Investment Promotion & Inter – Departmental Clearing House

1. Investment Promotion & Inter – Departmental Clearing House Presentation to the Parliamentary Portfolio Committee on Trade and Industry Cape Town 22 July 2015

2. The Rationale for Investment Promotion Agencies • What is Investment Promotion • It involves several coordinated activities designed to attract, grow and retain new foreign and mobile domestic investment. Broadly speaking, it also deals both with improving the investment climate (product development) and marketing the location’s potential to private investors. • Investment promotion is a Government activity and most IPAs, national or subnational, are financed by the public sector. • The establishment of a national IPA is a choice a national government can make when deciding on an investment promotion strategy. 2. Why is Investment Promotion Important? • Intense and increasing competition for foreign direct investment (FDI) • To compete for the FDI, governments need a national agency with specialized promotional skills • Information for investors in decision making, as this is generally lacking and can be appropriately provided and packaged by an agency Source: World Bank

3. What is an Investment Promotion Agency (IPA) MAIN SERVICES DEFINITION The International Trade Centre (ITC) defines an IPA as an institution whose purpose is to attract investment to a country, region or city. Source: ITC

4. Investment Promotion and Facilitation Investment Promotion and Facilitation facilitates the increase in the quality and quantity of foreign and domestic direct investment by providing an investment recruitment, problem-solving and information service in order to retain & expand Investment in South Africa and into Africa. The sub-programme is promoting South Africa as an investment destination, with a target of R140 billion over the next three years. The target for the investment pipeline for 2015/16 is R 45 bn.

5. The objective of the project is as follows: • To develop an investment strategy and methodology for investment promotion, facilitation, aftercare and policy advocacy. • To align IPICHs Investment Strategy with all Government programmes • To develop investment related products and service offerings • To design and develop a customised investor service and the implementation of a one-stop-shop service for investors. • To develop sector specific promotional strategies by focusing activities and initiatives to targeted markets. • To improve the investment climate. • To develop a 3-5 year operational plan to achieve the strategic objectives of IPICH. • To develop a strategy for outward investment into Africa. (Phase3) • To develop a strategy for the African Gateway concept. (Phase 3) National Investment Promotion and Facilitation Strategy Phase 2

6. Key Targets for Investment Promotion and Facilitation • To make South Africa a Top Ten investment destination • To make IPICH a top five world class investment promotion agency • Seek to attract an investment pipeline of R140 billion within the next 3 years • Targeted and co-ordinated investment drive amongst all stakeholders. Diversify and increase investment flows from emerging markets. Retain and expand investment flows from developed markets. • Reduce the cost of doing business and administrative barriers. Improve SA investment climate and investment attraction. • Common messaging and brand identity. Marketing and Facilitation support for the SEZ program & to host the Annual Africa Dialogue Conference • Capacitate the unit to provide a dedicated investment promotion, facilitation and aftercare through a one stop shop service.

7. Investment Promotion and Facilitation Opportunities • Investment and Export Opportunities are identified by the DTI’s Industrial Policy Framework and the resultant Industrial Policy Action Plan, the NGP and the NDP • The above inter-alia has identified those sectors and industries which South Africa has a competitive or potential advantage in terms of economic sustainability. • It follows that the identified sectors are the opportune areas for investment and that the products and services resulting there from have a propensity to be globally competitive. • Manufacturing: Automotive, Agro-processing, Capital equipment & transport • Advance Manufacturing: Pharmaceuticals, bio-technology, aerospace • Mining and mineral beneficiation • Services: BPO, Oil and Gas, Infrastructure • Green economy: Renewable energy, waste management, nuclear components

8. Priority Sectors For FDI • Advanced Manufacturing • Metals • Mining & Beneficiation • Biofuels • Agribusiness • Automotives & Components • Capital Equipment & Rail • Precision engineering • Aerospace • Film production • Tourism • Oil & Gas • Boat Building • ICT and electronics • BPO (Business Processing & Outsourcing) and Call Centres • Chemicals • Plastics & Composites • Bio-pharmaceuticals • Leather and footwear • Forestry products & Furniture • Energy and Renewables • Infrastructure Development • Waste Management • Energy Efficiency & Cleaner Technology

11. CONFIDENTIAL Analysis of Investment Trends

12. CONFIDENTIAL Analysis of Investment Trends

13. Investment Promotion and Inter-Departmental Clearing House Financial Year: 2014/2015 R43.8 billion Investment pipeline for potential investors Unilever R4bn over 4 years Manufacturing Manufacturing Gestamp (R220m) Manufacturing Toyota (R550m) Advanced Manufacturing Samsung (R228m) CCI Call centres (R200m) Services Services Four Seasons Hotel (R560m) Services Vodafone (R220m) Services Hunting Plc (R300m)

14. Source: www.doingbusiness.org

15. Source: www.doingbusiness.org

16. Source: www.doingbusiness.org

17. South Africa Tops the BRICS for Ease of Doing Business 2015 Source: The World Bank

20. Attract and Expand Investments in SA How do we do it? Get the Product Right • Use feedback from Aftercare and ranking studies to identify policy research agenda • Research supports policy advocacy agenda • Policy advocacy improves investment climate Aftercare Program • Maintain leadership role in ensuring execution • Provide pathfinding services to link foreign investors and domestic suppliers • Identify policies that impede investment Get the Message Out • Use Value Proposition (not only cost, but quality factors that demonstrate South Africa's advantage) • Marketing focussed on priority industry sectors • Key Conferences/Events • Peer to Peer marketing Proactive Prospecting • Focus on target firms in priority industries • Establish relationships • Use sector experts and private sector champions to present compelling business cases to investors Forge Investment Partnerships Focus on identifying priority industry experts to build business case Investment Promotion and Facilitation Strategy

21. Strategy Development and Implementation Country offer Global Trends Potential 2. Map out your country’s offer 1. Understand Global Trends 7. Define goals and targets 3. Identify Internationally mobile projects 8. Develop promotion/marketing strategies Opportunity areas 4. Develop selection criteria 9. Contact target firms 5. Benchmark your offer Investment leads 6. Make the final decision 10. Evaluate the results

23. INVESTMENT DECISION MAIN STEPS FOR THE PROCESS OF INVESTMENT DECISION MAKING • Marketing Strategy • Management strategy • Governance Strategy Overall Strategy Plan Domestic Research Reconfirm the items to be researched Defining the scope for investment Identification of Optimal Information Source Production Plan Feasibility Study Field Research Sales and Marketing Plan Formation of Business Plan Investment Environment Research Capital Plan Ground-level Actual Hearing and Research Judgement of Feasibility of Business Plan Human Resource Plan Formation of Entry -Strategy Final Decision on Investment Location Plan Move to Executive Phase

24. IPICH Investment Marketing & Promotion 5 Sector Units *Advance Manufacturing *Manufacturing *Green Economy *Resources *Services IPICH is the National Investment Promotion Agency within government MANDATE To facilitate theincrease in the quality and quantum of Foreign and Domestic Direct Investmentby providing an efficient and effective investment recruitment, problem solving and information service in order to retain and expand investment in South Africa and into Africa. Investment Facilitation (Visas & Work permits) Investment Information Investment Unit of DTI – ideal platform to be developed and serve as the inter-governmental clearing house.

25. According to research by investment specialists, as much as 70% of new investments are re-investment/expansion of existing companies – which means investor aftercare is paramount. • Investor Challenges alluded to in SONA 2015 • Municipalities • Licensing • Zoning • Permits • Environmental Impact Assessments • Electricity • Water • Home Affairs • ITAC • SARS • CIPC • Finance • Incentives

26. Investors require a quick efficient service for registration, permits and licensing.

27. MANY LOCAL IPA & INSTITUTIONS

28. India ebiz portal • India has a very complex business environment and is ranked 142 out of 180 countries in the World bank’s ease of doing business. • In order to improve the investment climate the Modi Government announced on the 2O February 2015, an ebiz portal , integrating 11 central government services, to facilitate faster clearances for businesses • Launching the portal, finance Minister Arun Jaitley, said that discretionary power would end with the portal.” India is committed to steps to foster business environment. • Ebiz is important as it will bring transparency and will improve efficiency, intergrate services and promote electronic delivery of services • The single window portal by the department of Industrial Policy and Promotion (DIPP) will provide all business and investment related clearance 24/7 with an intergrated payment gateway. India has developed an IT platform as the single window clearance.

29. What is Proposed A central nodal operational structureneeds to be established at national level to act as an implementing body and to serve as the convener for the Inter-Departmental Clearing House, to effectively service investors, local and foreign, coordinate the One Stop Shop’s in the SEZ’s and the work of the Provincial Investment Agencies and local authorities. The Inter-Departmental Clearing House would function through an Investment Council which is championed by the DG of the dti including the relevant DG’s of the economic cluster and operationalized by the DDG: Investment Promotion. The DDG: Investment Promotion will set up the Investment Council and serve as the secretariat. The policy mattersregarding investment and business will be channelled via the Minister of Trade and Industrywho is the chair of Outcome 4. Challenges that cannot be resolved will be escalated. Policy and reforms will be tabled in Outcome 4 and upon approval will be implemented council. The Ministerial Committee will be escalated authority to unblock and fast track issues of the clearing house

30. INTER-DEPARTMENTAL CLEARING HOUSE • Inter-Departmental Clearing House is an investment facilitation or a “single-window” mechanism where relevant government agencies are brought to single cohesive structure that coordinates and streamlines processes to provide prompt, efficient and transparent services to investors; • It shortens and simplifies administrative procedures and guidelines for issuance of business approvals, permits and licenses, thereby removing bottlenecks faced by investors in establishing and running businesses. • Inter- Departmental Clearing House for Investors will provide: • Facilitation of the entire investment value chain; • Will provide specialist advisory services to investors; • Co-ordination between the various line ministries; • Communication of these services to potential investors; and • Be the single-window clearance for registration, licensing and permits.

31. COGTA • HO • MUNICIPAL & LOCAL GOVERNMENT • INFRA-STRUCTURE DELIVERY NATIONAL GOVERNMENT DEPARTMENTS COORDINATION DMR dti TREASURY EDD DOC dha DIRCO • HO • REGIONAL OFFICES • STATE DIAMOND TRADER • STATE MINING COMPANY • PROSPECTING& MINING • HO • TISA • IDAD • ITED • IDD • CIPC • NEF • NCR • NRCS • ECIC • BPD • CCRD • FOREIGN OFFICES • SABS • HO • ITAC • IDC • COMPETITION COMMISSION • PICC • HO • BROADBAND INFRACO • SENTECH • ICASA • TELKOM • HO • DBSA • PIC • SARS • CUSTOMS • SARB • HO • FOREIGN OFFICES • VFS • CIVICS • HEAD OF MISSIONS • FOREIGN OFFICES • SUPPORT OF VISAS DPE • ESKOM • TRANSNET DEA WATER & SANITATION DAFF DRDLR DOH DOL DST DOE DOT • HO • REIPP • NERSA • NECSA • LICENSING • HO • LICENSING • INFRA-STRUCTURE • PRASA • HO • TIA • CSIR • NRF • SANERI • SKA • HO • PROVINCIAL OFFICES • TRANSFER & ZONING OF LAND • HO • EMPLOYMENT SERVICES • UIF • HO • REGIONAL OFFICES • EIA • HO • REGIONAL OFFICES • TCTA • WATER BOARDS • LICENSES • HO • REGIONAL OFFICES • FOREIGN OFFICERS • LAND BANK • PERMITS • HO • MCC/SAHPRA SA has 18 government departments involved in policy regulatory, registration permits and licensing

32. What will the Inter-Departmental Clearing House do? • Setup an Inter-Governmental Structure that will serve as the Inter-Departmental Clearing House. • It will firstly it will coordinate the relevant government departments involved in regulatory, registration, permits and licensing. • Reduce the silo mentality, turnaround times , red tape and improve service delivery • Improve the Investment Climate and ease of doing business by identifying bottlenecks, administrative barriers and have a plan of action to improve service delivery.

33. How will it be setup? • The Inter-Governmental Structure will be setup and championed by the DG of the dti for the Inter-Departmental Clearing House ( IDCH). The will be operationalised by the DDG of Investment within the dti, that will also be the secretariat. Each department would identify a DDG that will serve on the secretariat. The role of the DDG will be to coordinate the Government units within their respective departments and serve as “trouble-shooters” and facilitate and fast track matters of the clearing house. • The DDGs would meet monthly but would fast track matters on a daily basis as required. • The DG Forum would serve as the investment council and would include the CEOs of SOEs and SEZs. Investment planning , roll out, monitoring and evaluation and investment climate will be discussed and these will be operationalised by the clearing house. The DG Forum will meet on a bi – monthly basis. • The Ministerial Committee will serve as the authority for escalated clearing house issues . • Issues of policy and regulatory will be discussed at Outcome 4, Chaired by the Minister of Trade and Industry. • Clearing House matters will be on the agenda and monitoring and evaluation reports will be tabled in Outcome 4 • The Government Technical Assistance Centre (GTAC) and MPAT will support the capacity building of officials and process improvement to improve service delivery

34. INTER-DEPARTMENTAL CLEARING HOUSE PROGRESS • One stop shop pilot done with GGDA, at Gauteng Investment Centre (GIC), • VFS Centre, introduced at GIC, on 1 June by Minister Gigaba, for corporate and business permits. • Long term, Expedited Visas beyond BRICS Countries in pipeline to be introduced. • Facilitated energy connection for TEGA Industries with Ekurhuleni Municipality allowing them to expand a second plant. • Municipal facilitation and energy constraints been addressed at Nestle plants in Harrismith, Babelegei, Estcourt and East London. • Community and Municipal facilitation for Unilever at Lords View • Facilitation with DOL and community for Rayal Trading at Bronkorspruit. • Facilitation for Samsung with NRCS for Letters of Authority (LOA) and SARS on customs

35. Inter-Governmental Clearing House Structure Presidency Energy War Room Investment Policy Investment Climate Escalated Clearing House Matters Outcome 4 Minister dti - Chair MinMec Economic Sector Employment & Infrastructure Development (ESEID) Technical Cluster Technical MinMec DG - Forum Investment Council SOEs DDG – Clearing House Secretariat & Operational Cluster SEZs and PIPAs Policy & Regulatory Permits & Licensing Infrastructure Finance & Incentives dpme, dti, Treasury, dha, DOL, DPME, Water & Sanitation, DEA, COGTA, Rural Development & Land Reform, DOE, DAFF, dst, DOH, dpe, EDD, dot, dtps dti, dha, DMR, COGTA, dea, Rural Development & Land Reform, Water & Sanitation, DOL, dirco, DAFF, DOH, EDD, DOE, dpe, dot, dtps EDD, dti, dpe, COGTA, Water & Sanitation, dot, dtps dti, Treasury, DOE, DAFF, dst, EDD

36. Inter-Departmental Clearing House Secretariat Immigration, Labour & Talent Environmental Impact Assessment Licensing, Permits & Registrations Due Diligence, Incentive Facilitation, Funding & Finance Inter- Governmental Facilitation Stakeholder Management Regulatory & Compliance Investor Information Investor Service & Aftercare IDCH – Contact Centre Marketing, Communication, Operations , Legal & Financial Management IT and CRM Monitoring & Evaluation

38. INTER-DEPARTMENTAL COORDINATION dti TISA IDAD IDD CCRD BPD ITED dha Immigration Permits Corporate Account Civics DOL Employer Services CrossBorder IDD CCRD Each DDG is to internally coordinate in their respective departments, be the focal point and the “trouble-shooter” for the Inter-Governmental Clearing House.

39. ONE STOP SHOP Investment Climate & Policy Advocacy • Incentives Sector and Skills Development Investment Climate Policy Input Image building & branding IPICH Investment Promotion One Stop Shop Systematic Feedback Investor interest Aftercare Investor Servicing • Development Package preparation & delivery • Aftercare Promotion • Image Building • Branding • Lead Generation Detailed information Investment facilitation

40. Planning & coordination ... Licensing & permits Regulatory documentation Information dissemination Utilities Shared services Key Features of a OSS Information search One Stop Shop

41. PLAN OF ACTION

42. Investment Promotion and Facilitation Service Offerings Investment Recruitment • Promotion of investment opportunities • Marketing of investment projects • Guidance with plant/site locations – Industrial Development Zones & Special Economic Zones • Packaged Investment projects • Input into policy formulation Investment Information • Information on the local economy and various investment opportunities within SA sectors and industries. • Information on incentive packages • Information on regulatory and legal environment • Publications viz, investment opportunities, SA Fact Sheet and Investors Handbook • Information of South Africa’s trade and investment policy. • Information on government policy in strategic sectors

43. Investment Promotion Facilitations Service Offerings Facilitation • Facilitation of investment missions, including travel itineraries • Introduction of investors to key stakeholders in private and public sectors • Introduction of investors to potential joint venture partners and black economic partnerships • Facilitation of finance and incentives • Assistance with applications, company registration, EIA, etc • Recommendations: Immigration Act – Business & Corporate Permit applications • Fast Tracking regulatory, zoning, licensing & municipal connections for investors • Logistical support for relocation Aftercare • Aftercare Forums , Workshops & investor surveys • Aftercare Meetings & Site visits to retain & expand investments

44. South Africa’s Current Global Footprint Europe: Brussels, Geneva, London, Milan, Moscow, Stockholm, The Hague, Berlin, Madrid, Munich, Paris, Bern & Vienna North America: Chicago, New York, Washington & Toronto Asia: Beijing, Hong Kong, Seoul, Shanghai, Tokyo, Bangkok, Jakarta, Kuala Lumpur, Mumbai, New Delhi & Singapore Middle East: Cairo, Dubai, Riyadh, & Tehran Australia: Canberra Africa: Addis Ababa, Abuja, Harare, Kinshasa, Luanda, Maputo, Nairobi, Dakar, Kampala & Accra South America: Sao Paulo & Buenos Aires

45. INVESTING IN SOUTH AFRICA • Coega IDZ • East London IDZ • Richards Bay IDZ • OR Tambo International Airport (licensed) • Dube trade Port IDZ • Saldanha Bay IDZ Contact: Letta Kaseke Assistant Director: Investment Information Tel: +27 12 394 5935 Email: Lkaseke@thedti.gov.za REASONS TO INVEST IN SOUTH AFRICA – WORLD COMPETITIVENESS RANKINGS 2015 # 1 - Strength of auditing and reporting standards #6 – Soundness of Banks #1 – Regulation of securities exchange #10 - Strength of investor protection #2 – Protection of minority shareholders’ interests #11 – Quality of air transport infrastructure #6 – Availability of financial services #3 – Efficacy of corporate boards #56 Overall ranking out of 144 countries and #1 in Ease of doing business among BRICS countries in 2015 #3 – Financing through local equity market Top Investors Trade and Investment South Africa (TISA) is the National investment promotion agency of South Africa offering a one-stop-shop approach to investing in South Africa 2014 UNCTAD winner for excellence in promoting Foreign Direct investment (FDI) projects to advance sustainable development South Africa was ranked third in the world for investment in clean energy, according to Climatscope 2014 report released by Bloomberg New Energy finance SA was voted overall winner for Africa by the Financial Times for the best destination for 2013 and 2014 In May 2013, AIM award for facilitating the second-best investment project (pharmaceutical sector) 2014 – Winner at AIM for sustainable development

46. Thank You