PRESENTATION TO THE SELECT COMMITTEE ON … 2016-17-AR.pdf · PRESENTATION TO THE SELECT COMMITTEE ON TRADE AND INTERNATIONAL RELATIONS the dti ... In the post Global Financial Crisis,

PRESENTATION TO THE SELECT COMMITTEE ON TRADE AND INTERNATIONAL RELATIONS

the dti’s ANNUAL REPORT 2016-17

18 October 2017

Director-General

Lionel October

1

Presentation Outline

Economic Context Strategic Goals and objectives

Annual Performance Key Achievements Summary of achievements of targets Financial Management Audit results

2

Overview

the dti achieved a Clean Audit - Financial statements are free from material misstatements and no material findings reported on performance objectives or non-compliance with legislation;

99.62% of the allocated budget of R10.3 billion was spent;

50% women in senior management positions and 3.4% people with disabilities were employed;

All eligible creditors were paid within 30 days;

Through Black Industrialist Programme, over R3 billion of investments were leveraged, creating 7 000 new jobs.

3

Executive Summary

Broad Based Black Economic Empowerment regulations were gazetted and the Commission operationalized;

8th Iteration of IPAP launched – with strengthened support for Black Industrialists and Economic Transformation to grow productive sectors such as Agriculture, Manufacturing and Mining;

6 Industrial Parks were approved for revitalization;

Equity Equivalent Investment Programme facilitated skills development, enterprise development and research, leading to the creation of 241 job opportunities.

4

Strategic imperatives

Grow the manufacturing sector to promote industrial

development, job creation, investment

and exports

Improved conditions for consumers, artists

and opening up of markets for new patents players

Strengthened capacity to deliver on

the dti mandate

1. To facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation

2. Build mutually beneficial regional and global relations to advance South Africa’s trade, industrial policy and economic development objectives;

3. Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth;

4. Create a fair regulatory environment that enables investment, trade and enterprise development in an equitable and socially responsible manner;

5. Promote a professional, ethical, dynamic, competitive and customer-focused working environment that ensures effective and efficient service delivery.

A dynamic industrial,

globally competitive South

African economy,

characterised by inclusive

growth and development,

decent employment and

equity, built on the full

potential of all citizens.

5

6

Weak global economic performance in 2016

Global economy expanded by 3.1% in 2016

compared to the lower modest growth rate

of 3.4% registered in 2015.

The overall economic performance in both

developed and developing countries was

weak:

• Advanced economies grew by 1.7 % in

2016 compared to 2.1 % in 2015

• Growth in the Euro area slowed to just

1.7 % in 2016 compared to 2 % in 2015

• Economic growth in EMDEs remained

mixed as countries such as Russia and

Brazil remained in recession while

growth in China continued to slow.

• EMDEs grew by 4.1 % in 2016

compared to 4.2 % in 2015.

-6

-4

-2

0

2

4

6

8

10

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Per c

ent

Year

Global GDP Growth Rates: Selected Regions

World

Advancedeconomies

Euro area

Emergingmarket anddevelopingeconomies

Sub-SaharanAfrica

Source: IMF, world economic

outlook

7

8

SA avoided recession in 2016

Economic activity stalled in 2016 with growth of only 0.3% in 2016 compared with 1.3% in 2015.

This is the third year in a row that growth slowed and the lowest recorded since 2009.

However, the SA economy avoided recession in 2016, largely as a result of the positive growth rate in the tertiary sector which grew by 1.4 per cent.

Domestic economy is expected to grow at a rate of 0.8% and 1.6% in 2017 and 2018, respectively.

It remains unclear whether these projections will hold given the recent (April 2017) downgrade of the country’s credit rating to sub-investment grade.

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Per c

ent

Year

SA GDP Growth Rates at market prices (2010=100)

Source: StatsSA

9

Domestic investment maintained an upward trend

Domestic investment maintained an upward trend over the period from 2007 to 2016

However challenging economic and operating environment alongside subdued demand, both locally and abroad resulted in spare production capacity in many industries resulted in GFCF declining by 3.9 % in 2016.

GFCF by public corporations declined by 1.6 % from R124.0 billion in 2015 to R122.0 billion in 2016. The contraction is attributed to a decline in real capital outlays by the transport sector as some of the leading public entities, more especially Transnet, deferred capital projects.

GFCF by general government, although the smallest contributor to total GFCF, has been steadily increasing since 2010.

Due to continued construction of national and provincial roads, GFCF by government stood at R112.9 billion in 2016 compared to R111.6 billion in 2015.

0

100

200

300

400

500

600

700

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016R

'bill

ion

GFCF by orgaisation type

Total GFCF

GFCF:Generalgovernment

GFCF:Publiccorporations

GFCF:Privatebusinessenterprises

Source: SARB

10

Employment grew in Q4 2016

Despite weak economic performance, employment in the formal and informal sectors as reported in the Quarterly Labour Force Survey (QLFS) in Q4 2016 grew by 235 000 resulting in a slight decline of 0.6 percentage points in the unemployment rate to 26.5%.

