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Date : 20 September 2013 Director-General Mr Lionel October PowerPoint PPT Presentation


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Presentation to the Portfolio Committee on Trade and Industry – the dti’s 2012/13 Annual Report and the Second Quarter Report. Date : 20 September 2013 Director-General Mr Lionel October. Members of the Delegation. Jodi Scholtz – Group COO. Zodwa Ntuli – DDG: CCRD.

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Date : 20 September 2013 Director-General Mr Lionel October

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Date 20 september 2013 director general mr lionel october

Presentation to the Portfolio Committee on Trade and Industry – the dti’s 2012/13 Annual Report and the Second Quarter Report

Date : 20 September 2013

Director-General

Mr Lionel October


Members of the delegation

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.


Presentation outline

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


Economic trends

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


Economic trends1

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.

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Economic trends2

Economic Trends

Figure 1 Quarter-on-quarter growth 2006-2012

Source: South African Reserve Bank

6


Economic trends3

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.

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Economic trends4

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.

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Date 20 september 2013 director general mr lionel october

Economic Trends

Total Employment 2008 - 2012

Source: QLFS quarter 4:2012


Economic trends5

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 Africa’s 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


Economic trends6

Economic Trends

  • The ‘Great Recession’ and the Eurozone crisis demanded that the dti scale-up its efforts to diversify South Africa’s 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.

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Economic trends7

Economic Trends

Total quarterly exports and imports 2006-2012

Source: the dti


The structure of the dti s work

The structure of the dti’s work

the dti’s work is organised in terms of the following clusters:

Industrial development;

Trade, Investment and Exports;

Broadening participation;

Regulation, and

Administration and co-ordination

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Achievements against planned targets

Achievements against planned targets

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Date 20 september 2013 director general mr lionel october

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).

Industrial Development

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Date 20 september 2013 director general mr lionel october

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 incentivewhich 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.

Industrial Development

16


Date 20 september 2013 director general mr lionel october

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.

Industrial Development

17


Date 20 september 2013 director general mr lionel october

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.

Industrial Development

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Date 20 september 2013 director general mr lionel october

Approved 70 Film productions.

The successful and growing impact of industry demand resulted in the Monyetla Work-Readiness Programme training3 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 invarious 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 dti’s support of the BPS sector, SA was named Off-Shoring Destination of the Year in the 2012 United Kingdom (UK) National Outsourcing Association Awards.

Industrial Development

19


Trade investment exports

Trade, Investment & Exports


Trade investment exports1

Trade, Investment & Exports


Trade investment exports2

Trade, Investment & Exports


Trade investment exports3

Trade, Investment & Exports


Broadening participation

Broadening Participation


Broadening participation1

Broadening Participation


Legislation and regulation

Legislation and Regulation


Administration

Administration


Date 20 september 2013 director general mr lionel october

Targets partially achieved during 2012/13 FY


Date 20 september 2013 director general mr lionel october

Summary of Achievement of Targets for 2012/13 Financial Year

The calculation by the AG focuses on 100% of targets being achieved without taking into account substantive work already concluded. Good progress has been made on all partially achieved targets.

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Date 20 september 2013 director general mr lionel october

Financial management


Five year comparison of budget vs expenditure r 000

Five Year Comparison of budget vs Expenditure – R’000

33


Overview of the expenditure for the 2012 13

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:


Overview of the expenditure for the 2012 131

Overview of expenditure per economic classification:

Overview of the expenditure for the 2012/13


Date 20 september 2013 director general mr lionel october

2012/13 audit outcome and interventions to address the AG’s findings


Audit outcomes

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.


Date 20 september 2013 director general mr lionel october

Interventions to address AG’s Audit Findings


Key challenges

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.


Adjusted estimates 2013 14 fy refer to annexure b

Adjusted estimates – 2013/14 FY(Refer to Annexure B)

40


Adjusted estimates 2013 14 fy

Adjusted estimates 2013/14 FY


Adjusted estimates 2013 14 fy1

Adjusted Estimates 2013/14 FY

Overview of the adjustments per programme:


Mtef 2014 15 fy

MTEF - 2014/15 FY

(Refer to Annexure C)

43


Mtef 2014 15 fy1

MTEF 2014/15 FY


Budget allocations for 2014 15 fy

Budget allocations for 2014/15 FY

Overview of additional funds requested per programme:


Second quarter report key highlights refer to annexure d

Second Quarter Report - Key Highlights (Refer to Annexure D)

46


Key achievements

Key Achievements

Industrial Development

47


Key achievements1

Key Achievements

Industrial Development

48


Trade investment exports4

Trade, Investment & Exports


Broadening participation2

Broadening Participation


Legislation and regulation1

Legislation and Regulation


Summary of expenditure vs projections as at 31 08 13

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:


Date 20 september 2013 director general mr lionel october

Thank you

53


Annexures outline

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


Annexure a targets partially achieved

Annexure A: Targets partially achieved

55


Date 20 september 2013 director general mr lionel october

Targets partially achieved cont…

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Date 20 september 2013 director general mr lionel october

Targets partially achieved cont…

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Date 20 september 2013 director general mr lionel october

Targets partially achieved cont…

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Date 20 september 2013 director general mr lionel october

Targets partially achieved cont…

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Date 20 september 2013 director general mr lionel october

Targets partially achieved cont…

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Date 20 september 2013 director general mr lionel october

Targets partially achieved cont…

61


Annexure b adjusted estimates 2013 14 fy

Annexure B Adjusted estimates – 2013/14 FY

62


Adjusted estimates 2013 14 fy2

Adjusted estimates 2013/14 FY


Adjusted estimates 2013 14 fy3

Adjusted Estimates 2013/14 FY

Overview of the adjustments per programme:


Adjusted estimates 2013 14 fy4

Overview of the adjustments per economic classification:

Adjusted Estimates 2013/14 FY


Adjusted estimates 2013 14 fy5

Adjusted Estimates 2013/14 FY

The following below are the key items that were reprioritised during the adjusted budget process

Adjustments from:


Adjusted estimates 2013 14 fy6

Adjustments to:

Adjusted Estimates 2013/14 FY


Annexure c mtef 2014 15 fy

Annexure CMTEF - 2014/15 FY

68


Mtef 2014 15 fy2

MTEF 2014/15 FY


Budget allocations for 2014 15 fy1

Budget allocations for 2014/15 FY

Overview of additional funds requested per programme:


Budget allocations for 2014 15 fy2

Budget allocations for 2014/15 FY

Overview of additional funds requested per economic classification:


Mtef 2014 15 fy3

Motivation for the additional funds requested for the Department:

MTEF 2014/15 FY


Mtef 2014 15 fy4

Motivation for the additional funds requested for the entities:

MTEF 2014/15 FY


Mtef 2014 15 fy5

MTEF 2014/15 FY

Funds requested for new priorities


Annexure d second quarter report key highlights

Annexure DSecond Quarter Report - Key Highlights

75


Key achievements2

Key Achievements

Industrial Development

76


Key achievements3

Key Achievements

Industrial Development

77


Key achievements4

Key Achievements

Industrial Development

78


Key achievements5

Key Achievements

Industrial Development

79


Trade investment exports5

Trade, Investment & Exports


Trade investment exports6

Trade, Investment & Exports


Trade investment exports7

Trade, Investment & Exports


Trade investment exports8

Trade, Investment & Exports


Broadening participation3

Broadening Participation


Broadening participation4

Broadening Participation


Broadening participation5

Broadening Participation


Regulation

Regulation


Administration co ordination

Administration & Co-ordination


Summary of expenditure vs projections as at 31 august 2013

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:


Summary of expenditure vs projections as at 31 august 20131

Summary of Expenditure vs Projections as at 31 August 2013

Overview of expenditure per economic classification:


Reasons for material expenditure variance

Reasons for material expenditure variance


Reasons for material expenditure variance continued

Reasons for material expenditure variance (continued)


Reasons for material expenditure variance continued1

Reasons for material expenditure variance (continued)


Annexure e acronyms abbreviations

Annexure E:Acronyms & Abbreviations

94


Acronyms and abbreviations

Acronyms and Abbreviations


Acronyms and abbreviations1

Acronyms and Abbreviations


Acronyms and abbreviations2

Acronyms and Abbreviations


Acronyms and abbreviations3

Acronyms and Abbreviations


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