Implementation of Export Incentives and the National Exporters Development Programme: briefing by Trade and Investment South Africa

This premium content has been made freely available

Trade and Industry

07 November 2014
Chairperson: Ms J Fubbs (ANC)
Share this page:

Meeting Summary

The Trade and Investment South Africa (TISA) briefed the Committee on the implementation of export incentives and the National Exporters Development Programme, focussing primarily on the structure of the TISA, background to and the components of the National Exporter Development Programme (NEDP), and the Export Marketing and Investment Assistance (EMIA). It reported that it had made tremendous achievements in the facilitating South African companies to become exporters. In respect of the achievements for 2013/14 financial year, 739 companies were trained to be export ready under Global Exporter Passport Programme. Export Awareness and Outreach Programmes were conducted in all provinces and an Export Help Desk was established on 13 September 2013 at the DTI office to provide trade information and export advice to emerging and established exporters. Added to these achievements were technical missions to Spain, Italy and Malaysia, which were conducted in June 2014 to gather insight on best practice export village model for the South African environment.

Members sought clarity on a number of unclear issues including facilitation of speedy exportation of fresh products, the role of TISA in industrialisation, decline in the exportation of wine to China, TISA expansion, TISA’s budget and assistance schemes. Members questioned what the relationship between TISA and the International Trade Council was. Members sought clarity on whether the decline in exporting wine to China was caused by the issue of not meeting the winery standards.

Meeting report

Adoption of Agenda
The Chairperson acknowledged apologies from Ms P Mantashe (ANC) and Dr Z Luyenge (ANC) due to oversight visits and Mr B Mokongi (ANC) for coming late due to transport problem.

The Committee proceeded to the adoption of the agenda which was seconded by Mr N Koornholf (ANC) and Mr GG Hill-Lewis (DA). She welcomed the Trade and Industry South Africa, a division of the Department of Trade and Industry to brief the committee on the implementation of export incentives and the National Exporters Development Programme.

Trade and Industry South Africa (TISA) on the Implementation of Export Incentives and the National Exporters Development Programme
Mr Y Hoosen, Acting Deputy Director General: TISA took the Committee through the presentation, focusing on the structure of the TISA, background to and the components of the National Exporter Development Programme (NEDP), and the Export Marketing and Investment Assistance (EMIA) (see document). In introduction, he noted the services offered by the TISA, its vision and mission as well as strategic framework. He also noted that five NEDP pillars and the NEDP’s critical component. These five pillars were;
●Export culture
●Information and advice
●Capacity building and exposure
●Special projects
●Leadership

In respect of the achievements for 2013/14 financial year, 739 companies were trained to be export ready under Global Exporter Passport Programme. Export Awareness and Outreach Programmes were conducted in all provinces and an Export Help Desk was established on 13 September 2013 at the DTI office to provide trade information and export advice to emerging and established exporters. Added to these achievements were technical missions to Spain, Italy and Malaysia, which were conducted in June 2014 to gather insight on best practice export village model for the South African environment. For the 2014/15 financial year, one thousand companies would be trained and export culture would be enhanced through export awareness and Outreach Programmes.

In terms of implementation of export incentives, it was noted that the TISA had a programme of Export Marketing and Investment Assistance Scheme Offerings, whereas the Incentive Development and Administration Division (IDAD) had a programme of Export Marketing and Investment Assistance Schemes Individual Offerings. With regards to EMIA, the concept of EMIA was defined as “an incentive offered by the DTI, which seeks to partially compensate exporters for costs incurred in respect of developing export markets for South African products and services, of recruiting foreign direct investment (FDI) into South Africa, and of identifying new export markets through market research. The TISA’s EMIA group offerings were R114 million. The presentation further highlighted the EMIA 2013/14 sales achievements per provinces and per sector. The total number of companies assisted in all provinces was 1084. EMIA had been reviewed and the reviewed document was under the executive board for consideration. In conclusion, Members were briefed on the calendar of activities slated for 2014 (see document)z.

Discussion
The Chairperson sought clarity on slide 36, which provided for Sector Specific Assistance Scheme (SSAS) generic funding.

Mr Koornholf sought clarity on EMIA sales achievement per sector and asked how the money was spent. Was there any bilateral agreement on tariff and why should South Africa pay more tariffs in certain circumstances than other African countries such as Zimbabwe and Mozambique. With regard to Global Exporter Passport Programme, out of 739 companies trained, how many companies survived and became exporters?
 
