EDD Strategic Plan and Annual Performance Plan SELECT COMMITTEE 6 MAY 2015

1. 2015/16 EDD Strategic Plan and Annual Performance Plan SELECT COMMITTEE 6 MAY 2015

2. EDD’s mandate • EDD established in 2009 • Core mandates: • Identify priorities for job creation, inclusive growth and industrialisation • Support alignment of the state around implementation • Oversee and provide strategic direction to development finance institutions • Provide strategic direction on competition policy and trade administrative matters through oversight of regulatory bodies (competition authorities and International Trade Administration Commission)

3. Context of our work • Global economic performance and its impact on SA • Domestic economic performance and identifying constraints and challenges to be addressed • Provincial jobs performance and its impact on overall development, including of poorer regions • Addressing the triple challenges of poverty, inequality and unemployment in framework of radical economic transformation • Aligning public agencies and regulators to the national vision • Working with social partners to achieve inclusive growth and developmental outcomes

4. Context of our work • South Africa's GDP is about R3,8 trillion, roughly the same size as Iran, Malaysia, Denmark and Colombia. • A total of 15,3 million South Africans are employed, 1,7 million more than when the NGP was adopted in 2010. (About 1,8 million more black South Africans were working in 2014 than in 2010, showing that job creation has been faster for the population cohort with the highest level of unemployment). •  The South African economy is deeply integrated in the global economy, with SA exports equivalent in value to 30% of GDP. Developments in the global economy materially impact on domestic growth and jobs. •  Last year, the global economy grew by 3,3%, significantly lower than the growth of 5.7% in 2007 (before the 2008/9 global recession) or the 5,4% growth in 2010.

5. Context of our work • Demand (and prices) for South African exports are affected, impacting on the domestic economy. One example has been the sharp decline in demand and prices for platinum, and more recently, iron ore. • Domestic factors also impact on local growth, with conflictual industrial relations (fueled by high levels of income inequality) and energy shortages, as key contributors to lower growth. • The growth rates for the SA economy in 2014 was 1,5%, lower than what is needed to achieve national development goals. • Youth unemployment is a critical concern in SA and across the world. A recent United Nations Conference noted that the world needs 600 million new jobs, mainly for young people.

6. Context of our work • Within this context, we have made real, but not sufficient progress. In 2010 when the NGP was adopted, 5,7 million young people aged under 34 were employed. This has grown to 6,1 million, an increase in 416 000 new jobs for youth, while the number of unemployed youth grew by 13 000. • Government has set out its overall vision in the NDP, its economic growth strategy in the NGP and its action plans in programmes such as IPAP, APAP and the National Infrastructure Plan. To bring these into a single time-bound framework of action, the Medium-Term Strategic Framework was adopted by Cabinet in 2014, after the general elections.

7. Context of our work • The relative ranking of the contribution of the nine provinces to the South African economy did not change between 1998 and 2013. • Gauteng remains the largest (33,8 per cent), followed by KwaZulu-Natal (16,0 per cent) and Western Cape (13,7 per cent). • These three dominant provinces collectively accounts for nearly two-thirds to the South African economy. • The contribution by Limpopo province increased from 6.2 percent in 1998 to 7.3 percent in 2013.

8. Context of our work • The South African economy recorded an average growth rate of 3,7 per cent between 2003-2013 • Western Cape and Gauteng were above the national average with rates of 4,2 percent each, as was KwaZulu-Natal with a rate of 4,0 percent. • All other provincial economies recorded growth rates lower than the national average, e.g. North West posted an average economic growth rate of 2,3 per cent, whilst Limpopo grew at 2.7 per centover the period

9. Employment by province since the adoption of the NGP • Nationally, employment has increased by 12.3% since the adoption of the NGP in the 3rd quarter of 2010. • Gauteng, Limpopo, and KZN saw the largest gains in employment numbers over the NGP period. • In percentage terms, the largest gainers were Limpopo, North West and Mpumalanga.

10. Headline CPI - annual inflation rate as at March 2015

11. 18 STRATEGIC INTEGRATED PROJECTS • SIP 1 – The unlocking of the northern mineral belt with Waterberg as the catalysts. Situated in Limpopo, the SIP initiated key infrastructure provision in the Waterberg and Steelpoort districts • SIP 2 – The Durban Free State-Gauteng logistics and industrial corridor will improve logistics and economic integration between the three provinces • SIP 3 – South-Eastern node and corridor development will improve transport along the South East Coast and strengthen logistics between the Eastern Cape, the Northern Cape and KwaZulu-Natal, as well as build the region’s industrial, agricultural and tourism potential • SIP 4 – Unlocking the economic opportunities in North West Provincefacilitates further economic growth in that province through the acceleration of the roll out of water, road, rail and electricity infrastructure • SIP 5 – The Saldanha – Northern Cape development corridor promotes development and integration between the Northern Cape and Saldanha through the expansion of iron-ore mining, industrial beneficiation and export activities.

12. 18 STRATEGIC INTEGRATED PROJECTS, cont • SIP 6 – Integrated municipal infrastructure project will raise the quality of life in the least resourced municipalities through integrated action by National Departments in critical service delivery • SIP 7 – Integrated urban space and public transport programme promotes the strategic use of infrastructure to support urban development, overcome spatial apartheid, build integrated and sustainable communities (economic, residential and social), reduce commuting costs and time and promote green urban development • SIP 8 – Green energy in support of the South African economy establishes green energy alternatives for domestic and industrial use which supports sustainable green energy initiatives on a national scale through a diverse range of clean energy options as envisaged in the IPR2010 and to support biofuels production facilities. • SIP 9 – Electricity generation to support socio-economic will ensure that South Africa has adequate electricity generation capacity to meet economic and social requirements

13. 18 STRATEGIC INTEGRATED PROJECTS, cont • SIP 10 – Electricity transmission and distribution for all will increase the transmission network by 50% to transmit and distribute electricity to all South Africans and support economic development and in the process create up to 300 000 construction jobs • SIP 11 – Agri-logistics and rural infrastructure supports infrastructure for sustainable rural and agricultural development • SIP 12 – Revitalization of public hospitals and other health facilities supports the building and refurbishment of hospitals and other public health facilities to ensure access to quality health care and prepare for the National Health Insurance (NHI). • SIP 13 – National school building programme supports the fast-tracking the school-building programme through a national-delivery system • SIP 14 – Higher education infrastructure supports quality higher education utilizing construction and upgrading to build two new universities, expand university towns and precincts, build and refurbish FET colleges and expand student accommodation

14. 18 STRATEGIC INTEGRATED PROJECTS, cont • SIP 15 – Expanding access to communication technology seeks to support the development of infrastructure for information and communication technologies through broadband expansion, conversion from analogue to digital technologies, support for e-government programmes and linking schools to the Internet • SIP 16 – SKA & Meerkat seeks to support the building of the world’s largest advanced radio telescope (the Square Kilometre Array) by facilitating key technical and social infrastructure (broadband, roads, schools, housing) and developing industrial and research localisation opportunities and skills expansion • SIP 17 – Regional Integration for African cooperation and development seeks to support regional economic integration through promoting infrastructure in areas such as transport, energy, water, airlinks and other areas that will better connect neighbouring countries and expand Africa’s industrialisation and economic development • SIP 18 – Water and Sanitation Infrastructure seeks to support expansion of water and sanitation facilities through an integrated and accelerated programme of dam building, development of water treatment plants and sanitation systems, address acid mine drainage problems and ensure connection of taps and toilets for households

15. sefa Approval and Disbursements Since its establishment sefa’s loan book growth has outperformed the combined loan books of its predecessor institutions.

16. Sefa Growing the Co-operative Loan Book

17. Sefa Growing the Co-operative Loan Book (cont.)

18. IDC Portfolio (2) Portfolio by Province at cost March 2014 Portfolio by Province at market value March 2014 ‘At cost’ – value/ cost of investment at the time of funding Market value – valuation price of investment as at 31 March 2014

19. IDC Portfolio (3) Portfolio – number of clients per province - March 2014

20. IDC - Investment budgets Historical Approvals and Capital Allocated Capital Allocation by SBU – 2015/16 to 2019/20 • IDC annual approvals over the past five years was 57% higher than the previous five years. • Targeting to maintain and grow this to more than R100 billion over the next five years.

21. IDC provincial split of loans 2014-15

22. Previous presentation • 24 March 2015: The Ministry presented the conceptual framework of the Strategic Plan and Annual Performance Plan to the Economic Development Portfolio Committee, providing the context in which we operate and an overview of the Department’s programmes and strategic objectives. • Today: This presentation sets out the details of the Department’s KPIs and products or outputs • We have set ourselves an ambitious task: • 3 programmes to organise the Department around • 6 strategic objectives to provide direction • 23 KPIs to give effect to the strategic objectives • 164 products / outputs from the KPIs • Through this work we have aligned the work of EDD with the various policy and budget frameworks of government as a whole, including to the MTSF, the ENE and the SONA 9 Point Plan

23. The 14 outcomes of the MTSF The outcomes of the MTSF are as follows: • Quality basic education • A long and healthy life for all South Africans • All people in South Africa are and feel safe • Decent employment through inclusive growth • A skilled and capable workforce to support an inclusive growth path • An efficient, competitive and responsive economic infrastructure network • Vibrant, equitable, sustainable rural communities contributing towards food security for all • Sustainable human settlements and improved quality of household life • Responsive, accountable, effective and efficient local government • Protect and enhance our environmental assets and natural resources • Create a better South Africa and contribute to better Africa and better world • An efficient, effective and development-oriented public service • A comprehensive, responsive and sustainable social protection system • A diverse, socially cohesive society with a common national identity

24. The SONA 9 Point Plan The President outlined the following 9 Point Plan in SONA: • Resolving the energy challenges • Revitalising the agriculture and agro-processing value chain • Advancing beneficiation and adding value to mineral wealth • More effective implementation of IPAP • Encouraging private sector investment • Moderating workplace conflict • Unlocking potential of SMME, co-ops and township and rural enterprises potential • Cross cutting areas to reform, boost and diversify the economy, such as the water and sanitation infrastructure • Growing the ocean economy and tourism

25. The role of the Strategic plan and APP • The Strategic Plan lays out the department’s key objectives and tasks over the current administration • The APP is an implementation plan for the departmental strategic plan, which in turn implements the MTSF • The APP sets annual targets and aims to enhance implementation and accountability

26. Programmes and Strategic objectives Products are ongoing 2 Products 2 KPIs SO 1: KPIs (2 Products) Programme 1: Administration • Strategic objective 1: Provide strategic guidance to the Department; and technical and administrative support to the Ministry and the Department to achieve strategic objectives 2, 3, 4, 5 and 6 22 Products 6 KPIs SO 2: 5 KPIs (19 Products) SO 3: 1 KPI (3 Products) Programme 2: Growth and Jobs Drivers • Strategic objective 2: Coordinate jobs drivers and implementation of the NGP economic strategy in support of the NDP • Strategic objective 3: Facilitate social dialogue and implementation of social accords 140 Products 25 KPIs SO 4:16 KPIs (108 Products) SO 5: 5 KPIs (23 Products) SO 6: 4 KPIs (9 Products) • Strategic objective 4:Coordinate infrastructure development & strengthen its positive impact on the economy and citizens • Strategic objective 5: Promote investment, industrial funding and entrepreneurship for jobs and inclusive growth • Strategic objective 6: Promote competition, trade and economic regulation in support of job creation, industrialisation & social inclusion Programme 3: Investment, Competition & Trade

27. Strategic Objective 1 Strategic objective 1: Provide strategic guidance to the Department, and technical and administrative support to the Ministry and the Department to achieve strategic objectives 2, 3, 4, 5 and 6 There are 2 KPIs for this objective: Unqualified audit User survey within the Department to ensure back-office services (HR, finance, supply-chain, ICT, communications) are aligned to the needs of the executive authority and staff responsible for delivery of the core mandate of the Department

28. KPI 1 KPI 1: Unqualified audit report The three-year plan is as follows: In the current financial year the following KPIs are to be achieved:

29. KPI 2 KPI 2: Measured improvement in support services to strategic objectives 2, 3, 4, 5 and 6 and the Ministry as quantified by Users The three-year plan is as follows: In the current financial year the following KPIs are to be achieved:

30. Strategic Objective 2 Strategic objective 2: Coordinate jobs drivers and implementation of the New Growth Path economic strategy in support of the National Development Plan There are 5 KPIs for this objective, addressing: Macro and micro economic policy and infrastructure integration Strategic support for jobs drivers of the NGP The green economy and jobs Employment and entrepreneurship for black women and youth Spatial, local and provincial initiatives

31. KPI 3 KPI 3: Integrate NGP framework in macro and micro economic policy and infrastructure initiatives, including through selective impact assessments and updating the operational sections of the NGP where necessary, as part of strengthening implementation of the NGP The three-year plan is as follows: In the current financial year the following KPIs are to be achieved:

32. KPI 4 KPI 4: Strategic support for jobs drivers of the NGP, monitor implementation across the state, address blockages as required and identify new opportunities and risks as they arise, as part of strengthening implementation of the NGP The three-year plan is as follows: In the current financial year the following KPIs are to be achieved by the fourth quarter of the reporting period:

33. KPI 5 KPI 5:Support the development of the green economy and jobs through implementing the Green Economy Accord The three-year plan is as follows: In the current financial year the following KPIs are to be achieved:

34. KPI 6 KPI 6:Facilitate increased access to employment and entrepreneurship for black women and youth in the context of stronger support for emerging and smaller enterprises overall The three-year plan is as follows: In the current financial year the following KPIs are to be achieved:

35. KPI 7 KPI 7:Number of spatial, local and provincial initiatives to promote employment, empowerment and development The three-year plan is as follows: In the current financial year the following KPIs are to be achieved:

36. Strategic Objective 3 Strategic objective 3: Facilitate social dialogue and implementation of social accords • There is 1 KPI for this objective: • 1. Achieve more effective industrial relations and support for social accords

37. KPI 8 KPI 8:Development and support programmes for more effective industrial relations and support for implementation of social accords The three-year plan is as follows: In the current financial year the following KPIs are to be achieved by the fourth quarter:

38. Strategic Objective 4 Strategic objective 4: Coordinate infrastructure development and strengthen its positive impact on the economy and citizens There are 6 KPIs for this objective, addressing: Quarterly Cabinet-level progress reports of infrastructure SIPs Infrastructure projects unblocked, fast tracked or facilitated Cabinet and PICC strategic decisions on infrastructure implemented PICC meetings held and facilitated Implementation of SIP 5 of the National Infrastructure Plan Localisation in the infrastructure programme

39. KPI 9 KPI 9:Number of quarterly cabinet-level progress reports of infrastructure Strategic integrated Projects (SIPs) The three-year plan is as follows: In the current financial year the following KPIs are to be achieved:

40. KPI 10 KPI 10:Number of infrastructure projects unblocked, fast tracked or facilitated The three-year plan is as follows: In the current financial year the following KPIs are to be achieved by the fourth quarter:

41. KPI 11 KPI 11:Number of Cabinet and PICC strategic decisions on infrastructure implemented The three-year plan is as follows: In the current financial year the following KPIs are to be achieved by the fourth quarter:

42. KPI 12 KPI 12:Number of PICC meetings held and facilitated The three-year plan is as follows: In the current financial year the following KPIs are to be achieved:

43. KPI 13 KPI 13:Drive implementation of SIP 5 of the National Infrastructure Plan The three-year plan is as follows: In the current financial year the following KPIs are to be achieved:

44. KPI 14 KPI 14:Support programmes to drive localisation in the infrastructure programme, including through the PPPFA, and local supplier development initiatives The three-year plan is as follows: In the current financial year the following KPIs are to be achieved:

45. Strategic Objective 5 Strategic objective 5: Promote investment, industrial funding and entrepreneurship for jobs and inclusive growth There are 5 KPIs for this objective, addressing: Investment initiatives facilitated, fast tracked or unblocked Industrial funding for jobs drivers and township economies Industrial finance available from DFIs and departments and jobs impact DFIs efficiency/turnaround times for project approvals Infrastructure connection with productive investment and growth

46. KPI 15 KPI 15:Number of investment initiatives facilitated, fast tracked or unblocked The three-year plan is as follows: In the current financial year the following KPIs are to be achieved by the fourth quarter:

47. KPI 16 KPI 16:Establish and monitor industrial funding targets for identified jobs drivers and for township economies The three-year plan is as follows: In the current financial year the following KPIs are to be achieved:

48. KPI 17 KPI 17:Reports on increase in industrial finance available from DFIs and departments and its impact on job creation The three-year plan is as follows: In the current financial year the following KPIs are to be achieved by the fourth quarter:

49. KPI 18 KPI 18:Strategic engagements with DFIs to improve efficiency/ decrease turnaround times for project approvals The three-year plan is as follows: In the current financial year the following KPIs are to be achieved by the fourth quarter:

50. KPI 19 KPI 19:Connect infrastructure with productive investment and growth, including where appropriate through off-take agreements The three-year plan is as follows: In the current financial year the following KPIs are to be achieved by the fourth quarter: