1. Strategic Plan and Annual Performance Plan
Presentation to Select Committee
04 May 2016 1

2. Presentation outline Purpose of the presentation Strategic context
Strategic objectives
Strategic outcomes
2016/17 priorities
Resources
Strategy roadmap

3. Purpose of the presentation
The purpose of the presentation is to brief the Portfolio Committee on :
The strategic context within which the Department will implement its plans
The changes that have be introduced into the plans
The strategic outcomes that will be pursued by the Department over the MTSF period
Define the Strategic objectives of the Department
Outline the 2016/17 priorities for the Department
Resourcing of the mandate
The roadmap for the execution of the Strategy

4. Strategic context: Economic outlook
The current State of the economy presents a major challenge that needs to be actively addressed by the State
The poor performance of the global economy has exposed weaknesses in the domestic economy:
Greater dependency on the commodities that are vulnerable to changes in the global economy
Level of concentration in the economy that undermines new entrants
Infrastructure network that is geared for commodities and not support regional integration and industrialisation
Limited participation of the larger part of society which limits the vicious cycle of sustained growth 1

5. Strategic context: Investments in the economy
Investments in the economy has remained below the National Development Plan Target
The productive sectors of the economy has been worst affected with Investments in mining and manufacturing leveling off
This present a major challenge for the economy and the investment driven growth approach presented by Government in the New Growth Path and National Development Plan
This is requiring Government and its institutions to play a leading role in the short to the medium term 1

6. Strategic context: Investments in the economy
In 2005 investment by the public sector amounted to just over R80 bn per annum
Over a period of 10 years this has increased to R261 bn
While private sector investment still represents a greater proportion of total investment in the economy:
In 2013 private sector invested R412 bn but this has declined between 2014 and 2015 and falling below the R400 bn level
Private sector investments still dominated by Mining and financial services
Investment by Manufacturing remains weak

7. The spatial economy
The spatial distribution of economic activities has not significantly changed since 1994
Greater portion of the RSA economy still concentrated in Gauteng in particular manufacturing and financial services
Provinces such as Northern Cape and Free State have lowest contribution
This distribution needs to be changed and support must be extended to these provinces

8. Growth by Province
The collapse in the commodity prices had a devastating impact on commodity dependent provinces such as North West and being the only province experiencing a contraction in economic activities
The implementation of the Government’s Renewable Energy Programme had profound impact on Northern Cape limiting the impact of the collapse in steel prices and production

9. Economic context: Implications on Department’s Plan
The implementation of Government Plans will be more challenging
SOCs will be required to invest more optimally and support the diversification of the South African economy
SOCs must support recovery of other sectors of the economy
New opportunities must be explored and actively pursued
There must be greater coherence in the different spheres of Government

10. Strategic objectives: What has changed?
Greater emphasis on supporting the re-industrialisation programme of Government
Strengthening intergovernmental relations
Greater joint planning and execution between the Department and its Portfolio of SOCs
Active engagement with society to make SOC and Department more accountable to the public as part of building confidence in the State and its institutions
Pursuing fewer high impact targets: Greater influence in the transformation of the economy
Capacity building programmes to support other spheres of Government

11. Strategic outcomes i Core Outcomes ii Enabling
Financial Sustainability
Commercially viable operations
Capital projects delivery
Enabling
Strong Shareholder
Key strategic outcomes
Interventions within this segment are intended to resolve core capacity challenges, particular within Transnet and Eskom*, which directly impacts MTSF targets
Interventions that enable the institutional model to perform effectively, whilst supporting core outcomes as well and support greater collaboration i ii
Description of outcome
SOCs are entirely capable of funding their own operations, without requiring State intervention
Focus can be placed on running of efficient operations as the financial pressure has been alleviated
Alignment and efficiency across institutional model
Operations that are efficient and effective such that desired operational target levels are achieved, allowing for expansion of operational capability and capacity to occur
Capital project targets are met, in line with strategic and policy expectations, thereby enabling the rest of the economy to prosper, driving up investment, GDP and exports
Stakeholders are aligned across the institutional model, ensuring a collaborative and synergistic approach to delivery of policy
Improved ability to fast-track major decisions
Outreach programme (provincial, local and international)
DPE’s oversight of SOCs is strengthened, allowing it to play a more integral role and have a greater say in decisions going forward
DPE is internally, a robust and flexible organisation, that acts as the benchmark for its peers

12. Strategic outcomes .. Transfor Mation Outcomes Industrialisation
Skills development
Enterprise development
Key strategic outcomes
Interventions within this segment are intended to fast track the restructuring of the economy with focus on transformation and industrialisation iv
Description of outcome
Increasing the local content in the build programme in line with IPAP
Defining new initiatives that will improve industrial base and accelerate industrialisation
Accelerate the implementation of the current skills development programme
Engage on financing options
Identifying opportunities that will increase participation of enterprises owned by the previously disadvantaged
Explore set asides in partnership with DSBD

13. Strategic objectives to be jointly pursued with SOCs

14. Strategic objectives to be jointly pursued with SOCs..

15. Departmental 2016/17 Priorities
Finalisation of the SOC Shareholder Policy Concept Paper
Exploring funding options for SOCs
Development of the Intergovernmental relations programme and formation of strategic partnership with Provincial Economic Development Departments
Support the implementation of the Black Industrialists programme
Optimisation of SOCs’ Skills Development Programme focused on scarce and critical skills
Implementation of interventions to strengthen financial positions of SOCs
Position SOCs to be able to pursue African markets

16. Resourcing of the Department1

17. Strategy roadmap Solidify Strengthen Stabilise 36 – 60 months
Stabilisation:
Continue exploring programmes that will improve stability of the SOCs and contribute to economic development
Building for success:
DPE repositions itself and its SOCs onto a growth trajectory through delivery of projects positively impacting the economy and greater partnerships
Enhancing our value:
DPE recognises its original purpose as a Shareholder of excellence of SOCs through delivery of projects that ensure overarching targets are met, optimised shareholder function and greater contribution to economic developemnt
0 – 12 months
12 – 36 months
36 – 60 months

18. THANK YOU