Mr Hill-Lewis sought clarity on the process of accessing the support in terms of the assistance schemes and expressed concern about the declining of exporting wines to China, how the TISA worked with the South African Revenue Services (SARS) customs to facilitate speed and easy exportation of products and to ensure that the TISA’s work was not undermined by SARS bureaucracy.

Mr Mkongi asked whether TISA was giving consideration of the governmental priorities in terms of trade and industry. In its operation, did it consider as priority  industrialising the South African economy in supporting companies? What was South Africa’s export capability and capacity? What was the relationship between TISA and the International Trade Council?

Mr DW Macpherson (DA) sought clarity on the TISA’s relationship with South Africa’s foreign missions. He remarked that our foreign missions should play a vital role in promoting exportation of South African products.

The Chairperson sought clarity on whether the decline in exporting wine in China was caused by the issue of not meeting the winery standards.

Mr Hoosen replied that the funding that was approved for SSAS generic councils was not a blanket funding. It was funded based on the planned activity. Referring to tariffs, TISA uncovered the market issues through market research projects but the market access issue was done by the International Trade and Economic Division (ITED), which channelled bilateral and multilateral relationships with countries. TISA jointly worked with the ITED to implement the above-mentioned agreements or to find the market. For example, it had found a meat market in Russia and the process formed part of value chain. More work of the TISA was based on the market opportunity promotion. With reference to the 736 companies, these were companies that were trained under Global Exporter Passport Programme- companies’ trained got passports to export and this was the mechanism employed to migrate them to fully-fledged exporters. With reference to issue of resources and budget, TISA got R50 million for three years. It got R10 million for establishment of foreign offices. With a budget of R10 million, only three offices could be opened over the next three years, taking into account the exchange rates. On the decline of wine exports, TISA could give a deeper analysis, based on its work in China. There was a crackdown in the central government; the crackdown affected wine products that were exported to China.  Wine was procured by state entities- this had changed. Wine was imported by China’s private entities. TISA was in talks with 51 private companies (from different cities) in terms of reviving the wine market in China. Though there were decline in wine exportation to China, South Africa was still in the top five countries exporting wines. Another issue that identified as a problem was that the Chinese preferred “rooibos tea” over wines. On the issue of SARS, there was a close relationship between the TISA and SARS concerning customs and TISA would be happy to assist in speedy fresh products exportation. SARS were migrating to electronic data base system. The system would be easier and better in terms of processing products exportation. With regards to criteria, a company should basically be registered as an exporter with SARS and TDI; a company should have exporting product or products and be in existence for at least two years, and have financial capability and capacity to export. There is a form to fill to apply for the Global Exporter Passport Programme or other programmes. On the issue of industrialisation, TISA’s programme was quiet specific. It was about South African manufactured products export. It did not deal with companies that wanted to export commodities such as gold and diamonds; such companies did not get support from TISA. The TISA programme was purely for exporting manufactured products or value added products or export of services. With reference to foreign missions, TISA had a fantastic relationship with them. Foreign mission was at the heart of TISA and TISA provided training to foreign mission staff about trade and investment in order to promote export markets.

Mr Hill-Lewis further sought clarity on how people got in touch with the TISA to undergo the Global Exporter Passport Programme and on how TISA facilitated companies to comply with the rules requiring fresh products to be processed within 12 hours. The quality of products was of essence- longer processes would result in fresh products losing their quality.

Mr Hoosen replied that TISA had a fully-fledged director who dealt with fresh products matters to ensure easy, speedy and efficient process and requested that Mr Hill-Lewis furnished him with details of companies that might have been facing problems for assistance by TISA. 

The Chairperson asked Mr Hill-Lewis whether he was referring to fruit and vegetables and flowers and whether he was implying that the existing rule was prejudicial to the exportation of fresh products.

Mr Hoosen remarked that he would investigate the issue raised by Mr Hill-Lewis to have a clearer picture which would be reported to the Committee.

The Chairperson expressed concern about the exportation of fresh products, especially, in the case where they might not be exported because it was too late to do so, for example, when flowers died.

The Chairperson questioned the impact of increasing the number of offices and staff and which was the busiest office.

Mr Hoosen replied that TISA had a 36% increase amounting to 30 million rand. With additional funding, it could do better. TISA has opened a new office in Nigeria and prioritises its offices in certain countries – only 3 offices would be initiated in the coming financial year. TISA has also established a help desk at DTI.

Mr Hill-Lewis informed the Committee that he had learned that SARS was in the process of adopting new custom rules and requested TISA to engage with SARS and companies on the matter.

The Chairperson stated that, further questions should be sent to the Committee Secretary who would send it to TISA for written responses.

The meeting was adjourned.  
 

Share this page: