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)
DEFINITION
The International Trade Centre (ITC) defines an IPA as an institution whose purpose is to attract investment to a country, region or city.
MAIN SERVICES
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. National Investment Promotion and Facilitation Strategy Phase 2
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)

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. Analysis of Investment Trends
CONFIDENTIAL

12. Analysis of Investment Trends
CONFIDENTIAL

13. Investment Promotion and Inter-Departmental Clearing House
Financial Year: 2014/2015
R43.8 billion
Investment pipeline for potential investors
Manufacturing
Unilever R4bn over 4 years
Manufacturing
Gestamp (R220m)
Manufacturing
Toyota (R550m)
Advanced Manufacturing
Samsung (R228m)
Services
CCI Call centres (R200m)
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. How do we do it? Attract and Expand Investments in SA
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
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
Aftercare
Program
Maintain leadership role in ensuring execution
Provide pathfinding services to link foreign investors and domestic suppliers
Identify policies that impede investment
Forge Investment Partnerships
Focus on identifying priority industry experts
to build business case
Investment Promotion and Facilitation Strategy

21. Strategy Development and Implementation
Global
Trends
Potential
Country
offer
1. Understand Global Trends
2. Map out your country’s offer
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
Other indices:
Purchasing managers Index PMI: 1999 – 2015 averaged 51.84
This index measures the economic health of the manufacturing sector and is based on 5 major indicators
1. New orders, 2 inventory levels, 3production, 4 supplier deliveries , 5 Employment
Industrial production Index in SA averaged 1.53% between 2000 and This is a measure of businesses integrated into the manufacturing sector in South Africa
6. Make the final
decision
10. Evaluate the results

22. Objective/ Definition______
Origination
Scoping
Pre-feasibility
Bankable Feasibility
Pre Implementation
Implementation
Post Investment
Objective/ Definition______
Project ideas and applications are classified as Projects
An initial desk-top, techno-economic study of a specific project idea or application to determine interest to pursue the project further
A limited study to determine the economic and commercial viability of the project under different scenarios/options.
A detailed study to provide levels of confidence in the capital and operating expenditure within approximately +/- 10% and to assess the viability to move to the pre-implementation
All activities are conducted that is required for financial closure
Start with the design and basic engineering activities
All activities are conducted that is required for technical completion
The project development is complete and the Company now awaits a return on investment
Activities_______
Leads on E-Room
Initial screening
Initial due diligence
Submit recommendation
Conduct a scoping study
•Write a scoping report
•Submit report & recommendation (inclusive of funding for PFS)
Set-up project management structures (steering committee)
Conduct PFS
Due diligence on PFS
•Write and submit PFS submission report (inclusive of funding for BFS)
Conduct BFS via project management structures
Due diligence on BFS
•Write and submit BFS submission report (inclusive of funding for pre-implementation and/or actual investment)
Set-up final project structures with required policies and procedures
Fund raising & finalisation of funding agreements
Address all conditions precedent of shareholders and debt agreements
Start with basic engineering
Project achieves financial closure
Continue with detailed engineering
Procurement of capital items
Construction
Commissioning / Commercial Operation
Technical completion
Monitoring of investment
Outcomes _____
Request to accept application/idea on IDC project system
Desk-top, techno-economic study
•IDC Project Scoping Submission
Pre-feasibility study
Project Pre-feasibility Submission
Bankable feasibility study
Project bankable feasibility submission
Financial closure = project fully funded + unconditional funding agreements (debt and equity)
Pre-implementation memo
Technical completion = completion test is met and completion guarantee released
Implementation Memo
Repayment of IDC funding
IDC exit

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
Production Plan
Identification of Optimal Information Source
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. *Advance Manufacturing Investment Facilitation Investment Information
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 the increase in the quality and quantum of Foreign and Domestic Direct Investment by 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. – which means investor aftercare is paramount.
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 has developed an IT platform as the single window clearance.
India ebiz portal
India has a very complex business environment and is ranked 142 out of 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 structure needs 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 matters regarding investment and business will be channelled via the Minister of Trade and Industry who 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. NATIONAL GOVERNMENT DEPARTMENTS COORDINATION
dti HO
TISA
IDAD
ITED
IDD
CIPC
NEF
NCR
NRCS
ECIC
BPD
CCRD
FOREIGN OFFICES
SABS
dha HO
FOREIGN OFFICES
VFS
CIVICS
DOL HO
EMPLOYMENT SERVICES
UIF
DEA HO
REGIONAL OFFICES
EIA
DOT HO
LICENSING
INFRA-STRUCTURE
PRASA
EDD HO
ITAC
IDC
COMPETITION COMMISSION
PICC
DST HO
TIA
CSIR
NRF
SANERI
SKA
COGTA HO
MUNICIPAL & LOCAL GOVERNMENT
INFRA-STRUCTURE DELIVERY
DAFF HO
REGIONAL OFFICES
FOREIGN OFFICERS
LAND BANK
PERMITS
DOC HO
BROADBAND INFRACO
SENTECH
ICASA
TELKOM
DIRCO
HEAD OF MISSIONS
FOREIGN OFFICES
SUPPORT OF VISAS
DMR HO
REGIONAL OFFICES
STATE DIAMOND TRADER
STATE MINING COMPANY
PROSPECTING & MINING
WATER & SANITATION HO
REGIONAL OFFICES
TCTA
WATER BOARDS
LICENSES
TREASURY HO
DBSA
PIC
SARS
CUSTOMS
SARB
DOE HO
REIPP
NERSA
NECSA
LICENSING
DRDLR HO
PROVINCIAL OFFICES
TRANSFER & ZONING OF LAND
DOH HO
MCC/SAHPRA
DPE
ESKOM
TRANSNET
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
Regulatory & Compliance
Environmental Impact Assessment
Licensing, Permits & Registrations
Due Diligence, Incentive Facilitation, Funding & Finance
Inter- Governmental Facilitation
Investor Information
Investor Service & Aftercare
Stakeholder Management
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
Cross Border
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 IPICH Investment Promotion
Investment Climate & Policy Advocacy
Incentives
Sector and Skills Development
Investment Climate
Policy Input
Image building
& branding
Systematic Feedback
IPICH
Investment Promotion
One Stop Shop
Investor interest
Aftercare
Investor Servicing
Development Package preparation & delivery
Aftercare
Promotion
Image Building
Branding
Lead Generation
Detailed information
Investment facilitation

40. Key Features of a OSS Planning & coordination ... Information search
Regulatory documentation
Utilities
Shared services
Information dissemination
Licensing & permits
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 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
Asia: Beijing, Hong Kong, Seoul, Shanghai, Tokyo, Bangkok, Jakarta, Kuala Lumpur, Mumbai, New Delhi & Singapore
Africa: Addis Ababa, Abuja, Harare, Kinshasa, Luanda, Maputo, Nairobi, Dakar, Kampala & Accra
Middle East: Cairo, Dubai, Riyadh, & Tehran
North America: Chicago, New York, Washington & Toronto
South America: Sao Paulo & Buenos Aires
Australia: Canberra
Not allocated: %

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:  
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