New Growth Path: briefing by Economic Development Minister (cancelled); Economic Development Budgetary Review and Recommendation Report

Economic Development

01 November 2010
Chairperson: Ms E Coleman (ANC)
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Meeting Summary

The Minister of Economic Development, Mr Ebrahim Patel, was unable to brief the Committee on the New Growth Path owing to a clash with a Select Committee meeting and the preparation of a Ministerial statement to the National Assembly the same afternoon. After some members had expressed concerns that the Minister was “not taking the Committee seriously,” it was agreed to re-schedule the meeting.

The Budgetary Review and Recommendation Report (BRRR) was considered by the Committee, with the various issues listed as “observations” and “findings” in the report converted into recommendations to the Department.

Meeting report

Cancellation of briefing on New Growth Path  
The meeting was advised that the Minister of Economic Development would not be able to brief the Committee on the New Growth Path. In his letter of apology, he requested a postponement owing to the prior scheduling of the Select Committee meeting on the Department’s Annual Report, and the preparation of a ministerial statement to the National Assembly that same afternoon. The recent Cabinet reshuffle had also resulted in the appointment of a new deputy minister in the Department. He undertook to arrange an alternative date.

The Chairperson explained that because of the clash in scheduling of the Select and Portfolio Committee meetings, it had been originally intended that the Deputy Minister would attend the Select Committee. However, the changes to the Cabinet meant the Minister had had to attend himself.

Mr S Marais (DA) expressed concern that this was the second time in two weeks that the Minister had sent apologies, and there had been no response yet to the request to reschedule the previous meeting. He questioned whether the Minister was taking the Portfolio Committee seriously, as it had a specific role to play in the New Growth Path, and it was picking up information it had not heard about previously from the press. This was not fair to Parliament or the Committee.

Mr S Ngonyama (COPE) echoed these sentiments, saying that in the context of taking the Committee seriously, the Minister could at least have spent five minutes to convey his apology personally to members.

Mr X Mabaso (ANC), Mr Z Ntuli (ANC) and Mr K Matamela (ANC) all defended the Minister. They said the apology was legitimate in the light of the dilemma he faced with the clash of meetings and the change of Deputy Minister.

The Chairperson said she understood the concerns that had been raised, and would convey these to the Minister, but urged members to agree “in good spirit” to the re-scheduling of the meeting.

Budgetary Review and Recommendation Report (BRRR)
Mr Ntuli, supported by Mr Marais, proposed that the observations and findings listed in the report be converted into recommendations to the Department.

Mr Ngonyama suggested that many of the issues involved contained common threads, and should be clustered. It was agreed to follow this approach, and the following issues were highlighted:

▪ The building of capacity both within the Economic Development Department (EDD) and its entities.
▪ The need to address the lack of information about EDD programmes and activities of the Competition Commission and the International Trade Administration Commission of SA.
▪ The “Green Economy,” with special reference to its impact on job creation, and concern that it should not be promoted at such a pace that it would threaten jobs in the existing carbon-intensive industrial economy.
▪ The need to focus on broad policies affecting entire industries, rather than individual issues.
▪ Coordination and cooperation between the various Development Finance Institutions (DFIs).
▪ Following criticism of the EDD’s expenditure patterns in the first and second quarters, appropriate measures needed to be applied to ensure underspending was avoided by the end of the financial year.
▪ A reduction in the duplication of efforts among the EDD’s different entitities.
▪ Appropriate capitalisation of Khula Direct.
▪ A reduction in the cost of funding by DFIs.
▪ A greater focus on spending on development projects in rural areas, rather than the “richer” provinces.
▪ The provision of mentorships for Small and Medium Enterprises (SMEs) to ensure their sustainability.
▪ A requirement for entities seeking funding to provide an assessment of the job-creation potential of their projects.
▪ Challenges creating problems in the funding application process needed to be addressed.
▪ The IDC, EDD and Department of Trade and Industry needed to be involved in efforts to reduce the steel price, which was negatively impacting economic growth.

The Chairperson said the Committee’s discussions concluded its interaction on the report. The Report was adopted by the Committee.

The meeting was adjourned.

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