Minister on Department of Economic Development's 2014 Annual Performance Plan

Economic Development

30 June 2014
Chairperson: Ms E Coleman (ANC)
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Meeting Summary

The Minister of Economic Development, Mr Ebrahim Patel, briefed the Committee on its performance plan for the 2014/15 year. The Economic Development Department had received a budget allocation of R697 million for the 2014/15 year. An amount of R534 million had been transferred to agencies. The Department’s operational expenses amounted to R163 million. The performance plan covered a total of five core-mandate strategic objectives, 22 key performance indicators and 154 targets. The new strategic plan for the Department would be submitted with the 2015/16 annual performance plan.

Strategic objective 1
This focused on the coordination of job drivers, sector/spatial projects and the implementation of the New Growth Path for job creation, inclusive growth, industrialisation and social inclusion. Key performance indicators included strengthening the implementation of the New Growth Path so as to achieve the National Development Plan goals by 2030. A target had been set to implement four initiatives.

Strategic objective 2
This objective mandated the Department to coordinate infrastructure development for inclusive growth, service delivery, job creation, industrialisation and social inclusion and to provide the Presidential Infrastructure Coordinating Commission with a technical unit and strategic frameworks and targets.
Key performance indicators included ensuring that Cabinet and the Presidential Infrastructure Coordinating Commission strategic decisions on infrastructure were implemented.  In 2013/14, the Presidential Infrastructure Coordinating Commission technical unit had helped address water disruptions in specific towns, supported the roll out of the Accelerated School Infrastructure Delivery Initiative and assisted agencies to improve infrastructure spending.

Strategic objective 3
This objective tasked the Department to promote investments, expand industrial funding and entrepreneurship and improve the performance of development finance institutions for job creation, inclusive growth, industrialisation and social inclusion.  Key performance indicators included facilitating, fast tracking and/or unblocking 10 investment initiatives.  In the past year, the Department had helped new investors to obtain sites, electricity, water and mineral licences. It had also established soy crushing and taxi assembly industries in South Africa and supported new equipment assembly plants in Atlantis.

Strategic objective 4
Under this objective, the Department had been mandated to promote competition, trade and other economic regulation in support of job creation, inclusive growth, industrialisation and social inclusion.
In the past year, key gains included action against the construction cartel, promulgation of amendments to the Competition Act to enable the Commission to undertake market inquiries and trade measures to revitalise the poultry, foundry (scrap metals) and other industries.  Key performance indicators included reducing red tape and unnecessary restrictions on enterprises and/or improve impact assessment of regulatory measures. Two initiatives had been earmarked.

Strategic objective 5
The Department was mandated to facilitate social dialogue and implement social accords; support productivity and innovation for job creation, inclusive growth, industrialisation and social inclusion; and to promote broader consensus on other key strategic objectives. Key performance indicators included facilitating national, sector or workplace economic development partnerships with social partners and four interventions were required that would improve social equity and productivity and reduce workplace conflict and/or promote greater innovation and entrepreneurship.  In the past year, the EDD had finalised the Youth Employment Accord and helped to implement the Presidential Youth Indaba Accord.

The Members expressed concern that local manufacturers and cooperatives were not benefiting from the Department’s efforts to promote entrepreneurship and economic growth. They wanted to know whether the government was procuring goods and services from local businesses and what the Department had done to include cooperatives in the real economy. 
 

Meeting report

Briefing by Minister of Economic Development
Mr Ebrahim Patel, Minister of the Economic Development Department (EDD), briefed the Committee on its performance plan for the 2014/15 year. The annual performance plan (APP) had been revised to reflect the new medium term strategic framework (MTSF) approved by Cabinet. The revised objectives in this APP constituted an effective re-alignment of the EDD’s strategic plan and covered a total of five core-mandate strategic objectives, with 22 key performance indicators (KPIs) and 154 targets. The strategic plan would be revised more fully and submitted for 2015/16.

The EDD received a budget allocation of R697 million for the 2014/15 year.  An amount of R534 million had been transferred to agencies. The Department’s operational expenses amounted to R163 million, of which R79 million had been allocated to its administration programme, R23 million towards economic policy development, R45 million for economic planning and coordination and R15 million for socio-economic development and social dialogue.

Strategic objective 1
This objective mandated the EDD to coordinate job drivers, sector/spatial projects and the implementation of the New Growth Path (NGP) for job creation, inclusive growth, industrialisation and social inclusion.
The EDD had learned from the Presidential Infrastructure Coordinating Commission (PICC) that a responsive state required quality information provided timeously so that challenges and opportunities could be identified and addressed they arose. This has been put in place for infrastructure development.

KPIs for strategic objective 1
KPI 1
Coordinate and support the implementation of two job drivers through the development of information and monitoring dashboards, the collation of data on performance, aligning activities with overall government plans and unblocking obstacles to implementation.

KPI 2
Participate in cluster and Outcome 4 processes within government and facilitate the achievement of economic outcomes of the MTSF. Produce quarterly progress reports on Outcome 4 and two in-depth reviews on the progress of the Cabinet Makgotla, as well as the opportunities and risks associated with it.

KPI 3
Strengthen the implementation of the NGP so as to achieve the National Development Plan goals by 2030. Target: four initiatives.

KPI 4
Complete six spatial, local and/or provincial initiatives to support inclusive growth and job creation. Focus on national economic priorities and promote greater accountability.

Strategic objective 2
This objective mandated the EDD to coordinate infrastructure development for inclusive growth, service delivery, job creation, industrialisation and social inclusion. This objective arose out of the EDD’s role of supporting the PICC under the Infrastructure Development Act, in particular providing it with a technical unit and strategic frameworks and targets.

In 2013/14, the PICC technical unit had submitted regular reports on strategic integrated projects (SIPs) to the PICC and unblocked infrastructure projects. It had also helped address water disruptions in specific towns, supported the roll out of the Accelerated School Infrastructure Delivery Initiative (ASIDI) school-build programme and solar water heaters. It had also assisted agencies to improve infrastructure spending.

KPIs for strategic objective 2
KPI 5
Produce Cabinet-level quarterly progress reports on each strategic integrated project. Target of 60.

KPI 6
Produce unblocked, fast-tracked or facilitated infrastructure projects. Target of eight.

KPI 7
Ensure that Cabinet and PICC strategic decisions on infrastructure (policy, funding, users, development impact and capacity development areas) are implemented. Target of four.

KPI 8
Provide the secretariat and coordination function for PICC. A total of 20 council, secretariat, Manco and SIP coordinators meetings.

Strategic objective 3
This objective mandated the EDD to promote investments, expand industrial funding and entrepreneurship and improve the performance of development finance institutions (DFIs) for job creation, inclusive growth, industrialisation and social inclusion. The EDD supported new investment that would diversify the economy and create employment, either directly or by addressing blockages. The Department needed to ensure that investments drive industrialisation, create jobs and provide opportunities for women, youth, small, medium and micro enterprises (SMMEs) as well as rural people.
In the past year, the EDD had helped new investors to obtain sites, electricity, water and mineral licences. It had also established soy crushing and taxi assembly industries in South Africa and supported new equipment assembly plants in Atlantis.  Furthermore, it had increased industrial financing through the Industrial Development Corporation (IDC) and consolidated national lending to SMMEs, youth and the green economy.

KPIs for strategic objective 3
KPI 9
Facilitate, fast track and/or unblock 10 investment initiatives.

KPI 10
Improve the efficiencies of DFIs and ensure world-class institutions through strategic guidance and departmental work. Target: four initiatives.

KPI 11
Measure and expand the level of industrial funding available across government and DFIs. Two initiatives to be implemented.

KPI 12
Measure and facilitate development goals through industrial funding. Two initiatives to be implemented.

Strategic objective 4
This objective mandated the EDD to promote competition, trade and other economic regulations in support of job creation, inclusive growth, industrialisation and social inclusion. In the past year, key gains included action against the construction cartel, promulgation of amendments to the Competition Act to enable the Commission to undertake market inquiries and trade measures to revitalise the poultry, foundry (scrap metals) and other industries.

KPIs for objective 4
KPI 14
Strengthen administrative efficiency of trade and competition authorities and ensure world class institutions. Three initiatives are to be implemented.

KPI 15
Evaluate and strengthen the jobs, inclusive growth and developmental impact of economic regulators.  Four initiatives to be implemented.

KPI 16
Reduce red tape and unnecessary restrictions on enterprises and/or improve impact assessment of regulatory measures. Two initiatives earmarked.

KPI 17
Build regulatory capacity and effectiveness across the state, including through improved training of regulators and, where necessary, consolidate regulatory institutions and amendment of legislation.  One initiative to be implemented.

Strategic objective 5
This objective mandated the EDD to facilitate social dialogue and implement social accords; support productivity and innovation for job creation, inclusive growth, industrialisation and social inclusion; and promote broader consensus on other key strategic objectives.

The EDD had facilitated social accords on youth employment, the green economy, local procurement and skills development. Social dialogue at national, sectoral and workplace level were also important for sustainable long-run growth.

In the past year, the EDD had finalized the Youth Employment Accord and helped to implement the Presidential Youth Indaba Accord.

KPIs for strategic objective 5
KPI 18
Support local procurement of goods and services and/or the implementation of the Local Procurement Accord. Four interventions needed to be implemented.

KPI 19
Support the development of the green economy and green jobs and/or the implementation of the Green Economy Accord. Two interventions are needed.

KPI 20
Enhance skills development and/or the implementation of the National Skills Accord. Two interventions needed.

KPI 21
Enhance youth empowerment (employment, skills or entrepreneurship) and/or the implementation of the Youth Employment Accord. Four interventions are required.

KPI 22
Facilitate national, sector or workplace economic development partnerships with social partners. Four interventions are required that would improve social equity and productivity and reduce workplace conflict and/or promote greater innovation and entrepreneurship.

Discussion
Mr S Marais (DA) asked if the Department had adequate funds to implement its objectives.

The Minister replied that it was not just about funding, but ensuring better delivery. He mentioned an example of how the EDD had reacted to the challenge of manufacturing taxis locally by unlocking opportunities. Today South Africa had two plants that manufactures taxis. It was not about getting more funding, but about getting projects moving.

Mr X Mabasa (ANC) asked why the EDD was focusing on assisting only SMMEs. What about co-operatives? Cooperatives must also be included in the real economy, as it was one way of overcoming the gulf between the rich and the poor.

The Minister replied that South Africa had a history of making cooperatives economically viable and mentioned the example of KWV, which had started off as a cooperative. It was the Department’s aim to unlock the potential of cooperatives in South Africa so that it could be on par with large co-ops run in Spain and India. To make that happen, the Department needed to move from advocacy to implementation.

Mr P Atkinson (DA) referred to the job drivers mentioned by the Minister, and asked what the Department’s plans were concerning the future in the mining and beneficiation spheres?

The Minister replied that instead of looking at historic mining options, the Department needed to explore new deposits in mining, as this could change the sector. The Department was looking at practical beneficiation plans to make use of iron ore. The building of new dams in areas where mine workers were laid off would create opportunities for subsistence farming as a potential income stream. The Department had to look at ways of creating sustainable employment.

Mr S Tleane (ANC) asked what the Department would do differently to ensure the promotion of local producers and local goods, as many goods were procured from China and India at the moment.

The Minister replied that the government was procuring from a bus manufacturing concern in Cape Town and were making use of a local company to refurbish and maintain rail carriages.

Mr M Mbatha (EFF) asked what the Department would be doing for marginalised communities which were struggling with transportation challenges.

Ms N Bhengu, chairperson for the Portfolio Committee on Small Business Development, suggested that Mr Mbatha should attend the portfolio meetings of the Departments of Rural Development and Infrastructure and Transport, as these departments had detailed plans dealing with transportation issues.

The Minister replied that the Department had a mandate to empower youth, women and communities in rural areas. It was envisaged that through dam projects, such as those in Limpopo, local communities would be empowered through entrepreneurship opportunities.

Chairperson’s remarks
The Chairperson thanked the Minister for his presentation. She expressed confidence that the EDD would be able to respond to the challenges of growth and unemployment and that it would be able to meet the targets that had been set. The Chairperson said the Committee would ensure that the Department “stayed on the right track”.

The meeting was adjourned.
 

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