Reply:

The funding made available to the Solidarity Fund, like that of all donors, are not ring-fenced to individual projects. The reports of the Solidarity Fund, setting out its work is obtainable from its website at https://solidarityfund.co.za/

In respect of the National Lotteries Commission (NLC), the following information has been provided:

• the NLC approved micro pro-active funding of R 10 Million for basic and essential hygiene goods, food parcels and cooked meals to assist the most vulnerable groups. To ensure that the approved funds reach affected citizen, the funds were allocated to fifty-four (54) organisations across the country. The above intervention assisted in providing immediate relief programme to affected communities.
• The NLC concluded that many Non-Profit Entities (NPEs) were at a brink of collapse because of the nation-wide lockdown. The NLC approved further funding of R 150 Million to assist NPEs to stay afloat. The fund targeted mainly the operational cost of the organisations. In order to ensure that the approved funds yield the envisaged return, the funding was divided into two categories:

(1) R 100 Million will fund operational cost for the qualifying NPOs and

(2) R 50 Million will be for macro projects that will assist in cross-functional relief programme nationally.

(b) The list of organisations that received R10 million for food and hygiene hampers is attached as Annexure A.

(c) The list of organisations that received R150 million for relief fund to assist struggling non-profit organisations to keep afloat and cross functional relief programmes is attached as Annexure B.

In terms of the Covid Fund Relief, R145 799 864 was allocated from the R150 million. There was a saving of R4 200 136 from the amount that was approved. Details of the beneficiaries and different categories have been attached in Annexure B.

-END-

Reply:

I am advised by the Department as follows:

(1) There are 3 (three) officials who are undergoing disciplinary action and 1 (one) official who was suspended.

No	(a)(i) Disciplinary action	(a)(ii) Suspension	(b) Job Title	(c) Reason for disciplinary action and/or suspension	(d) Reasons for non-finalisation
1	Yes	No	Deputy Director	Failure to fully disclose financial interest	The audi alteram partem letter was issued and the official’s representation is pending.
2	Yes	No	Chief Director	Alleged fraud	The notice still to be served. The identified witnesses were not cooperating to prepare for the hearing. The Department of Agriculture is being requested to release the witnesses.
3	Yes	No	Director	Incompatibility/ Insubordination	The matter was postponed by the Chairperson and could not be set down expeditiously until the Promotion of Access to Information Act application was finalised. The appointed external Chairperson could not continue with the matter and a new Chairperson had to be appointed. The matter is scheduled for 25 and 26 May 2022.
4	No	Yes	Cashier: Financial Accounting	Alleged fraud	The matter is under investigation. However, the official resigned on 4 March 2022, with his last working day on 31 March 2022. The new employer was informed and the outcome is pending the findings.

2. The official was suspended for four (4) working days with effect from 25 March 2022, he resigned on 4 March 2022 and his last day with the Department was 31 March 2022.

2. Yes, the official was suspended with full pay and received R3,712.51 as part of his monthly remuneration during the period of his suspension.

-END-

Reply:

The dtic has a number of industrialisation projects and initiatives in progress to address the need to expand industrial output, save jobs and increase the level of employment in South Africa. These are set out in more detail in the Annual Reports and parliamentary Portfolio Committee reports of among others:

• the Department (www.thedtic.gov.za)
• the Industrial Development Corporation (www.idc.co.za)
• the National Empowerment Fund (www.nefcorp.co.za)
• the Export Credit Insurance Corporation (www.ecic.co.za)
• the Competition Commission (www.compcom.co.za)
• the International Trade Administration Commission (www.itac.org.za)

These projects and initiatives include:

1. Direct financial support through grants to firms in sectors where employment is a key concern
2. Industrial loans to firms, through development finance institutions
3. Equity in private companies
4. Support to provincial Special Economic Zones and Industrial Parks
5. Competition settlement agreements that protect jobs or require firms to increase the number of jobs as a result of mergers
6. Industry partnerships through master plans that are directed at saving and growing jobs
7. Export promotion and facilitation projects, including outward missions and exhibitions of SA-made products, as well as provision of export credit insurance
8. Trade agreements at bilateral and multilateral levels, including negotiation of the African Continental Free Trade Agreement
9. Promotion of investment in job-creating activities, including through initiatives to address red tape and make it easier to start new businesses
10. Initiatives to assist businesses with licenses, and to address challenges at local levels
11. Protection of jobs through use of import tariffs and safeguard and anti-dumping duties; as well as import rebates that lowers the cost of key inputs
12. Public procurement measures
13. Localisation measures through working closely with firms, trade unions and sectors
14. Competitiveness enhancing measures, including on technology
15. Projects that promote beneficiation of raw materials locally
16. Initiatives to support food and health-care security in SA, in particular covid-19 therapeutics, PPEs and vaccines
17. Support to companies displaced or damaged by the July 2021 unrest in KZN and elsewhere
18. Support for black industrialists and SMMEs.

In the 2020/21 financial year, the dtic, Industrial Development Corporation (IDC) and the National Empowerment Fund (NEF) reported that R16.2 billion in financial support was provided to domestic firms to improve their overall competitiveness. It resulted in the creation of new jobs and the retention of large numbers of existing jobs. Firms that benefited from the dtic, IDC and NEF support are located in all nine Provinces.

-END-

Reply:

a) The quantity of all types of fertilisers imported under HS code Chapter 31 (H31: Fertilisers) over the last 5 years is given in the table below:

Fertiliser Imported	2017	2018	2019	2020	2021
Quantity (kg)	2 271 365 365	2 018 206 922	2 029 747 898	2 230 811 393	2 572 542 319
Value (R)	6 656 612 069	7 908 784 745	8 265 235 097	8 354 231 397	15 235 368 483

b) In 2021, the top five countries from which South Africa imported fertiliser from is given in the table below:

TOP 5 COUNTRIES SOUTH AFRICA IMPORTED FERTILISER FROM , BY VALUE, IN 2021
COUNTRY	VALUE (R)	QUANTITY (KG)
1. Saudi Arabia	3 078 674 393	346 948 554
2. Russia	2 249 902 035	306 099 894
3. Qatar	2 069 268 636	310 356 864
4. China	1 572 415 102	384 444 680
5. Germany	1 289 965 653	274 766 845

 

These listed countries have been the main sources of imports for South Africa (by value) over the last 5 years.

c) Chemical fertilisers are generally divided into three main nutrients: Nitrogen (N), Phosphate (P), and Potassium (K). Each fertiliser base has a separate primary function in spurring plant growth. In 2021, nitrogen based fertilisers were the most imported, followed by chemical fertilisers containing two or three of the fertilising elements nitrogen, phosphorus and potassium; followed by potassium based fertilisers and then phosphorous based fertilisers. The quantities and value of these are given in the table below:

TYPE OF FERTILISER IMPORTED IN 2021	QUANTITY (KG)	VALUE (R)
Mineral or chemical fertilisers, nitrogenous	8 949 665 815	1 636 219 538
Mineral or chemical fertilisers containing two or three of the fertilising elements nitrogen, phosphorus and potassium	3 601 768 964	392 324 029
Mineral or chemical fertilisers, potassic	2 483 240 713	515 006 507
Mineral or chemical fertilisers, phosphatic	130 932 227	22 934 366

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Reply:

(a) (i) (ii) (aa) (bb) (cc) (dd) (ee)

The department advises that it, through DIRCO concluded a Tenancy Agreement for the dtic’s Foreign Economic Representative’s residential accommodation. The Tenancy Agreement came to an end on the 30th May 2020. The Department advises that the value since 1 April 2017 to 30 May 2020 was R6.2 million.

The department through the Export Marketing and Investment Assistance (EMIA) scheme entered into annual agreements for the rental of space during the annual World Food Moscow exhibition to showcase South African products. The total value for 1 April 2017 to February 2020 was R9.6 million.

(b)(i) (ii) (aa) (bb) (cc) (dd) (ee)

The Department advises that entities reporting to the dtic do not have commercial contracts with the government of the Russian Federation, nor with any entity based in the Russian Federation.

-END-

Reply:

Within the available time, the Department advises that 132 projects (involving 112 firms) have been supported in the Nelson Mandela Bay Metropolitan Municipality through 3 programmes, namely the support administered by the Industrial Financing Branch, the funding by the Industrial Development Corporation and the transactions of the National Empowerment Fund. Other programmes are in the process of recording their activities at District Municipality level, and the figures may be updated in future.

Data on ownership demographics for firms in Nelson Mandela Bay metro are available as follows:

1. The IDC supported 64 firms since the 2018/19 financial year. Forty-one (41) firms have black shareholding, ranging from four percent to 100% black ownership. Nineteen (19) of the firms were 100% black-owned.
2. The NEF supported 12 businesses all of which are black-owned and managed. More broadly in the E Cape, the NEF approved R706 million to date.
3. The Industrial Financing Branch supported 61 projects, involving 36 companies, 1 Trust and 11 projects in Coega, for 2018/19 to January 2022. Demographic details will be compiled by the Department. The Department advises that R1,7 billion was approved for the 61 projects, with total investment generated of R3,5 billion, which are projected to create 1 150 new jobs and retain 13 850 direct jobs with a further 926 construction jobs.

The Department has highlighted a number of success stories involving masterplan sectors in the presentation to Parliament on 27 October 2020. These include sectors with exposure in the Eastern Cape, including the following:

• The auto sector, covering both production of cars, bakkies and trucks as well as the manufacture of components locally. This is important for Nelson Mandela Bay as the auto sector is the largest manufacturing sector in the E Cape. Further examples of progress relates to VW production, Isuzu’s new model that is being rolled out and the new auto plant, namely BAIC.
• Clothing, textiles and footwear, with a stronger focus on localisation of supply-chains.
• Steel and metal fabrication, with programmes to rebuild the foundations of the sector.

-END-

Reply:

a) There were no incidents of sexual harassment or sexual assault reported during the past three (3) financial years and since 1 April 2021.

b) and (c) There were no cases of sexual harassment opened/withdrawn and thus no sanctions had to be issued.

-END-

Reply:

864. (a) (b) (c) (i) (ii)(iii)

All expenditures in relation to catering, entertainment and travel and subsistence including accommodation are disclosed in the audited Annual Financial Statements. The expenditure for the 2019/20 financial year was disclosed in the audited Annual Financial Statements of the former departments of Trade and Industry and Economic Development Department and the expenditure for the 2020/21 financial year was 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 2022.

Catering:

The accounting records reflects expenditure on a cost centre level and according to the departmental records, the following amounts were spent for Ministry on catering which covers catering for meetings convened by Minister, Deputy Ministers and/ or the staff of Ministry. Catering covers refreshments, light meals or snacks.

Cost centre	2019/20	2020/21	Total
Ministry	R53 870	R22 292	R76 162

Entertainment:

The departments have spent the following amounts on entertainment for Ministry which largely cover expenditure for dinner meetings on international trips with international counterparts.

Cost centre	2019/20	2020/21	Total
Ministry	R10 556	R0	R10 556

Accommodation:

The departments have spent the following amounts on accommodation for Ministry which covers local and international accommodation booked for Minister, Deputy Ministers and/ or the staff of Ministry.

Cost centre	2019/20	2020/21	Total
Ministry

-END-

Reply:

(1)(a) The Competition Commission undertakes stakeholder education and training initiatives on various aspects of the Competition Act, to promote compliance to its provisions. For the past five years, training has been focused on Public Procurement, with the following workshops conducted from 01 April 2021 to 14 March 2022:

Dates	Stakeholder	Notes
September 2021	Auditor General	The Commission provided training on Competition issues in Public Procurement to 180 participants in the Free State and Gauteng Business Units.
February 2022	Auditor General	The Commission provided training on Competition issues in Public Procurement to over 300 participants in the Mpumalanga and KwaZulu-Natal Business Units.
March 2022	Auditor General	The Commission provided training on Competition issues in Public Procurement to over 100 participants in the Eastern Cape Business Unit.
March 2022	Gauteng Department of Roads and Transport	The Commission provided training to officials at the GDRT Competition issues in Public Procurement. The training session also sought to highlight issues related to a particular tender number PPR 2017 and SBD 9 Sub-contracting requirements.

In March 2022, the Commission published a training manual on procurement for officials, entitled: “A Guide on Promoting Competition in Public Procurement”; and a YouTube video entitled: “What Bidders Need To Know About Bid Rigging”.

(2)(a) and (b) The Commission did not conduct any benchmarking exercises, or have key performance indicators in place for this area of work. However, the Commission receives formal and informal feedback on its workshops from the institution/department where the training was provided and directly from workshop participants, all of which has been positive to date. The Commission also regularly receives complaints from government departments- in the main. These complaints are lodged by officials who are either aware of, or have received the Commission’s training on bid-rigging detection. Further, suspicious bid activity is an area which the AG highlights in their audit reports of entities. The relevant entities are expected to engage with the Commission on the matters, as they resolve audit findings.

-END-

Reply:

On 22 March 2022, I advised the Portfolio Committee of the work of the Department and its entities on the Economic Reconstruction and Recovery Plan. In the course of the presentation and the engagement, I drew attention to the need to scale up the impact of the state’s efforts to promote spatial development. The Project Management Unit (PMU) was set up at the Industrial Development Corporation (IDC) to enable better performance of Special Economic Zones and Industrial Parks; and to integrate work on SEZs with the overall work of industrial funding by the IDC. Staff from the dtic were seconded to the Unit, with the budgeted financial allocation for salaries still being the responsibility of the Department. Their responsibilities include assisting companies to establish new businesses and significant progress has been made in the Tshwane SEZ, which has helped to create close to 4000 construction jobs and 559 permanent jobs to date.

-END-

Reply:

(a) (b) (c) (d) (i) (ii)

(i) nThe Department did not purchase a vehicle for the Minister during the current Administration. The two vehicles used by Minister were purchased in 2011 and 2016 and are both Totoya Fortuners.

(ii) The Department purchased a BMW 5 Series (year model 2021) in October 2021 at a price of R799 910 for Deputy Minister Majola. The Department has ordered but not yet received a BMW 5 Series, at a purchase price of R743 624 for Deputy Minister Gina.

-END-

Reply:

The Commissioner of the National Lotteries Commission (NLC), Ms Thabang Mampane has furnished me with the following response to the question:

“(a) and (b) The named person is a duly appointed staff member of the NLC who has been on medical leave in line with NLC approved policies and employment laws since end of May 2021.

(c) From May 2021 to date, the employee has earned a salary of R1 472 564.”

-END-

Reply:

The Companies and Intellectual Property Commission (CIPC), is mandated to implement the Counterfeit Goods Act, No. 37 of 1997, which provides enforcement remedies to intellectual property rights holders. The CIPC Commissioner Advocate Rory Voller has advised as follows:

Effective protection of copyright and trademarks are supported through coordinated physical enforcement actions. These seizure operations are spearheaded by the Directorate for Priority Crime Investigations, commonly known as the HAWKS.

Most products are counterfeited, from toys to motor spare parts. Social Media Driven Awareness Campaigns on Respect for Intellectual Property (IP) are continuously conducted by the CIPC. In addition, the Agency collaborates with industry to ensure that public demand for fake goods decreases, with emphasis on engagements with students and SMMEs.

The CIPC conducts training and capacity building events to designated SAPS, and SARS officials and follows a holistic approach that includes private sector stakeholders and the judiciary. Training workshops on Investigating and Prosecuting IP Crime for Senior Law Enforcement officials are conducted. The International Police Agency (Interpol) attended the most recent workshop, emphasising the need to combat this practice across borders and online. CIPC recently hosted a hybrid Conference in Cape Town on Anti-Counterfeiting (22-24 February 2022), which focussed on IP rights and responsibilities. In attendance were African countries, brand protection managers and self-regulatory bodies representing the industries that suffer the most from counterfeiting.

CIPC has just launched a cell phone application to enhance accurate statistical reporting, which law enforcement officials will use to gather accurate statistics to support effective enforcement.

-END-

Reply:

Interactions with the Ministry of Police takes place through the normal government channels. The decision on which measures to implement on scrap metals is still under consideration. Once a final decision has been taken, details will be made available.

-END-

Reply:

On 07 February 2022, Foskor received a complaint from the uMhlathuze Local Municipality regarding a possible gas leak from its Acid Plant at a localised area of Richards Bay High School. A detailed investigation was immediately conducted by Foskor’s environmental and emergency management. I am advised of the following results:

a) The investigation revealed that there was no gas leak at Foskor facilities.

b) The cause of the incident is still being determined.

Foskor committed to work with the relevant institutions to assist in determining the cause of the incident.

 

-END-

Reply:

The department informs me that the grant approval for the movie Peru and Bala was cancelled due to the applicant’s failure apparently to comply with the Film and Television incentive guideline requirements and with the conditions set out on the approval letter. I will be reviewing the file and will thereafter provide the member with a further update.

-END-

Reply:

The reply furnished to me by the Commissioner of the National Lotteries Commission (NLC), Ms Thabang Mampane has not replied fully to (a) other than to state that it is the “Internal Audit Specialist” and I will be requesting further information. In respect of (b), the reply received states that an amount of R64 256 has been paid as the acting allowance from July 2021 to February 2022.

-END-

Reply:

For the current financial year, the Department of Trade, Industry and Competition has spent an amount of R419 504 303 on goods and services to date and there are no unpaid invoices outstanding for more than 30 days.

A supplementary reply on invoices on the entities reporting to the department will be submitted shortly as the information is being compiled.

-END-

Reply:

1. Trade decisions on imports are made in compliance with the rules of the World Trade Organisation (WTO). It requires granting non-discriminatory market access for imports from all WTO Members, subject to applicable tariffs and health, safety and environmental standards, such as sanitary and phyto-sanitary requirements. Any restrictions beyond these need to comply with specified rules. This provides the legal framework within which any administration is required to operate.

2. International trade data is not disaggregated to sub-national levels. Available data specifies the country of origin only.

