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Economic Development 1 st and 2 nd quarterly report. Presentation to the Portfolio Committee 26 October 2010. Presentation outline. Outcomes approach Progress against the Strategic Plan Performance against ENE targets Financial performance Equity status. 2. Outcomes approach.

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economic development 1 st and 2 nd quarterly report

Economic Development 1st and 2nd quarterly report

Presentation to the

Portfolio Committee

26 October 2010

presentation outline
Presentation outline
  • Outcomes approach
  • Progress against the Strategic Plan
  • Performance against ENE targets
  • Financial performance
  • Equity status

2

outcomes approach
Outcomes approach
  • The electoral mandate for 2009-2014 requires that government focus on five priorities: education, health, rural development, employment creation and combating crime and corruption
  • The Presidency developed an outcomes based approach and identified 12 outcomes for government for 2014
  • One of the outcomes is “Decent Employment through Inclusive Economic Growth”, led by the Economic Cluster of departments of which the Economic Development Department is part.
  • Between the January and July Cabinet Makgotla the Delivery Agreement for Outcome 4 was designed and discussed between the affected departments
  • The Delivery Agreement has been signed by a number of the signatory Ministers

3

strategic plan outline
Strategic Plan outline
  • Programme 1: Administration
    • Ministry
    • ODG
    • General Management Services
  • Programme 2: Economic Policy Development
    • Growth Path and the Creation of Decent Work
    • Economic policy
    • Broad-based BEE
    • The Second Economy
    • Economic Development Institute and Research

4

strategic plan outline cont
Strategic Plan outline, cont

Programme 3: Economic Planning & Coordination

Spatial, Sector and National Economic Planning

Investment for Economic Development

Competitiveness and Trade for Decent Work

Economic Development, State Budgeting and Financial and Procurement Processes

Green Economy

Programme 4: Economic Development and Dialogue

National Social Dialogue and Strategic Frameworks

Sectoral and Workplace Social Dialogue

Capacity Building for Economic Development

Productivity, Entrepreneurships and Innovation

5

programme 1 ministry
Programme 1: Ministry

Ministry supported the Minister in:

Cabinet, Cabinet Committees, IMCs and Presidential Councils

Economic Sectors and Employment Cluster

MinMec and MECs of FS and EC

Foreign delegations and multilateral organisations

Travel to WEF, UAE and China

Replies to 30 questions

Portfolio and Select Committee meetings

Consultations on the Growth Path

Tabling of strategic plans and annual reports

Convening Leadership Team meetings

6

programme 1 ministry cont
Programme 1: Ministry,cont

Ministry supported the Deputy Minister in:

Cabinet and Cabinet Committee meetings

Crans Montana Forum in Brussels

Provincial visits

Engaging stakeholders on cooperatives and SMMEs

Engaging COGTA, SALGA and other stakeholders on local economic development

MinMec and MECs of FS and KZN

Meetings of Nedlac EXCO

Meetings with Ambassadors of Korea and Malaysia

Community engagements

7

programme 1 odg
Programme 1: ODG

The ODG supported the DG in:

Implementation of the Recruitment Plan

Implementation of the Strategic Plan

Planning and reporting (Annual Report, quarterly reports)

ESEC Cluster meetings and consultations on the Growth Path

Technical MinMec meetings and engagements with provincial Economic Development HODs

Presentations for Parliamentary Committees

Liaison with the Ministry and Department

Efficient administration and document flow

8

programme 1 general management services 1
Programme 1: General Management Services (1)

Human Resource Management

EDD had 3 permanent staff on 1 April 2010

Selection processes for 4 DDGs, 4 CDs and three corporate managers

Take home project and exam

DDG: Economic Policy Development, CD: Growth Path, CD: Economic Planning, CFO, CD: HR and D: ODG appointed in July

14 other staff appointed during second quarter

23 jobs (53 posts) job-evaluated

Currently selection of Senior Economist and Policy Analyst and Director: Legal Service in progress

9

programme 1 general management services 2
Programme 1: General Management Services (2)

Chief Financial Officer

Financial Maturity Capability Report submitted to the National Treasury

Submitted EDD 2011 MTEF submission to National Treasury

Submitted monthly PFMA section 40 reports

Prepared the expenditure plan for the remainder of the financial year

Made progress in securing additional accommodation

Performed the procurement function with the support of the dti

10

programme 1 general management services 3
Programme 1: General Management Services (3)

Legal Services

Post advertised and shortlisting underway

IT services

Support from the dti

One contract worker appointed

Communications

MLO assisting

JE awaiting approval

11

programme 2 economic policy development
Programme 2: Economic Policy Development

Growth Path and Creation of Decent Work

Various officials assisted the Minister with aspects of the development of the Growth Path

A summary and executive summary have been prepared

Policy papers have been drafted

The Minister, DG and officials led delegations to Ministries and Departments

The Growth Path was discussed at the ESEC Ministers and DG Cluster

The Growth Path was presented to the July Cabinet Lekgotla

A special Cabinet has been held to discuss it further

12

programme 2 economic policy development1
Programme 2: Economic Policy Development

Economic policy

Discussions have been held in the Cluster and with coordinating departments on macro-economic issues

Work was completed on economic overview and trends (macro and micro issues)

Fact sheets and policy briefings:

Integrated Resource Plan on Energy

Assessment of conditions in Bitou

Task Team on Arcelor Mittal / Kumba

Partnerships explored on economic modelling

Broad-based BEE

Supported the Minister’s participation in the BBBEE Advisory Council

13

programme 2 economic policy development2
Programme 2: Economic Policy Development

Second Economy

Multi-pronged strategy to reduce youth unemployment

Initial research undertaken

Engagements held with NT and the dti

MTEF submission submitted

Fact sheet prepared

Strategy to integrate the second economy into the mainstream

Initial research undertaken

Engagements held with NT and the dti

Review of informal trader conditions conducted

Cooperatives strategy

Initial research undertaken

Engagements held with NT

Further consultations with the dti and ILO

Draft concept paper on the social economy prepared

MOA drafted with academic institution

14

programme 3 economic planning coordination
Programme 3: Economic Planning & Coordination

Spatial, Sector and National Economic Planning

National Economic Planning

Working with dti in fast-tracking IDZ policy approval

Developing package for Coega

Consulted with Eastern Cape Economic Development Dept

Spatial Economic Development Action Plans

EDD held consultative meetings with the dti, COGTA, DRDLR and NPC to understand criteria for intervention

Forum planned for 27 October to discuss criteria and harmonise programmes

Participated in the National Planning Commission Spatial Planning Seminar

15

programme 3 economic planning coordination1
Programme 3: Economic Planning & Coordination

Spatial, Sector and National Economic Planning

Coherence of Provincial and Local Economic Development Plans and Agencies

MinMec held on 24 June

Focused on the Growth Path and IPAP2

Presentation made on Outcome 4 Delivery Agreement

Technical Minmecs held on 6 August and 13 September in preparation for the MinMec

First meeting focused on the functioning of the MinMec and ways of prioritising themes and projects for discussion at MinMec

Second meeting considered presentations on the Green Economy, preferential procurement and IDZs

National and provincial agencies are invited to the MinMecs and Technical MinMecs to align their work to the strategic priorities of government

Sector Economic Development

Discussed under ENE

16

programme 3 economic planning coordination2
Programme 3: Economic Planning & Coordination

Investment for Economic Development

Development Finance Institutions

Engagement with DFIs and ERBs on 4 June

Entities required to review their strategic plans in line with the Growth Path and IPAP

Special focus required on employment creation, green economy, youth employment and cooperatives strategy

Prepared a dashboard of indicators for measuring performance of entities

Major engagement with the IDC on 3 September focusing on Green Economy, agro-processing, spatial plans, IDZs

Undertook evaluation of entities’ revised strategic plans

Engaged with Khula and Samaf on corporate governance

Consultations held with NT on Khula Direct

Investment and Development

The IDC and UIF launched a development bond of R2 billion on 14 April

R104 million committed for 12 companies creating or saving 736 jobs at R142 000 per job

17

programme 3 economic planning coordination3
Programme 3: Economic Planning & Coordination

Competitiveness and Trade for Decent Work

Economic Regulatory Bodies

Engagement with DFIs and ERBs on 4 June

Entities required to review their strategic plans in line with the Growth Path and IPAP

Special focus required on employment creation, green economy, youth employment and cooperatives strategy

Prepared a dashboard of indicators for measuring performance of entities

Engagements regarding competition policy, the budget of the Competition Commission, the Competition Amendment Act

Undertook evaluation of entities’ revised strategic plans

Continental and International Interface

Major focus was State Visit to China from 21-27 August

Beijing Declaration finalised, three paragraphs from EDD

Minister met China Africa Development Fund and China Development Bank

Steps taken to prepare for workshop between Chinese and South African Green Economy entrepreneurs and businesspeople

18

programme 3 economic planning coordination4
Programme 3: Economic Planning & Coordination

Economic Development, State Budgeting and Financial and Procurement Processes

Budgeting and Financing

EDD has been engaging with the budget process to ensure that the strategic priorities of the new Growth Path are prioritised

Procurement

The Preferential Procurement Regulations substantially revised to promote local production

Work done by NT, the dti and EDD

19

programme 3 economic planning coordination5
Programme 3: Economic Planning & Coordination

Green Economy

Engaged with the IDC, DEA, NT, DBSA and the ILO to promote the Green Economy

Participated in interdepartmental work on the rollout of solar water heating, concentrated solar thermal, establishment of a Solar Park in Upington and developing sector strategies for labour-intensive sectors in renewable energy

Database of Green Economy companies being developed

Aim to hold a workshop with SA entrepreneurs and business-people and then a workshop with SA and Chinese Green Economy entrepreneurs and businesspeople

China Africa Development Fund and China Development Bank have been engaged

IDC and EDD has conducted research into Green Economy projects in the provinces

20

programme 4 economic development dialogue
Programme 4: Economic Development & Dialogue

National Social Dialogue and Strategic Frameworks

Social Partnering and National Social Dialogue

Numerous engagements held including with HSRC, ILO, IMF, DBSA, Cam clothing, Clinton Foundation, BNDES, pharmaceutical sector, metals bargaining council, working group on the social economy, NUMSA, Naledi

2nd Next Economy Social Dialogue on the economic lessons from the World Cup held on 19 July

Implementation of Strategic Frameworks

Leadership Team on the Framework for SA’s Response to the International Economic Crisis met on 26 April and 2 July

R1,265 billion committed for 12 companies in distress in Q1 and Q2

R104 million of UIF fund committed to 12 companies

5532 workers trained or in training on the Training Layoff Scheme

855 applications in process

Various engagements to promote implementation of the Framework

Rules of the Training Layoff Scheme amended to allow easier access to the Scheme

21

programme 4 economic development dialogue1
Programme 4: Economic Development & Dialogue

Sectoral and Workplace Dialogue

Sector and Workplace agreements covered in ENE

Capacity Building for Economic Development

Capacity Building of Social Partners

15 workshops held with the IDC to promote the Training Layoff Scheme and support for distressed companies

Harnessing Economic Development Expertise

Minister appointed Economic Advisory Panel on 23 March

Panel met on 25 May and 14 July

First meeting presentations on Growth Path and IPAP2 as well as SA and global economies

Second meeting with President Zuma

22

ene targets for 2010 11
ENE targets for 2010/11

Indicator

Q1 & Q2

Target

Number of policy and analytical papers on economic policy challenges

7

10

Number of policy platforms on economic policy challenges

3

10

Number of engagements with provincial and/or local government

6

10

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

6

6

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

R2bn

R2bn

Number of sector plans produced or reviewed

3

5

Number of spatial plans produced or reviewed

4

10

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

4

10

Social dialogue and capacity building engagements

10

10

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

4

10

23

ene annual targets 1
ENE annual targets (1)

Policy and analytical papers (7/10)

Growth Path document and summaries

Identifies jobs drivers, policy drivers, institutional drivers for decent work and inclusive growth

Discussion document on the social economy

Research for a cooperatives strategy

Discussion document on the knowledge economy

Focus on innovation, research and development

Discussion document on mining and beneficiation

Draws on DMR, IDC and other research

Discussion document on manufacturing

Identifies interventions to improve the competitiveness of the sector

Discussion document on the public sector

Considers public employment schemes and the role of the public service

Discussion document on agriculture and rural development

Draws on work of DRDLR and DAFF, analysis of the spatial economy and the potential of various schemes to contrbute to rural livelihoods

24

ene annual targets 2
ENE annual targets (2)

Policy platforms on economic challenges (3/10)

2nd Next Economy National Dialogue

Discussing the economic lessons of the Soccer World Cup

Speakers: Dr Danny Jordaan, Dr Nkosazana Zuma and Goolam Ballim

Filmed for a documentary on the World Cup

Co-hosting of the Green Economy Summit

Co-hosted with Department of Environment Affairs

EDD presented a detailed assessment of the potential of the Green Economy to generate employment opportunities

Highlighted the importance of social dialogue

EDD-ILO Workshop on the Construction Sector and the Green Economy

Identified high growth potential sectors including energy efficiency, renewable energy, mobility, recycling, sustainable forestry and agriculture, environmental services and renewable materials

The building sectors present significant opportunities to create green jobs

25

ene annual targets 3
ENE annual targets (3)

Engagements with provincial and local governments (6/10)

MinMec 24 June and Technical MinMecs 6 August and 13 September

Focus on Growth Path and IPAP2 and Outcome 4 Delivery Agreement

Minister and Deputy Minister visits to MEC Free State

On strategic provincial projects and SMMEs / cooperatives

MEC Eastern Cape on strategic infrastructure projects

N2 Wild Cost Toll Road, Coega IDZ, East London IDZ, biofuels and forestry projects

MEC Eastern Cape on an Eastern Cape Clothing Firm

Intervention regarding potential retrenchments

MEC KwaZulu-Natal

Best practice on SMMEs and cooperatives

Matzikama engagement with local government on small business

Brought development finance institutions, banks, national, provincial and local government together with small businesspersons

26

ene annual targets 4
ENE annual targets (4)

Strategic engagements with DFIs and ERBs (6/6)

Engagement on strategic plans

Entities advised on amendments required and resubmitted plans

Meeting with DFIs and ERBs on 4 June

Presentation on Growth Path and outlined ways in which entities should amend priorities to align with national priorities

COTII

All dti and EDD agencies addressed on the Growth Path

Minister’s engagements with the IDC

Engagement on 3 September to discuss the green economy, agro-processing, spatial plans, IDZs, China and the Middle East

Khula Direct

Discussed demand for loans and administrative costs

Competition Commission

Competition policy, Competition Amendment Act

27

ene annual targets 5
ENE annual targets (5)

Special financing for small business, targeted growth sectors and companies in distress (R2bn/R2bn)

IDC and UIF development bond launched on 14 April

28

ene annual targets 6
ENE annual targets (6)

Sector plans produced or reviewed (3/5)

Green economy

Worked with IDC and DBSA to assess the employment potential of different elements in the green economy and to identify key policy interventions to achieve that potential

Agricultural value chain

Assessed the potential of the agriculture value chain for employment creation and rural development

Steel sector

Supported the dti in developing a proposal for improved steel pricing, identifying specific measures the state could use

29

ene annual targets 7
ENE annual targets (7)

Spatial plans produced or reviewed (4/10)

N2 Wild Cost Toll Road

Reviewed reports and developed a proposal

Bitou Municipality

In preparation for the Deputy President’s Anti-poverty Campaign visit reviewed LED strategy, Spatial Development Framework and other economic interventions underway

Coega IDZ

Developed a package of measures for the IDZ

Atlantis

Reviewed LED Strategy of 2008 and work commissioned by the City of Cape Town

30

ene annual targets 8
ENE annual targets (8)

Leveraging state expenditure and procurement (4/10)

Procurement regulations

Collaboration of NT, the dti and EDD to promote local production in state procurement

Pharmaceutical sector

Follow-up on roundtable exploring sector agreement

Fifa jerseys intervention

Assisted local firms to compete for a contract

Local stationery procurement project

Internally EDD promoting local production

31

ene annual targets 9a
ENE annual targets (9a)

Social dialogue and capacity building engagements (10/10)

Cam clothing

Engagements resulted in Workplace Social Dialogue Agreement

Leadership Task Team

Reviewed and drove implementation of the Framework

Clothing sector

ILO-SACTWU-AMSA workshop on productivity

Pharmaceutical sectors

Engagements towards a sector agreement

Solar Water Heaters

Workshop with key stakeholders including DOE, dti, SABS, BUSA, Eskom, SESSA, Standard Bank and DBSA

32

ene annual targets 9b
ENE annual targets (9b)

Social dialogue and capacity building engagements (10/10) cont

Procurement (Nedlac)

Engagements at Nedlac on the Preferential Procurement Regulations

Electricity sector (Nedlac)

Engagement on section 77 submission on electricity prices

Eastern Cape Clothing Firm

Engagement with SACTWU and firm to avoid retrenchments

IDC workshops

11 workshops on IDC funding and Training Layoff Scheme

Atlantis

Engagement with Atlanis Economic Development Task Team (labour, community, business, provincial government, Wesgro, City of Cape Town)

33

ene annual targets 10
ENE annual targets (10)

Sectoral, workplace and national agreements (4/10)

Cam Clothing Agreement

Engagements with Cam and SACTWU led to workplace agreement

Procurement agreement

Agreement on a number of areas at Nedlac

Training Layoff procedures agreement

Agreement on relaxation of the requirements to facilitate access to the Scheme

Agreement to establish a pilot project to build decent work in the construction industry

Agreement reached at the EDD-ILO Green Jobs Workshop

34

financial performance 1
Financial Performance (1)

Overview of Expenditure

Information is based on September 2010 IYM reports or section 40(4)of PFMA reports

Signed by the Accounting Officer and sent to National Treasury

Total budget of R 418.6 million for 2010/11 financial year

Expenditure in the first six months of 2010/11 is R 171 million or 40.9% of the main appropriation of R 418 million

Spending is marginally below the norm due to the high vacancy rate associated with the start up and initiation of operations in the new Department

35

financial performance 3
Financial Performance (3)
  • Actual spending for Programme 1 as at 30 Sept 2010 is R 14.4 million

37

financial performance 4
Financial Performance (4)

Expenditure for Programme 2 amounts to R 700 000

38

financial performance 5
Financial Performance (5)

Year-to-date expenditure for programme 3 is R 155.8 million of a budget of R 344.4 million

39

financial performance 6
Financial Performance (6)

No spending to date for Programme 4 from budget of R 11.2 million

Under spending caused by officials in Programme 4 being erroneously paid under Programme 1

This will be corrected on Persal allocations and journals

40

financial performance 7
Financial Performance (7)

Overview of Revenue

Revenue collection in first six months of 2010/11 is R 67.6 million

No comparison with 2009/10 as EDD is in its first financial year of operation

Main revenue generator for EDD is fines from penalties from Competition Commission

41

concluding remarks
Concluding remarks

Measure of overlap of Strategic Plan activities and ENE outputs

Good but uneven progress in implementation of the Strategic Plan

Major constraint is lack of capacity to drive sub-programmes

Slower spending linked to lack of staff capacity

Recruitment a priority but procedures are time consuming

Progress in relation to the ENE targets is solid

Need to strengthen representivity at senior management level

44

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