Economic Development 1 st and 2 nd quarterly report Presentation to the Portfolio Committee 11 October 2011.

Economic Development 1st and 2nd quarterly report

Presentation to the

Portfolio Committee

11 October 2011

Presentation outline

• 1st quarter performance

• 2nd quarter performance

• Progress against ENE targets

• Corporate services

• Financial performance

• Concluding remarks2

1st quarter performance

3

Economic Policy Development (1)

• Guide created for employment reporting for provinces

• Report on employment submitted to the July 2011 Cabinet Lekgotla– Employment trends– Progress in relation to employment drivers– Departmental reports on employment creation– Progress in implementing Outcome 4

• A template for employment reporting for state departments and agencies was developed in collaboration with DPME and the ILO

4

Economic Policy Development (2)

• Economic Development Conference held– Conference held in Johannesburg on 30-31 May 2011– Panel discussions focused on New Growth Path– Attended by Cabinet Ministers, senior officials, academics,

leaders of industry, labour movements and civil society organisations

– Set a standard of rigorous and well-informed engagement by policymakers and key stakeholders

• Draft discussion document on alignment of B-BBEE with NGP

5

Economic Planning andCoordination (1)

• Engagements with provincial and local government– Ekurhuleni Metro – alignment with NGP– Ethekwini Metro – discussion on NGP– Gauteng Economic Development Department – presentation on

the NGP and follow-up session on the province’s priority projects– Mpumalanga Provincial Government Department of Economic

Development, Environment and Tourism – discussion on draft Growth and Development Plan

– Lekwa Local Council – land tenure, bulk infrastructure– Technical MinMec to prepare for MinMec– MinMec on NGP, IPAP2, IDZs, Khula Direct, IDC engagements

with provinces– Technical MinMec on employment impact reporting

6

Economic Planning andCoordination (2)• Sector plans

– Assessment of infrastructure sector for Lekgotla report– Assessment of the agricultural value chain for Lekgotla report

• Spatial plans– Presidential Intervention Initiative King Sabata Dalindyebo (KSD)

Municipality• Commented on Socio-Economic Development Strategy re alignment

with NGP– Deputy President’s Anti-Poverty Campaign

• Reviewed N Cape PGDS and IDP of Renosterberg Local Municipality and identified key interventions

– Review of the Standerton (Lekwa Municipality) area • to assess establishment of soyabean and sunseed oil crushing plant

– Spatial action plan for Doringbaai-Matzikamma Municipality• Faciliting assistance to Noordebaai Vissers and RiseUp Bakery

Holdings

7

Economic Planning andCoordination (3)• Engagements with DFIs and ERBs

– The Minister held a meeting with the IDC to review their financial results and performance

– The DG hosted an all-day workshop with representatives of IDC, Khula and samaf to discuss the merger of the three institutions

– Quarterly reporting meeting with DFIs and ERBs

• Small business merger– Overview document produced– Due Diligence and Business Case moved to second quarter

• Engagements with SOEs and PIC– Meeting with PIC on investment instrument, financial models and

optimising existing savings and attracting new investments for development

8

Economic Planning andCoordination (4)• Special financing

– IDC distress fund allocated R148.7 million saving or creating 4087 jobs

– Transfers to DFIs: R63,2 million– IDC disbursed R1.3 billion in 4th quarter 2010/11

• Leveraging state expenditure and procurement– Work with the dti on the sector designation process– Meeting held with SABS on technical specifications

• Consultative forums on African regional development– Attended SADC-EAC-COMESA Tripartite Summit held in June

2011– Regional communities initiated discussion on establishment of a

Tripartite Free Trade Agreement

9

Economic Developmentand Dialogue (1)• Social dialogue and capacity building engagements

– Presented on skills development to Home Affairs forum on foreign skills

– Workshop with Metals and Engineering Bargaining Council– Meeting with IDC managers on Training Layoff Scheme

• Economic Development Agreements– Agreement on skills and cluster development with the Western

Cape Furniture initiative

• Organised labour capacity building– Scoping workshop on the implementation of a Technical

Assistance Programme held

10

Economic Developmentand Dialogue (2)

