DTIC 2022/23 Annual Performance Plan, with Minister and Deputy Minister

This premium content has been made freely available

Trade, Industry and Competition

19 April 2022
Chairperson: Ms J Hermans (ANC)
Share this page:

Meeting Summary

Video

DTIC 2022/23 Annual Performance Plan

The Portfolio Committee on Trade and Industry met with the Minister and Deputy Minister of Trade, Industry and Competition and officials from the Department in a hybrid meeting located at the campus of the Department for a briefing on its strategic and annual performance plans. The meeting also reflected on the State of the Nation Address (SONA) and the budget related to the Department's mandate.

The Minister said that the annual performance plan (APP) reflected the Department's strengthened strategic focus, which was aimed at bolstering its implementation and impact in contributing to the priorities of the Sixth Administration. The plan introduced three succinct outcomes that were intended to bring greater coherence to the work of the Department -- industrialisation to promote jobs and rising incomes; transformation to build an inclusive economy, and a capable state to ensure an improved impact of public policies. It required a different way of working by the Department and its entities, so following its adoption, it would put detailed implementation plans in place, accompanied by a training programme for staff. The Minister raised three key weaknesses that had to be addressed. These were local economic development (special economic zones and industrial parks), bilateral trade policy and export promotion connecting with industrialisation, and coordination with other spheres of government.

The Department sought to contribute to inclusive growth and job creation by ensuring an increase in the level of investment in the economy; improved industrialisation of the economy through contributing to selected projects leading to a target of R200 billion in additional local industrial output over five years; and supporting the structural transformation of firms and sectors through customised packages of support and by maintaining South Africa’s share of manufactured global exports.

Members noted the three outcomes of the Department but were concerned that if there were too much focus on transformation, it would draw attention away from the other outcomes. How would the Department ensure a synergy in which one outcome did not detract from the others? How did one turn investment pledges into projects and employment? The Department had spoken of nimbleness, but how would it use that nimbleness to address the export challenge? What sort of inter-department and entity engagement was there to limit structural challenges and red tape, which the President had committed to address? What was the Department’s role in developing skills in engineering and in the building and industrial trades?

For some Members, the budget was a concern. What was the reason for the decrease in the budget allocations for industrial financing, economic research and Trade and Investment SA? The budget of the industrial financing project would be decreased by 19.5% in the current financial year. What was the expected impact of that decrease in the budget?

Members asked about the impact of the Russian-Ukrainian conflict on South Africa's trade negotiations regarding renewal of the trade agreement with the European Union in the light of South Africa's stance on Russia. What impact had the conflict had on citrus farmers who exported large quantities of fruit to Russia? The Minister was asked to clarify his position regarding metal recyclers and the export of scrap metal. Had the African Continental Free Trade Area (AfCFTA) finally agreed on the Rules of Origin and had South Africa derived any benefit from AfCFTA?

The Special Investigating Unit (SIU) had promised to submit a report on the fraud and corruption in the National Lottery Fund (NLC) by the beginning of April. Had the Minister received the report? Had the focus on industrial transformation over the years impacted structural transformation in the economy? Why were there no specific targets for job creation in the financial year? What progress was being made in respect of new Bills? When did the DTIC expect to table the Designs Amendment Bill? What aspects of the broad-based black economic empowerment (B-BBEE) policy and administrative arrangements did the Department intend to review? Could the Committee be informed how many jobs had been created due to the investments? Could it give examples of what had been done to cut red tape? Was it not time for an economic workshop on how to take the economy forward?
 

Meeting report

Opening Remarks

The Chairperson announced this was the first hybrid meeting of the Committee -- the meeting was being held on the campus of the Department of Trade, Industry and Competition. At the same time, the Minister of Trade, Industry and Competition and some Committee Members would join the meeting via an online platform. She also welcomed Mr Mgcini Tshwakau, the replacement for EFF Member Ms Yoliswa Yako, to the Committee.

Minister's overview

Mr Ebrahim Patel, Minister of Trade, Industry and Competition, said that he was in Durban attempting to deal with some of the issues at the port, which had suffered severe damage in the storm and was having difficulty in maintaining the supply chain to the city and the rest of the country. Mr Fikile Majola, the Deputy Minister, was in attendance and would remain for the entire meeting.

The annual performance plan (APP) had been submitted to Parliament some weeks before to facilitate the engagement. It was fundamental to the oversight function of the Portfolio Committee.

Minister Patel said that the APP reflected the strengthened strategic focus of the Department of Trade, Industry and Competition (DTIC), which aimed to bolster the Department's implementation and impact in contributing to the priorities of the Sixth Administration. The idea of joint key performance indicators (KPIs), introduced the previous year, was being taken further by introducing three succinct outcomes that replaced the previous sprawling 17 outcomes, bringing greater coherence to the work of the Department. The three outcomes were:

industrialisation to promote jobs and rising incomes;
transformation to build an inclusive economy; and
a capable state to ensure improved impact of public policies.

The APP required a different way of working by the Department and its entities, so following its adoption, the Department would put detailed implementation plans in place, accompanied by a training programme for staff.

In the APP, three key weaknesses were addressed: local economic development (special economic zones and industrial parks), bilateral trade policy and export promotion connecting with industrialisation, and coordination with other spheres of government.

The DTIC sought to contribute to inclusive growth and job creation by pursuing inter alia the following:

an increase in the level of investment in the economy;
improved industrialisation of the economy through contributing to selected projects leading to the target of R200 billion in additional local industrial output over five years;
support for structural transformation of firms and sectors through customised packages of support of R22 billion by the DTIC and its entities; and
maintaining South Africa’s share of manufacturing global exports.

The Minister left to attend other engagements. The Deputy Minister handed over to Ms Malebo Mabitje-Thompson, Acting Director-General (DG), to deal with the presentation of the specific programmes within the DTIC.

Ms Mabitje-Thompson made a comprehensive presentation of the APP in terms of each of the programmes of the DTIC, while Mr Shabeer Khan, the Chief Financial Officer (CFO), presented details of the allocated budget and how it would be used to support the programmes.
(See attached document for details)

Discussion

Mr W Thring (ACDP) asked about the three outcomes for the work of the DTIC: industrialisation, transformation and a capable state. All three were important, but too much focus on transformation drew attention away from the other outcomes. How would the Department ensure a synergy in which one did not detract from the other?

He observed that despite some innovative ideas, policies and plans, the DTIC had not achieved its goals over the years. One of the key strategies was employment generation, but there was huge joblessness in SA. The brilliant policies and plans were insufficient to address unemployment. The fact was that there was some R336.8 billion in new investment. How could one leverage an additional R3 to R4 on top of every R1 spent? How did one turn pledges into projects and employment?

Regarding the war between Russia and Ukraine, he wondered what was happening about the millions of rands pledged in terms of the export of citrus fruit to those countries. The DTIC had spoken of nimbleness. How would it use that nimbleness to address the export challenge?

He said structural challenges occurred when there was policy and political uncertainty resulting from different departments and entities not speaking to each other. Proper alignment would mitigate the structural challenges. What sort of inter-department and entity engagement was there to limit the structural challenges and red tape that the President had committed to address? The Minister talked about Eskom and the energy challenges that were an impediment to economic growth. However, he had personally spoken to someone who wanted to invest in the Hammarsdale Industrial Park. The intention was to go off-grid by creating their own water and energy supply in an innovative move, but the company had been told it did not have the necessary licences. He noted that some municipalities were incapable of supplying services, especially water and electricity. What was the Department's role in industries going green?

As his parting shot, Mr Thring raised the question of education concerning South Africa's skills needed to allow the country to grow to its potential. The appropriate standards of education in engineering and the building and industrial trades and the qualifications were currently not being adhered to. South Africa was in dire need of those skills and would need them in the years to come. He did not believe that it was necessary to import those skills. What was the Department’s role in developing those skills? It was a huge uphill challenge but an important one, as he did not want to see SA importing those skills when there were so many unemployed people in the country.

Ms N Motaung (ANC) noted the investments that had been pledged as planned and asked what the impact of the investments would be on job creation. What was the reason for the decrease in budget allocations for industrial financing, economic research and Trade and Investment SA? The budget of the industrial financing project would be decreased by 19.5% in the current financial year. What was the expected impact of that decrease in the budget?

Mr M Cuthbert (DA) welcomed the rationalisation of the Department. Members had heard in the past that this was being considered, and he hoped that it would soon be finalised and that the benefits would be evident as resources were used more effectively.

He expressed his discomfort that the entities were not included in the type of reporting that the Committee was currently receiving.

He commented that SA’s economic partnership agreement (EPA) in Europe, which had been under review since 2021, might be strained by SA's response to the Russian invasion of Ukraine. What was the Department's view on renewing that agreement? The European Union (EU) was South Africa’s largest trading partner, and SA benefited from 36 non-reciprocal tariff duties regarding its exports to those countries. He believed that every effort must be made to retain the EPA. What was the Department's view on the renewal of that EPA? SA's position had been put in jeopardy by its recent voting pattern at the United Nations General Assembly. He did not think that the country should do anything that might compromise the country’s trading position.

He had recently asked the Minister a set of questions about metal recyclers. The stealing of scrap metal was a major problem, and Johannesburg had recently been hit hard on that front. There were a number of senior players in the metal recycling business who had approached the Committee with calls for a ban on the export of scrap metal. He believed that it was a crime and there had to be better law enforcement. He also believed that checks at customs had to be put in place to manage the situation. The Minister had not shared his views on controlling that industry, and he asked for some clarity.

How far was the African Continental Free Trade Area (AfCFTA) from agreeing on the final Rules of Origin for the AfCFTA? The previous year, the Committee had been told that it was 90% finalised -- what were the remaining issues? How far away was it from being operationalised? What benefits had SA derived from the AfCTA thus far?

He asked about the report that the Committee was to have received from the Special Investigating Unit (SIU) on the fraud and corruption in the National Lottery Fund (NLC). The Committee had been promised that it would receive a copy as soon as it was handed to the President on 1 April so that the Portfolio Committee could discuss it. Had the Minister received the SIU report and, if he had, why had it not been shared?

Looking at the broad strokes covered in the presentation, he was reminded of a combination of the Conservative and Labour governments in the United Kingdom in the 1970s. It was very much focused on the things as they were at that time. He believed in innovation and would like to see a little of the money spent on technology investment. He understood that the country was working towards absorbing unskilled and low skilled workers, but if there was an investment in technology, SA could find itself with a comparative advantage. Incentives would work well. He understood the investment in poultry, sugar, etc., but that was not the future. The future was in technology, particularly on the continent of Africa. He asked why SA was not taking advantage of that. Was there any commitment by the Department to bring investment into that kind of industry so that those kinds of jobs could be generated?

Mr C Malematja (ANC) appreciated the new approach. The ministry had a new approach for the past year and refined that approach so that it was now very focused on the economy's needs. For the success of any plan, one needed to have capable staff. The rearrangement of the staff would enable them to have a more coordinated approach to attaining the goals set for the Department. It was helpful for Members to understand how the Department arranged its staff. He believed that transformation was critical in the creation of jobs. The goal of transformation was very important because there had to be a balance to life in general, and it could not be as in the past, where only a certain few benefited and the majority had nothing. He liked the approach to ensure job creation so that all could participate in the economy. A capable state was essential, and he was happy that government focused on dealing with corruption because that had the potential to collapse the economy.

He asked about the economic policy and whether the focus on industrial transformation over the years had impacted structural transformation in the economy.
 
Ms R Moatshe (ANC) asked what impact the Black Industrialists Programme had on the economy's transformation. She asked why the first quarter report of 2020/21 had shown a budget of R9.7 billion, but the DTIC had actually received R11.8 billion, as shown in the third quarter report. Why was there such a discrepancy in the figures?

Mr S Mbuyane (ANC) asked about the legislative programme -- the Companies Amendment Bill, the Labour Amendment Bill, the Gambling Amendment Bill and a Bill on the Special Economic Zones. Regarding the issue of scrap metal exports, was the Department considering strengthening the export controls, or did it have another approach to resolve the problem of metal stolen for scrap?

The issue of competition was a concern because it impacted the ability of the economy to continue to grow. What collaborative effort had been put in place to address that? What aspects of the broad-based black economic empowerment (B-BBEE) policy and administrative arrangements did the DTIC intend to review?

Mr M Tshwaku (EFF) thought the DTIC would have put in tangible targets. Unemployment sat at 34.5%. The Department needed to create industries so that people could be employed. He had looked through the presentation on the APP, but he could not find any indication of specific targets for job creation in the financial year. All other programmes were acceptable, but unemployment was becoming a disaster and so he thought the targets of jobs to be created should be indicated. He noted that a number of targets were written reports, but there was nothing on jobs. Was the Department serious about creating jobs? Slide 37 referred to the need to finalise the special economic zone (SEZ) framework. The SEZs were where jobs were supposed to be created. Why had it not yet been finalised so that jobs could be created for local economies? What was the hold-up?

He expressed concern about the pledges of billions of rand in investment. Had the investments taken place and, if so, how many jobs had been created using that money? Was there a report on that, or could the Committee be informed how many jobs had been created?

He also referred to the red tape issue, saying he did not know what red tape had been cut. Could the Department give examples of what had been done, because he still saw queues of people who wished to register companies and heard of backlogs in the finalisation of those companies?

The President had said that government was central to creating jobs, and Mr Tshwaku wanted to ask the Minister whether he believed that. In a developing country, there had to be a state-led economy with intervention by government to create jobs. The private sector was about creating profits. Why could he not see that in the APP? The government should take centre stage and be 65% involved in job creation.

Mr Tshwaku commented on the Economic Research Division and referred to the training in economics offered by Parliament through the Wits Business School. There the professors had said that none of the economic policies adopted by the government since 1994 had worked. The Portfolio Committee on Trade and Industry and Parliament, were following economic policies that were not working. Was it not time for an economic workshop on how to take the economy forward? The EFF had papers on economic policies that worked. Maybe each political party could present its paper on an economic policy that would create jobs. That had to happen before there was a blood bath because unemployment was rising.

Prince Z Burns-Ncamashe (ANC) said that the truth about the SA economic situation would always be predicated on the understanding and reality that SA had a legacy of economic exploitation, especially by oligarchical structures benefiting from exclusionary measures. That had to be acknowledged by everyone, irrespective of the party to which one belonged -- it was a matter of acknowledging the past atrocities. This had led to unfair concentration of the economy, which meant that an inclusive economy was a fundamental imperative of the transformation agenda. During the State of the Nation Address (SONA), the President had said that the hemp and cannabis sector could create more than 100 000 jobs in KwaZulu-Natal and the Eastern Cape. However, work needed to be done, especially regarding a legislative framework. He was raising the point on behalf of those who had been systematically regulated into merely participating at the productive level while the rest of the segments of the value chain institutionally and systemically excluded them. What was being done to address that?

His second question related to the trade policy. In the previous financial year, the DTIC had a target for border interception to reduce illegal imports. The target for border interception was in collaboration with other agencies which were meant to manage trade through SA‘s borders, so why did the DTIC have those targets? Regarding SA's trade policy, there were targets for patents and designs, but when did the DTIC expect to table the Amendment Bill?

He could not pretend that he had not heard what the DA Member had said. SA was part of international institutions, such as the United Nations and the African Union, etc. The narrative that characterised the scenario of the invasion of Ukraine by Russia without acknowledging the role of the North Atlantic Treaty Organisation (NATO) and others was rather hypocritical and not encouraging fair and constructive dialogue. The approach of the SA government was to encourage dialogue and mediation, which had worked for the people of SA. No one thought of the fall of apartheid, but because the ANC had the interest of all people at heart, it had created dialogue to create a better life for all. That was why SA wanted to encourage dialogue, encouraging mediation and resolution under the United Nations.

The Chairperson congratulated the DTIC on meeting and exceeding the targets for disabled people and women. In the document, the Department had spoken about a report on progress supporting black industrialists and black women and youth-owned businesses. Why was the target a report rather than an actual target of the number of specific people?

She asked Mr Tshwaku to inform Ms Yako about the R197.5 million committed by the Industrial Development Corporation (IDC) towards her favourite project.

DTIC's response

Deputy Minister Majola requested the Acting DG and the team respond to the questions.

Ms Mabitje-Thompson appreciated the positive feedback from the Members. She would ask her colleagues to add the details to the DTIC's response.

She referred to Mr Thring’s question about the DTIC's three outcomes of industrialisation, transformation and a capable state and how the Department should ensure that transformation did not overpower the others to the economy's detriment. The DTIC found, particularly when working with companies, that some of the work in attaining the outcomes was done in tandem because as the company grew, one looked at the workforce and who was being employed and the transactions and who the company transacted with, etc. The stakeholders that the DTIC worked with tended to look at industrialisation and transformation together, and both outcomes influenced their decision-making. Companies actually said that they could not work in an environment such as SA without considering transformation. Transformation was intended to grow the economy, so the Department would look at transformation as going together with growth and not as separate issues; only then would the Department look at the costs involved. A similar approach was taken regarding the master plans and other divisions.

The Department was looking at aligning emerging priorities. A particular concern was that when B-BBEE deals were often considered, the company did not look to loyal workers who had been there for many years but looked to other people. If there were transformation those people should be taken into consideration, considering that they had given their lives to the company. How did the DTIC work with those companies to ensure that they supported transformation? Making workers owners were real empowerment. The Department had to relook at all its plans in the light of those three goals.

The Acting DG said that the Department’s focus was currently on master plans, and the discussion with companies involved in these plans involved what it would take for a company to go to the next level of investment because SA did need the jobs. The companies had raised issues, so the DTIC was looking to assist them where there were stumbling blocks, such as looking at the regulatory framework to sharpen it to make it much more helpful. The DTIC looked at what existed in the sector and what was possible. Sometimes competitiveness would take centre stage; sometimes it would be another issue. The DTIC was looking at the SA environment's economy and where it placed SA in the world marketplace. The intention was that SA should not remain at the bottom of the value chain but should work its way up the value chain to where the most benefit could be gained.

Agreeing with Members that the issue of unemployment had reached a crisis point, she said that in all of its programmes, the DTIC was looking at which companies might lose people and was supporting them, as SA could not afford to lose jobs. To receive support from the DTIC, a company had to agree not to shed jobs and to have a trajectory that increased jobs. Beyond the master plans, other factors had to be addressed. Eskom was one example of such a factor, as load shedding had a negative impact on production and jobs. The DTIC had to coordinate with the rest of government to support industrial growth. It was essential to have a stable supply of energy. One could not talk of economic growth and an increase in jobs without a stable electricity supply. The point was well taken that the DTIC had work to do in government to focus on an increase in jobs.

Concerning the war in Ukraine, the DTIC was looking at the implications of that war on the SA economy and providing support for the companies and the people employed in affected companies. It was aware of the sharp price rises due to the war. The Department was looking particularly at the effects on basic foodstuffs such as wheat and the impact on the SA market and those investments that had a lot of exposure to both Ukraine and Russia, in particular, as most of the world was isolating Russia. The country had to balance its response to the situation. She assured Members that the DTIC was not working in a silo separate from other government departments and within the Department. Common outcomes meant that all expertise from across the DTIC was being brought to bear on addressing issues.

Municipalities were often a hindrance to companies, and the DTIC was working to ensure that they had much more independence to create a stable environment for their work to continue. Government would be giving support to them so that a much more stable environment could be created. The President had referred to the reduction of red tape. That matter was being addressed in the Presidency, so it had been raised far above the level of the DTIC working on its own on the problem. It was not a matter that could be resolved by the DTIC alone. It was working closely with that office in the Presidency. It had had engagement with the officials regarding some of the red tape issues in municipalities and the cost of services that had become far too expensive to support economic growth and industrialisation.

The greening of the economy was another area in which the DTIC was working -- from managing the use of paper to looking at green energy, although the campus did not allow the Department to do certain things. It was hoping to be permitted to use solar panels. It was important to reduce the costs while producing energy. The DTIC did not deal directly with consumers but would ensure that the producers took as many people as possible while transitioning to a green economy.

Ms Mabitje-Thompson fully agreed that there was a need to train artisans. She said that it was unbelievable that SA was importing basic skills with its high unemployment rate. However, the DTIC was looking at the regulations to limit workers coming to SA to ensure a balance and that restrictions did not impede the ease of doing business. The DTIC had built into the APP the need to work with other departments responsible for training people and ensure the people trained were trained to the appropriate standard. The Sector Education and Training Authorities (SETAs) were churning out many people, and the DTIC was working with them to ensure their training was aligned with the economy. It also wanted to ensure that all training opportunities were aligned with opportunities in the workplace. It was committed to working on the training issue.

Responding to Ms Motaung’s question on budget cuts, she confirmed that the DTIC was working under a very constrained fiscal environment. The frequency of curved balls tossed into the economy was increasing. The Department had been dealing with the Ukraine matter when the next curve ball, the KwaZulu-Natal floods, had arrived. There was also a concern about global markets. So, even with reduced budgets, the DTIC had to be aware that there would be increased emergencies. The DTIC was engaging with National Treasury, but it was mindful of the difficulties faced by Treasury. It was looking at how to adapt its support and was considering making concessionary loans instead of grants so that the Department could have self-funding programmes which would be sustainable. The Department had re-shaped itself to deal with funding issues, but it remained a concern.

Regarding the realisation of promised investments, she said the DTIC had presented a slide at the investment conference on investments that had not materialised. It had been quite open about investment pledges that had not materialised. It had shown on the slide the original amount pledged and it had then taken out the amount that had not been realised and used the reduced amount to indicate how far the country was from its goal. The investment numbers were real investments. The DTIC would ask if it could share with the Committee the information supplied at the conference about job numbers created as a result of those investments so that Members could be fully appraised of the work being done in respect of the investments.

Ms Mabitje-Thompson assured Members that officials in the DTIC were highly skilled negotiators and knew what they were able to put on the table. Importantly, they knew when to raise a red flag. She assured them that officials would be alert in the trade negotiations with the EU and would put SA’s interests at the centre of the discussions, but would seek an outcome that would work and make the agreement viable for both parties. The negotiators were clear about which compromises were acceptable and which were not.

Regarding the question of scrap metal, she said that the Department was continuously assessing the situation and determining what was possible and what was feasible. It would inform the Minister of the position based on its assessment of the scrap metal environment. The recommendations would be underpinned by research and by the capability of all the stakeholders concerned, including law enforcement. It would also consider the issues relating to preparing scrap metal for export. The DTIC was looking at all possible options in that regard.

She said the working group was nearing conclusion on matters relating to the Rules of Origin in the AfCFTA. She agreed that the economy had to exploit all opportunities for innovation and new technologies. Programme Six was looking at offering support to enterprises/projects supporting green economy initiatives, and a master plan was being developed regarding global business services, which would focus on information technology (IT).

Industrial policy was one area where the DTIC would never achieve everything it wanted to achieve. It always strived towards the goal but had to deal with the curveballs thrown at it as it went along. She pointed out that if some of the interventions had not been in place, the country might have found itself in a very bad position. The auto sector was one example of an intervention that had really assisted the country. The absence of any intervention would have been disastrous, but the DTIC was the first to admit it could do more and recognised that it should do that with less.

 A report on black industrialist support had been issued, which consolidated the actions that the DTIC had taken in a written format. If the report had not been shared with the Committee, she would ensure that copies were provided.

Ms Niki Kruger, Chief Director: Trade Negotiations, DTIC, said the Acting DG had responded to the question about the EU negotiations. However, it was not SA alone that was involved in the negotiations -- the Southern African Customs Union (SACU) and Angola were also involved. The work was ongoing and had not been affected by the situation in Ukraine. Both sides were working towards the best outcome. They were addressing issues that had arisen in the past five years under the current agreement to see if those problems could be avoided.

Regarding the AfCFTA, she said there was agreement on 87.9% of the Rules of Origin. The outstanding issues related to some lines of tobacco and some lines of sugar, but she hoped those items would be finalised in the following month or two. The big issue related to textiles and clothing and issues outstanding there added up to about 5% of the rules. Considering the benefits of the AfCFTA for SA, she commented that the agreement should have come into effect on 1 January 2021. However, the negotiators were still working on the Rules of Origin and some tariff issues. 90% of the tariff lines had been finalised and the final offer was ready to be approved by the Ministers in the next meeting of the AfCFTA, and then the AfCFTA would be able to begin operations. After that, it would be ready for implementation.

The target on border interceptions was removed from the APP because there was a new target for reporting on the impact of illegal trade. As far as that report was concerned, the DTIC would be reporting together with the SA Revenue Services (SARS) and the International Trade Administration Commission of South Africa (ITAC), which had formed an interagency working group to deal with illegal trade.

The DTIC was working on the draft regulations on anti-dumping, safeguard measures and tariff investigations, and they would be brought to Parliament in the fourth quarter of the year. The draft Amendment Bill on Designs and full explanatory memoranda had to be submitted to the executive authority and taken through the economic cluster.

Dr Evelyn Masotja, Deputy Director-General (DDG): Consumer and Corporate Regulation, DTIC, responded to Mr Mbuyane's questions about the two Companies Amendment Bills. The first Bill, known as the Omnibus Bill, was looking at amendments to remuneration disclosures, disclosures of shares in company ownership, and other amendments to update the Act published in 2011. That Bill was made available for public comment in 2021. It had been delayed because when the previous National Economic Development and Labour Council (NEDLAC) processes were finalised, stakeholders had areas of disagreement, so the Bill was being reviewed. She could not say precisely when the Bill would be introduced to Parliament, but the plan was to introduce it in that financial year. There should not be too many areas of contestation.

The focus of the second Companies Amendment Bill was on worker participation in the board structures of companies. It looked at how workers could benefit from ownership of shares in companies. The Bill would ensure the voice of labour and workers in the board structures of companies so that they could enjoy participation. The Bill would be developed in 2022.
 
The Liquor Bill had been developed prior to the pandemic, but during the pandemic, the DTIC was able to see the massive abuses of the Liquor Act, so the Bill was being reviewed as officials considered how to strengthen the Liquor Act. It had been determined that a coordinated approach with other departments would be best, but this would take time, especially as they needed to respond to wider issues. Through the Minister of Trade, Industry and Competition, other Ministers would be engaged so that they could bring their departments on board.

The Chairperson said that she would like a document detailing all the legislation prepared for submission to Parliament, as that was one of the fundamental mandates of the Portfolio Committee.

Ms Lerato Mataboge, Acting DDG: Export Development, Promotion and Outward Investments, DTIC, responded to the question by Mr Thring about how nimble the DTIC was in responding to export issues. Regarding the export of citrus fruit to Russia and Ukraine, the DTIC engaged with the industry. The problem was two-fold -- not only were they losing a huge market, but there were also internal problems around ports. The Department's engagements with the industry had been to find new market opportunities so that the industry could diversify, and there were a number of other market opportunities. The problem was that trucks of fruit could not wait for days for access to the port, and now Durban was non-functional, but fortunately, with the help of the President, it had been arranged that exports could go via Maputo and that had helped tremendously with the movement of goods.

Mr Khan responded to the third quarter report that showed a variance in the budget. He said that an adjustment had occurred as a result of an injection to the budget of R1.3 billion to deal with the KwaZulu-Natal and Gauteng unrest and money for the social employment fund. The adjustment had been assented to by the President in the fourth quarter (on 19 January 2022), so it was a question of timing that had resulted in the budget showing different amounts between the various quarter reports.
                                                                                                                                                                                         
Mr Cuthbert asked whether the SIU had presented its report on 1 April 2022 or given any idea of when the report on the National Lottery Commission would be presented.

Ms Mabitje-Thompson responded that the SIU had not submitted the report as proposed, nor had it given any reason for not submitting the report.

The Chairperson agreed on the urgency of the SIU matter, and therefore the Portfolio Committee would request a follow-up so that it was informed of the situation.

She noted that questions had been asked about red tape by Mr Tshwaku, a question about B-BBEE by Mr Mbuyane, and questions from Mr Burns-Ncamashe that had not been responded to. She was aware that they could not get to all the questions in the meeting in the time available, as she intended to conclude the meeting at 13:00, so those questions would have to be responded to in writing.

Deputy Minister's concluding remarks

Deputy Minister Majola said that the Members' questions were very useful, as they enabled the Ministry and the Department to see the blind spots they had not seen. He repeated what the Minister had said: the central question the economic cluster was asking itself was why, despite their best efforts over the years, the results were not satisfactory, especially in addressing unemployment, poverty and inequality. That was a big question for the Ministry and the Department, and it meant that things had to be done differently. That was the reason for the three core outcomes, and their attainment would ensure an impact on unemployment, poverty and inequality. To keep going the way they had been going would simply produce the same results, so there had to be a change.

He agreed with Mr Thring that they should ensure a balance between the three outcomes. Transformation was very important, but it had to be achieved without neglecting the others, or it would not happen.

The Deputy Minister understood what Mr Cuthbert was saying, but he had to say that the stance of the SA government had been the most elegant response, and he thought that an aggressive approach would have had greater negative consequences for the Ukraine-Russian conflict.

He told Mr Tshwaku that there had been some confusion about the Department’s approach to the economy. The two extremes in a modern industrial economy were not helpful. It could not be that the private sector created jobs and that it was not the business of government; nor did the other extreme help, where it was contended that government-created jobs and the private sector had nothing to do with creating jobs. Those modern developmental states that had succeeded had ensured that government and the private sector worked in tandem. The Department had to lead and had to facilitate jobs or even create jobs because of the size of the problem in the economy, but it was also the responsibility of the private sector to grow their businesses and create jobs. It was not a useful dichotomy to say either one or the other should create jobs. The President had emphasised that point, so they agreed with Mr Tshwaku. Similarly, the issue relating to scrap metal was not an either/or. The Department had engaged with National Treasury and also law enforcement. It was necessary to deal with crime and offer support to local industries in the sector.

He thanked the Committee for meeting at the DTIC campus.

Closing remarks

The Chairperson referred to the President's State of the Nation speech in 2022. He said: "We are working together to revitalise our economy and end the inequality and injustice that impedes our progress." That had to be their watchword and everything they did had to be considered in terms of whether or not they impeded the economy.
           
The meeting was adjourned.


 

Download as PDF

You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.

See detailed instructions for your browser here.

Share this page: