and accessories and other transport by
    2,3 and food and beverages by 2,1).
  • Overall, the sluggish economic recovery
    necessitated additional proactive interventions
    by Government.
  • Key interventions introduced to enhance
    manufacturing competitiveness included the launch
    of the MCEP and Designations for local
    procurement by Government.

7
8
Economic Trends
  • Growth was supported by an increase of 126 000
    jobs in community and social services, 65 000 in
    finance and other business services, and 55 000
    jobs in agriculture. However, these gains were
    offset by the shedding of jobs in other sectors,
    led by the trade sector, which shed 139 000 jobs.

8
9
Economic Trends
Total Employment 2008 - 2012
Source QLFS quarter 42012
10
Economic Trends
  • Real gross fixed capital formation by general
    government accelerated from 7,7 in the third
    quarter of 2011 to 23,4 in the third quarter of
    2012.
  • South Africas total merchandise exports
    (excluding gold) increased from R150.9 billion in
    the first quarter of 2012 to R170.4 billion in
    the fourth quarter of 2012.
  • Exports were boosted by growth in manufacturing
    of precious metals, base metals, steel, coal and
    motor vehicles.
  • This led to an increase in imports of transport
    equipment, chemicals, plastics and rubber and
    vehicle components in the first nine months of
    the year.

10
11
Economic Trends
  • The Great Recession and the Eurozone crisis
    demanded that the dti scale-up its efforts to
    diversify South Africas trade and investment
    markets, with priority focus falling on the
    fast-growing, emerging markets in Africa,
    South-East Asia, the Middle East and South
    America.
  • Export volumes to emerging economies in Asia and
    Africa have been growing more than volumes to the
    Americas.
  • Trade with BRICS is about 10 of total South
    African exports.
  • The top manufactured exports to BRICS were basic
    chemicals, basic iron and steel, basic
    non-ferrous metal and motor vehicles, parts and
    accessories.


11
12
Economic Trends
  • Total quarterly exports and imports 2006-2012

Source the dti
13
The structure of the dtis work
  • the dtis work is organised in terms of the
    following clusters
  • Industrial development
  • Trade, Investment and Exports
  • Broadening participation
  • Regulation, and
  • Administration and co-ordination

13
14
Achievements against planned targets
14
15
Industrial Development
  • Chinese automotive company, First Automobile
    Works (FAW) has commenced with the construction
    of a truck plant at the Coega IDZ in the Eastern
    Cape Province.
  • Beijing Automotive Works (BAW) invested R196
    million in a taxi assembly plant for the South
    African/sub-Saharan markets.
  • The Minister approved the Electric Vehicle (EV)
    Roadmap in early 2013.
  • Toyota SA opened its new Ses'fikile taxi assembly
    line in Durban and a new R363 million parts
    distribution warehouse (Africa's largest).

15
16
Industrial Development
  • The development of the Clothing and Textiles
    Competitiveness Programme (CTCP) marked an
    important incentive development phase for the dti
    through the introduction of a production and
    competitiveness enhancement incentive which
    encourages production and job creation activities
    more directly.
  • Approximately 12 205 new, decent permanent jobs
    have been created in the sector as a direct
    result of the CTCP.
  • Conditions in the footwear sector also improved
    and, after years of
  • decline, the sector now projects an increase in
    the quantity of shoes produced, from 52 million
    to 100 million in the next three years.

16
17
Industrial Development
  • Facilitated the establishment and launch of a
    Small-Scale Milling plant by Kuvusa Pty (Ltd) in
    Durban, intended to reduce the price of maize
    meal by up to 20 for South African households.
  • Energy-Efficiency Training Centre was established
    at the National Cleaner Production Centre with
    the first 600 students accepted for training,
    while a Radiation Training Facility has been
    established at the South African Nuclear Energy
    Corporation.
  • Approval of the Aquaculture Development and
    Enhancement Programme (ADEP) incentive to
    increase investments in the sector, enhance
    competitiveness and grow employment.

17
18
Industrial Development
  • Manufacturing Competitiveness Enhancement
    Programme launched in May 2012 189 enterprises
    approved for grants valued at R999,2 m and 33 551
    jobs expected to be retained.
  • Supported 12I projects with the project
    investment value of R10.2 bn and 1 357 projected
    jobs.
  • Four (4) sector/subsector designation templates
    completed and approved. (furniture,
    pharmaceuticals, solar water heaters and power
    and telecoms cable)


  • Support Programme for Industrial Innovation
    (SPII) approved for 53 projects to the total
    value of support of R203.5m.
  • 1506 students and 1 135 researchers approved for
    Technology and Human Resources for Industry
    Programme (THRIP) funding.

18
19
Industrial Development
  • Approved 70 Film productions.
  • The successful and growing impact of industry
    demand resulted in the Monyetla Work-Readiness
    Programme training 3 819 learners as Business
    Process Services (BPS) agents (3 233 agents and
    586 team leaders trained) and a total of 2 120
    competent learners being placed in various
    sectors of employment. 
  • Investments worth R1.3 billion were secured from
    the BPS Incentive Programme and 4 500 jobs are
    expected to be created over the next three years.
  • Due to the dtis support of the BPS sector, SA
    was named Off-Shoring Destination of the Year in
    the 2012 United Kingdom (UK) National Outsourcing
    Association Awards.
  •  

19
20
Overview of Incentive Schemes Overview of Incentive Schemes Overview of Incentive Schemes
Description Actual Actual
Description Number of firms/projects supported Potential jobs supported
Industrial Financing
EIP- MIP 548 12 269
EIP-TSP 122 1 357
AIS 28 767
BPS 12 3 936
Film Television 70 -
12i 12 1 357
CIP 6 -
MCEP 189 -
21
Overview of Incentive Schemes Overview of Incentive Schemes
Description Actual
Description Number of firms/projects supported
Broadening Participation Broadening Participation
CIS 314
BBSDP 1 212
SPII 53
Trade, Investment Exports Trade, Investment Exports
EMIA 1 082
22
Trade, Investment Exports
Investment and Export Promotion
Exports of R53.5 billion were achieved. Five Investment and Trade Initiatives (ITIs) were organised in Brazil, India, Russia and Zimbabwe and the Democratic Republic of Congo. Financially assisted 259 emerging exporters with access to export markets. R3.88 billion in potential investment projects was facilitated, in which Europe accounted for 19, Africa and Middle East contributed 13, Asia contributed 61, Latin America 2 and North American Free Trade (NAFTA) 5. Financial assistance provided to 1082 enterprises participating in Exporting, Marketing and Investment Assistance (EMIA) scheme. Organised the South African Expos in Beijing and Shanghai, China, in November 2012 in which 61 South African companies participated. Exports generated 6 months after event amounted to R35 million.
23
Trade, Investment Exports
Multilateral
The Third BRICS Trade Ministers Meeting was successfully held in Durban resulting in the adoption of the BRICS Trade and Investment Co-operation Framework. Participated in Third Contact Group on Economic and Trade Issues (CGETI) meeting in New Delhi, India to refine the Terms of Reference (TOR) and action plans for BRICS work programme on economic and trade issues. Significant advances were made in Economic Partnership Agreement (EPA) negotiations on tariff exchange, outstanding legal provisions and cooperation on new trade-related issues with European Union (EU).
24
Trade, Investment Exports
Africa
South African Development Community (SADC) Summit approved the approach to strengthening regional economic integration through the Tripartite Initiative, drawing together SADC, Common Market for Eastern and Southern Africa (COMESA) and the East African Community (EAC). The Summit also approved the launch of negotiations in SADC on trade in services. Led the process of co-ordinating a unified Southern African Customs Union (SACU) position during participation in the Tripartite Free Trade Area (T-FTA) negotiations. Contributed to the complementary work on infrastructure development under the T-FTA by leading the negotiations on the conclusion of the Memorandum of Understanding (MoU) for the North-South Corridor.
25
Trade, Investment Exports
Bilateral
17 Bilateral engagements concluded, notably with China, Brazil, Cuba, Indonesia and Japan. 11 Technical business missions conducted (Angola, Democratic Republic of Congo, Zambia, Ethiopia, Zimbabwe, Cameroon, Gabon, Kenya, Sudan, Mauritius and Egypt). 43 Trade missions were organised.
26
Broadening Participation
Enterprise Development Seda Technology Programme (stp) 8 new incubators were established 1 514 Small, Medium, Micro Enterprises (SMMEs) supported and 376 new SMMEs approved for assistance. 42 Incubation Centres countrywide supporting SMMEs in various economic sectors such as biotechnology, mining, agro-processing, construction, jewellery, automotives, metals and renewable energy. Women and Youth Empowerment The National Strategic Framework on Gender and Women Economic Empowerment was endorsed by ExBo and awaiting presentation to Cabinet. The Isivande Womens Fund (IWF) supported 22 projects. The Youth Enterprise Development Strategy (YEDS) has been drafted and consultations with key stakeholders were at an advanced stage.
27
Broadening Participation
Co-operatives
Workplace Challenge (WPC) extended its scope to 80 co-operatives in rural areas, KwaZulu-Natal Province (68) and Western Cape Province (12). 83 new contracts with new companies participating in the WPC. Eastern Cape (1), Gauteng (9), KwaZulu-Natal (56), North West Province (3), Western Cape (14).  
28
Legislation and Regulation
Policy and legislative development
Four draft Policy Frameworks developed for approval by Cabinet (Intellectual Property, Licensing of Business, Lotteries, Business Reform Registration and National Credit). Three Bills developed for approval by Cabinet (Licensing of Business Bill, Lotteries Amendment Bill, Business Reform Registration and National Credit Amendment Bill ). Special Economic Zones (SEZ) Bill introduced in Parliament. The Co-operatives Amendment Bill also introduced into Parliament. The B-BBEE Amendment Bill was approved by Cabinet and consultation process was undertaken. Legal Metrology Bill approved by Cabinet for public consultations
29
Administration

Vacancy rate has been reduced to 8 by 31 March 2013. The percentage of persons with disability status is 2.8 against an annual target of 2.4. The percentage of women in Senior Management Service (SMS) is at 43. All eligible creditors payments have been processed within 30 days. Policy Framework on Governance and Oversight approved by Minister to strengthen the relations between the dti and its entities.
30
Targets partially achieved during 2012/13 FY
31
Summary of Achievement of Targets for 2012/13
Financial Year
Strategic Goal (SG) Total APP Target per Strategic Goal Targets Achieved Partially Achieved
SG 1 20 13 7
SG 2 5 5 0
SG 3 20 9 11
SG 4 2 1 1
SG 5 9 8 1
TOTAL 56 36 20
31
32
Financial management
33
Five Year Comparison of budget vs Expenditure
R000
33
34
Overview of the expenditure for the 2012/13
  • The expenditure based on the final appropriation
    of R8,351 billion is 99.23 or R8,286 billion,
    implying an under-spending of R65 million (0.77)
  • Overview of expenditure per programme

Programme Final Appropriation Actual Expenditure Variance in R000 Variance as a of Final Appropriation
  R000 R000 R000
Administration 710,393 705,425 4,968 0.7
International Trade and Economic Development 133,116 132,705 411 0.3
Broadening Participation 940,319 929,694 10,625 1.1
Industrial Development 1,508,225 1,505,090 3,135 0.2
Consumer and Corporate Regulations 230,841 223,568 7,273 3.2
Industrial Development Incentive Administration 4,551,356 4,514,551 36,805 0.8
Trade and Investment South Africa 276,836 275,395 1,441 0.5
Total 8,351,086 8,286,428 64,658 0.8
35
Overview of the expenditure for the 2012/13
Overview of expenditure per economic
classification
Economic Classification Final Appropriation Actual Expenditure Variance in R000 Variance as a of Final Appropriation
  R000 R000 R000
Current payments
Compensation of Employees 675,319 671,550 3,769 0.6
Goods and Services 600,656 592,838 7,818 1.3
Interest and rent on land 492 487 5 1.0
Transfer and subsidies
Departmental agencies and accounts 1,128,695 1,127,995 700 0.1
Universities and technikons 32,604 32,600 4 0.1
Foreign government and international organisations 38,040 37,344 696 0.5
Public corporations and private enterprises 5,700,401 5,671,754 28,647 1.8
Non-profit institutions 23,900 23,900 - 0.0
Households 5,740 5,334 406 7.1
Payment for capital assets
Machinery and equipment 40,811 36,632 4,179 10.2
Software and other intangible assets 21,975 3,863 18,112 82.4
Payment for financial assets 82,453 82,131 322 0.4
Total 8,351,086 8,286,428 64,658 0.8
36
2012/13 audit outcome and interventions to
address the AGs findings
37
Audit outcomes
  • For the 2012/13 financial year, the department
    has received a financially unqualified audit
    opinion from the Auditor-General (AG). Both the
    areas of non-compliance reported by the AG
    relate to supply chain management.

38
Interventions to address AGs Audit Findings
Finding Management interventions
Certain goods and services with a transaction value below R500k were procured without obtaining the required price quotations. The accounting officer did not take steps to prevent irregular expenditure. These relate to transactions where three quotations could not be obtained and the delegations of authority did not specifically provide for these deviations. The delegations have since been amended to include the deviations. The following additional measures will be implemented Clear communication via financial circulars on the procurement requirements of transactions less than R500,000 will be sent to all staff. Targeted training interventions with procurement staff and divisional advisors on the departments procurement policies and procedures and SCM legislation. Irregular expenditure transactions have been analysed per Division and letters will be issued to the relevant managers to take appropriate action.
39
Key Challenges
  • The economic slowdown in traditional markets
    limits export growth.
  • Building support from big business to form
    partnerships with township business, small scale
    black farmers and the informal sector.
  • Creating buy-in for local procurement.

40
Adjusted estimates 2013/14 FY (Refer to
Annexure B)
40
41
Adjusted estimates 2013/14 FY
The department is currently busy with the adjusted estimates process. All inputs need to be submitted to National Treasury by the 10 October 2013. The database and AENE chapter was submitted to National Treasury on the 17 September 2013. This includes the reprioritisation between the different programmes and economic classifications. All the shifting/virement of funds between transfer payments is subject to National Treasurys approval. There were no additional funds requested for unforeseeable and unavoidable expenditure. The slide that follows includes a high level overview of the adjustments made.
42
Adjusted Estimates 2013/14 FY
Overview of the adjustments per programme
Programme Original Adjustments Revised Budget
  R000 R000 R000
Administration 690,079 35,950 726,029
International Trade and Economic Development 138,638 3,000 141,638
Broadening Participation 968,307 41,900 1,010,207
Industrial Development 1 606,524 (9,850) 1,596,674
Consumer and Corporate Regulations 256,157 - 256,157
Industrial Development Incentive Administration 5,543,134 (50,000) 5,493,134
Trade and Investment South Africa 369,741 (28,100) 341,641
Total 9,572,580 (7,100) 9,565,480
43
MTEF - 2014/15 FY
(Refer to Annexure C)
43
44
MTEF 2014/15 FY
The department submitted its MTEF inputs to National Treasury on the 17 July 2013. There was a request for additional funds over the MTEF period for the department and its agencies'. There was also a request for new priorities i.e. funding for the establishment of the Co-operative Tribunal, Co-Operative Development Agency and Support to the Co-Operative Apex Organisation. The slide that follows includes a high level overview of the funds requested and the motivation for such requests is included in the annexures.
45
Budget allocations for 2014/15 FY
Overview of additional funds requested per
programme
Programme Baseline Additional funds requested Revised based line
  R000 R000 R000
Administration 705,249 80,628 785,877
International Trade and Economic Development 148,324 - 148,324
Broadening Participation 1,007,387 1,100,003 2,107,390
Industrial Development 1,768,217 - 1,768,217
Consumer and Corporate Regulations 274,383 110,181 384,564
Industrial Development Incentive Administration 5,642,036 - 5,642,036
Trade and Investment South Africa 412,433 20,000 432,433
Total 9,958,029 1,310,812 11,268,841
46
Second Quarter Report - Key Highlights (Refer
to Annexure D)
46
47
Key Achievements
Industrial Development
SG 1 Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation
Launch of the SABS Local Content Verification Office and verification done on the framework for the verification of local production of busses and rail rolling stock and Verification of Johannesburg Rea Vaya BRT Busses for Phase 1B Route has started. Part of the 2013-2014 Family Planning tender (all SA-made contraceptives) worth est. R 100 million has been designated. Preliminary data show that 70 of the 2013-2014 anti-TB tender worth R 850 million has been won by SA manufacturers (in the absence of designation). Instruction Notes for Power and Telecom Cables, and Solar Water Heaters (SWHs) were published by the National Treasury during the period under review. Launch of the Solar PV Localisation Roadmap in conjunction with the Solar PV Industry Association. Establishment of the Mr Price Footwear and Leather Goods Cluster which will see the low end market being supplied with locally manufactured goods.
47
48
Key Achievements
Industrial Development
SG 1 Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation
The Pan African Quality Infrastructure (PAQI) was launched in Kenya on 30 August 2013. South Africa, through SANAS, NMISA and SABS holds the secretariats for 3 of the 4 PAQI structures, namely AFRAC, AFRIMETS and AFSEC as well as the Chairmanship of AFRAC. The Workplace Challenge Programme (WCP) -13 new companies participating. 64 projects with the investment value of R2,4 billion have been supported under MIP incentive 7 projects supported under AIS. 13 projects supported under the Film incentive. 87 projects supported under the MCEP incentive. 20 new projects under SPII approved to the value of R 58.96 million.
48
49
Trade, Investment Exports
SG 2 Build mutually beneficial regional global relations to advance SAs trade, industrial policy economic development objective
Facilitated Exports to the value of R1 198 million. Achieved R11.5 billion pipeline of investment in Renewable Energy projects. Trained 341 companies under the Programme to raise awareness on Export Processes. 2002 SACU Agreement amended to establish SACU Summit. SADC Model Bilateral Investment Treaty Template approved by MTF aligned to SA position. South Africa registered its position in support of the extension of AGOA beyond 2015 and pressed for the need for the countrys continued retention in AGOA as a beneficiary during the AGOA Forum held in Addis Ababa, Ethiopia, 9-13 August 2013. Progress Report on NTBs with respect to Brazil concluded.
50
Broadening Participation
SG 3 Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth
Draft Government-Wide Action Plan presented at the recent Cabinet Lekgotla. Public comments on the B-BBEE Codes of Good Practice submitted to the Minister for consideration. Launched the Bachelor of Economic Development Degree offered through the University of Western Cape. 30 incubators have been approved under the Incubation Support Programme. Supported 10 projects under the ISP incentive. Supported 64 projects under the CIS incentive. Supported 263 projects under the BBSDP incentive.
51
Legislation and Regulation
SG 4 Create a fair regulatory environment that enables investment, trade enterprise development in an equitable socially responsible manner
Co-operatives Amendment Act, 2013 assented to by the President. B-BBBE Amendment Bill classified as Section 76 and consulted with Provinces. Policy Framework and Licensing of Business Bill developed and public consultations conducted. Policy Framework and Lotteries Amendment Bill developed and public consultations conducted. Currently being debated in Parliament. Policy framework and National Credit Amendment Bill developed and approved by Cabinet for public consultations. Impact Assessment Study on the Liquor Act and Draft Policy developed. Final Policy Framework on Intellectual Property presented and approved by Cabinet for public consultations.
52
Summary of Expenditure vs Projections as at
31/08/13
  • The expenditure based on the year to date
    projections of R3,870 billion, is 85.1 or R3,323
    billion, implying an under-spending of R547
    million (14.1).
  • Overview of expenditure per programme

Programme Revised budget 2013/14 R000 YTD projection R'000 YTD expenditure R'000 Variance Variance Available Budget R'000
Programme Revised budget 2013/14 R000 YTD projection R'000 YTD expenditure R'000 Value R'000 Available Budget R'000
Administration 694,029 271,855 276,940 (5,085) (1.87) 417,089
International Trade and Economic Development 138,638 45,024 46,834 (1,810) (4.02) 91,804
Broadening Participation 964,807 426,915 419,234 7,681 1.80 545,573
Industrial Development 1,606,074 888,506 847,123 41,383 4.66 758,951
Consumer and Corporate Regulations 256,157 132,821 120,887 11,934 8.99 135,270
Industrial Development Incentive Administration 5,543,134 1,934,668 1,465,922 468,746 24.23 4,077,212
Trade and Investment South Africa 369,741 170,959 146,499 24,460 14.31 223,242
TOTAL 9,572,580 3,870,748 3,323,439 547,309 14.14 6,249,141
53
  • Thank you

53
54
Annexures Outline
  • Annexure A Targets partially achieved
  • Annexure B Adjusted Estimates 2013/14 FY
  • Annexure C MTEF 2014/15 FY
  • Annexure D Q2 report Key Highlights
  • Annexure E Acronyms and Abbreviations

54
55
Annexure A Targets partially achieved
55
56
Targets partially achieved cont
Strategic Objective 1 Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation Strategic Objective 1 Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation Strategic Objective 1 Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation Strategic Objective 1 Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation
Output Targets Actual Achievement Reasons for Variance
Automotive Incentive Scheme (AIS) and 12I tax allowance Number of enterprises approved for incentives AIS54 28 Variance (26) High-value projects were supported. No new original equipment manufacturers were introduced impacting on jobs projection
Automotive Incentive Scheme (AIS) and 12I tax allowance Value of projected investments from projects approved AISR2bn R1.8 bn Variance (R200 mn) Initial research at the introduction of the AIS, based on information from industry, indicated higher numbers for applications to be submitted, investment and jobs to be facilitated. No new models were introduced by OEMs in 2012/2013.
Automotive Incentive Scheme (AIS) and 12I tax allowance Number of new jobs projected from projects approvedAIS2 300 767 Variance (1 533) Initial research at the introduction of the AIS, based on information from industry, indicated higher numbers for applications to be submitted, investment and jobs to be facilitated. No new models were introduced by OEMs in 2012/2013.
Automotive Incentive Scheme (AIS) and 12I tax allowance Number of new jobs projected from projects approved 12I 2000 1357 Variance (643) The objective of the scheme is investment hence approved projects were more capital intensive not labour intensive.
56
57
Targets partially achieved cont
Strategic Objective 1 Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation Strategic Objective 1 Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation Strategic Objective 1 Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation Strategic Objective 1 Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation
Output Target Actual Achievement Reasons for Variance
Critical Infrastructure Programme ( CIP) implemented 12 enterprises financially supported worth R6bn 6 Variance (6) The majority of targeted projects were renewable energy projects, which could not be approved due to the bidding process managed by DOE. the dti is still awaiting clarity in terms of how CIP could support such projects.
Business Process Services (BPS), Film and TV Production 15 BPS projects approved 12 Variance (3) The programme performance dropped in 2012/13 due to global economic slowdown.
Business Process Services (BPS), Film and TV Production Number of Projected jobs from applications for BPS grant 6000 3936 Variance (2064) The target of the jobs was not achieved due to most of the jobs being realized in the year 2011/12 and sufficient skills pool being built to provide for BPS demand
57
58
Targets partially achieved cont
Strategic Objective 3 Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth. Strategic Objective 3 Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth. Strategic Objective 3 Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth. Strategic Objective 3 Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth.
Output Target Actual Achievement Reasons for Variance
Implementation of the enterprise investment programme ( EIP) Number of SMEs approved for EIP (MIP and TSP) IncentiveEIP-TSP300 122 Variance (178) The TSP product line was terminated mid-way of the financial year under review, hence fewer projects than anticipated.
Implementation of the enterprise investment programme ( EIP) Value of projected investments from projects approved EIP-TSPR4.2bn R1.5 bn Variance (R2.7 bn) The TSP product line was terminated mid-way of the financial year under review, hence fewer projects than anticipated.
Implementation of the enterprise investment programme ( EIP) Number of new projected jobs from approved projects EIP-TSP 6 160 1357 Variance (4803) The TSP product line was terminated mid-way of the financial year under review, hence fewer projects than anticipated.
Recommendation for the SMME review report implemented Approved action plan emanating from the SMME review report Draft Action Plan developed. Variance no approval Approval of Action plan not obtained
Implemented the Ten set-aside products Agreement with National Treasury on the implementation of the Ten set-aside products Deliberations with National Treasury took place. Variance No agreement reached 10 set-aside products still in deliberations with NT. An agreement was reached on reviewing the proposed ten set aside measures in light of the designation of sectors as a way of increasing market access.
CIS and BBSDP programme Number of enterprises approved for CIS and BBSDP grantsCIS490 314 Variance (176) The business model was improved in order to clear the applications backlog, but due to capacity constraints the target was not met.
58
59
Targets partially achieved cont
Strategic Objective 3 Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth. Strategic Objective 3 Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth. Strategic Objective 3 Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth. Strategic Objective 3 Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth.
Output Target Not Achieved Actual Achievement Reasons for Variance
B-BBEE Act and Codes of Good Practice for B-BBEE Release of the approved Amended B-BBEE Act for implementation The B-BBEE Bill was approved by Cabinet and introduced in Parliament Variance - no implementation Consultation process took longer than anticipated
B-BBEE Act and Codes of Good Practice for B-BBEE Release of amended Codes of good practice for implementation Revised Codes of good Practice were gazetted for 60 days to allow public consultation. Variance no implementation Consultation process took longer than anticipated
Developed and implemented the National Strategic Framework on Gender and Women Empowerment National Strategic Framework on Gender and Women Empowerment finalized and submitted to Cabinet for approval National Strategic Framework on Gender and Women Empowerment was endorsed by dtis EXBO. Variance approval by Cabinet not obtained. Consultation process took longer than anticipated
CIS and BBSDP programme Number of enterprises approved for CIS and BBSDP grantsCIS490 314 Variance (716) The business model was improved in order to clear the applications backlog, but due to capacity constraint the target was not met.
Developed and Implemented the Youth Enterprise Development Strategy Finalise Youth Enterprise Development Strategy and submit to Cabinet for approval Finalise Youth Enterprise Development Strategy supported/endorsed by the dtis Exbo. Variance no Cabinet approval The process was changed to focus on the development of a Programme of Action and its submission to the Minister.
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Targets partially achieved cont
Strategic Objective 4 Create a fair regulatory environment that enables investment, trade and enterprise development in an equitable and socially responsible manner. Strategic Objective 4 Create a fair regulatory environment that enables investment, trade and enterprise development in an equitable and socially responsible manner. Strategic Objective 4 Create a fair regulatory environment that enables investment, trade and enterprise development in an equitable and socially responsible manner. Strategic Objective 4 Create a fair regulatory environment that enables investment, trade and enterprise development in an equitable and socially responsible manner.
Output Target Actual Achievement Reasons for Variance
Policies, Bills, Regulations to enforce fair business practices developed One draft Bill on IP Not achieved. Three other Bills developed for approval. Variance the IP Bill was not developed Intellectual Property Bill not developed as it is awaiting adoption of Policy by Cabinet.   The other 3 Bills were prioritised as per Cabinet request.
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Targets partially achieved cont
Strategic objective 5 Promote a professional, ethical, dynamic, competitive customer-focused working environment that ensures effective efficient service delivery Strategic objective 5 Promote a professional, ethical, dynamic, competitive customer-focused working environment that ensures effective efficient service delivery Strategic objective 5 Promote a professional, ethical, dynamic, competitive customer-focused working environment that ensures effective efficient service delivery Strategic objective 5 Promote a professional, ethical, dynamic, competitive customer-focused working environment that ensures effective efficient service delivery
Output Target Actual Achievement Reasons for Variance
Annual Adjusted HR Plan Percentage () of vacancy rate 5 8 Variance (3) New positions were created late in the financial year. However, year-on-year improvement evident.
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Annexure B Adjusted estimates 2013/14 FY
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Adjusted estimates 2013/14 FY
The department is currently busy with the adjusted estimates process. All inputs need to be submitted to National Treasury by the 10 October 2013. The database and AENE chapter was submitted to National Treasury on the 17 September 2013. This includes the reprioritisation between the different programmes and economic classifications. All the shifting/virement of funds between transfer payments is subject to National Treasurys approval. There were no additional funds requested for unforeseeable and unavoidable expenditure. The slides that follow includes a high level overview of the adjustments made.
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Adjusted Estimates 2013/14 FY
Overview of the adjustments per programme
Programme Original Adjustments Revised Budget
  R000 R000 R000
Administration 690,079 35,950 726,029
International Trade and Economic Development 138,638 3,000 141,638
Broadening Participation 968,307 41,900 1,010,207
Industrial Development 1 606,524 (9,850) 1,596,674
Consumer and Corporate Regulations 256,157 - 256,157
Industrial Development Incentive Administration 5,543,134 (50,000) 5,493,134
Trade and Investment South Africa 369,741 (28,100) 341,641
Total 9,572,580 (7,100) 9,565,480
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Adjusted Estimates 2013/14 FY
Overview of the adjustments per economic
classification
Economic Classification Original Adjustments Revised Budget
  R000 R000 R000
Current payments
Compensation of Employees 854,246 (34,539) 819,707
Goods and Services 639,053 66,976 706,029
Interest and rent on land
Transfer and subsidies
Departmental agencies and accounts 1,234,727 50,995 1,285,722
Universities and technikons 12,834 - 12,834
Foreign government and international organisations 39,738 (35,200) 34,538
Public corporations and private enterprises 6,751,175 (77,730) 6,636,445
Non-profit institutions 18,885 8,900 27,785
Households 1,900 759 2,659
Payment for capital assets
Machinery and equipment 10,867 2,496 13,363
Software and other intangible assets 9,155 15,190 24,345
Payment for financial assets - 1 1
Total 9,572,580 (7,100) 9,565,480
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Adjusted Estimates 2013/14 FY
The following below are the key items that were
reprioritised during the adjusted budget
process Adjustments from
Programme Item Amount R000 Motivation
Programme 4 Industrial Development Policy Development Transfer Payment IDC Clothing Textile Production Incentive 75,825 Redirected between the Clothing Textiles Production Incentive Programme (PIP) and the Clothing Textiles Competitiveness Improvement Programme (CIP). This amounts to 10 of the PIP budget which is redirected in support of national cluster activities.
Programme 6 Industrial Development Incentive Administration Transfer payment Manufacturing Development Incentives (Automotive Production and Development) 265,000 The expected applications and claims are based on the Light Motor Vehicle Manufacturer production cycle, for example when they are introducing a new model or a face-lift/upgrade.  The applications for Component manufacturers are influenced and the volumes determined by this.
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Adjusted Estimates 2013/14 FY
Adjustments to
Programme Item Amount R000 Motivation
Programme 4 Industrial Development Policy Development Industrial Development Corporation Customised Sector Programme   72,325 Redirected between the Clothing Textiles Production Incentive Programme (PIP) and the Clothing Textiles Competitiveness Improvement Programme (CIP). This amounts to 10 of the PIP budget which is redirected in support of national cluster activities.
Programme 3 Broadening Participation Small Enterprise Development Agency     40,920 The Department of Trade and Industry has mandated Small Enterprise Development Agency (Seda) to provide non-financial support services to small, medium and micro enterprises (SMMEs) through-out the country. Over the years, Seda has been diligent in delivering a variety of programmes to SMMEs.
Programme 6 Industrial Development Incentive Administration Broadening Participation Development Incentive 220,000 To date since re-launching of the revised program 1 508 projects have been approved, with projects for enterprise improvement worth over R500 million and approximately R250 million paid as grants to approved applicants.
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Annexure C MTEF - 2014/15 FY
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MTEF 2014/15 FY
The department submitted its MTEF inputs to National Treasury on the 17 July 2013. There was a request for additional funds over the MTEF period for the department and its agencies'. There was also a request for new priorities i.e. funding for the establishment of the Co-operative Tribunal, Co-Operative Development Agency and Support to the Co-Operative Apex Organisation. The slides that follow includes a high level overview of the funds requested and the motivation for such requests.
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Budget allocations for 2014/15 FY
Overview of additional funds requested per
programme
Programme Baseline Additional funds requested Revised based line
  R000 R000 R000
Administration 705,249 80,628 785,877
International Trade and Economic Development 148,324 - 148,324
Broadening Participation 1,007,387 1,100,003 2,107,390
Industrial Development 1,768,217 - 1,768,217
Consumer and Corporate Regulations 274,383 110,181 384,564
Industrial Development Incentive Administration 5,642,036 - 5,642,036
Trade and Investment South Africa 412,433 20,000 432,433
Total 9,958,029 1,310,812 11,268,841
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Budget allocations for 2014/15 FY
Overview of additional funds requested per
economic classification
Economic Classification Baseline Additional funds requested Revised based line
  R000 R000 R000
Current payments 1,542,577 100,628 1,643,205
Compensation of Employees 915,033 915,033
Goods and Services 627,544 100,628 728,172
Interest and rent on land
Transfer and subsidies 8,388,188 1,210,184 9,598,372
Departmental agencies and accounts 1,343,622 1,210,184 2,553,806
Universities and technikons 15,751 15,751
Foreign government and international organisations 35,642 35,642
Public corporations and private enterprises 6,927,103 6,927,103
Non-profit institutions 64,320 64,320
Households 1,750 1,750
Payment for capital assets 27,264 27,264
Machinery and equipment 18,553 18,553
Software and other intangible assets 8,711 8,711
Payment for financial assets
Total 9,958,029 1,310,812 11,268,841
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MTEF 2014/15 FY
Motivation for the additional funds requested for
the Department
Item Descriptions 2014/15 2015/16 2016/17 Total MTEF PERIOD Motivations
  R000 R000 R000 R000
Office Accommodation 80,628 116,565 108,030 305,223 The request is for additional funds is for the DTI Campus contractual commitments under the PPP (R33.2m), rental of The Fields (Seda) (R18.5m) and the rental and facilities management for Block G (R31.5m).
TISA Foreign mission office 20,000 25,000 75,000 75,000 The spending pressure under programme seven is as a result of a need to define the dtis global footprint through the establishment of additional foreign offices as indicated on the letter from the speaker of the National Assembly date 11 June 2013.
Totals 100,628 141,565 183,030 425,223
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MTEF 2014/15 FY
Motivation for the additional funds requested for
the entities
Item Descriptions 2014/15 2015/16 2016/17 Total MTEF PERIOD Motivations
  R000 R000 R000
Companies Tribunal 10,000 14,092 21,989 46,081 For ICT strategy implementation plan for the effective functioning of the Tribunal.
National Credit Regulator 37,286 25,755 27,380 90,421 Funds are require for acquisition of new building National Credit Regulator occupied their current premises since the inception of the NCR in July 2006.
National Consumer Tribunal 8,510 13,610 20,430 42,550 There are currently amendments proposed to the National Credit Act (NCA) that will impact on and expand the mandate of the NCT substantially with concomitant cost implications.
National Consumer Commission 40,085 53,475 - 93,560 It is necessary for the NCC to have an ICT strategy implementation plan for the effective functioning of the entity. Additional funds are also requested for the design and hosting of the NCC website
National Gambling Board 14,300 6,100 5,700 26,100 The NGB has been allocated a budget which does not fully fund the legislative mandate of the Board in terms of what the Act requires.
Export Credit Insurance Corporation - 269,740 136,564 406,304 Funding, of interest make up transfers existing and pipeline export credit projects supported by ECIC.
National Empowerment Fund 1,100,000 1,100,000 1,100,000 3,300,000 The NEF is now at a growth stage where significant additional capital will be required to fund the rapidly increasing programme transaction pipeline which has been developed directly in line with Governments programme of economic development.
Totals 1,210,181 1,482,772 1,312,063 4,005,016
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MTEF 2014/15 FY
Funds requested for new priorities
Item Descriptions 2014/15 2015/16 2016/17 Total MTEF PERIOD Motivations
  R000 R000 R000 R000
Co-operative Tribunal 1 14,345 15,265 29,611 The Co-operatives Amendment Bill was approved by both houses of Parliament, i.e. National Assembly in November 2012 and National Council of Provinces (NCOP) in May 2013
Co-Operative Development Agency 1 46,200 62,000 108,201 The Co-operatives Amendment Bill was approved by both houses of Parliament, i.e. National Assembly in November 2012 and National Council of Provinces (NCOP) in May 2013
Support to the Co-Operative Apex Organisation 1 4,717  5,417 10,135 The Co-operatives Amendment Bill was approved by both houses of Parliament, i.e. National Assembly in November 2012 and National Council of Provinces (NCOP) in May 2013
Totals 3 65,262 85,682 147,947
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Annexure D Second Quarter Report - Key
Highlights
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Key Achievements
Industrial Development
SG 1 Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation
Industrial Policy Action Plan (IPAP) Annual Report prepared and approved by DG and Minister. Key research project undertaken on smoke detectors study to indicate possibility of designation. Part of the 2013-2014 Family Planning tender (all SA-made contraceptives) worth est. R 100 million has been designated. Preliminary data show that 70 of the 2013-2014 anti-TB tender worth R 850 million has been won by SA manufacturers (in the absence of designation). Instruction Notes for Power and Telecom Cables, and Solar Water Heaters (SWHs) were published by the National Treasury during the period under review.
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Key Achievements
Industrial Development
SG 1 Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation
ITAC issued final regulations on scrap metals export controls in August 2013. The regulations calls for a Price Preferential System which will come into effect from 16 September 2013. A draft instruction note submitted to National Treasury for the designation of Valves Products and Actuators and is currently being reviewed. Practice Notes on Revised NIPP policy are currently being considered jointly by the dti and National Treasury. Launch of the Solar PV Localisation Roadmap in conjunction with the Solar PV Industry Association. APORDE Capacity Building Programme and parallel workshops conducted.
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Key Achievements
Industrial Development
SG 1 Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation
Significantly assisted EDD and ITAC in formulating Scrap Metal policy intervention which will create a significant cost advantage for local processing industries (i.e. steel mini-mills, foundries and secondary smelters). Launch of the SABS Local Content Verification Office and verification done on the framework for the verification of local production of busses and rail rolling stock and Johannesburg Rea Vaya BRT Busses for Phase 1B Route has started. Made substantive progress on tripartite negotiations on TBT Chapter. The Pan African Quality Infrastructure (PAQI) was launched in Kenya on 30 August 2013. South Africa, through SANAS, NMISA and SABS holds the secretariats for 3 of the 4 PAQI structures, namely AFRAC, AFRIMETS and AFSEC as well as the Chairmanship of AFRAC.

