Presentation to the PC onTrade and Industry – the dti’s Achievements 2009/10 to 2013/14

Presentation to the PC onTrade and Industry – the dti’s Achievements 2009/10 to 2013/14 11 March 2014 Minister of Trade and Industry

Presentation Outline Economic Context - 2009 Priority Interventions and Achievements: Industrialisation Broadening economic participation Strategic use of trade and investment instruments to support industrialisation Providing an appropriate regulatory environment for economic development & protecting vulnerable consumers Driving operational excellence in the dti and its agencies IPAP 2014/15 Indicative Directions 2

Global Economic Context - 2009 • Sub-prime mortgage crisis in US and fall of Lehman Brothers triggered Global Financial Crisis which engulfed globe. • While impacts were uneven across countries and regions, practically all countries experienced: • Fall in business and consumer confidence, • Fall in investment rates, • Fall in international trade, • Fall in GDP, and • Rising unemployment. • New dimensions to the crisis have emerged and necessitated new measures. • Some effects of the Crisis and the resulting ‘Great Recession’ are still visible and the rapid v-shaped recovery which many analysts predicted has been elusive.

Domestic Economic Context - 2009 • SA slips into recession and GDP has still not returned to pre-crisis levels

Domestic Economic Context - 2009 • Commodity prices slump up to 60% in platinum and export demand crashes • Imports rise as other countries seek markets for their excess production

Priority Intervention 1: IndustrialisationIPAP Context and Underlying Principles • The IPAP is aligned with the vision of the NDP and the growth drivers of the NGP. IPAP seeks to restructure the economy and reverse the threat of deindustrialisation, placing it on a more value-adding, labour-intensive and environmentally sustainable growth path, especially in globally competitive, non-traditional tradable goods & services. • This is premised on the principle that the manufacturing sector has the highest economic and employment multipliers and is the principal driver of innovation and technology with multiple spill over effects. • IPAP seeks to build systematic, employment-creating linkages to the other primary productive and service sectors of the economy; with a focus on historically disadvantaged people and regions of SA. In so doing to contribute towards industrial development in Africa, focussed on infrastructure, productive capacity and regional integration. • IPAP is predicated on the state supporting, nurturing and defending these objectives where it seeks to assert state leadership by ‘steering but not rowing.’ Thus IPAP identifies a complex range of complementary, interlocking policies that require alignment, and in some cases subordination to industrial policy, such as aspects of macro policy, trade policy, dfi financing and so forth. • It is increasingly predicated on stronger developmental conditionalities and reciprocal obligations from beneficiaries of state support in areas such as competitiveness and exports; employment retention and creation and investment.

Context and Underlying Principles • Successive iterations of IPAP set out Transversal & Sector Programmes and Action Plans with time-bound milestones and lead and supporting responsibility of departments and instiutions. Methodology proven to be an important tool for planning, management, monitoring & evaluation, oversight; stakeholder engagement and intra-government integration and co-ordination. • Predicated on sound research, intensive stakeholder engagement; identification of market failures; self discovery and learning by doing with the design of appropriate measures to address these. • Demonstrable progress and results illustrate that industrial policy has and can work if it based on these principles and is adequately resourced – auto’s; clothing and textiles; business process services and film being good examples. Progress achieved in the face of extremely unfavourable domestic and global economic conditions. • Progress achievements and new platforms created establish a foundation upon which industrial policy can be deepened and extended to achieve much wider industrial and economic development objectives under the incoming administration. These include for example procurement; industrial financing; incentives; and trade measures.