• Research reports on productivity– Desk-top research was undertaken and resulted in

the development of a draft productivity concept paper

• Interventions to create or save jobs– Isithebe Plan – assisting a garment factory in KZN

• Engagements with stakeholders– Training Layoff Scheme Task Team met to discuss

implementation of new arrangements for the scheme

11

2nd quarter performance

12

Economic PolicyDevelopment (1)

• Employment impact reports generated for clusters and provinces

• Work initiated on discussion paper on an economic development index

• Discussion document on sectoral methodology to support employment creation initiated– Delays due to failure to fill relevant positions – headhunting underway– Discussion document to be finalised by January 2012

• Work commissioned on alignment of B-BBEE with NGP

• Business plan for Economic Development Institute under development

13

Economic PolicyDevelopment (2)

• Discussion document on youth employment drafted

• Discussion document on gender policy – Detailed outline and analysis of data completed

• Reporting framework on income inequality– Initial presentation developed

• Support for the Academy on the Social Economy– Paper on cooperatives finalised

• Assessment of pay increases and structure

• Conference on Ownership, Class and Inequality held with Friedrich Ebert Stiftung and Studies in Poverty and Inequality Institute

14

Economic Planning andCoordination (1)

• Engagements with provincial and local govt– Engaged with North West and Limpopo on alignment with the NGP

and unblocking projects– Green Economy meeting with Western Cape Department of

Economic Development and Tourism and City of Cape Town

• Spatial plans– Draft Framework for the Revitalisation of Atlantis completed– Doringbaai Aquaculture Project facilitated– Initiatives in support of the KSD municipality

• Sector plans– Analysis of Eastern Cape Auto Industry– Steel options developed

15

Economic Planning andCoordination (2)

• Strategic engagements with DFIs and ERBs– Quarterly reporting meeting with DFIs and ERBs– Steering Committee meeting on the merger– DG engagement with staff of Khula and samaf– Minister met with Acting Chairs of IDC and Khula– EDD hosted a consultative workshop with clients of Khula and

samaf

• Small business merger– Draft business case prepared– Technical due diligence submitted– Risk Assessment Report prepared

16

Economic Planning andCoordination (2)• Distress fund

– IDC allocated R107.1m to 4 companies saving or creating 610 jobs– Transfers to DFIs: R54,7 million– IDC disbursed R2.2 billion in 1st quarter 2011/12

• Leveraging state expenditure and procurement– SABS working group finalised the technical specification on local content– Participated in MTEC process and made recommendations on the national

budget – Developed and consulted on Accord on Local Procurement– Developed and consulted on Accord on Green Economy– Participated in task team on implementation of Skills Accord

• Green economy– Established task team on the implementation of government’s commitment

to install 1m solar water heaters by 2014/5– Contributed to government’s work on biofuels– Participated in preparations for COP17

17

Economic Developmentand Dialogue (1)• Social dialogue and capacity building

– Visits to 8 PE factories to evaluate competitiveness– Meeting with Social Partners on Green Economy– NGP social dialogue meetings held on 13 July and 26 August

• Draft Accords on Enterprise Development, Green Economy and Local Procurement

• Updates on implementation of Skills and Basic Education Accords

• Economic development agreements signed 13 July– National Accord on Skills– National Accord on Basic Education

• Sector and workplace social dialogue– Met with Western Cape Economic Development and Tourism

Department on MOU with Employment Creation Fund– Participated in meeting on revitalising the clothing and textile industry in

the Free State

18

Economic Developmentand Dialogue (2)• National and sectoral engagements on productivity

– Discussed the development of a National Productivity Accord with COSATU

– Held similar sessions with FEDUSA and NACTU– Discussions took place with BUSA and Community constituencies– Developed MOU with Productivity SA

• Framework for South Africa’s Response to the International Economic Crisis– Distress fund has committed approximately R3,9 billion to 98

companies saving and/or creating 35 846 jobs– 8054 workers have benefited from the Training Layoff Scheme and a

total of R64,9 million was allocated to 35 companies.

• Intervention to create or save jobs– Visit to Eastern Cape non-auto manufacturing sector on 25-27 July with

provincial department

19

ENE targets for 2011/12 (1 of 2)

20

Indicator 1st q target

1st q actual

2nd q target

2nd q actual

Annual target

Number of reports on the implementation of the NGP 1 1 1 1 4

Number of reports on interventions to reduce cost drivers - - 1 1 2

Number of policy and analytical papers on economic policy challenges

3 3 3 3 12

Number of engagements with provincial and/or local government

2 8 3 3 10

Number of strategic engagements with development finance institutions and/or economic regulatory bodies

- 2 6 8 12

Value of special financing facilitated for small businesses, targeted growth sectors and companies in distress

R1.25 bn

R1,512 bn

R1.25 bn

R2,362 bn

R5bn

ENE targets for 2011/12(2 of 2)

21

Indicator 1st q target

1st q actual

2nd q target

2nd q actual

Annual target

Number of sector plans produced or reviewed 2 2 2 2 8

Number of spatial plans produced or reviewed 3 4 3 3 12

Number of interventions in relation to promoting economic development through leveraging state expenditure and procurement

3 2 3 5 12

Number of reports on the implementation of the green economy strategy

- - 1 1 2

Number of interventions to create or save jobs 1 1 1 1 4

Number of policy platforms, social dialogue and capacity building engagements

5 5 5 10 10

Number of economic development agreements (sectoral, workplace and national) facilitated with social partners

3 1 2 2 10

22

PROGRAMME # OF FUNDED POSTS FILLED POSTS

ADMINISTRATION 62 63

POLICY DEVELOPMENT 18 9

PLANNING & COORDINATION 24 15

SOCIAL DIALOGUE 25 8

TOTAL 129 95

%

Staff complementat 30 September

Recruitment process

Advertisement of posts:

- 3 Deputy Director General posts

Interviews held in the last 2 quarters include the filling of positions for the following posts:

- Dialogue Specialist – 2 appointments finalised

- Sector Specialist – 1 appointment finalised, 2 being considered

- Economic Planner – 2appointments finalised, 3 being considered

- Economic & Statistical Modeller – interviews held and no suitable candidate found

- Policy Analyst – appointments in progress

- Registry Clerk – appointment in progress

- Senior Personnel Officer – 1 appointment finalised

Recruitment Strategies :

- The Department has embarked on a headhunting process to attract relevant skilled staff

23

Financial Performance

• Overview of Expenditure

• The information is based on September 2011 IYM reports or section 40(4)of PFMA reports

• Total budget of R 594.5 million for 2011/11 financial year

• Expenditure in the first six months of 2011/12 is R 266 million or 45% of the main appropriation of R 594.5 million

• Spending hampered by slow filling of posts owing to challenges of scarce skills in the economic sector

24

Financial Performance

25

Table: 1 Total Economic Development Department

Act Act Act Act 2011/12

Per Programme QUARTER 1 QUARTER 2 YTD % Spent Main Appropriation

R'000 R'000 R'000 R'000

ADMINISTRATION 11,001 15,762 26,763 49% 55,031

ECONOMIC POLICY DEVELOPMENT 3,993 3,112 7,105 30% 23,327

ECONOMIC PLANNING AND CO-ORDINATION 153,221 77,746 230,967 46% 499,898

ECONOMIC DEVELOPMENT AND DIALOGUE 141 895 1,036 6% 16,284

TOTAL INCL. TRANSFERS 168,356 97,516 265,872 45% 594,540

TOTAL EXCL. TRANSFERS 16,841 23,664 40,504 31% 129,717

Per Item Classification

COMPESATION OF EMPLOYEES 11,122 12,078 23,201 29% 79,200

GOODS AND SERVICES 5,129 11,281 16,410 37% 44,022

DEPARTMENTAL AGENCIES AND ACCOUNTS 151,515 73,853 225,368 48% 464,823

PAYMENT OF CAPITAL ASSETS 589 304 893 14% 6,495

TOTAL INCL. TRANSFERS 168,356 97,516 265,872 45% 594,540

YTD EXPENDITURE

Siyabonga