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Key Achievements
Industrial Development
SG 1 Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation
Establishment of the Mr Price Footwear and Leather Goods Cluster which will see the low end market being supplied with locally manufactured goods. A combined approval to date of more than R2.1bn has been achieved and over R1.27bn has been disbursed to the participating enterprises from CIP and PIP respectively. Since inception 20 385 jobs have been created as a result of the support. The Workplace Challenge Programme (WCP) -13 new companies participating. 64 projects with the investment value of R2,4 billion have been supported under MIP incentive. 7 projects supported under AIS. 13 projects supported under the Film incentive. 87 projects supported under the MCEP incentive.
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Trade, Investment Exports
SG 2 Build mutually beneficial regional global relations to advance SAs trade, industrial policy economic development objective
Developed and advanced SA/SACU negotiating positions for T-FTA. Monitored the implementation of the SADC Trade Protocol commitments towards South Africa. 2002 SACU Agreement amended to establish SACU Summit. Cab memo prepared on SA position to promote a development integration agenda in SACU aligned to SAs regional integration approach. Tariff modalities not re-opened and agreed modalities reflect SACUs positions very well. SADC Model Bilateral Investment Treaty Template approved by MTF aligned to SA position.
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Trade, Investment Exports
SG 2 Build mutually beneficial regional global relations to advance SAs trade, industrial policy economic development objective
Cab memo on options of SA approach to SACU developed resulting in prioritisation of engagements with BLNS at Presidential level. 2 National Pavilions organised in 31 August 2013, namely FILDA and FACIM Bilateral meeting held with the Namibian Trade and Industry Minister in August 2013. Facilitated a seminar on construction and tourism sectors during a visit by the Tunisian Minister of Tourism in August 2013.
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Trade, Investment Exports
SG 2 Build mutually beneficial regional global relations to advance South Africas trade, industrial policy economic development objective
South Africa registered its position in support of the extension of AGOA beyond 2015 and pressed for the need for the countrys continued retention in AGOA as a beneficiary during the AGOA Forum held in Addis Ababa, Ethiopia, 9-13 August 2013. Progress Report on NTBs with respect to Brazil concluded. Successful 10th SA-UK Bilateral Forum, Sub Committee on Trade, Investment and Economic Issues held in Cape Town on 09-10 September 2013. Task Team established and coordinated research and analysis for SA Country Chapter of BRICS Joint Trade Study.
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Trade, Investment Exports
SG 2 Build mutually beneficial regional global relations to advance South Africas trade, industrial policy economic development objective
Facilitated the Swiss Business Forum in Cape Town in September. Held six Government to Government Platforms. Hosted seven Successful Technical and Business missions (Africa Bilateral). Facilitated Exports to the tune of R1 198 million. Achieved R11.5 billion pipeline of investment in Renewable Energy projects. Trained 341 companies under the Programme to raise awareness on Export Processes.
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Broadening Participation
SG 3 Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth
Draft Broad-Based Black Economic Empowerment Act classified as Section 76. 8 public hearings conducted in 9 Provinces. Comments from public hearings have been incorporated. Draft Government-Wide Action Plan presented at the recent Cabinet Lekgotla. Public comments on the B-BBEE Codes of Good Practice submitted to the Minister for consideration. Launched the Bachelor of Economic Development Degree offered through the University of Western Cape.
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Broadening Participation
SG 3 Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth
Establishment of Sector Specific Regional Industrial Clusters (1st cluster Mpumalanga Stainless Steel Cluster). Support Programme for Industrial Innovation (SPII) 20 new projects approved to the value of R 58.96 million. A total of 1135 researchers supported - Support Programme for Technology and Human Resources for Industrial Progamme (THRIP). 30 incubators have been approved under the Incubation Support Programme.
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Broadening Participation
SG 3 Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth
The President has assented to the Co-operatives Amendment Act, 2013. The Act has been published in the government gazette No. 36729 (Notice No. 558) of 05 August 2013. Held the International Day of Co-operatives in Durban in July 2013. Supported 10 projects under the ISP incentive. Supported 64 projects under the CIS incentive. Supported 263 projects under the BBSDP incentive.
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Regulation
SG 4 Create a fair regulatory environment that enables investment, trade enterprise development in an equitable socially responsible manner
Policy Framework and Licensing of Business Bill developed and public consultations conducted. Policy Framework and Lotteries Amendment Bill developed and public consultations conducted. Currently being debated in Parliament. Policy framework and National Credit Amendment Bill developed and approved by Cabinet for public consultations. Impact Assessment Study on the Liquor Act and Draft Policy developed. Final Policy Framework on Intellectual Property presented and approved by Cabinet for public consultations. Legal Metrology Bill was certified after engagements with State Law Advisers.
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Administration Co-ordination
SG 5 Promote a professional, ethical, dynamic, competitive customer-focused working environment that ensures effective efficient service delivery
Vacancy Rate is at 10.13 - increase was due to 52 new posts created since April 2013. Statistics for women in Senior Management Service (SMS) positions is at 43.97 and the people with disability is at 2.52. Received Top Award for best government department in women empowerment. All eligible creditors payments were processed within 30 days. Launched the Small Business Connect newspaper Launched the 2013 Big Break Legacy TV Show 18 exhibitions and outreach initiatives conducted
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Summary of Expenditure vs Projections as at 31
August 2013
  • The expenditure based on the year to date
    projections of R3,870 billion, is 85.1 or R3,323
    billion, implying an under-spending of R547
    million (14.1).
  • Overview of expenditure per programme

Programme Revised budget 2013/14 R000 YTD projection R'000 YTD expenditure R'000 Variance Variance Available Budget R'000
Programme Revised budget 2013/14 R000 YTD projection R'000 YTD expenditure R'000 Value R'000 Available Budget R'000
Administration 694,029 271,855 276,940 (5,085) (1.87) 417,089
International Trade and Economic Development 138,638 45,024 46,834 (1,810) (4.02) 91,804
Broadening Participation 964,807 426,915 419,234 7,681 1.80 545,573
Industrial Development 1,606,074 888,506 847,123 41,383 4.66 758,951
Consumer and Corporate Regulations 256,157 132,821 120,887 11,934 8.99 135,270
Industrial Development Incentive Administration 5,543,134 1,934,668 1,465,922 468,746 24.23 4,077,212
Trade and Investment South Africa 369,741 170,959 146,499 24,460 14.31 223,242
TOTAL 9,572,580 3,870,748 3,323,439 547,309 14.14 6,249,141
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Summary of Expenditure vs Projections as at 31
August 2013
  • Overview of expenditure per economic
    classification

Economic classification Revised budget 2012/13 R'000 YTD projection R'000 YTD expenditure R'000 Variance Variance Available Budget R'000
Economic classification Revised budget 2012/13 R'000 YTD projection R'000 YTD expenditure R'000 Value R'000 Available Budget R'000
Compensation of employees 854,246 335,255 308,691 26,564 7.92 545,555
Goods and services 636,767 260,123 239,221 20,902 8.04 397,546
Payments for Financial Assets 0 0 604 (604) 0.00 (604)
Payment for capital assets 22,110 6,974 5,338 1,636 23.46 16,772
Transfers subsidies 8,059,457 3,268,396 2,769,586 498,810 15.26 5,289,871
TOTAL 9,572,580 3,870,748 3,323,439 547,309 14.14 6,249,141
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Reasons for material expenditure variance
Item description Amount (R000) Reasons for under/(over) expenditure
Compensation of employees 26,564 Under spending due to 144 (10) vacant positions out of 1421 posts
Good Services 20,902 Under spending occurred largely on business and advisory consultants due to Payment not made to Deloitte consultants due to deviations from payment schedule and SLA. The final report for the studies of the Optimal Economies of scale to support localization which was received late, payment is anticipated during September 2013 Encompassing study of BEE deals has been concluded, however, the final payment has not been made as the study had to be vetted by the Chief Economist. Payment will be made after final sign-off of the report. Under expenditure on travel is mainly due to outstanding foreign mission accounts
Capital 1,636 The procurement of hardware and software for the Integrated Electronic Management System (IEMS) is in the process of being finalised by SITA.
Transfer subsidies
Centurion Aerospace Village 6,636 R6.6 million earmarked for the Centurion Aerospace Village could not be disbursed due to an outstanding business plan and Memorandum of Agreement
INTSIMBI National Tooling Initiative 21,800 Payment of R21.8 million was submitted to Finance but could not be processed due to the unavailability of the BAS system
CSIR National Foundry Technology Network Metals 7,065 Payment of R7 million was submitted to Finance but could not be processed due to unavailability of the BAS system
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Reasons for material expenditure variance
(continued)
Item description Amount (R000) Reasons for under/(over) expenditure
National Consumer Commission 10,033 Payments are made on a monthly basis in line with the NCCs spending pattern.
Coega Development Corporation 100,000 The under expenditure was as a result of a R100 million claim received but not submitted to Finance for payment due to compliance issues not met in terms of the funding agreement. Payment is anticipated to be made during September 2013.
Small and Medium Enterprise Development Programme (2,839) Ov
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