1. 1 Presentation on the dti’s Strategic Plan 2015-2020 and Annual Performance Plan 2015-2018 to the Select Committee on Trade and International Relations Date: 13 May 2015 Director-General Mr Lionel October

2. 2 CONTENTS the dti’s Vision, Mission, Strategic Goals and objectives Economic overview Key Interventions for 2015/16 Allocated resources Strategic Risks Key achievements 2014/15

3. 3 VISION A dynamic industrial, globally competitive South African economy, characterised by inclusive growth and development, decent employment and equity, built on the full potential of all citizens

4. To facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation; Build mutually beneficial regional and global relations to advance South Africa’s trade, industrial policy and economic development objectives; Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth; Create a fair regulatory environment that enables investment, trade and enterprise development in an equitable and socially responsible manner; Promote a professional, ethical, dynamic, competitive and customer- focused working environment that ensures effective and efficient service delivery. STRATEGIC GOALS

5. 5 CORE PROGRAMMES AND CLUSTERS Industrial Development – the development of policies and strategies that promote sector competitiveness, growth, job creation and efficient administration of support measures. Trade, Investment and Exports – the strengthening trade and investment links with key economies and fostering African development, including through regional and continental integration and development co-operation in line with the New Partnership for African’s Development (NEPAD). Broadening Participation – the development of interventions and strategies that promote enterprise growth, empowerment and equity Regulation – the development and implementation of coherent, predictable and transparent regulatory solutions that facilitate easy access to redress and efficient regulatory services for economic citizens. Administration – effective co-ordination of departmental programmes and provision of necessary support for efficient implementation.

6. 6 PROGRAMMES OF the dti Programme 1: Administration Programme 2: International Trade and Economic Development Programme 3: Special Economic Zones and Economic Transformation Programme 4: Industrial Development Programme 5: Consumer and Corporate Regulation Programme 6: Incentive Development and Administration Programme 7: Trade and Investment South Africa

7. 7 ECONOMIC OVERVIEW

8. Global Economic Context The global economy grew by 3.4% in 2014. South Africa’s main trading partners have experienced divergent economic growth:  The European Union grew by just 0.9% while Japan shrunk by 0.1%.  However, Sub-Saharan Africa grew by 5% and the United States grew by a robust 2.4%. China’s economy continues to slow with growth moderating to a still impressive 7.4%. Commodity prices of Iron-ore, Coal, Platinum and Oil are still well below their 2008 highs. The substantial drop in the international Oil price has brought benefits for South Africa but may lead to a slowing of growth in oil-producing African countries which have become key trading partners for SA manufactured exports. 8

9. Domestic Economic Context The South African economy grew by 1.5% in 2014.  Agriculture grew by 5.6% and Services grew by 2.1%.  Mining however shrunk by 1.6% and Manufacturing was flat. The weaker Mining and Manufacturing growth performance was primarily due to the lengthy Platinum and Metal sector strikes in the first half of 2014. In the second half of 2014, electricity shortages constrained Manufacturing output substantially. The SA economy would have grown by approximately 2.2% – 2.7% in 2014 were it not for the labour and electricity stoppages. Amongst the BRICS countries, SA grew faster than both Brazil (0.1%) and Russia (0.6%). 9

10. Gross Domestic Product 10

11. Employment 11

12. Total Merchandise Trade 12

13. Trade 13  Exports of South African goods continues to grow albeit at a slower pace than imports.  SA exports of mineral commodities have slowed due to lower international prices.  Trade balance has worsened as global demand has remained relatively weak. Need for trade protection remains high.

14. 14 SP (5-year) 21 priorities SP (5-year) 21 priorities NDP 5-year MSTF Outcomes 5-year MSTF Outcomes APP (3-year) the dti ESEI & ICTS Clusters of Cabinet ESEI & ICTS Clusters of Cabinet The Presidency (SONA) 9- point plan Impact Outcomes Outputs Activities Inputs IPAP MTEF (3-year) ENE (1-year) Link to NDP, MTSF, SONA

15. 15 OVERVIEW OF the dti’s KEY PRIORITIES FOR 2015-2020

16. Strategic priorities for 2015 - 2020 16 Outcome 4: Decent employment through inclusive growth Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation MTSF the dti Strategic Goal Proclaim three Special Economic Zones (SEZs) All IPAP (Industrial Policy Action Plan) interventions implemented – 250 projects implemented Industrial Development Cooperation (IDC) to fund two higher level beneficiation projects Develop Mineral Beneficiation Action Plan (MBAP) and incorporate into IPAP Increase use of local metals in South African manufacturing Increase localisation target to 75% Develop options for stable and competitive exchange rate Priorities

17. Strategic priorities for 2015 - 2020 17 Outcome 7: Vibrant, equitable, sustainable rural communities contributing towards food security for all Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth. MTSF the dti Strategic Goal Five investors per district municipality National Rural investment incentive Develop Supplier Development Incentive for procurement Priorities

18. Strategic priorities for 2015 - 2020 18 Outcome 11: Create a better South Africa and a better world Build mutually beneficial regional and global relations to advance South Africa’s trade, industrial policy and economic development objectives MTSF the dti Strategic Goal Export Council to develop African Export Markets Foreign Direct Investment (FDI) investment pipeline of R50 billion Economic diplomacy and pavilions Seven investments and five trade promotion projects South Africa’s position on Southern African Development Community (SADC) Regional Indicative Strategic Development Plan (RISDP) Southern African Customs Union (SACU) development integration Tripartite-Free Trade Agreement (T-FTA) South Africa’s position on T-FTA and Continental-FTA 26 bilateral cooperation agreements in Africa 59 bi-laterals with countries of the South Priorities

19. 19 KEY PLANNED INTERVENTIONS FOR 2015/16 FINANCIAL YEAR

20. STRATEGIC OBJECTIVES 1.Grow the manufacturing sector to promote industrial development, job creation, investment and exports 2.Improved conditions for consumers, artists and opening up of markets for new patents players 3.Strengthened capacity to deliver on the dti mandate

21. 21 KEY INTERVENTIONS – INDUSTRIAL DEVELOPMENT Upscale industrial policy by tabling the annual rolling Industrial Policy Action Plan (IPAP) to Cabinet and produce quarterly implementation reports; Four designation requests submitted to facilitate strategic use of public procurement to enhance local productive capabilities; Tool-making apprentice programme Support 120 students enrolled for the tool, die and moulding skills development programme through the National Tooling Initiative; Industrial upgrading programme  Support 250 workers trained through the industrial upgrading programme to upgrade the foundry industry;

22. 22 KEY INTERVENTIONS – INDUSTRIAL DEVELOPMENT 970 enterprises approved to participate in Exporting, Marketing and Investment Assistance (EMIA) scheme; 400 enterprises approved for incentives under Production Incentive : Manufacturing Competitiveness Enhancement Programme (MCEP); Secure R2 billion investments in designated Special Economic Zones (SEZs) through implementation of the SEZ Programme; Support 76 Film and Television productions with projected investment of R 2 billion;

23. 23 INDUSTRIAL DEVELOPMENT INCENTIVES Description Planned Number of projects/ enterprises supported Potential jobs supported Projected investment Industrial Financing Automotive Incentive Scheme (AIS) 25 550R1.8 billion Business Process Services (BPS) 122 500R800 million 12I tax incentive12 1 800R9 billion Critical Infrastructure Programme (CIP) 133 600R6 billion

24. 24 Africa regional development programme implemented-progress report produced on implementation of agreed programme and projects for priority development areas in SACU and SADC-FTA. Status reports produced on the conclusion of the trade negotiations on the:- Economic Partnership Agreement (EPA) with the European Union (EU); Southern African Customs Union (SACU) India Preferential Trade Agreement (PTA); Southern African Development Communities (SADC)- East African Community (EAC)- Common Market for Eastern and Southern Africa (COMESA) Free Trade Agreement (FTA)– Tripartite-Free Trade Agreement (T-FTA). KEY INTERVENTIONS – TRADE, INVESTMENT AND EXPORTS

25. 25 Increased export of diversified value-added and locally manufactured products and services under EMIA facilitated to the value R 3.5 billion with emphasis on high growth markets, particularly Africa and the BRIC region; Investment projects facilitated in pipeline to the value of R45 billion in targeted sectors KEY INTERVENTIONS – TRADE, INVESTMENT AND EXPORTS

26. 26 Approve 110 incubators for the Incubator Support Programme (ISP) incentive Approved implementation reports on the continued phased-in operationalisation of the Broad-Based Black Economic Empowerment (B-BBEE) Commission 20 Black Industrialists created in key sectors 20 Regional Clusters and Projects in initiated in under-developed regions 10 projects approved with investment value of R100 million in the in Enterprise Investment Programme (EIP): Aquaculture Development and Enhancement Programme (ADEP) KEY INTERVENTIONS – BROADENING PARTICIPATION

27. 27 KEY INTERVENTIONS - REGULATION Impact assessment of regulation on business and economic citizens  Eight Regulatory Impact Assessment (RIA) reports (pre) on Companies Amendment Bill and Intellectual Property (IP) Bills developed for Minister’s approval (Trade Marks Act, Designs Act, Merchandise Act, Unauthorised Use of Emblems Act, Counterfeit Goods Acts, Patents Act and Performers Protection Act).  One RIA report (post) on National Credit Act (exemptions) developed for Minister’s approval.  One monitoring report on the impact of Consumer and Corporate Regulation (CCRD) agencies developed for Minister’s approval

28. 28 KEY INTERVENTIONS - REGULATION Policies, Bills and Regulations to enforce fair business practices  One policy framework on legislative audit report developed for Minister’s approval (policy position on policies to retain or migrate).  Eight bills developed for approval by Minister on Companies Amendment and IP (Trade Marks Act, Designs Act, Merchandise Act, Unauthorised Use of Emblems Act, Counterfeit Goods Acts, Patents Act and Performers Protection Act).  Four regulations on Liquor, Gambling, Copyright and Licensing of Businesses developed for approval by Minister and published.

29. 29 KEY INTERVENTIONS – ADMINISTRATION Attract, develop and retain professional and skilled officials  Reduction of the vacancy rate to 5%.  Reduction of the staff turnover rate to 6.8%.  Employment of people with disability to 3.0%.  50 % women employed in senior management. Creditors’ payments made to suppliers made within 30 days.

30. 30 KEY INTERVENTIONS – ADMINISTRATION Public Awareness Platforms  Conduct 20 multimedia awareness campaigns on key sectors of IPAP and the dti strategic projects.  Conduct 32 outreach engagements and 40 exhibitions Conduct 2 evaluations on key programmes. Service Delivery Improvement Plan (SDIP)  2014/15 implementation report for SDIP produced and submitted to DPSA.

31. 31 ALLOCATED BUDGET

32. 32 Medium Term Expenditure Framework 2015/162016/172017/18 ProgrammesMedium-Term Expenditure Framework (MTEF) (R ’000) Administration689 740720 145763 734 International Trade and Economic Development 164 754172 530180 838 Special Economic Zones and Economic Transformation 263 224279 013285 312 Industrial Development 1 973 5342 045 3382 143 330 Consumer and Corporate Regulation294 496306 963321 887 Incentive Development and Administration5 795 6396 554 1935 369 264 Trade and Investment South Africa412 328427 132444 821 Total For Programmes9 593 71510 505 3149 509 186

33. 33 Medium Term Expenditure Framework 2015/162016/172017/18 Economic ClassificationMedium-Term Expenditure Framework (MTEF) (R ’000) Compensation of Employees897 730950 3111 007 778 Goods and Services577 945593 042622 946 Transfers and Subsidies8 083 8788 928 6997 843 622 Departmental Agencies and Accounts761 528784 809855 793 Highest Education Institutions12 47413 13513 792 Foreign Governments and International Organizations 31 73833 58534 523 Public Corporations and Private Enterprises7 131 5977 956 5126 799 523 Non Profit Institutions144 078138 107137 352 Households2 4632 5512 639 Payments for Capital Assets34 16233 26234 840 Payment for Financial Assets000 Total Economic Classification9 593 71510 505 3149 509 186

34. Strategic risks that would impede the achievement of strategic objectives impacting on the dti include, but not limited to: negative impact of the downturn in the global economic environment on South Africa's economic growth and employment potential caused by stalled global economic recovery; demand for South African exports, international investors response to changes to quantitative easing leading to currency volatility; the inability to be competitive and domestic shocks to the economy due to administered prices (electricity, water and port charges), transport, energy and logistic constraints, skills for the economy, monopolistic pricing of privately owned key intermediate inputs; and Due to previous negative press reports on governance issues around the department's entities, there is the potential for reputational risk due to actions of the entities. STRATEGIC RISKS

35. These risks are being adequately managed through, but not limited to, the following mitigating actions: early warning system- economic intelligence reporting; the prioritisation of African continent as major source of demand (more foreign representatives, more trade missions going to Africa); energy efficiency programmes (clean audits) and research studies for alternate energy sources as well as participation in the electricity war room; skills development programmes for the country; and regular engagements with entity/management of entities and collective bargaining pilot programme for entities. STRATEGIC RISKS

36. Ke ya leboga Ke a leboha Ke a leboga Ngiyabonga Ndiyabulela Ngiyathokoza Ngiyabonga Inkomu Ndi khou livhuha Dankie Thank you