Questions and Replies

Reply:

Following information received from the National Gambling Board (NGB) relating to this transaction, I have requested the Director-General to further engage the NGB on information required and processes followed and provide me with a Report. A supplementary reply will be provided once the information has been received.

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Reply:

The World Economic Forum (WEF) 2024, which took place in Davos-Klosters, Switzerland, from 15 to 19 January 2024, provided South Africa an opportunity to engage international investors and policy-makers.

I was accompanied by the Acting DDG Invest SA and two DTIC permanent representatives to Geneva. The department’s appropriated budget covered all expenses.

The engagements and activities included

• More than 15 separate sessions with investors in sectors such as beverages, transport-logistics, energy, steel, engineering and retail.
• Meetings with a number of trade and economic ministers from across the world, including Norway, the UAE, Saudi Arabia, Qatar, Netherlands and Oman and with government advisors from Nigeria
• A meeting with the European Union Vice President and Trade Commissioner on SA-EU trade matters and on the WTO
• A session with a US Senator, covering SA-US trade and investment relations
• Participating as a speaker in panels dealing with development and with SMME promotion in value-chains
• A ‘South Africa Investment’ session hosted by Bloomberg
• Separate meetings with the Director General of the WTO and with the Secretary General of the AfCFTA
• Participation in a number of briefing sessions on global policy matters, including by the Premier of China and the US Secretary of State
• A WTO session attended by officials.

I am advised the total cost was R802 000, made up of accommodation, air travel, and ground transportation, food, subsistence and travel costs.

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Reply:

South Africa currently exports around 63% of its vehicle production, making it imperative to consider global developments in the auto industry. Major export markets such as the EU and the UK have announced bans on internal combustion engine (ICE) vehicle sales by 2035, accompanied by incentives for electric vehicle (EV) adoption. This global shift towards environmentally friendly transportation is expected to reduce demand for vehicles manufactured in South Africa.

Following extensive work undertaken both with industry and within government, a White Paper was finalised by Cabinet, setting out the policy framework for the technology, production, export and domestic market adoption of electric vehicles, as well as a detailed roadmap and plan of action. The White Paper was publicly released in December 2023.

Subsequently, the Minister of Finance released details of tax benefits that will be available to the industry to facilitate the transition. In addition, discussions have been held with auto-producers not yet in the SA market to encourage new investment in the sector.

While existing policies like the Automotive Production Development Programme and the Automotive Investment Scheme provide a good framework for developing EV productive capacity, including in assembly and component manufacture, additional action will be required. The White Paper thus identifies 10 policy goals with a set of 16 specific and distinct policy actions to be implemented over specified timelines between 2023 and 2035 with 10 actions in support of the development of cost-competitive EV productive capacity in South Africa; and 6 actions in support of the development of a cost-effective local market for EVs.

A copy of the White Paper may be accessed at http://www.thedtic.gov.za/wp-content/uploads/EV-White-Paper.pdf

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Reply:

The National Lotteries Commission has furnished me with the attached response to the question.

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Reply:

a) Because an international agreement will be binding on South Africa, the country must be able to maintain its international obligations in terms of the Treaty to which it has acceded. In order to accede to the Marrakesh Treaty, it is necessary therefore to finalise amendments to the Copyright Act, Act 98 of 1978. The Copyright Amendment Bill that addresses these matters was passed by the National Assembly recently, for referral to the President for assent.

b) The Constitutional Court found Section 13 of the Copyright Act to be unconstitutional. In its order, the court read into the Copyright Act, 1978 an exception that allows persons who are blind and visually impaired to convert published works into accessible formats without the consent of the copyright holder. The judgment thus offered the blind and visually impaired remedies with immediate effect. This exception is valid for a period of 2 years until 20 September 2024 pending the approval of the Copyright Amendment Bill, to ensure that the rights of the blind and visually impaired are not compromised. Clause 19D of the Copyright Amendment Bill extends to persons with disabilities such as learning disabilities, dyslexia etc and not only for the blind and visually impaired.

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Reply:

(1) Retrofitting in the automotive industry refers to the practice of replacing internal combustion engines (ICE) in vehicles with an electric motor and large storage batteries, making them electric vehicles (EVs). This practice thus means that an old or used vehicle is fitted with modified or new equipment for alternative propulsion than initially designed for.

In the case of retrofitting, the manufacturer of the original vehicle provides no warranty or assurance of its integrity as the fitment of non-original parts generally compromises the vehicle as it deviates from the original specifications for safety and other parameters.

The government focuses on supporting the mass production of new vehicles that can be distributed globally and meet stringent homologation requirements. Vehicle assemblers provide warranties on their originally-built vehicles and components thus giving consumers relative comfort and confidence that such vehicles are of acceptable and good standard.

 

a) In light of the above, government has collaborated with key stakeholders including vehicle assembler OEMs, Component Manufacturers and other stakeholders such as Research institutions in developing an EV White Paper that was published in December 2023. This White Paper seeks to create an environment supportive to investment for and production of electric vehicles and components in response to the global transition from ICE to EVs.

b) The National Treasury has announced through the Budget Speech on the 22 February 2024, the introduction of a tax support mechanism for EV production with effect from April 2026. Details of this tax support will be published in due course following the adoption of implementation guidelines.

c) EV manufacturing will in addition to the tax support also benefit from the Automotive Production and Development Programme (APDP). The APDP supports the manufacturing of vehicles on a completely knock-down basis and not retrofitting.

The objectives of the EV White Paper are to:

• Provide additional investment funding to attract investment in the local production of electric vehicles and components.

• Promote access for these locally produced vehicles to regional and global markets.

• Deepen the automotive value chain by promoting regional cooperation for the local beneficiation of critical minerals.

• Promote uptake of locally produced vehicles through fleets including government.

• Develop requisite skills to support the transition to electric vehicles through partnerships with industry and academic institutions.

(i) Ensuring safety standards is critical for the transition to EV production. Therefore, all EV vehicles will be homologated in line with applicable regulations of the South African Bureau of Standards (SABS) and the National Regulator for Compulsory Specifications (NRCS).

(ii) The vehicle component manufacturers represented by the National Association of Automotive Component and Allied Manufacturers (NAACAM) are key stakeholders in the growth of the local automotive industry. Thus, they continued to be actively involved in the development of the framework for the transition to EVs. The component manufacturing industry accounts for the lion's share of jobs in the automotive industry, over 70% of the total employment in the automotive industry in 2022.

(iii) The success of the transition requires all stakeholders to continue to work collaboratively to navigate this challenging transition and transform it into an opportunity for growth, sustainability, and economic vitality. There is an established industry stakeholder engagement platform called the Executive Oversight Committee (EOC) to oversee the implementation of the SAAM 2035. Its mandate will be expanded to include overseeing the implementation of the EV White Paper. Therefore, there is a requirement for the active participation of additional stakeholders including those in Logistics (rail and electricity), technology developers (innovation, research, and technology commercialisation), EV support infrastructure (charging facilities providers, emergency services providers). It will also include those involved in marketing SA capabilities to position South Africa as a production and demand destination for EVs and related components.

(iv) Technology changes are at the core of this transition. This includes the introduction of new raw materials and components, while some ICE-specific components are expected to become obsolete over time. These changes in the supply chain are resulting in the re-organisation of the global value chain with the growing importance of locations that can supply EV-specific components.

(v) the dtic has collaborated with Research institutions and entities mainly as service providers during the development of the EV White paper which is the culmination of substantial research and engagement over the last number of years and follows the publication of a green paper in 2021, a process of receiving public comments, which have been integrated into the policy actions to be taken. This collaboration continues during the transition to EV production.

(2) The EV White Paper focusses on the manufacturing of electric vehicles and their components rather than on retrofitting used vehicles. This focus will mitigate potential job-losses due to the transition to e-mobility as EVs have fewer components and also ensure that South Africa remains a viable manufacturing location in the global setting.

The EV transition requires new certification programs and extensive reskilling to produce and use the associated new technologies. To this end, the industry has completed a Comprehensive Skills Gap Analysis that covers the Labour Market Analysis which gives the future occupations, and the Competency Analysis which gives the future competencies. To address the skills gaps, five roadmaps have been developed.

As part of the implementation of the roadmaps, MerSETA, the Department of Higher Education, and the automotive industry are developing the EV curriculum and certificate. The main beneficiaries will be young people with the automotive industry setting a target of 10 000 learnerships and apprenticeships by 2035.

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Reply:

The IDC’s investment portfolio in terms of exposure, is currently at R98.9 billion, made up of R65.7 billion (66%) in Debt and R33.2 billion (34%) in Equity. Debt investments are those that are classified as Solely Payments of Principal and Interest (SPPI) and Equity investments are classified as Non-SPPI. The Mining Sector comprises the most significant exposure at 38%, followed by Chemicals (17%) and Energy (12%). Details are as shown in Table 1 below.

Table 1: IDC Portfolio Per Sector

 

Full list of companies under each of the investment sectors listed in Table 1

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Reply:

A well-functioning transport and logistics system is vital to unlock the opportunities presented by trade, to grow the SA economy and create jobs.

The Department of Trade, Industry and Competition (the dtic) supports efforts by the Department of Public Enterprises (DPE) to address challenges at ports and find permanent and systemic solutions. A workstream has been put in place by DPE and the Presidency with the private sector, which enables skilled personnel to assist with improving the country’s logistics systems. the dtic attends the oversight meetings convened by the Presidency.

Companies from time to time approach the dtic with specific challenges relating to a shipment of cargo. the dtic engages Transnet on these in order to resolve them.

The DPE will be best placed to provide information on the measures taken to date to address the challenges and the progress made.

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Reply:

In the past five years the Industrial Development Corporation (IDC) issued:

The total number of 834 business loans and equity funding.

The total monetary value is R80,5 billion.

Total Approvals

BEE owned (>50%)

Women owned (>50%)

Non-South African companies

a) Total number of the business loans/equity that were issued:

1. 53,7% of the total number of business loans/equity by the IDC in the last five financial years was issued to majority black-owned companies; and by value it constituted 31,3% of all loans/equity approvals.
2. 11,8% of the total number of business loans/equity by the IDC in the last five financial years was issued to majority woman-owned companies.
3. 3,8% of the total number of business loans/equity by the IDC in the last five financial years was issued to non-South African companies (including investment in other African countries, and by value it constituted 15% of all loans/equity approvals.

Additional information requested will be compiled.

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Reply:

The post of Director General was advertised, and applications were considered by an Inter-Ministerial Committee. However, during the process, the Minister was requested to consider whether structural changes should be proposed involving the responsibilities within the dtic, which would affect the selection of a suitable candidate. This has taken some consideration during the second half of 2023. The Department intends that the position will be filled by the end of the financial year.

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Reply:

The SBIDZ is managed by the Western Cape Provincial Government.

According to the Western Cape Provincial Government and the SBIDZ, the entity is not yet independently financially sustainable and is still reliant upon the Provincial Government as the owner of the SEZ, for operational funding.

Below is a table with the provincial allocation for the financial years 2022-2026.

Specific Budget policy programmes	2022/23	2023/24	2024/25	2025/26
	(R ‘000)	(R ‘000)	(R ‘000)	(R ‘000)
Operational Funding	41 977	-	-	-
New Integrated Port PPF request for SBIDZ	-	9,400*	-	-
Investment – Green Hydrogen development (Earmarked priority allocations)	-	3,300	18,150	18,150
Total	41 977	12,700	18,150	18,150

*To note, R9,4 million appropriated in the 2023/24 main budget for the Project Preparation facility for the integrated port upgrade in Saldanha is to be reclassified in the 2023 Adjusted Estimated for use as operational expenditure by the entity to assist with the entity’s sustainability.

In terms of funding from the SEZ fund, managed by the dtic the SBIDZ zone has received the following funding:

Bulk infrastructure	R 741 858 000
Top structure	R 391 130 000
Skills development	R 4 495 000
Total	R1 137 483 000

The total amount the SBIDZ received from the dtic SEZ fund is R1 137 483 000 over seven years, between 2016/2017 – 2023/2024.

In respect of green energy, the SBIDZ would require operational funding from the Provincial Government. the dtic, IDC and the SBIDZ are working together to attract private investment in green energy.

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Reply:

a) The Special Economic Zone (SEZ) tax incentive was introduced into the Income Tax Act to promote investment, growth and job creation in the South African manufacturing sector and the development of designated regions. On 6 July 2018, the Minister of Finance issued Government Gazette 41758, with the following SEZ’s eligible for purposes of the reduced income tax rate:

• COEGA Special Economic Zone

• Dube Trade Port Special Economic Zone

• East London Special Economic Zone

• Maluti-a-Phofung Special Economic Zone

• Richards Bay Special Economic Zone

• Saldanha Bay Special Economic Zone

A qualifying company can only benefit from the tax incentive if it is located within an eligible SEZ and based on financial considerations to the state, as required by section 12E(3) of the Income Tax Act. The potential benefits are:

• A reduced corporate income tax rate of 15%; and
• An accelerated depreciation allowance of 10% on cost of any new and unused buildings or improvement owned by the qualifying company.

In terms of the qualifying criteria, 90% of the companies income must be derived from the carrying on of business or provision of services within that SEZ; and no more than 20% of the deductible expenses incurred or 20% of the income received by or accrued to the company are from transactions with connected persons that are residents or with non-residents and those transactions are attributable to a permanent establishment in the Republic.

With regards to the depreciation allowance, companies do not qualify, if the buildings are owned by the SEZs themselves.

(i) and (ii) According to information provided by the qualifying SEZs for the financial years 2020-21 and 2022-23, 9 companies applied for the reduced income tax rate. Three (3) companies in COEGA and six (6) companies applied in Dube Trade Port for the reduced income tax rate.

b) The disclosure of the total value of the tax discounts for companies is governed in terms of the Tax Administration Act, 2011, administered by SARS. Taxpayer information is subject to the confidentiality provisions, which contained in Chapter 6 (sections 67 to 74) of the Act.

Access to information can be directed through the relevant portfolio committee to SARS.

 

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Reply:

I am advised that the National Empowerment Fund did not pay for the Chief Executive Officer or any other official to travel to France during the stated period. The NEF pays travel and related expenses exclusively for official business trips.

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Reply:

Appointments made within the dtic-group are based on suitability of candidates for the job. In addition, the dtic-group has taken action to address any instances of corrupt and/or inappropriate financial behaviour, as evidenced by steps taken in respect of the National Lotteries Commission.

The reasons for deindustrialisation can inter alia be traced back to premature and sharp reductions in trade support to industry, following the binding offer made prior to 1994 by the National Party government during the global trade talks in the Uruguay Round of the Generalised Agreement on Tariffs and Trade (GATT). This was compounded by limited supply-side measures to assist firms to strengthen their competitiveness, which is normally applied to assist with a transition from high trade protection, at about the time when China and other Asian exporters expanded their manufacturing output. A number of structural factors that have been highlighted previously, have also served to constrain manufacturing growth.

The focus on sector-specific growth strategies as contained in masterplans, access to large export markets, support for local firms and other elements of the reimagined industrial strategy, are aimed at reversing these trends. Preferential procurement policies have included support for procurement from local manufacturers, which have helped to lean against deindustrialisation pressures.

Government considers lessons from global best-practice and research and insights from policy-thinkers in adjusting policies to address the extraordinary challenges faced from the legacy of our past.

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Reply:

Restrictions on exports of certain scrap metal and copper cable products have been put in place since 30 November 2022, following research done on measures to curb widespread theft; and at the request of law enforcement and other entities.

Concerns have been raised by companies in the blast-furnace value chain and by scrap metal exporters. Support has been expressed by companies in the arc-furnace value-chain. The IDC is exposed to investments in both blast-furnace and arc-furnace value-chains. The export restriction is not however an industrial policy measure but is specifically focused on addressing the demand for scrap metal, which has been found to be a factor in incentivizing theft of cable and metal from public infrastructure. The impact of the measures is being considered and no information is ready for public release.

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Reply:

I am advised as follows. On 6 July 2018, the Minister of Finance issued Government Gazette 41758 indicating that companies located in the Saldanha Bay IDZ can be eligible for tax incentives/rebates based on qualifying criteria.

These incentives include:

• • A reduced corporate income tax rate of 15%.
  • An accelerated depreciation allowance of 10% on cost of any new and unused buildings or improvement owned by the qualifying company.
  • Customs Control Area Incentives (CCA).

Currently National Treasury has put a sunset clause for SEZ Tax Incentives/ Rebates ending 2031. In terms of the SEZ Act No. 16 of 2014, the Minister of Trade and Industry and Competition must consult with the Minister of Finance on tax incentives for special economic zones. The Minister of Finance is the authority to extend tax incentives/rebates. Should a clear business case be made out for extension of a tax incentive, the dtic will assist to bring same to the attention of the National Treasury for consideration.

Saldanha Bay Industrial Development Zone (SBIDZ) is a designated as an SEZ which is specifically focused on the maritime, energy, logistics and green hydrogen sectors, it offers a platform for global exports by attracting foreign and local investment in the associated manufacturing and services industries.

 

Value Proposition of the SEZ:

• Strategically located within the deep-water port of Saldanha Bay, which allows for easy access to worldwide shipping routes and road linkages to the Saldanha – Northern Cape Logistics Corridor, Cape Town and beyond, and as such represents a prime logistics location.
• Tenants and qualifying investors have access to various incentives and support, including top structures and CCA benefits.
• 356-hectare footprint of secure and prime serviced industrial land, investor sites are available for occupation.
• Saldanha has also established the Saldanha Bay Innovation Campus to boost skills development in innovation and technology in the Marine and Energy Sectors.

 

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Reply:

I am advised that the following key tax incentives and support apply:

• A reduced corporate income tax rate of 15%
• An accelerated depreciation allowance of 10% on cost of any new and unused buildings or improvement owned by the qualifying company, where applicable.
• Customs Control Incentives (CCA).
• Building of Top Structures for tenants in the SBIDZ.

These incentives and support are subject to applicants meeting application criteria and budgetary availability. National Treasury considers tax incentives relating to SEZs.

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Reply:

I have been furnished with the information below by the IDC:

The IDC’s investment portfolio, in terms of exposure, is currently at R98.9 billion, made up of R65.7 billion (66%) in Debt and R33.2 billion (34%) in Equity. Debt investments are classified as Solely Payments of Principal and Interest (SPPI), and Equity investments are classified as Non-SPPI. The Mining Sector comprises the most significant exposure at 38%, followed by Chemicals (17%) and Energy (12%). Details are shown in Table 1 below.

Table 1: IDC Portfolio Per Sector

 

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Reply:

In 2022 South Africa’s goods exports to the United States amounted to about US$14.4 billion. Of this, 21% ($3 billion) entered the US under AGOA. Over the recent five years since 2018, on average 16% of SA exports entered the US under AGOA.

Some sectors utilise AGOA for a significant portion of their US exports. I attach a revised copy of a presentation made to a joint meeting of the Portfolio and Select Committees of Parliament on 26 September 2023.

Both the SA and US data sets do not distinguish exports/imports by company size and employment and also do not record the suppliers of inputs into the production of the exported/imported products.

The Impact of AGOA on economic growth will require detailed research, and will not be definitive, as a number of factors influence trade performance, for example changes in the exchange rate of the currency.

 

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Reply:

The department has not paid for anyone to travel to France to attend the Rugby World Cup final in France during October 2023. We are proud of the victory of the Springboks and the thrilling matches against France, England and New Zealand.

 

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Reply:

Work done by the National Treasury over the past number of months has pointed to the need to identify ways to reduce the levels of public expenditure, including structural costs due to the number of public entities.

the dtic-group is therefore reviewing the Standards, Quality Assurance, Accreditation, and Metrology entities to identify whether potential mergers of entities can be effected, whilst enhancing service delivery.

The appointment of CEOs on lengthy fixed term contracts may impact on these. Steps were taken for the appointment of CEOs in the Standards, Quality Assurance, Accreditation, and Metrology institutions prior to the above considerations and the Department is working to align these two processes, taking into account the need for stability.

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Reply:

The NEF has not paid for any employee to travel to France during the months of September and October 2023.

.

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Reply:

Information sourced from Export Councils, who are partially supported by the Department, and which represent exporters of fruit, ostrich and abalone indicates that the two most important factors that affect the quality of perishable products destined for export markets are time and temperature control. For products that are scheduled for export at the Container Depots, load shedding and unstable supply of electricity necessitates that alternative power sources are installed in the form of diesel-powered generators for cold chain maintenance and operations which cannot be halted.

With regards to Cold Stores, time becomes a critical factor for temperature control of perishable products. Several contact points in cold stores that are impacted by electricity supply include the container-truck waiting times; all of which have a knock-on effect on the export load schedules as well as booking times at the ports. Final Inspections by the Perishable Produce Export Control Board (PPECB) at the cold stores may result in reefer rejections if the time and temperature control requirements are not complied with, which can lead to either compromised shelf-life or spoilage of the perishable products.

Between April 2021 and September 2023, R323 million was approved to support more than 50 projects in the agriculture and agro-processing industries. During the same period R260 million was disbursed to just over 45 projects in the agriculture and agro-processing industries.

Products include the following:

• Fruits such as blue berries, citrus, dried mango and tropical fruits;
• Meat products such as processed meat, pork carcasses;
• Dairy products;
• Alcohol such as wine and gin;
• Vegetable oils; and
• Snacks such as sugar-based confectionaries, condiments, popcorn, and cookies.

Given the above, we welcome and support the measures to address electricity supply and stability.

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Reply:

Industrial Parks fall within the responsibility of Provinces and in some instances, municipalities. The role of the dtic is to consider requests for funding for infrastructure improvements, typically on areas such as fencing and security. The dtic does not manage implementation of upgrading nor does it operate industrial parks. The Department has tabled reports on SEZs and Industrial Parks at the Portfolio Committee of Trade and Industry, addressing the challenges with the existing model and the need for reform.

The Department has provided the following details on developments relating to the Ekandustria Industrial Park, which I set out below.

a) Budget allocations for industrial parks, under the Industrial Parks Revitalisation Programme (IPRP) of the dtic, are approved on an application basis and there is therefore not a dedicated budget to a specific industrial park.

The Ekandustria Industrial Park received approval for R51,812,604 in the

2015–2016 financial year (FY), and construction was finished in the 2019–2020 financial year.

(i) FY 2019-2020 - R268,398 was spent as the last tranche of the allocation;

(ii) FY 2021-2022 – nil; and

(iii) FY 2022-2023 – nil.

b) (i) The activities listed below that began in FY 2015–2016 were finished in

FY 2019-2020:

• 13 Factory spaces were revamped, amounting to 35 835 square metres of roofing with new ventilators, box gutters and insulation;
• 2km Clear View fencing installed;
• 3 Guard houses constructed;
• 3 Swing gates and 6 boom gates with pedestrian walkways/gates; and
• Refurbishment of Waste Water Treatment Plant;

(ii) 2021-22 – nil; and

(iii) 2022-23 – nil.

c) The original application submitted by MEGA has been reworked to include investors/tenants' priority critical infrastructure needs. A Project Steering Committee comprising of City of Tshwane, MEGA, and Gauteng Department of Economic Development, is finalising the application to be submitted to the dtic.

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Reply:

The 2019-2024 Executive Performance Agreement was entered into in November 2020 following an agreement on Ministerial priorities and activities with the President.

Key elements of the Performance Agreement are included in Annual Performance Plans by the department and entities. Detailed quarterly reports are provided to the portfolio committee setting out performance on key areas, as shaped by the performance agreements.

In addition, the annual reports of the Department and Entities for the following years provide further details:

• 2020/21
• 2021/22
• 2022/23

In May 2023, a review of the department's priorities and the executive's performance occurred, resulting in a revised priorities agreement for the 2023/24 financial year. These have mainly been incorporated in or are reflected in the Annual Performance Plan of the dtic-group for 2023/24.

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Reply:

During the course of the current Administration, two factors required a different approach to the administration of applications and recommendations relating to trade.

First, the new industrial strategy framework was based on a more careful coordination of trade policy measures with industrial policy. This required

1. the development of masterplans and sector growth strategies in particular sectors

2. consideration of the principles underpinning masterplans to other sectors, and

3. consideration of the impact of a trade measure on the growth of the industry and on downstream sectors.

Second, COVID-19 caused a slowdown in world trade, disruption in global supply chains and changing trade flows. Some of these had significant impacts on consumer prices. Following Covid-19, four other shocks affected the domestic market: the July 2021 unrest, the April 2022 floods and the war in Ukraine. The latter in particular saw a spike in food, fuel and fertiliser prices. A number of proposed trade measures were put on hold to enable the effects of extraordinary events to be considered and monitored, and for normal market conditions to return, except where circumstances required otherwise.

The timeframes therefore for introducing specific trade measures have changed, based on the above. Certain tariff recommendations were therefore only considered at a later stage than would have applied in the past. A supplementary reply will be compiled to the question, to provide specific examples of these.

In respect of the costs associated with timing of trade measures, there is no agreed methodology to calculate costs. While local industries may benefit from a tariff increase, importers may see it as a cost. Public policy carefully balances a number of policy goals in setting of trade policy.

More research will be conducted in the form of impact assessments trade measures, including tariff increases. This research may provide additional information that relate to the question above and the results will be made available publicly once these are available.

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Reply:

In May 2021, I set out in the Budget Vote speech details of key policies on trade and industrial development to be publicly released. These were subsequently done, and covered both trade and industrial policy matters, and can be obtained from the relevant government gazettes. A number of masterplans were developed and key trade measures were adopted.

In addition, I will provide the Honourable Member with a list of trade and industrial policies tabled or made public prior to 2021, and will make it available as soon as the process of compiling these are completed.

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Reply:

The Industrial Development Corporation has not invested in copper smelting activities in the past three financials years being, FY2022/23, FY2021/22 and FY2020/21.

The Department does not have a dedicated funding facility for smelters in its budget, approved by Parliament, and no disbursements were made in the financial years concerned to copper smelters.

Tax incentives are announced by the Minister of Finance.

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Reply:

I published Regulations in May 2023 under the Companies Act, as amended in 2022, to prescribe how companies will submit information to disclose; or make known companies shareholders; or those who hold beneficial interest in securities in companies.

Companies will be required to file the register of the disclosure of beneficial interest in their companies with the Companies and Intellectual Property Commission (CIPC) when submitting their annual returns. The companies required to disclose the beneficial ownership information include mining companies or their subsidiaries. The information as currently provided for in the legislation and regulations, is for law enforcement agencies.

The new Companies Amendment Bill, 2023 addresses the matter of broader disclosure of information on shareholding. I believe it is in the public interest that beneficial ownership should be available more widely. The Bill is currently before Parliament and I await its consideration by Parliament

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Reply:

The spending by the Department is set out below. Information on entities will be provided in a supplementary reply.

Entity		(aa) 2020-21	(bb) 2021-22	(cc) 2022-23
Department of Trade Industry and Competition (DTIC)	Total amount paid	R279 950.00	R255 850.00	R269 400.00
	Supplier	Bakhoni Ba Kopane Trading (Pty) Ltd	Indulgence Palace (Pty) Ltd	MKYJAN Trading (PTY) Ltd
	Total number of copies printed	420	420	420

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Reply:

The existing EME threshold of R10 million annual revenue was set to exempt small businesses from mandatory compliance with B-BBEE.

While the exchange rate itself may not be sufficient grounds for a review, there may be other information that justifies a review. I am accordingly requesting the Department to consider the matter and advise me by the end of November 2023 whether there are grounds for a review.

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Reply:

The top export and import partners, and trade values are summarised below.

Exports reached an all-time high in 2022, surpassing ZAR 2 trillion for the first time, with notable growth in exports to markets including Germany, Japan, the Netherlands, India, and all neighbouring countries.

	TOP 10 Export destinations	Exported value in 2022
	World	2 024 476 648
1	China	195 591 758
2	United States of America	179 425 236
3	Germany	163 795 988
4	Japan	140 869 179
5	United Kingdom	103 567 427
6	Netherlands	98 245 133
7	India	84 135 321
8	Botswana	77 071 498
9	Belgium	65 199 545
10	Namibia	56 997 549

Imports grew rapidly, particularly due to the rising petroleum imports, which also drove a rapid spike in imports from India, the UAE and Oman.

	TOP 10 Import suppliers	Imported value in 2022
	World	1 832 262 773
1	China	368 761 963
2	India	136 911 736
3	Germany	135 371 730
4	United States of America	134 817 391
5	Saudi Arabia	71 916 317
6	United Arab Emirates	67 786 536
7	Thailand	50 512 434
8	Japan	46 522 269
9	Oman	43 472 407
10	Italy	40 429 620

Data source: International Trade Centre TradeMap reporting of SARS data. Exports to Mozambique have been adjusted to account for misclassified data bound for third markets via the Port of Maputo. Reported figures are as reflected in official SARS data, and may include some transit trade classified as exports by SARS.

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Reply:

The Companies and Intellectual Property Commission (CIPC) has furnished me with the following response to the question, received from Adv R Voller:

“(1) Prior to 2016, SAMPRA was accredited as a Collecting Society for owners of sound recordings in terms of Regulation 3(1)(a) of the Regulations on Collecting Societies. It was in 2016 that SAMPRA transited into a Collecting Society representing both owners of sound recordings and performers in terms of Regulation 3(1)(c) of the Regulations on Collecting Societies.

During such period of changing its representation, an interim board was established representing both performers and owners of sound recordings. The interim board served to approve all business activities of the Collecting Society.

The Companies and Intellectual Property Commission (CIPC) is not aware of any situation that might have availed a conflict of interest especially that the interim board constituted of two chairpersons representing the interests of all members (the performers and owners of sound recordings).

Further, there was no complaint or request directed to CIPC to investigate such conflict of interest. The SAMPRA as an accredited Collecting Society is also subjecting itself to auditing by its auditors.

(2) The CIPC is not aware of any information indicating that SAMPRA absorbed losses incurred by RISA as a result of 2016 edition of SAMA but should such information be brought to its attention, it will investigate the matter accordingly.

(3) During the transitioning period, the interim board was established to approve the business affairs and transactions at SAMPRA. The CIPC is therefore not aware of any sponsorship amount of R600 000 approved by SAMPRA – RISA Chairman, which belonged to SAMPRA.

If there is any information indicating that SAMPRA monies were approved contrary to the parameters of the Regulations on Collecting Societies, CIPC is prepared to investigate such allegations, as mentioned above. The SAMPRA has been consistently deducting its 20% administration costs in accordance with the Regulations.”
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Reply:

a) Announced at the 2023 Budget Vote of the Department of International Relations and Cooperation (DIRCO), South Africa has representation through 116 diplomatic missions in 102 countries.

b) In terms of the above DIRCO missions, the dtic has 31 missions allocated for the transfer of officials to serve as Foreign Economic Representatives (FERs), fulfilling the roles associated with trade attachés or commissioners

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Reply:

Based on SARS provisional data, the top 10 countries from which SA imported goods in the period 1 January to 31 March 2023 are:

1. China

2. Germany

3. USA

4. India

5. UAE

6. Thailand

7. Nigeria

8. Saudi Arabia

9. Japan

10. Oman.

Based on SARS provisional data, the top 10 countries to whose markets SA exported goods in the period 1 January to 31 March 2023 are:

1. China

2. USA

3. Germany

4. Japan

5. India

6. UK

7. Netherlands

8. Belgium

9. Botswana

10. UAE

South Africa’s import suppliers (Rand values)

		Total (January to March 2023)
	World	R485 259 081 939
1	China	R99 146 820 610
2	Germany	R39 723 451 934
3	United States	R36 334 678 519
4	India	R32 626 305 702
5	UAE	R19 055 926 925
6	Thailand	R15 515 425 690
7	Nigeria	R13 003 529 551
8	Saudi Arabia	R12 835 399 393
9	Japan	R11 345 815 628
10	Oman	R10 959 640 838

Data source: SARS, adjusted for transit trade

(2)(a) and (b):

South Africa’s export destinations (Rand values)

		Total (January to March 2023)
	World	R455 061 074 141
1	China	R54 887 839 800
2	United States	R36 896 513 669
3	Germany	R31 268 892 040
4	Japan	R28 613 650 186
5	India	R22 963 598 797
6	United Kingdom	R21 062 612 635
7	Netherlands	R20 751 577 401
8	Belgium	R15 869 295 095
9	Botswana	R15 319 831 767
10	UAE	R12 369 444 500

Data source: SARS, adjusted for transit trade and errors in export data.

The Department also considers revisions in SARS data, as well as data from trading partners to build a more accurate picture. The latter data is not fully available for all countries yet.

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Reply:

The findings of the Competition Commission report are taken up in a number of ways. They include the following:

1. Market Inquiries/investigations in terms of the Competition Act.

2. Considerations applied during the assessment of merger applications.

3. Support for SMMEs through financing packages.

4. Measures to strengthen the competitiveness of smaller firms.

5. Promotion of supplier development funds and partnerships.

6. Measures in masterplans.

the dtic and its entities, the Industrial Development Corporation (IDC) and National Empowerment Fund (NEF) offer a range of funding instruments for the support of SMMES as grants and loans.

the dtic provides support to emerging exporters, to show-case their products at international exhibitions, funding to develop emerging black film makers through the Film and TV incentive as well as emerging black aquaculture farmers.

Other cost-sharing grant funding is available to SMMEs operating in the research and development field . The funding for these incentives is structured to encourage collaboration between industry and academia that will result in the development of pioneering prototypes ready for commercialisation.

A recent report to the Portfolio Committee highlighted the work of the dtic-group on township economies.

Additional resources are mobilised through supplier funds, such as:

1. Shoprite establishing a R350 million development fund to develop independent retails, spaza shops, micro caterers and micro farmers.
2. Heineken to establish a R400 million Supplier Development Fund, and procure R4.7 billion from Historically Disadvantaged Persons.
3. Pepsico has made R300 million available as a development fund to develop the capacity of emerging farmers, R100 million contribution for enterprise development and R200 million for educational programmes in partnership with universities.
4. Coca-Cola has contributed R240 million to a localization fund and will increase volumes of sugar procured from black sugarcane farmers.
5. Implats will contribute R50 million for regional enterprise development that will benefit women and youth owned businesses.
6. Mediclinic will for a period of five years will ensure procurement of R2.5 billion from small and black owned enterprises.

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Reply:

The impact of the Protocol on Intellectual Property Rights and the agreement at the World Trade Organisation on waivers and flexibilities relating to pandemic use of patented vaccines are being considered. Should no changes be necessary, the Bill will be finalised for public consultation. Should changes be necessary, these will be effected prior to the release of the Bill.

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Reply:

Trade with the United States is regulated by two types of legal instruments: the first is the multilateral framework of the World Trade Organisation, under which the largest part of SA exports to the US is classified; and unilateral preferential market access arrangements, such as the African Growth and Opportunity Act (AGOA) and the Generalised System of Preferences (GSP).

AGOA is a preference granted by the United States to sub-Saharan countries qualifying in terms of criteria established by the US Congress. AGOA is currently set to expire in 2025. Decisions around renewal are taken by the United States and it is then up to exporters from eligible countries to utilise the preferential access to the US market.

South Africa together with other African countries have put forward the proposal for the extension of AGOA beyond 2025.

While the value of trade under AGOA has decreased, it continues to provide benefits to South African exporters, which assists with job creation and has positive spill-over effects in the region. Given the size of South Africa’s employment challenge, every trade benefit that is available should be utilised.

In light hereof, South Africa continues to engage the United States on the future of AGOA and the value of extending AGOA beyond the current expiry date.

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Reply:

a) The Programme for Infrastructure Development in Africa (PIDA) is a programme of the African Union (AU) launched in 2012. It is coordinated through the AU Development Agency (AUDA-NEPAD) in cooperation with regional economic communities, regional and continental technical agencies, and participating countries. The Presidency acts as the focal point in South Africa for PIDA.

According to the Virtual PIDA Information Centre, the following South African firms and entities have been involved in the development and implementation of the PIDA Priority Action Plan (PIDA PAP1 2012-2020):

No	Project Name	SA Firms/Entities	Status
01	Durban Port Expansion	Transnet	Ongoing
02	Maputo Port Expansion (Maputo and Matola Drybulk Terminal)	Grindrod and Zutari	Ongoing
03	Dar es Salaam-Isaka-Mwanza Standard Gauge Railway Project	DBSA	Ongoing
04	Beitbridge One Stop Border Post	Rand Merchant Bank, Standard Bank, Nedbank, ECIC and Raubex Group Ltd	Ongoing

* Source: PIDA Dashboard, company websites and media

b) With regards to the internet and Information and communication technologies (ICT), the PIDA Dashboard indicates a total of 114 projects that have been prioritised under PIDA PAP1. A further 11 anchor projects have also been approved for the PIDA PAP2 2021-2030, which is the second PIDA priority action plan for the period 2021-2030.

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Reply:

Through its procurement, the dtic group has a concerted effort to ensure that it procures from SMME, women, youth and people with disability, inclusive of township and rural enterprises.

The following information has been submitted by the dtic-group:

(a)&(b) DTIC and its Entities	(aa)&(bb) Financial Period	b(i)
Department of Trade Industry and Competition (the dtic) including B-BBEE Commission	2021-22	56%
	Since 1 April 2023	93,36%
Companies and Intellectual Property Commission (CIPC)	2021-22	There was no direct allocation to SMMEs. However, CIPC procures through RFQs and tenders from suppliers registered on the CSD. This includes SMMEs.
	Since 1 April 2023	There was no direct allocation to SMMEs. However, CIPC procures through RFQs and tenders from suppliers registered on the CSD. This includes SMMEs.
Companies Tribunal (CT)	2021-22	60%
	Since 1 April 2023	65%
Competition Commission	2021-22	85%
	Since 1 April 2023	98%
Competition Tribunal	2021-22	57.59%
	Since 1 April 2023	68.52%
Export Credit Insurance Corporation (ECIC)	2021-22	45.63%
	Since 1 April 2023	58.82%
Industrial Development Corporation of South Africa Limited (IDC)	2021-22	50.65%
	Since 1 April 2023	78.74%
International Trade Administration Commission (ITAC)	2021-22	46% (R928 047.80)
	Since 1 April 2023	71% (R213 420.34)
	Since 1 April 2023	0%
National Consumer Tribunal (NCT)	2021-22	55%
	Since 1 April 2023	R1.2 million
National Credit Regulator (NCR)	2021-22	58%
	Since 1 April 2023	54%
National Empowerment Fund (NEF)	2021-22	The National Empowerment Fund has procured goods and services to the total amount of R35.8 million for the period under review with a combined percentage of 75% being spent as follows: Exempted Micro Enterprises - R16,9 million (47%) Qualifying Small Enterprises – R9,9 million (28%)
	Since 1 April 2023	From 1 April 2023 to date a combined percentage of 89% of the total amount of R2,5 million being spent as follows: Exempted Micro Enterprises - R1,7 million (67%) Qualifying Small Enterprises – R560k (22%)
National Gambling Board (NGB)	2021-22	2.72%
	Since 1 April 2023	1%
National Lotteries Commission (NLC)	2021-22	32.80% was procured from Qualifying Small Enterprises (QSE). 29.46% was procured from Exempted Micro Enterprises (EME).
	Since 1 April 2023	Approximately 40% was procured from Qualifying Small Enterprises (QSE).
	Since 1 April 2023
National Regulator For Compulsory Specifications (NRCS)	2021-22	(i)(aa) 16% (R5 240 909,60)
	Since 1 April 2023	(i)(bb) 84% (R4 873 670,00)
South African Bureau of Standards (SABS)	2021-22	43.2%
	Since 1 April 2023	Procurement spend for this category is unknown as the data is only manually calculated against B-BBEE certificates on quarterly basis.
South African National Accreditation System (SANAS)	2021-22	100% SMMEs - 73% EMEs - 27%
	Since 1 April 2023	100% SMMEs - 35% EMEs - 65%

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Reply:

The National Lotteries Commission has furnished me with the following response to the question

The NLC paid the following amounts for copies of its annual reports:

2020: R1, 987, 926

2021: R2, 695,956

2022: R2, 600, 897

The supplier in all three years was INCE (PTY) LTD.

The number of copies printed were as follows:

2020: 205 copies printed;

2021: 200 copies printed;

2022: 70 copies printed.

I am advised that an official with relevant information on the distribution of the copies of the Annual Report is currently on suspension and therefore not all the requested information is available. I have further requested the NLC to provide an updated report on the distribution of annual reports as soon as the information is available.

The SIU has made substantial progress with probing allocation of grant monies under the pro-active scheme. I have requested that the NLC also investigates all its procurement contracts and have proposed that the terms of the SIU be widened to cover procurement and payments to consultancies. Given the amounts of money involved in the printing of the annual report, this expenditure should also be covered by the internal and external investigation.

 

-END-

Reply:

1. The draft legislation had been prepared by the department for consideration. There were two processes that needed to be taken account of however, prior to Cabinet consideration of its contents. The first relates to the World ~Trade Organisation (WTO) discussions on flexibilities to international rules on intellectual property. The second was the discussions held under the auspices of the African Continental Free Trade Area (AfCFTA) on an African Protocol on Intellectual Property Rights.

Significant progress has been achieved on both, with conclusion on a WTO agreement covering vaccines, reached in June 2022; and finalisation of the AfCFTA Protocol in February 2023. The content of draft legislation can thus be evaluated against these changes in the global regulatory landscape by Cabinet during its consideration of the Bill, which is expected shortly. The legislation will be released for public comment within one week of approval by Cabinet.

2. Officials of the Department have not experienced external pressures from any trade entities from any country and no entity would be privy to the content of the draft legislation until same is released publicly.

3. It is intended that the draft Bill would be submitted to Cabinet shortly after completion of the process referred to in 1 above.

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Reply:

South Africa is the second largest exporter of citrus fruits globally. Our exports of citrus fruits represent 11.2% of world exports for this product.

The measures introduced by the European Union, both in respect of citrus black spot and false coddling moth are inappropriate, unjustified and not consistent with the EU’s international obligations.

South Africa requested consultations with the EU on 22 July 2022 in World Trade Organisation (WTO). The consultations were held on 15-16 September 2022.

The objective of consultations is to achieve a mutually agreed solution. Both South Africa and the EU saw value in exploring options for settlement of the dispute (before proceeding to the formal dispute through panel proceedings).

South Africa is exploring all its options, including proceeding to the Panel and is also assessing options for a mutually acceptable outcome. In this regard, Minister Didiza and I have held meetings with EU policy-makers outside the WTO framework, including over the past three months.

This process of engaging the EU is still on-going with Government using every opportunity to seek a solution that can support the industry during the current season. We are considering requesting a WTO Panel though it should be noted that the panel process can be lengthy and on average takes approximately 18 months. In addition, there is no functioning appellate body in place at the WTO.

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Reply:

the dtic has been mandated by the Presidency to support supply of energy through the Energy One-Stop-Shop (EOSS), that will be housed at the dtic Campus. It is envisaged that the EOSS Phase 1 will be operational by end May 2023 and will thereafter expand its capacity.

The EOSS core team is currently creating a single window process for Energy Project Developers to access assistance in fast-tracking their applications to the appropriate Departments.

Internal resources have been prioritised and technical expertise are being recruited to engage with Energy Project Developers and applicants.

InvestSA is available to engage with developers, applicants and the Energy Technical Working Group.

Progress has been made already with addressing challenges faced by users, as reported to the Portfolio Committee on Trade, Industry and Competition on 14 March 2023, involving a large industrial energy user in KwaDukuza in KZN.

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Reply:

The information in Table 1 sets out salaries for development finance institutions, where significant sums of monies are managed by the entity concerned; and skills akin to those found in commercial financial institutions are generally required.

Entity	Function	Salaries	Meeting allowances
Industrial Development Corporation of South Africa Limited (IDC)	The IDC is a development finance institution with total Assets worth R174bn and net profit of R7, 2bn. The IDC offers funding across mandated sectors under the following Strategic Business Units: Mining & Metals, Infrastructure, Energy, Agro-processing & Agriculture, Tourism & Services, Automotive & Transport Equipment, Chemicals, Medical Products & Industrial Minerals, Machinery, Equipment & Electronics, Textiles & Wood Products, and Small Business Development. The Corporations business support programme also offers non-financial support to entrepreneurs. The support is available during pre and post approval stages, including assistance to distressed clients. In 2022, the IDC committed to transformation of R6.6bn and facilitated 27,130 jobs (created and or saved).	Chief Executive Officer: R5 939 012 Chief Financial Officer: R4 542 300 Chief Operating Officer: R4 326 000 Divisional Executive Manufacturing: R4 020 400 Divisional Executive Group Risk: R3 972 578 Divisional Executive Industry Planning and Project Development: R3 937 500 Divisional Executive Client Support and Growth: R3 650 100 Divisional Executive Agro Industries and Service Sectors: R3 650 000 Divisional Executive Strategy and Corporate Affairs: R3 639 520 Divisional Executive Human Capital: R3 226 900 Divisional Executive Legal and Compliance: R3 060 400 Group Company Secretary: R3 000 000	None
National Empowerment Fund (NEF)	The NEF provides non-financial support to investees, emerging entrepreneurs and communities through the following business-planning support, entrepreneurial training, incubation, mentorship and back-office support, workouts and restructuring of distressed businesses, socio-economic development and social facilitation. The NEF has total assets worth R7,3bn under its management. The organisation facilitated and supported 11 429 job opportunities, of which 2 999 were new against a set target of 3 456.	Chief Executive Officer: R4 785 219 General Counsel: R2 927 700 Divisional Executive – VC & CF: R2 215 400 Divisional Executive – SME & RD: R2 530 000	None
Export Credit Insurance Corporation (ECIC)	The ECIC provides political and commercial risk insurance to South African exporters of capital goods and related services, with total Assets worth R10 bn. Over the last 10 financial years, the ECIC has grown considerably supporting almost 54 export-led and investment-related projects across the African continent and other emerging economies. This accumulated to approximately R39bn worth of loans supported by ECIC in the following sectors: power, mining, rail, construction and telecommunications.	Chief Executive Officer: R3 106 938 Chief Actuarial and Investment: R2 839 780 Chief Financial Officer: R2 603 907 Chief Risk Officer: R 2 472 813 General Counsel: R 2 472 813	None

Information in Table 2 sets out salaries for regulators and executives of standards bodies.

Remuneration of the following entities was determined by the Department after benchmarking with Director-General salaries. In certain instances where specialist and scarce skills are required (Competition Authorities, Tribunals and Standards and Quality Institutions), adjustments to take account of market salaries were applied.

 

Entity	Salaries	Meeting allowances
B-BBEE Commission	Commissioner: R2 262 252 Chief Operating Officer: R1 308 051 – R1 563 948 Executive Manager Investigations & Enforcement:R1 308 051 – R1 563 948 Executive Manager Compliance: R1 308 051 – R1 563 948	None
Companies and Intellectual Property Commission (CIPC)	Commissioner: R2 407 000 Executive Innovation and Creativity: R2 271 000 Executive Corporate Services: R2 037 000 Chief Strategy Executive: R1 996 000 Executive Business Intelligence: R1 872 000 Risk, Governance and Compliance: R1 778 000 Chief Financial Officer: R1 696 000 Chief Audit Executive: R1 543 000	None
Companies Tribunal (CT)	Chief Operating Officer: R1 981 418 Chief Financial Officer: R1 598 201	None
Competition Commission	Commissioner: R2 464 207 Deputy Commissioner: R2 457 647 Manager Market Conduct: R1 944 000 Manager Advocacy: R2 160 000 Manager Mergers and Acquisitions: R1 925 083 Chief Financial Officer: R1 918 841 Manager Cartels: R2 220 174 Manager Corporate Services: R2 160 000 Chief Legal Counsel: R2 172 506 Chief Economist: R2 160 000 Manager Office of the Commissioner: R2 160 000	None
Competition Tribunal	Chairperson of the Tribunal: R3 088 261 Full-Time Tribunal member: R2 677 261 Chief Operating Officer: R2 354 000 Chief Financial Officer: R2 218 503	None
International Trade Administration Commission (ITAC)	Chief Commissioner: R1 713 696* under review Deputy Chief Commissioner: R1 409 157 General Manager Corporate Services: R1 563 948 Chief Financial Officer: R1 302 102 Senior Manager Internal Audit: R1 302 102	None
National Consumer Commission (NCC)	Commissioner: R2 037 890 Deputy Commissioner: R1 757 502 Head Corporate Services/ CFO: R1 430 619 Company Secretary: R1 289 010 Head Legal Services: R1 289 010 Head Enforcement and Investigation: R1 388 640 Head Education, Compliance and Advocacy: R1 388 640	None
National Consumer Tribunal (NCT)	Executive Chairperson: R2 375 364 Chief Operating Officer: R1 911 578 Chief Financial Officer: R1 694 913 Registrar: R1 625 762 Corporate Service Executive: R1 483 434	None
National Credit Regulator (NCR)	Chief Executive Officer: R3 270 344 Chief Financial Officer: R1 453 712 Company Secretary: R1 683 362	None
National Gambling Board (NGB)	Chief Strategic Officer: R2 315 335 Chief Financial Officer: R1 774 779 Chief Compliance Officer: R1 761 553	None
National Lotteries Commission (NLC)	Commissioner: R2 537 000 Executive Manager Regulatory Compliance: R2 531 000 Chief Information Officer: R3 150 000 Company Secretary: R2 478 000	None
National Metrology Institute of South Africa (NMISA)	Chief Executive Officer: R3 132 172 Chief Financial Officer: R2 277 806 Director Applied Metrology: R1 918 850 Director International Liaison: R1 918 850 Director Physical & Electrical Metrology: R1 918 850 Director Chemical Materials and Medical Metrology: R1 879 000 Director Strategic, Business Development and Governance: R1 838 324 Director Corporate Services: R1 761 178	None
National Regulator For Compulsory Specifications (NRCS)	Chief Executive Officer: R2 226 875 General Manager Foods: R1 781 289 General Manager Electro-technical: R1 834 130 General Manager CMM: R1 834 130 Chief Information Officer: R1 807 714 General Manager Automotive: R1 675 636	None
South African Bureau of Standards (SABS)	Chief Financial Officer: R2 519 000 Executive Manager Standards: R2 420 000 Executive Manager Human Capital: R2 313 000 Acting Executive Manager Certification: R1 983 000 Acting Executive Manager Customer Partnering: R1 846 000 Acting Executive Manager LSD: R1 494 000	None
South African National Accreditation System (SANAS)	Acting Chief Executive Officer: R2 068 458 Executive Accreditation: R2 211 289 Executive Corporate Services: R2 211 289 Chief Financial Officer: R1 872 975 Executive Strategy and Development: R1 703 818	None

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Reply:

1. The Ministry undertakes international travel to carry out the core mandate on Trade, Industry and Competition. Travel is either at the request of the President, particularly for State Visits, or through our membership of global structures where South Africa’s interests have to be defended or advanced (for example in the World Trade Organisation), or meetings with investors.

In the period under question, the travel undertaken focused on the following four categories:

1. Promoting African trade, investment and industrialisation.
2. Meeting with major trading partners, including State Visits
3. Meetings where South Africa is a member of the International Organisations.
4. Travel to set out the case for investment in South Africa.

Total spending on the above will be finalised shortly and provided as an updated reply.

(2) Minister Patel’s domestic travel since 1 June 2019 amounts to R 748 328. This covers trips between the seat of Parliament (Cape Town) and the seat of the Executive (Pretoria), as well as meetings in different provinces, such as E Cape and KZN. All travel is currently in economy class, except where seats are not available.

Deputy Minister Majola’s domestic travel since 1 June 2019 amounts to R 518 460. All travel is currently in economy class, except where seats are not available.

Deputy Minister Gina’s total cost incurred for domestic travel since 1 June 2019 amounts to R1 154 770. All travel is currently in economy class, except where seats are not available.

3. The expenditure for the 2019/20 financial year was disclosed in the audited Annual Financial Statements of the former department of Trade and Industry and the expenditure for the 2020/21 and 2021/22 financial years were disclosed in the audited Annual Financial Statements Department of Trade, Industry and Competition (the dtic). The current financial year’s audited Annual Financial Statements will be available in September 2023.

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Reply:

During the dtic Budget Vote in May 2022, I advised that the dtic completed comprehensive work on a draft Patents Bill (PB) to be submitted to Parliament after consideration by Cabinet. The aim of the draft Bill is to update and reform SA’s patent legislation by synchronizing the legislation with international developments.

The draft Bill was indeed subsequently completed.

Following the Budget Vote debate however, further consultations were required to take account of two additional developments:

First, the final agreement reached at the World Trade Organisation (WTO) on waivers and flexibilities relating to pandemic use of patented vaccines, contained a provision to conclude discussion on therapeutics and diagnostics with an extended timeframe. This follows a request from developed countries for such facility; and

Second, discussions that took place during the latter half of 2022 at the African Union, through the Council of Ministers responsible for the AfCFTA, on a Protocol on Intellectual Property Rights, which was formally reported to at the African Union Assembly during February 2023.

Both these international agreements may impact on the contents of the Bill.

As soon as the implications of these two developments have been considered, the final version will be submitted to Cabinet.

-END-

Reply:

The total number of staff employed and/or provided as departmental support in the private offices is provided below. The employment is in accordance with the Ministerial handbook and excludes advisors.

Office of the Minister

No.	(b)(i) Job Title	Salary level
	Chief of Staff	14
	Private Secretary	13
	Parliamentary and Cabinet Support Officer	13
	Administrative Secretary	13
	Assistant Appointment Secretary	9
	Secretary/Receptionist	7
	Registry Clerk	7
	Service Aide in Parliamentary office in Cape Town	5
	Driver/Messenger	5

Office of Deputy Minister Gina

No.	(b)(i) Job Title	Salary level
	Head of Office	13
	Private Secretary	12
	Technical Specialist	13
	Parliamentary and Cabinet Support	11
	Community Outreach Officer	11
	Receptionist	7
	Household Aide	3
	Driver/Messenger	5

Office Deputy Minister Majola

No.	(b)(i) Job Title	Salary level
	Head of Office	13
	Private Secretary	12
	Parliamentary and Cabinet Support	11
	Community Outreach Officer	11
	Receptionist	7
	Senior Registry Clerk	6
	Household Aide	3
	Household Aide	3
	Driver/Messenger	6

In addition to the above staff complement, there are two interns placed in the Ministry who are paid a stipend.

-END-

Reply:

During the Uruguay Round of multilateral trade talks that commenced in 1986, the National Party government of the time bound South Africa to substantial trade liberalization commitments that were incorporated in the terms of South Africa’s accession to the World Trade Organisation in 1994. Details of the background hereto was provided in a presentation made by the Ministry to the Portfolio Committee on Trade and Industry on 15 November 2022. The rapid liberalization without supportive industrial policies to address the lack of competitiveness of major parts of the pre-1994 industrial base, led to a sharp decline in the proportion of GDP made up by manufacturing output, in other words, a de-industrialisation of the economy.

In 2019 at the start of the current Administration, the President outlined the basic elements of a ‘re-imagined industrial strategy’ that placed deeper local industrialisation at the core of public policy. Though interrupted by the global economic disruptions caused by the Covid-19 pandemic, key elements of this reindustrialization strategy are being implemented. These include the following:

1. the focus on sector-level industrial plans agreed with business and labour, through a number of Master Plans agreed for a number of sectors, complemented by efforts during Covid-19 to build the medical industrial sector
2. the Economic Reconstruction and Recovery plan and the Accord on Localisation agreed with social partners at Nedlac, covering 42 product categories and a number of value-chains
3. protection of local industry through appropriate tariff increases on industrial and agricultural products; or where warranted, decreases in duties applicable through rebates of duty;
4. industrial support measures to address structural inefficiencies and assist with structural transformation of sectors
5. the focus on trade with the rest of the African continent, including through trade agreements such as the African Continental Free Trade Agreement (the AfCFTA); and
6. the identification of and support to beneficiation and green industrial projects.

The Portfolio Committee on Trade and Industry has been provided with periodic reports on progress made in these areas, including most recently with the detailed half-year report on the 2022/23 Annual Performance Plan, provided to the Committee on 1 November 2022. The Honourable Member is invited to consider the details provided therein.

Reports on mineral beneficiation have been provided in the quarterly updates by the Department to the Portfolio Committee. Our natural endowment of primary minerals and its beneficiation is an opportunity to promote further industrialisation. At the start of this year the dtic along with the IDC and the DMRE institutionalised the Inter-Agency Working Group on Minerals Beneficiation to align priorities and improve the impact. The Working Group focus currently is on Minerals that go into our renewable energy distribution and generation transition, including battery energy storage, and jewellery minerals.

With regards to Platinum Group Metals (PGMs), a PGMs roadmap is being worked on with Mintek with the departments responsible for mineral resources and energy (DMRE) and science and innovation (DSI) that includes projects focused on the hydrogen economy, batteries, new medical equipment and products, and catalysts.

The chrome beneficiation value-chain already focuses on stainless steel products manufacturing and smelting within the Republic. Impediments to our mineral endowment beneficiation strategies include inadequate freight rail infrastructure and the availability and price of energy.

South Africa is learning from experiences of industrialisation by a number of countries, including fast-growing Asian economies such as China, though conditions in each country are different. For example, China is able to leverage off its massive domestic market of 1,5 million consumers and its early phase of industrialisation was based inter alia on lower input costs that what applies in South Africa. To address scale, South Africa is working with neighbouring countries to finalise a free-trade agreement covering countries on the African continent to create a larger market for local producers. To address input costs, the focus will be on improved industrial dynamism and multi-factor productivity.

Our industrialisation efforts are focused on strategic industries, defined by their capacity to be labour absorbing or providers of critical public goods or significant earners of foreign exchange. Many of the world’s largest economies including the United States, China, India and countries in the European Union continue to actively protect and promote their domestic firms through a range of policy measures in order to retain and change the structure of their respective economies.

Government’s industrialisation initiatives such as encouraging localisation of production; social compacts in the form of Master Plans; strong industrial supply chains to underpin our response to COVID-19 and create an African medical productive hub; or our work on the Africa Continental Free Trade Area (AfCFTA), have all sought to provide local industry with the space and opportunity to acquire the know-how and capabilities to develop dynamic firms, grow the economy, create jobs for the citizens of the South Africa.

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Reply:

Domestic economic growth is the aggregation of multiple, complex streams of for example: production, consumption, expenditure, imports and exports. These are in turn affected by a wide range of domestic and global factors. It is not advisable to reduce these complex interactions to a simple direct and/or proportional relationship. Subject to this caution, the following information has been provided to me by the dtic.

In the Financial year 2021-22, Foreign direct investment (FDI), measured as investment liability inflows by the South African Reserve Bank (SARB), increased from R17.3 billion at the beginning of the 2021/22 financial year to R39.9bn at the end of the financial year, growing by 130.8% during the 2021/22 financial year. In the same period, GDP grew by 1.3%, from R4.5 trillion (tr) to R4.6trn during the same period. Some studies indicate that in South Africa, FDI and economic growth are positively related (Masipa, 2014[1]; Awolusi and Adeyeye, 2016[2]; Makhoba and Zungu, 2021[3]).

In Quarter 1 2022/23 (April to June 2022), FDI declined (-34.2%) quarter-on-quarter while economic growth contracted (-0.7%) quarter-on-quarter.

Regarding Job creation, in the Financial year 2021/22: Foreign direct investment (FDI), measured as investment liability inflows, by the South African Reserve Bank (SARB), increased from R17.3 billion at the beginning of the 2021/22 financial year to R39.9bn at the end of the financial year, growing by 130.8% during the 2021/22 financial year. During the same period, Statistics South Africa (StatsSA) reported that employment contracted by 0.2%, with employment declining from 14.94 million to 14.91 million. Some empirical studies have found a positive relationship between FDI and job creation in South Africa (see Masipa, 2014).

Quarter 1 of this Financial Year 2022/23, Employment increased by 4% quarter-on-quarter while FDI declined (-34.2%) quarter-on-quarter.

Lags in an increase (or decrease) in investment and a subsequent increase (or decrease) in employment may also not follow in the same year, but may lag the change.

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1. Masipa, T. 2014. The Impact of Foreign Direct Investment on Economic Growth and Employment in South Africa: A Time Series Analysis. Mediterranean Journal of Social Sciences, 5(25), 18-27. ↑

2. Awolusi, OD. and Adeyeye, OP. (2016). Impact of foreign direct investment on economic growth in Africa. Problems and Perspectives in Management, 14(2-2), 289-297. doi:10.21511/ppm.14(2-2).2016.04. ↑

3. Makhoba, BP. and Zungu, LT. 2021. Foreign Direct Investment and Economic Growth in South Africa: Is there a Mutually Beneficial Relationship? African Journal of Business and Economic Research, 16(4). ↑