Achievement Highlights: Transversal Areas • Procurement • Amended regulations of the PPPFA enabled the Designation of 11sectors/products for local procurement. Significant progress in embedding and deepening programmes of localisation and supplier development in Eskom and Transnet. Buses, locomotives and rolling stock R198 bn procurement. Amended NIPP aligns procurement instruments and strengthen direct investment provisions. • Renewable Energy Independent Power Produce Programme: 47 bids awarded, with minimum levels of local content ranging from 25%-45%; set to rise to maximum 65% in solar, wind & solar CSP. The total preferred bidders’ investment is estimated at R28.1 billion with a local content value of R11.8 billion and 7,385 jobs expected to be created. The IDC’s total REIPPPP-related commitments currently stand at R7.7billion • On 5 July 2013, the dti launched the new SABS Local Content Verification Office, together with a new technical instrument (SATS 1286) in support of South Africa’s localisation strategy for state and SOE procurement. The tool creates clear objective criteria for the issuance of an audited ‘Local Content Certificate • In November 2013, Proudly South African (PSA) unveiled South Africa’s above-the-line buy-local campaign, BuyBack SA - a collaborative effort between the dti, business and PSA, including co-financing.

Achievement Highlights: Transversal Areas • Industrial Financing and Incentives: • Ongoing progress with respect to the IDC’s capacity to finance IPAP and NGP sectors with R102bn allocation • Funding approvals over last 4 years was R50.8bn securing and creating 130,642 jobs since 2009 • This is inclusive of R2.7bn to boost youth entrepreneurship • The Manufacturing Competitiveness Enhancement Programme (MCEP): • MCEP has approved 413 entities with the investment value of R12,4bn and helped to sustain 110 977 jobs throughout South Africa since its inception in 2012 • Agro-processing (R1bn), Chemicals (R440m) & Metals (R831m) received the highest approvals in both number and value • 12i Tax Incentive: • Since 2010, the 12i has offered R20bn in tax breaks for compliant manufacturing projects (26); leveraging R32bn in actual and projected new investments over the period 2010-2015 • Projected jobs since inception approximately 3,326 • Manufacturing Investment Programme (MIP): • Since 2008, the (MIP) has approved 1,856 projects, with a total incentive value of R4.9bn • These are projected to secure investments amounting to R35.4bn and create 43,570 jobs

Achievement Highlights: Transversal Areas • Co-operatives Incentive Scheme (CIS): • Since inception in April 2005, 1,202 applications have been approved to the value of R286.5m • CIS supported 184 agricultural co-operatives (poultry and vegetable production) mainly in the EC, KZN and Limpopo provinces in 2012/13 • An interesting subsector in manufacturing is brick-making, where 23 co-operatives were approved • Number of co-operatives in the services sector improved due to the approval of 17 catering co-operatives • Emerging sectors with approvals include mining and quarrying sectors • Film Incentive: • The Film incentive has supported 343 productions with a combined value of R294m in support of 75,278 full time jobs • A number of blockbuster films have been approved for support including Mad Max 4 – Fury Road, Chronicle, Safe House, the 3D comic-book adventure Dredd, the television drama Mary and Martha and locally produced animated feature film The Adventures of Zambezia, Khumba , Long walk to Freedom, Blitz Patrollie, Black South Easter and Zulu.

Achievement Highlights: Transversal Areas • Customs Fraud • Significant progress registered with respect to customs fraud, illegal imports and import of substandard goods • R1bn worth of illegal or substandard confiscated over the past 3 years. This has been achieved against the backdrop of the SARS Modernisation Programme, which includes a real-time electronic system and introduces an electronic reference pricing system and risk engine for search and seizure • Trade Measures: • Consolidation and realignment of ITAC to support industrial development imperatives reflected in completion of numerous applications for increases, rebates and reductions of duties across a range of sectors • The technical infrastructure institutions (SQAM) have continued to re-align and re-prioritise activities - from trade facilitation to strategic support for manufacturing. • Work on standards has enabled the growth of industries such as green industries and industrial energy efficiency. SABS and SANAS have developed a range of enabling standards and accreditation programmes and increased testing capacity for various industries and products.

