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Economic Development 1 st and 2 nd quarterly report

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

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  1. Economic Development 1st and 2nd quarterly report Presentation to the Portfolio Committee 26 October 2010

  2. Presentation outline • Outcomes approach • Progress against the Strategic Plan • Performance against ENE targets • Financial performance • Equity status 2

  3. 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

  4. 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

  5. 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

  6. 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

  7. 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

  8. 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

  9. 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

  10. 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

  11. 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

  12. 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

  13. 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

  14. 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

  15. 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

  16. 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

  17. 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

  18. 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

  19. 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

  20. 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

  21. 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

  22. 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

  23. 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

  24. 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

  25. 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

  26. 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

  27. 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

  28. 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

  29. 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

  30. 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

  31. 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

  32. 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

  33. 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

  34. 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

  35. 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

  36. Financial Performance (2) 36

  37. Financial Performance (3) • Actual spending for Programme 1 as at 30 Sept 2010 is R 14.4 million 37

  38. Financial Performance (4) Expenditure for Programme 2 amounts to R 700 000 38

  39. Financial Performance (5) Year-to-date expenditure for programme 3 is R 155.8 million of a budget of R 344.4 million 39

  40. 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

  41. 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

  42. Representivity of staff: race 42

  43. Representivity of staff: gender and disability 43

  44. 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

  45. Siyabonga

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