However, unemployment is 2% higher compared to the fourth quarter of 2015.

The growth in employment was mainly driven by the community, social and personal services sector which grew by 73,000 jobs, followed by Transport and Manufacturing by 46,000 and 44,000 jobs, respectively.

Mining and construction sectors declined by 17,000 and 9,000 jobs respectively.

12,000

12,500

13,000

13,500

14,000

14,500

15,000

15,500

16,000

16,500

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

2008 2009 2010 2011 2012 2013 2014 2015 2016

Empl

oym

ent (

in th

ousa

nds)

Quarter

Total employed:QLFS from 2008-2016

Total employed:QLFSSource: Stats SA

11

Auto sector dominate SA manufactured exports

From 2007 to 2016, vehicles topped the list of the exported manufactured goods reaching R772 billion.

The Americas and Europe were the top export destinations of SA manufactured motor vehicles for transport of persons.

Metals were South Africa’s second largest manufactured export product to the world. The top three export destination for this commodity were Asia (in particular China) recording R291 billion, Europe R159 billion and Africa R97 billion.

Machinery and equipment ranked the third largest manufactured export with exports totalling R588 billion in the last decade (2007 to 2016). Exports to Africa accounted for 44 per cent and Europe 35 per cent of total machinery exports.

0 500 1,000

Vehicles

Metals

Machinery and Equipments

Chemicals

Metal Products

Petrolium Products

Food

Machinery and Equipments

Paper

Plastics

R billions

Sect

ors

South Africa's 10 Manufactured export products from 2007- 2016

Source: Data & Graph-the dti

12

SA trade with Africa is rising

The priority for this government in the medium term is to promote intra-African trade and broaden integration across existing regional communities within a development integration framework.

Due to these efforts, the rest of Africa is the destination for approximately 30 % of South Africa’s global exports.

In 2010, Africa was the fourth largest export destination for South African products. However, in 2016, Africa became the second largest destination for South African products.

Cumulatively, in the past ten years, South Africa’s exports to Africa were mainly from the Manufacturing sector (88 %), followed by Mining (5 %) and the remaining 7% were from the Agriculture, forestry and fisheries sector.

Most fundamentally, is the content of this trade as it is increasingly in value-added products thus supporting our objectives of industrial development, job creation and economic transformation.

R 2 R 9

R 110 R 112 R 126 R 129

R 150 R 159

R 187 R 202

0

50

100

150

200

250

300

350

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016R

bill

ions

Year

South Africa's Trade with Africa from 2007-2016

Exports toAfrica

Imports fromAfrica

TradeBalance

Source: Data & Graphs-the dti

13

SA trade balance with BRICS in negative territory

South Africa has been trading in a deficit with BRICS countries in the past ten years (2007 to 2016).

In 2016, the negative trade balance narrowed to R113 billion from R130 billion in 2015.

This was ascribed to a rise in exports by 6.7 per cent alongside with imports plunging by 2.9 per cent.

India and China are still the biggest importers of the South African products.

In the post Global Financial Crisis, South Africa’s demand for goods from BRICS grew to reach its highest level of R277 billion in 2015 and thereafter dropped to R269 billion in 2016.

-R 58 -R 67

-R 31 -R 27 -R 22 -R 48

-R 70 -R 90

-R 130 -R 113

-200

-150

-100

-50

0

50

100

150

200

250

300

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

R b

illio

ns

Year

South Africa's Trade with BRICS from 2007-2016

Exports toBRICS

Importsfrom BRICS

TradeBalance

Source: Data & Graph-the dti

14

KEY ACHIEVEMENTS: ANNUAL REPORT 1 APRIL 2016– 31 MARCH 2017

15

INDUSTRIAL DEVELOPMENT

16

SG 1: Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation Instruction notes issued for designations during the financial year were for steel and steel products

to ensure the maximum utilisation of existing steel fabrication capacity across the infrastructure build programme;

the dti invoked provisions of Section 9.3 of the Preferential Procurement Policy Framework Act, 2000 (Act No. 5 of 2000) to engage the South African National Roads Agency Limited (Sanral) to secure the localisation of steelworks in the Mtentu and Msikaba bridge projects in Eastern Cape, and mandated the local purchase of stationery by state-owned companies and municipalities;

Progress has been made in supporting several local companies to improve their competitiveness and increase their export capabilities. This has been done either through funding, technology transfer or linking local players with global Original Equipment Manufacturer (OEM) value supply chains. Highlights include an agreement between the dti, South African Airways Technical (SAAT) and

the National Industrial Participation (NIP) obligor to revive the aircraft engine maintenance, repair and overhaul capabilities of SAAT.

Industrial financing interventions have significantly contributed to rescue, revival and growth in several

sectors. The Industrial Development Corporation (IDC) was the major source of dedicated industrial financing, having disbursed R9.1 billion between April 2016 and February 2017 across various IPAP sectors.

17

SG 1: Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation

In a joint investment project with the IDC, Beijing Automobile International Corporation began building its new R11 billion vehicle manufacturing plant, which is set to create 2 500 direct jobs;

Toyota South Africa opened a R6.1 billion assembly line to produce its Fortuner and Hilux models, R1.9 billion of which will go towards supplier tooling, R1.4 billion to in-house tooling, and the remainder to in-house facilities and buildings to cater for new press machines. The project attracted 5 new international suppliers, while creating about 2 000 new jobs in the supply chain;

Ford South Africa invested R11.5 million in the construction and operation of a new job training and entrepreneurial development centre, which opened in October 2016;

Volkwagen South Africa invested R120 million in a new 21 000 try-out press to improve manufacturing capabilities;

Mercedes - Benz South Africa awarded a tender to Great North Transport for the supply, maintenance and financing of 150 commuter buses, with Marcopolo South Africa as the bus body builder. The approved total bid price, including repairs and maintenance is R511.6 million over a 5-year period.

18


BMW South Africa unveiled a purpose-built solar carport that allows its electric vehicle range to charge using solar energy. BMW is also set to expand its shared services centre and IT operations centre, which is one of only two specialist hubs globally, with the aim of increasing personnel in both operations by 220 people;

Footwear manufacturing increased by 2 million pairs in the first quarter of 2016 and employment creation continued. Exports in the leather and footwear sector have begun to increase as well;

Bombardier Transportation launched its propulsion and control facility in Elandsfointein, Eastern Gauteng, in July 2016. The new 6 000m2 facility will produce Bombardier Mitrac high- power propulsion equipment for use in Transnet’s locomotives project;

In September 2016, AVK Valves officially launched its new R200-million plant in Benoni, Eastern Gauteng, in partnership with Premier Valves. The plant features improved engineering processes, computer numeric-controlled machines and a training facility;

MTU South Africa unveiled its newly upgraded workshop facility in Cape Town in October 2016. It will assemble diesel engines for 232 diesel locomotives that China North Rail is to deliver to Transnet as part of the locomotive build programme.

19

China North Rail delivered 2 Complete Knock Down (CKD) diesel locomotives for final assembly at Transnet Engineering’s Durban facility;

Transnet Engineering unveiled its locally manufactured Trans-Africa diesel-powered locomotive, which is particularly suitable for use on branch lines and in shunting yards;

Gibela secured 32 local suppliers for the R51 billion Prasa contract, and seeks many more suppliers to produce 600 new passenger trains, of which 580 will be produced in South Africa. Gibela also signed a 19-year maintenance and technical support programme with PRASA;

the dti launched a R100-million tomato processing plant in Tzaneen by Dursots-All Joy. The factory is expected to assist in addressing the increased demand for tomato paste in South Africa while ensuring business for 15 commercial farmers in the area. The plan is to ultimately employ 300 people;

In partnership with National Treasury and the deciduous fruit industry, the Western Cape Provincial Government has established the Deciduous Fruit Development Chamber commercialisation programme. This will disburse R120 million in funding to emerging fruit farmers to grow their businesses to fully commercial status.


20

MPACT opened a R350 million polyethylene terephthalate recycling plant that created 1 000 indirect jobs. The operation resulted in South Africa becoming the 24th country overall and the first in Africa to meet Coca-Cola’s certification requirements to package their soft drinks;

Yangtze Optics Africa Company launched its R150 million investment in a 15 000 meter square fibre optic plant at Dube Trade Port in May 2016. The investment is expected to create approximately 150 new jobs for the Chinese company to supply fibre optic cables and fibre to the home solutions and local telecommunications players including Telkom, Neotel, Vodacom, MTN, Cell C and Vumatel;

Tronox opened its new, R3.3 billion Fairbreeze mineral sands mine in KwaZulu-Natal, its main product titanium dioxide. 250 direct jobs and 1 000 indirect jobs have been created.


21

PROVINCIAL SPREAD OF APPROVALS WITH PROJECTED NEW JOBS AND INVESTMENTS

22

PROVINCIAL SPREAD OF APPROVALS WITH PROJECTED NEW JOBS AND INVESTMENTS

NORTH WEST 2015/16 26 approvals (R178.7m) R403.4m projected investment 577 projected new jobs

2016/17 35 approvals

(R106m) R324.6m projected

investment 88 projected new jobs

LIMPOPO 2015/16 69 approvals (R17.8m) R226.8m projected investment 1 575 projected new jobs


(R660.9m) R2.8bn projected

investment 272 projected

new jobs

GAUTENG 2015/16 807 approvals (R4.3bn) R37bn projected investment 62 860 projected new jobs

2016/17 597 approvals (R3.9bn)

R11bn projected investment

8 647 projected new jobs

2016/17 11 approvals (R73.7m)

R29.6m projected investment

2015/16 34 approvals (R480m) R943.5m projected investment 1 139 projected new jobs

MPUMALANGA

FREE STATE 2015/16 13 approvals (R298.6m) R800.5m projected investment 192 projected new jobs

2016/17 8 approvals (R402m)

R1.7bn projected investment

339 projected new jobs

KWAZULU-NATAL 2015/16 261 approvals (R2.4bn) R13.3bn projected investment 15 537 projected new jobs


(R4.6bn) R15.8bn projected

investment 4 513 projected

new jobs


(R1.5bn) R2.9bn projected

investment 800 projected

new jobs

2015/16 75 approvals (R775m) R2bn projected investment 5 525 projected new jobs

EASTERN CAPE WESTERN CAPE 2016/17

556 approvals (R1.5bn)

R4.6bn projected investment

8 583 projected new jobs

2015/16 672 approvals (R2.1bn) R9.5bn projected investment 33 123 projected new jobs

NORTHERN CAPE 2015/16 5 approvals (R9.3bn) R315.9m projected investment 1 210 projected new jobs

2016/17 6 approvals (R26.7m)

R180.6m projected Investment

100 projected new jobs

23

BLACK INDUSTRIALIST SCHEME

PROJECTED JOBS AND INVESTMENT PER PROVINCE

36 Projects

approved (R1bn)

R3.1bn

Projected investment

3 979 Projected new jobs

3 837 Baseline

jobs

R122.5m Disbursed

PROVINCE APPROVAL AMOUNT

BASELINE JOBS

PROJECTED JOBS

PROJECTED INVESTMENT

Eastern Cape R94.9m 242 332 R383.1m

Free State R8m 12 73 R34.5m

Limpopo R48.3m 125 70 R120.8m

KwaZulu-

Natal

R219.9m 1 651 1 608 R623.8m

Gauteng R564.7m 1 549 1 755 R1.77bn

Western

Cape

R66.8m 258 141 R169.6m

24

6 Projects approved (R13.4m)

R14.3m Projected

investment

R20.8m Disbursed

SPII supports industrial innovation for a competitive South African economy.

APPROVALS IN THE WESTERN CAPE SPII APROVALS 8 2016/17

Number of projects approved 6

Grant approved R13.4m

Projected investment R14.3m

SUPPORT PROGRAMME FOR INDUSTRIAL INNOVATION

FAST FACTS

25

TECHNOLOGY AND HUMAN RESOURCE FOR INNOVATION PROGRAMME


R251m Projected

investment

R1.6m Claims paid

75 Students to be

supported

EASTERN CAPE NORTH WEST GAUTENG Agro-processing

R12.2m (1) Advanced manufacturing

R6.7m (1) Downstream minerals

R2.4m (1) Green energy saving

R13.6m (1)

Agro-processing R1.1m (1)

Advanced manufacturing R31.8m (3)

Business development services R10.2m (2) Plastics

R4.3m (1)

NORTHERN CAPE MPUMALANGA WESTERN CAPE Green energy saving

R1.1m (1) Green energy saving

R23.7m (1) Agro-processing

R12.9m (3) Advanced manufacturing

R14.7m (3) Electricity R20.4m (3)

Upstream oil R1.1m (1)

APPROVALS PER PROVINCE AND SUBSECTOR

22

STUDENTS SUPPORTED PER PROVINCE

10

3 6

30

4

North West

Northern Cape

Mpumalanga

Gauteng

Eastern Cape

R84.1m

R38.2m

PROJECTED INVESTMENT PER PROVINCE R16.1m

Western Cape

R81.7m

R29.6m

R1.3m

Western Cape

North West

Northern Mpuma- Gauteng Eastern Cape langa Cape

FAST FACTS

26

12I TAX ALLOWANCE INCENTIVE

25 Projects approved

1 148 Projected new

jobs

R14.3bn Projected

investment

R83.4m Training

allowance approved

R3.9bn Investment allowance approved

12I encourages industrial investment EASTERN CAPE GAUTENG KWAZULU-

NATAL FREE STATE WESTERN CAPE LIMPOPO

2015/16 2 approvals R413.9m investment allowance R14.4m training allowance R788.8m projected investment 363 projected jobs

2015/16 9 approvals R2.3bn investment allowance R16.2m training allowance R5bn projected investment 415 projected jobs

2015/16 11 approvals R1.5bn investment allowance R43.8m training allowance R3.4bn projected investment 1 196 projected jobs


2015/16 11 approvals R1bn investment allowance R58.7m training allowance R2.5bn projected investment 4 407 projected jobs


2016/17 11 approvals R1.1bn investment allowance R33.1m training allowance R2.9bn projected investment 455 projected jobs

2016/17 7 approvals R1.5bn investment allowance R28m training allowance R7bn projected investment 380 projected jobs

2016/17 1 approval R321.3m investment allowance R1.6m training allowance R953m projected investment 0 projected jobs


2016/17 1 approval R550m investment allowance R6.9m training allowance R2.7bn projected investment 194 projected jobs

FAST FACTS

27

AUTOMOTIVE INVESTMENT SCHEME

R12.4bn Projected

investment

34 788 Baseline jobs


R2bn

Disbursed

1 Capturing data for projected jobs only commenced in 2016/17.

EASTERN CAPE GAUTENG KWAZUL-NATAL NORTH WEST WESTERN CAPE

2015/16 14 approvals (R241m) Baseline jobs: 289 1

Projected investment: R832m

2015/16 12 approvals (R291m) Baseline jobs: 123 Projected investment: R1.3bn

2015/16 8 approvals (R404m) Baseline jobs: 199 Projected investment: R1.3bn

2015/16 1 approval (R41m) Baseline jobs: 0 Projected investment: R164m

2016/17 27 approvals (R273.3m) Baseline jobs: 9 699 Projected new jobs: 339 Projected investment: R973m

2016/17 24 approvals (R1bn) Baseline jobs: 9 145 Projected new jobs: 763 Projected investment: R3.6bn

2016/17 33 approvals (R2.2bn) Baseline jobs: 14 605 Projected new jobs: 1 183 Projected investment: R7.7bn

2016/17 1 approval (R13.7m) Baseline jobs: 495 Projected new jobs: 2 Projected investment: R45.8m

2016/17 3 approvals (R36.6m) Baseline jobs: 844 Projected new jobs: 83 Projected investment: R113.4m

APPROVALS PER PROVINCE FAST FACTS

88 Projects approved (R3.6bn)

28

26 030 New jobs supported

508 Number of claims

paid R400.8m

Disbursed

29

FAST FACTS

MANUFACTURING INVESTMENT PROGRAMME

EASTERN CAPE GAUTENG KWAZULU-NATAL WESTERN CAPE 2015/16 80 claims (R49m) 3 740 jobs

2015/16 302 claims (R235m) 11 027 jobs supported

2015/16 116 claims (R95.3m) 5 822 jobs supported






LIMPOPO FREE STATE NORTHERN CAPE NORTH WEST 2015/16 25 claims (R10.1m) 806 jobs supported

2015/16 13 claims (R16m) 470 jobs supported

2015/16 15 claims (R7.9m) 362 jobs supported

2015/16 9 claims (R7m) 293 jobs supported





MIP DISBURSEMENTS PER PROVINCE

MIP IS ACHIEVING ITS OBJECTIVE OF JOB CREATION

AQUACULTURE DEVELOPMENT ENHANCEMENT PROGRAMME

R198m Projected

investment

220 Projected new jobs

141 New jobs supported

R20m Disbursed

ADEP APPROVALS PER PROVINCE

GAUTENG LIMPOPO WESTERN CAPE

2015/16 1 approval (R2m) Projected new jobs: 6 Projected investment: R8.2m

2015/16 3 approvals (R4m) Projected new jobs: 18 Projected investment: R10.3m



2016/17 1 approval (R2m) Projected new jobs: 8 Projected investment: R4.9m


8m Projects

approved (R45m)

FAST FACTS

30

INCUBATION SUPPORT PROGRAMME

2 Projects approved (R27.7m) in Gauteng

51 Projected

incubatees/ SMMEs

R34.5m Disbursed

237 Projected new

jobs

R55.5m Projected

investment

R

ISP promotes the inclusion of SMMEs into the value chain

3 868

• Based in Gauteng • Incubates individual entrepreneurs and provides steel manufacturing training. • Approved R14.4 million • Projected R28.7 million investment to be leveraged • 77 new jobs to be created with 11 incubatees to be developed.

FAST FACTS

R884m

31

BUSINESS PROCESS SERVICES PROGRAMME



R7.1bn Projected

export revenue

R288m Disbursed

The BPS sector is

growing on average 25% year on year.

GAUTENG KWAZULU-NATAL WESTERN CAPE 2015/16 1 approval (R2m) Projected new jobs: 6 Projected investment: R8.2m

2015/16 3 approvals (R11.9m) Projected new jobs: 1 253 Projected export revenue: R598.9m

2015/16 5 approvals (R53.2m) Projected new jobs: 2 578 Projected export revenue: R1.9bn


2016/17 1 approval (R2.2m) Projected new jobs: 424 Projected export revenue: R476m


FAST FACTS

The value-chain of service offerings now includes higher valued skills, such as IT Services, Financial and accounting services, and Legal Process Outsourcing, thus creating career opportunities for Youth to service Global Markets

32

FILM AND TELEVISION PRODUCTION AND POST-PRODUCTION INCENTIVE


R3.8bn Projected

investment

6 029 Projected new

jobs

R513m Disbursed

R816.4m Grant approved

OVERALL FILM AND TV APPROVALS PER PROVINCE

EASTERN CAPE GAUTENG FREE STATE KWAZULU-

NATAL NORTH WEST

WESTERN CAPE

2015/16 1 approval (R2m) 135 projected jobs R3.6m projected ***QSAPE

2015/16 69 approvals (R276.7m) 7 966 projected jobs R901.5m projected QSAPE

2015/16 1 approval (R2.6m) 64 projected jobs R7.3m projected QSAPE

2015/16 5 approvals (R20.3m) 927 projected jobs R75.2m projected QSAPE


2015/16 37 approvals (R529.7m) 14 825 projected jobs R2.4bn projected QSAPE

2016/17 2 approvals (R6.2m) 28 projected jobs R15m projected QSAPE


2016/17 1 approval (R3.7m) 11 projected jobs R8m projected QSAPE

2016/17 2 approvals (R18.4m) 533 projected jobs R65m projected QSAPE



FAST FACTS

QUALIFYING SOUTH AFRICAN PRODUCTION EXPENDITURE 33

MANUFACTURING COMPETITIVENESS ENHANCEMENT PROGRAMME

377 Claims

70 704 Jobs at claim

stage

R989.2m Disbursed

R3.9bn Investment

MCEP promotes investment and encourages job creation

EASTERN CAPE FREE STATE MPUMALANGA 23 claims

R24.7m disbursed 2 924 jobs at claim stage

R119.8m actual investment

9 claims paid R16.7m disbursed

3 095 jobs at claim stage R104.7m actual investment

9 claims R16.5m disbursed

1 171 jobs at claim stage R53.1m actual investment

KWAZULU-NATAL GAUTENG WESTERN CAPE 41 claims

R71.9m disbursed 5 026 jobs at claim stage


152 claims paid R520m disbursed

36 910 jobs at claim stage R2.2bn actual investment


20 032 jobs at claim stage R1.1bn actual investment

LIMPOPO NORTH WEST NORTHERN CAPE 6 claims

R15m disbursed 875 jobs at claim stage



521 jobs at claim stage R64.4m actual investment


150 jobs at claim stage R4.5m actual investment

FAST FACTS

34

MCEP LOAN APPROVALS PER PROVINCE

PROVINCE

NUMBER OF APPROVALS

PROJECTED JOBS TO BE SUSTAINED

VALUE OF APPROVALS

Eastern Cape 2 53 R64 639 000

Gauteng 27 2 491 R518 861 042

KwaZulu-Natal 10 1 159 R189 559 864

Western Cape 2 972 R98 000 000

Grand Total 41 4 675 R871 059 906

The Industrial Development Corporation is responsible for the administering of MCEP loans for the dti

35

EASTERN CAPE GAUTENG KWAZULU-NATAL WESTERN CAPE 2015/16 8 (R774 070) approvals 8 (R774 070) WM SMMEs

2015/16 275 (R25.4m) approvals 130 (R12.8m) B SMMEs 81 (R6.3m) WM SMMEs 26 (R2.1m) WF SMMEs 38 (R4.2m) Large

2015/16 68 (R5.3m) approvals 11 (R949 089) B SMMEs 32 (R2.2m) WM SMMEs 6 (R523 427) WF SMMEs 19 (R1.6m) Large

2015/16 263 (R21.6m) approvals 13 (R1m) B SMMEs 166 (R13.1m) WM SMMEs 46 (R3.6m) WF SMMEs 38 (R3.9m) Large

2016/17 9 (R690 237) approvals 1 (R78 216) BM SMMEs 6 (R512 021) WM SMMEs 2 (R100 000) Large

2016/17 114 (R9m) approvals 7 (R621 329) BM SMMEs 48 (R4.1m) WM SMMEs 16 (R1.5m) BF SMMEs 11 (R1.1m) WF SMMEs 32 (R1.8m) Large

2016/17 46 (R3.5m) approvals 5 (R515 582) BM SMME 18 (R1.5m) WM SMMEs 1 (R50 971) BF SMMEs 2 (R190 740) WF SMMEs 20 (R1.2m) Large

2016/17 219 (R17.4m) approvals 2 (R195 805) BM SMMEs 147 (R12.4m) WM SMMEs 7 (R626 485) BF SMMEs 28 (R2.3m) WF SMMEs 35 (R1.8m) Large

LIMPOPO FREE STATE MPUMALANGA NORTH WEST 2015/16 9 (R655 582) approvals 6 (R467 782) B SMMEs 1 (R80 800) WF SMMEs 2 (R107 000) Large

2015/16 1 (R98 556) approvals 1 (R98 556) WF SMMEs

2015/16 4 (R412 382) approvals 2 (R242 750) B SMMEs 2 (R169 632) WF SMMEs

2015/16 11 (R821 862) approvals 6 (R639 862) B SMMEs 5 (R182 000) Large

2016/17 9 (R647 262) approvals 3 (R167 925) WM SMMEs 3 (R296 130) BM SMMEs 3 (R183 207) WF SMMEs

2016/17 2 (R160 720) approvals 1 (R78 920) WM SMME 1 (R81 800) WF SMM

2016/17 1 (R86 083) approvals 1 (R86 083) BF SMMEs

2016/17 8 (R632 299) approvals 1 (R119 100) BF SMMEs 4 (R228 000) Large 3 (R285 199) WM SMMEs

B SMMEs Black-owned SMMEs WF SMMEs White female-owned SMMEs BF SMMEs Black female-owned SMMEs WM SMMEs White male-owned SMMEs BM SMMEs Black male-owned SMMEs Large Large enterprises

EXPORT MARKETING AND INVESTMENT ASSISTANCE SCHEME

36

R51.2m Disbursed

SECTOR-SPECIFIC ASSISTANCE SCHEME

SSAS prepares future exporters and provides market exposure fo SMMEs

SSAS APPROVALS


R74.3m Grant approved

332 Female-owned

SMMEs

432 Male-owned

SMMEs

764 SMMEs

FAST FACTS

Entity Type

East

ern

Cape

Free

Sta

te

Gaut

eng

KwaZ

ulu-

Nata

l

Lim

popo

Mpu

mal

anga

Nort

h W

est

Nort

hern

Cap

e

Wes

tern

Cap

e

Gran

d To

tal

Black Male 12 0 133 33 12 5 9 3 49 256

White Male 0 0 62 27 1 0 0 1 83 174

Black Female 6 1 106 28 3 3 9 0 33 189

White Female 4 0 33 23 2 0 0 0 83 145

Grand Total 22 1 334 111 18 8 18 4 248 764

37

CAPITAL PROJECTS FEASIBILITY PROGRAMME

5 Projects approved (R34m)

R20.3m Disbursed

Mozambique – Development of ARCO Norte Tourism Products

Zambia – Development of Lusaka Medical Park

Botswana – Development of the Phatana Fuel Storage Facility

Swaziland – Expansion of the Matsapha Inland Clearance Depot (Dry Port)

Mozambique – Lurio Project in the Cabo Delgabo

APPROVAL AMOUNT: R7.2M

APPROVAL AMOUNT: R5.8M

APPROVAL AMOUNT: R8M



CPFP facilitates inter-African investment and promotes regional trade

FAST FACTS

Approvals per province

R38.4m

R8m R34m

Gauteng Western Cape

2015/16 2016/17

38

16 Projects approved (R1.7bn)

Value approved R844m

R375m R302m

R138m

10

2 2 2

Number of Projects

SPECIAL ECONOMIC ZONES

Coega Development Corporation

• The COEGA SEZ has now reached 7 170 operational jobs

• 9 330 new construction jobs both in the SEZ and new infrastructure projects

• SMME spend achieved: R776 million

16 500 JOBS

CREATED

R11.7bn VALUE OF NEW INVESTMENT

5 886 EMPLOYEES

TRAINED

16 NEW

INVESTORS

FAST FACTS

39

CRITICAL INFRASTRUCTURE PROGRAMME


R310.9m Grants

approved

R3bn Projected

investment


R164m Disbursed

4 515 Actual jobs

created

Revitalisation of Industrial Parks ACTUAL JOBS SUPPORTED PER PROVINCE AND SECTOR Province

Industrial park Mining Agro-processing Minerals Total jobs Direct Construction Direct Construction Direct Construction Direct Construction

Gauteng 7 290 129 794 0 0 0 0 1 220

KwaZulu-Natal 0 0 0 0 3 260 0 0 263

Mpumalanga 0 0 0 0 0 0 824 2 060 2 884

North West 0 0 0 0 0 0 0 148 148

Total 7 290 129 794 3 260 824 2 208 4 515

FAST FACTS

40

Number of approvals Grant amount approved Projected investment

Eastern Cape 2 R18 710 520 R3 455 700

North West 2 R20 000 000 R5 529 600

Western Cape 2 R17 905 760 R7 186 389

Gauteng 1 R9 325 201 R2 475 300

Total 7 R65 941 481 R18 646 989

7 Projects approved

R65.9m Grants approved

R18.6m Projected

investment

1 132 Baseline jobs R10.8m

Disbursed

CDP supports the retention of jobs

APPROVALS PER PROVINCE

CLUSTER DEVELOPMENT PROGRAMME

FAST FACTS

41

Trade, Investment & Exports

42

TRADE, INVESTMENT & EXPORTS

The Economic Partnership Agreement (EPA) between the SACU and the EU provisionally entered into on 10 October 2016 and the new agricultural market access under the EPA was implemented on 1 November 2016;

Successfully advanced SA positions in the Trade and Development Committee (TDC) with the EU in relation to wheat, poultry and the textile lines;

Ratification by Parliament of Trade Facilitation Agreement and Establishment of the National Committee on Trade Facilitation;

The SACU-MERCOSUR PTA entered into force on April 2016. the dti together with DAFF submitted a proposal to SACU on division of the quotas in the PTA, and this was adopted by the SACU Commission;

SADC Trade in Services negotiations continued with 12 offers tabled in four of the six priority sectors.

SG 2: Build mutually beneficial regional & global relations to advance South Africa’s trade, industrial policy & economic development objective

43


Minister Dr Rob Davies and European Union Ambassador briefing the Media on the Signed Economic Partnership Agreement with the EU

44

A number of investment projects were launched during the reporting period. This has created a number of jobs, as outlined below:


May

New polyethylene terephthalate production plant established in Wadeville, Ekurhuleni. Mpact invests R350 million, and the project is expected to employ 1

085 people by completion. Dursots launches its new tomato paste plants in Tzaneen and Musina, Limpopo. Toyota

launches it new Hilux and Fortuner

December Yangtze Optics Africa Cable launches its

plant at Dube Trade Port.

June Cipla signs a memorandum of

understanding with Dube Trade Port to establish a R1.5 billion biologics facility.

July HBM-SA launches a R60 million latex condom facility at Dube Trade Port,

creating 145 jobs.

October Launch of 3M expanded facility in

Ekurhuleni.

November Hitachi built a pilot seawater desalination

and water reuse integrated system in Durban.

August Launch of the Dormac Dry Dock facility at Durban Port. Launch of the IBM research

lab at Wits University, Johannesburg.

45

46

SEZ & ECONOMIC TRANSFORMATION

Six (6) Industrial Parks were approved for revitalization under the Critical Infrastructure Programme:

Phuthaditjhaba; Garankuwa; Seshego; Nkowankowa; Ekandustrial; and Bodirelo

SG3: Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth

47

In pursuit of driving economic transformation and increased participation in industrialisation, the programme expended R98 million of its allocated budget. Of the R98 million, 12% was used for transfer payments to the National Productivity Institute, the Council for Scientific and Industrial Research: Fibre and Textile Centre of Excellence, and the Black Business Council;

In the first full year of operation of the Black Industrialist Programme, 36 companies were assisted, with support of approximately R1 billion; investments of over R3 billion have been leveraged thereby creating 7,000 new direct jobs.


48


49


50

51

REGULATION

SG 4: Create a fair regulatory environment that enables investment, trade and enterprise development in an equitable and socially responsible manner

One monitoring report on implementation of

legislation developed for Minister’s approval

Five Bills on Companies, Copyright, Performers’ Protection, Liquor and Gambling

Amendment Bills developed for

Minister’s approval

52

SG 4: Create a fair regulatory environment that enables investment, trade and enterprise development in an equitable and socially responsible manner

53

54

ADMINISTRATION

SG 5: Promote a professional, ethical, dynamic and competitive and customer–focused working environment that ensures effective and efficient services delivery

50% of women in senior

management

3.4% people with disability

Payment of all eligible creditors within 30 days.

55

56

FINANCIAL PERFORMANCE ANNUAL REPORT

During the financial year, the department spent 99.62% of its allocated budget of R10.3 billion;

This spending pattern should be considered in the context of the Departmental

cost drivers, comprising of: 75.03% or R7.7 billion transferred to beneficiaries across the various

incentive scheme programmes; 10.17% or R1 billion to other transfer payments – comprising of departmental

agencies, foreign governments and international organisations, and others;

The remaining 14.80% was utilised for operational expenditure.

FINANCIAL RESULTS OVERVIEW

57


2012/13 2013/14 2014/15 2015/16 2016/17Budget 8,351,086 9,515,580 9,918,729 9,497,844 10,389,517Expenditure 8,286,428 9,380,302 9,785,298 9,471,659 10,349,396Unspent 64,658 135,278 133,431 26,185 40,121% Unspent 0.77% 1.42% 1.35% 0.28% 0.39%

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

2012/13 to 2016/17 comparison on spending

R'0

00

As depicted in the graph above, there has been consistency in the spending

pattern of the department against its budgetary allocation over the past five

years, where the under-spending has been below 2% of the allocated budget for

each specific year.

58


59

60

AUDIT OUTCOMES

the dti achieved a clean audit i.e opinion with no findings. This means that the Department's 2016/2017 financial statements are free from material misstatements and there were no material findings reported on performance objectives or non-compliance with legislation.


61

Ke ya leboga

Ke a leboha

Ke a leboga

Ngiyabonga

Ndiyabulela

Ngiyathokoza

Ngiyabonga

Inkomu

Ndi khou livhuha

Dankie

Thank you

62 62

Documents

PRESENTATION TO THE SELECT COMMITTEE ON … 2016-17-AR.pdf · PRESENTATION TO THE SELECT COMMITTEE ON TRADE AND INTERNATIONAL RELATIONS the dti ... In the post Global Financial Crisis,