Achievement Highlights: Transversal Areas • Competition Policy: • Over the past 12 years, some R2.6bn worth of penalties for anticompetitive behavior. • These include fines on Pioneer foods (R1bn), Telkom (R449m),Construction companies for bid rigging(1.46bn), Lafarge (R148,7m), FoodCorp (R88,5m), Astral (R16,7m), Oceana (R35m) • The World Economic Forum’s Global Competitiveness Report for 2013-14 ranked South Africa eighth out of 148 countries for the effectiveness of its anti-monopoly policy • The Competition Commission has gazetted the terms of reference for the market inquiry into private healthcare • Industrial Development Zones and Special Economic Zones: • In August 2013 legislation was endorsed by the NA and NCOP Trade and Industry Portfolio Committees that will enable the graduation of Industrial Development Zones into Special Economic Zones. The Bill is presently before Parliament. • A new tax incentive which offers a blanket corporate tax rate of 15% was approved as an investment incentive in SEZs. • The Saldanha Bay IDZ launched by President Zuma in October 2013 and is expected to attract R9.3bn in foreign direct investment over the next 25 years; with a focus on servicing the very large oil and gas sector on the West Coast of Africa.

Achievement Highlights: Sectoral • Automotives: • Completion of the transition from the MIDP to the APDP. • Exports exceeded $12bn with consolidation of platforms and economies of scale in a narrower range of vehicles. • Average annual growth in value added in auto’s sector significantly outstripped overall economic performance between 1994 and 2011 by 1.5%. (Auto’s 4.8% and GDP 3.4%) • Since its establishment the Automotive Investment Scheme (AIS) has approved 200 projects, with total estimated investments of R26.2bn, supporting 56,197 jobs and is expected to create 21 836 new jobs, examples include • Mercedes-Benz SA has escalated its total investment in SA to over R5bn, underpinning an increase in its local output to 100,000 units a year and creating 800 new jobs • the dti created a "People Carrier" automotive incentive scheme for minibus and midi-bus taxis, to grow local assembly and production. This has facilitated investments by First Automobile Works (FAW) , Beijing Automotive Works (BAW) ,Toyota SA, Iveco SA and the Larimar group

Achievement Highlights: Sectoral • Clothing and Textiles: • Implementation of support measures has stabilised a sector in deep distress significantly slowing down employment decline and factory closures • Since inception the Clothing and Textiles Competitiveness Programme, (CTCP) 777 applications to the value of R2.2bn were approved under the Production Incentive • 63,311 jobs were saved and 8,459 were created • Competitiveness Improvement component approved 44 applications to the value of R 645m • The share of locally produced clothing sold in the South African market has remained at around the 25% to 30% mark, despite fierce international competition and the continuing threat of ‘grey’ and illegal imports, while aggregate consumer demand has steadily grown over the past 10 years • The footwear sector projects an increase in production from 52 million to 100 million units in next 3 years • To facilitate cluster-level engagements, the National Fashion Council was established and the funding structure developed, while the National Leather and Footwear Cluster at the Vaal University of Technology was established to accelerate skills and technology development in the Leather and Footwear sector • Southern Cape Regional cluster increased production from zero to 6,350 pairs per day (approximately 133,350 pairs per month) thereby creating 560 sustainable new jobs

Achievement Highlights: Sectoral • Green industries: • Secured minimum and ongoing increasing levels of local content in the Renewable Energy Independent Power Producer Programme (REIPP) and Designation of Solar Water Heaters. • Significant investments (43 projects worth R3.8bn)with IDC support in solar water heater manufacture; wind tower production, solar PV structures and PV panel assembly. Includes DCD investment in wind-tower manufacture in Coega; Mainstream Renewable Power 138MW wind energy plant in Jefrreys Bay and Edison R1.2bn 30MW plant in Coega, with R1.4bn project to follow in Limpopo. • Business Process Services : • Since inception in January 2011, a total of 43 projects have been approved with the grant amount value of R249.6m under the BPS incentive programme. The estimated investment value is R5.9bn in support of 8,904 actual jobs • Over the past five years, South Africa has emerged as a global competitor on the BPS and Offshoring stage, attracting a number of the world’s biggest outsourcers/service providers. • These include Aegis, Capita, Genpact, Global Telesales, IBM, British Gas, Amazon, ASDA, Bloomberg, WNS, Serco, iiNet, Kleinwort Benson, Lufthansa, O2, Shell, Shop Direct, TalkTalk and T-Mobile • The successful and growing impact of industry demand resulted in the Monyetla Work-Readiness Programme training 3,819 learners as BPS agents (3,233 agents and 586 team leaders trained) and a total of 2,120 competent learners being placed in employment

Achievement Highlights: Sectoral • Agro-processing • Together with the Foundation of African Business and Consumer Services (FABCOS), the dti facilitated the launch of an agro-processing investment worth R1.2 billion to assist in growing sustainable HDI-owned/ controlled SMMEs. • the dti with other partners facilitated the establishment and launch of a small-scale milling plants such as Kuvusa Pty (Ltd) in Durban and Isigayo • the dti launched the Emerging Organic Farmer/Retailer Programme with Pick n Pay to provide shelf space and support to emerging organic farmers’ co-operatives • The Eat Well, Eat Safe campaign was launched and rolled-out, stressing the advantages of buying local, high quality, safe products. • the dtiin conjunction with DAFF developed and launched the Aquaculture Development and Enhancement Programme (ADEP), to unlock the latent economic potential of the aquaculture sector • Since inception in 2013 ,11 projects valued at R314m were approved for ADEP to the value of R72m in incentives expected to create 364

Achievement Highlights: Sectoral • Metals fabrication, capital & rail transport equipment • Policy directive under ITAC to prevent unencumbered export of scrap metal and to make it available for local beneficiation at discounted prices introduced. The directive aims to reverse de-industrialisation in the metals’ beneficiation and fabrication • the dti was instrumental in the opening of a R1 billion metals coating facility (Safal Steel) in KwaZulu-Natal • Since its establishment in 2010, the competency-based apprenticeship programme under the National Tooling Initiative (NTI), has created a pipeline of more than 1,000 new students • R200m was allocated from the National Skills Fund to train a further 970 new apprentices under the National Tooling Initiative • 345 workers were trained under the National Foundry Technology Network • Continuous dti-SOC engagement on supplier development and localisation has embedded significant supplier development and strategic sourcing in ESKOM and Transnet through the Competitive Supplier Development Programme in the multi-billion rail procurement programmes.

Industrial Development Challenges • Protracted recession and decreased demand for SA exports in SA’s traditional export markets in the US and Euro Zone. Difficulties associated with changing export paradigm. • Weakened domestic demand as the credit-fueled boom of 2005-2007 continues to prove unsustainable. • Financial market failure: requiring a more strategically focused set of investment instruments and incentives across all DFIs and Departments. • Monopolistic pricing of privately-owned key intermediate inputs into the manufacturing sector. • Continuing currency volatility. • Sharply escalating and ‘bunched up’ administered prices - most notably double-digit electricity municipal price increases, • Weaknesses in intra-governmental coordination • Possible negative consequences for productive economy if environmental regulations are not calibrated and phased-in to allow necessary breathing space for manufacturers to reach full compliance • Continuing high port charges and freight and logistics inefficiencies for export of value-added goods • Continuing skills deficits and mismatches across the economy – an especially critical problem for the new growth sectors • Continuing labour relations volatility

Opportunities • Local procurement and supplier development: • Experience gained and platforms built in Designations; Competitive Supplier Development Programmes of SOC create platform for intensive scaling up. NT/DPE and DTI Task Team Full Review of Procurement regime create possibility of step change localisation across government and agencies which must include building strategic supplier development capacity in large procuring entities. • Significant unrealised and important opportunities to deepen localisation and supplier development in the private sector – retail; mining and construction; ICT etc – with very significant benefits for local manufacture • Beneficiation • Strengthening and deepening industrial development will need to rest in great measure on securing concessional access to mineral feedstocks as a source of competitive advantage and value adding beneficiation as a competitive advantage for domestic manufacturing sector • Necessity to ensure SA’s resource endowment which constitutes single biggest opportunity for competitive advantage; key consideration is required alignment with amendments to Mineral Petroleum Resources Development Act (MPRDA) to secure developmental prices.

Opportunities • Focussed and Conditional Support:Work to measure; assess; align and strengthen incentives and industrial financing across government departments and agencies increasingly stronger conditionalities with sharper focus on exports to better counter the negative balance on the trade account and promote competetiveness in key sectors where SA enjoys global competetiveadvatages such as Mining and Transport Capital Equipment. • Infrastructure development: Make good use of the massively scaled up infrastructure investment programmes being driven under the PICC as a powerful stimulus to industrialisation. This will provide both a challenge and an enormous opportunity for the localisation of a wide range of manufactured inputs into the infrastructure build – especially in construction, metals, capital and rail transport equipment and renewable energy - provided that the required institutional architecture and localisation programmes can be fully secured. • Natural and Shale Gas: The discovery of extensive natural gas fields in Eastern and Southern Africa and of very large indicative deposits of shale gas in South Africa brings with it the possibility of a major shift in SA’s existing energy mix, with the potential to lower the cost of energy for the production sectors, driving significant upstream opportunities across a range of sectors and enhancing downstream beneficiation.

Opportunities • Regional industrial integration and new export markets • Sustained & concerted regional growth is arguably the biggest stimulus to long-term growth in South Africa. In the short to medium term regional integration offers continuous opportunities for SA to grow its exports base. • A number of ongoing and scaled-up interventions are in the pipeline. These include: planning cross-border infrastructure, effective articulation of up- and down-stream linkages in resource exploitation; and the realisation of massive construction opportunities • BRICS • South Africa’s participation in the BRICS provides important opportunities to build its domestic manufacturing base, enhance value-added exports, promote technology sharing, support small business development and expand trade and investment opportunities. • Development of complementarities and integrated value chains should be underpinned by an overall approach that puts industrialisation at the core of the engagement.

Priority Intervention 2: Broadening Economic Participation • The Department through the Small Enterprise Development Agency (seda) has to date established a network of 43 branches, 18 mobile units and 50 information kiosks. • Hosted together with private sector partners the International Small Business Congress between 15 to18 September 2012.

SMME Development • SMME Payment Assistance Hotline facilitated R2,998,657.87 worth of late payments to small enterprises from July 2013 till December 2013. • The Intergrated SMME and Co-ops Framework and the action have been approved by MinMec. • The Operational Plan is completed and was presented and approved by the Technical MinMec on 15 November 2013. • The National Informal Business Upliftment Strategy has been developed and will be officially launched on 14 March 2014 • The Red Tape Reduction Guidelines for Municipalities have been launched. National Workshops and Information sessions are underway

Co-operatives Development • 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. • South Africa hosted the 3rd BRICS Co-operatives meeting in Cape Town from 26 to 28 October 2013.

Incubation Support Programme • Official launch on the 16th September 2012 • Encourage private sector partnerships with government to support incubators in order to develop and nurture SMME’s into sustainable enterprises that can provide employment; and contribute to economic growth • The incubation support is available on a cost sharing basis between the government and private sector partners • 50:50 for large business and 40:60 for SMEs • Capped at R10 million per financial year over a 3 year period

Incubation Support Programme Provincial Breakdown • 42 Incubators are currently operating

Incubation Support Programme

Women and Gender Empowerment • Technogirl Entrepreneurship Programme: • The Programme was initiated in 2006 and this year it celebrates 7 years of operation. • It has been implemented in all Provinces, exposing 1,210 girl learners to the world of business and technology.

Women and Gender Empowerment The B’avumile Skills Development programme is the dti initiative that provides formal training for women to enhance their expertise in production of high quality competitive goods and creation of formal enterprises in the creative and clothing and textiles industry. Over the last 5 years, 434 women from all 9 provinces have been trained successfully on the B’avumile programme and have been encouraged to formalise their businesses in order to participate in the relevant economic sectors. The Isivande Women’s Fund is aimed at providing affordable finance in all sectors of the economy with particular emphasis on rural enterprises. To date a total 33 projects have been approved to the value of more than R22 million since 2012/13.

Broad-based Black Economic Empowerment • B-BBEE Advisory Council Operational. Presidential Council recommendations formulated, developed, tabled in Cabinet, resulting in reorientation of B-BBEE and alignment to broader government priorities (IPAP,NGP). Work-plan and subcommittees for Council approved. • PPPFA regulations have been aligned to the B-BBEE Act and came into effect on 7 December 2011.

Broad-based Black Economic Empowerment • National B-BBEE Summit successfully hosted on 3-4 October 2013 which unveiled the amended Codes and B-BBEE second baseline study • The Minister gazetted the amended Codes of Good Practice on 11 October 2013. • The B-BBEE Amendment Act has been ascended by the President • the dti has in conjunction with University of South Africa (UNISA) and University of the Witwatersrand (Wits) developed and launched a B-BBEE Management Development Programme (MDP)

Youth Enterprise Development • The Youth Enterprise Development Strategy (YEDS) has been finalised, approved and signed off by the dti. The YEDS is dti’s contribution to Commitment 5 of the Youth Accord, which specifies that Youth Entrepreneurship and Youth Cooperatives should be promoted • Youth Enterprise Development Strategy launched successfully by the Minister on 11 November 2013 • Official launch of the Itukise Programme on 4 March 2014 – Internships for Unemployed Graduates programme aims to place 1,200 unemployed graduates in private companies over the next two years, thereby equipping them with the relevant work experience to improve their employability

Priority Intervention 3: Strategic Use of Trade and Investment Instruments • Trade Policy: • The major tariff policy initiatives arising from industrial policy have been to lower tariffs for formerly protected upstream, capital-intensive industries which produce inputs that are important cost items for downstream industries • the dti has also co-ordinated steps to crack down on under-invoicing and illegal imports as growing evidence suggests that this has become pervasive • The global crisis has highlighted the importance of strengthening intra-regional cooperation and SA remains committed to deepening regional integration in Sub-Saharan Africa through a Tri-partite Free Trade Agreement with existing regional trading areas such as Comesa, the EAC and SADC. This will create large regional markets as a base for industrialisation, mutually beneficial infrastructure development, and regional value-chain development to build productive sectors. • During this Administration’s tenure, SA was invited to join BRICS. In 2013, SA hosted the 3rd BRICS Trade Ministers Meeting ahead of the Fifth BRICS Summit and the department led the process of developing the Trade and Investment Co-operation Framework that places the work programme on trade and investment co-operation in a longer-term strategic perspective. This includes efforts to strengthen co-operation in multilateral fora where trade and investment matters arise, notably in the WTO, and to explore BRICS partnerships that support Africa’s development agenda. A key outcome included the BRICS Trade and Investment Co-operation Framework.

Priority Intervention 3: Strategic Use of Trade and Investment Instruments • Investment: • Performance Agreement commitment on FDI had a target of R115bn for the period 2009/10 – 2013/14 • the dti achieved an investment pipeline of potential investment projects of: • Financial Year 2009/10 - R40bn, • Financial Year 2010/11 - R31.2bn, • Financial Year 2011/12 – R40.9bn, • Financial Year 2012/2013 – R53.5bn, • Financial Year 2013/14 to Q3 - R34.1bn has been achieved.

Priority Intervention 3: Strategic Use of Trade and Investment Instruments • Major Manufacturing Projects Facilitated • Over the past five years multinationals have affirmed South Africa as a regional manufacturing hub. The Sedibeng Heineken is South Africa’s largest green field project built in a record time before the 2010 World Cup and has a capacity of 3-million hectolitres. • Unilever projects such as “Indonsa” is a global first for the group in terms of advancing its focus on advanced sustainable “green” technology. It is Unilever’s second largest plant in the world and its 5th plant in South Africa. • Other FMCG companies such as Proctor & Gamble, Nestle, Kimberley Clark, Ranbaxy, Hisense and LG have established new plants or expanded their operations. • In the Auto sector, the unit has facilitated projects for Toyota, Nissan, Ford, General Motors, Tata, FAW, BMW, Iveco, KLT, Motherson Somi and Johnsons Control. • Resource Based Projects • Projects have been established or facilitated for Kiran Global, Sephaku Cement, Mamba Cement, Astral Foods, Jindal and Rayal Tile

Priority Intervention 3: Strategic Use of Trade and Investment Instruments • Green Economy • Projects have been established or facilitated for DCD Wind, Jinko Solar, Powerway, Mainstream, Art Solar, Italian Building Energy, G P Tech and Gestamp. TISA has facilitated the establishment of these projects in support of the Renewable Energy Independent Power Producer Procurement Programme (REIPPP) • Services • Major BPO centres have been attracted and established in South Africa such as Amazon, SERCO, Capita, Teleperformance, CCI, WNS and Mindpearl. Leading ICT multi nationals have established presence in South Africa namely Wipro, L & T Infotech. TISA has provided facilitation support to these companies such as their skills development and empowerment initiatives.

Priority Intervention 3: Strategic Use of Trade and Investment Instruments • Awards • In 2013 TISA was elected Executive Vice President of the World Association of Investment Promotion Agency (WAIPA) • SA voted overall winner by Financial Times for best investment destination for 2013 and 2014 • In 2012, South Africa was recognised as the UK Outsourcing Association Offshoring destination of the year, a significant achievement in our key target market • South Africa in 2013 has won the European Outsourcing Association (EOA) Offshoring Destination of the Year Award, confirming its status as a leading Business Process Outsourcing (BPO) destination • In May 2013 TISA received an award for facilitating the second best investment project(pharmaceutical sector) by AIM in Dubai

Priority Intervention 3: Strategic Use of Trade and Investment Instruments • Exports: • Over the past five years, export sales valued at R10.124 billion was facilitated through the organisation of 103 pavilions, 173 trade missions and 23 Investment and Trade Initiatives in six countries. • South Africa has gradually diversified its trade and investment strategy to place a stronger focus on fast growing emerging markets in Africa, South-East Asia, the Middle East and South America. This strategy has continued during the global financial crises (including the Eurozone crisis) with even more concerted effort. Growing relations with the BRIC (Brazil, Russia, India, China) countries and the rest of Africa hold out the possibility of new markets for South African value added products and for the attraction of investment. • Exports to the BRIC countries increased by a significant average annual growth rate of 32% over the past 10 years, of which the most radical growth happened since 2006 (average annual growth rate of 43%). China was once again the main driving force behind the persistent increase in exports, with India playing a strong supporting role. The export composition to the BRIC countries is still in favour of commodities, but value added products are slowly starting to become more prominent.

Priority Intervention 3: Strategic Use of Trade and Investment Instruments • Africa’s growing importance has also significantly influenced South Africa’s export focus. Africa is rapidly becoming the continent with the fastest- expanding economic region in the world. In the 2012/13 financial year: 75% of the National Pavilions that the dti is organising at International Trade Exhibitions are in high growth emerging markets (30% of these are in Africa); 100% of Investment and Trade Initiatives are to Africa and the BRIC countries – 33% of these are to Africa (Zimbabwe and the Democratic Republic of Congo).

Priority Intervention 3: Strategic Use of Trade and Investment Instruments • Trade Activities Undertaken: • In the 2009-10 FY • 24 National Pavilions (NP) organised • 49 Trade Missions were organised • 3 Investment Trade Initiatives (ITI) were organised • In the 2010-11 FY • Exports of R1,67bn were facilitated • 311 companies were financially assisted • 20 Group Missions were organised • 6 ITI were organised • 16 NPs were organised • In the 2011-12 FY • Exports of R6,42bn were facilitated. • 4 ITI were organised to Brazil, India, Russia and Zimbabwe, in which 51 emerging exporters and 39 SMMEs participated • Participated in 21 NPs • 919 companies were financially assisted • 29 Trade Missions were organised

Priority Intervention 3: Strategic Use of Trade and Investment Instruments • In the 2012 – 13 FY, • Exports to the value of R3,8bn were facilitated • 1,213 companies were financially assisted • 22 NPs were organised • 46 Trade Missions organised • 6 ITIs and 2 special projects were organised • In the 2013-14 FY up to Q3, • Exports to the value of R2.2bn were facilitated • 859 companies were financially assisted • 20 NPs were organised • 29 Trade Missions organised • 4 ITIs and 2 special projects were organised

Priority Intervention 3: Strategic Use of Trade and Investment Instruments • Export Development Achievements: Capacity Building and Training • Over the past 5 years the companies trained to be export ready amounted to 2,830 • Clients Assisted with trade information and export advice • Over the past 5 years 2,433 clients were assisted with trade enquiries and export advice • Trade leads disseminated • The trade leads which were disseminated amounted to 2,733 • Awareness Raising and Capacity Building • Over the past 5 years a total of 86 awareness raising and capacity building workshops were conducted

Priority Intervention 3: Strategic Use of Trade and Investment Instruments • Programmes and Policies finalised • The Impact Assessment and Review of the Export Council Model in South Africa finalised and approved • The National Exporter Development Programme launched in April 2013. The key pillars of the NEDP are: to enhance the national export culture, launch an extensive capacity building initiative (i.e. Global Exporter Passport Initiative), build a reliable National Trade Information System, developing special projects to encourage the pooling of resources such as Export Villages and to establish a National Export Forum supported by a specific charter • Furthermore, the dti has established an export help desk at the campus in order to enhance access to trade information and provide export advice

Priority Intervention 4: Providing An Appropriate Regulatory Environment For Economic Development • Industrial policy requires a supportive regulatory environment to foster more competitive and dynamic industries and businesses, and prevent harmful market domination and abuse, and the exploitation of consumers. In recognition of the apartheid legacy of high levels of corporate and industrial monopolies in the economy, a far more robust Competition Act that informed the establishment of the Competition Commission and Tribunal was introduced in 1998. During this Administration’s tenure, Amendments to strengthen the Competition Act were developed by the dti. • SA’s Competition Policy framework is robust by international standards, includes innovative elements such as the inclusion of a public interest clause to protect vulnerable workers, and its institutions have won global acclaim for the technical quality and nuance of their decisions. • Key pieces of legislation such as the Companies Act and Consumer Protection Act were implemented in the last 4 years. The new Companies Act introduced a framework to facilitate the rescue of businesses that are in financial distress to ensure that potentially viable (in the long-term) firms do not have to close if there is an alternative. The Companies and Intellectual Property Commission has grown in stature over the last 2 years and the time required to register a business with CIPC is comparable to international averages.

Priority Intervention 5: Driving Operational Excellence in the dti and its Agencies • Human Resources

the dti’s Incentive Achievements in Numbers

IPAP 2014/15 -16/17 Indicative Directions • Regional industrial integration and new export markets • Sustained & concerted regional growth is arguably the biggest stimulus to long-term growth in South Africa. In the short to medium term regional integration offers continuous opportunities for SA to grow its exports base. • A number of ongoing and scaled-up interventions are in the pipeline. These include: planning cross-border infrastructure, effective articulation of up- and down-stream linkages in resource exploitation; and the realisation of massive construction opportunities • BRICS • South Africa’s participation in the BRICS provides important opportunities to build its domestic manufacturing base, enhance value-added exports, promote technology sharing, support small business development and expand trade and investment opportunities. • Development of complementarities and integrated value chains should be underpinned by an overall approach that puts industrialisation at the core of the engagement.

IPAP 2014/15 -16/17 Indicative Directions • Strengthen transversal and sector specific interventions including with 'deep dive', granular industry and firm level research to identify and support dynamic firms • Greater emphasis on focused export promotion strategy • Greater emphasis on science, innovation and technology; interface with DST and 'new machine age'' • Stronger leveraging of public procurement and securing support from private sector for localisation • Scope and review of industrial financing and incentives to support this emphasis • Beneficiation inclusive of strategic roadmap for optimal use of large natural and shale gas deposits in South and Southern Africa.

Presentation to the PC onTrade and Industry – the dti’s Achievements 2009/10 to 2013/14