3 Any illegal relabeling practices which misrepresent the national origin will be in contravention of South African customs, legislation requiring that imports enter the South African market only if accompanied with a declaration of the true country of origin and of export (Article 40.1(c) of Customs and Excise Act). Should the Honourable Member have evidence of any illegal labeling practices, it should be reported to the Office of the Head of Customs at the South African Revenue Services (SARS).

-END-

Reply:

One of the primary objectives of South Africa’s participation at EXPO2020 is to provide South African companies exposure and access to global markets. To date, more than 219 companies have been recruited and economic development agencies are being provided a unique platform to display trade and investment opportunities offered by South Africa. In addition to the exposure received through the more than 125 000 visitors that have visited the stand since opening, a number of export and investment leads directly linked to South Africa’s participation at EXPO2020 have been registered.

 

Examples include potential exports orders of fresh produce and food products by supermarkets and importers with headquarters in the UAE and Lebanon. Leads on potential investments in oil and gas, renewables, agro-processing, healthcare, construction and real estate were also registered.

Following the Tourism Promotion month, which concluded on 31 December; an MOU between SA Tourism and Emirates Airlines has been initiated aimed at promoting South Africa as a tourist destination; facilitate packages to South Africa; as well as a number of code-share agreements with various airlines operating in South Africa. In terms of Tourism investment leads, the Bin Otaiba Hotels (or The Otaiba Group) from the UAE which currently has invested more than R 4 billion in the South African tourism sector, has pledged to continue investment in South Africa and work towards reopening closed hotels due to Covid -19 and take up new opportunities for investment in South Africa. In addition, Millat Investment has also pledged to expand their footprint in SA in-terms of their hotel chains, undertaking to open a third branch of the Hyatt Hotels in 2022.

As the Expo is still currently being held until 31 March 2022, a detailed report indicating the impact and exposure will be completed thereafter.

According to the official EXPO2020 website, 192 countries are participating in the Dubai EXPO2020, with exhibitors required to build their own pavilions and ensure that their products are services are marketed. the dtic has budgeted R54 million to the following line items to enable the participation of South African public and private entities:

 Pavilion Construction

 Exhibition Space Rental

 Business-to-Business Virtual Platform

 Freight

 Travel and Accommodation for officials

I am advised that the South African pavilion work within the regulated hours of the EXPO, requiring all pavilions to be open 7 days a week from 10:00 to 22:00, and include the following additional information provided by the Department, as follows.

 

The South African pavilion has only been closed to the public on three occasions. On 17 October 2021, the pavilion closed at 17:00 to allow for South Africa’s official opening and launch at EXPO2020. The second instance was on 28 October 2021, where doors closed from 18:00 to 20:00 for the hosting of a fashion show, allowing local South African clothing designers to present their exciting offerings to buyers from the Middle East. The third instance was on 31 December 2021 where the doors were closed at 20:00 to allow for fogging of the pavilion as part of Covid 19 protocols. The stand had been staffed for the full period.

Four dtic officials have flown from South Africa to be at the event and to remain until the closure of EXPO2020.

The list of the dtic officials mandated to attend to the stand are:

1) Ms Fuziwe Kubheka – Deputy Director

2) Mr Henry Mabale – Assistant Director

3) Mr Thabang Mamaru – Assistant Director

4) Ms Portia Chokoe – Trade and Industry Advisor

the dtic officials are also supported by four (4) ushers locally recruited in Dubai by the service provider as part of the stand building contract. The relevant attendance registers for officials and ushers can be supplied by the Director General of the Department.

-END-

 

Reply:

Three entities within the dtic institutions have collectively assisted approximately 288 youth-owned and empowered enterprises with approved funding of R9,57 billion over the past five financial years. This includes the work of the Industrial Financing Branch (IFB) within the dtic and the department’s entities, the Industrial Development Corporation (IDC) and the National Empowerment Fund (NEF).

I am advised that the IFB approved 92 youth-owned enterprises for cost-sharing reimbursed grant funding amounting to R1 billion. The IDC and NEF provided support with the former approving R8.2 billion for 196 youth-owned and empowered enterprises and the latter R357.6 million for the benefit of businesses that are owned and managed by black youth. Further information supplied by the relevant entities are set out below.

While the data is not easily comparable between rural and urban youth support, the available data shows that youth-owned and empowered enterprises in rural areas received support of approximately R1.4 billion comprising cost-sharing grant funding to the value of R83.98 million and a mix of loan and grant funding of R1.3 billion from IDC and R35.76 million from NEF. This is in addition to non-financial support provided bydifferent dtic-agencies to youth-empowered businesses.

Rural youth enterprises can apply to a number of incentives that the Department is offering. In particular, over the past five years, youth-owned enterprises in rural areas were supported by the following incentives: Agro-Processing Support Programme (APSS), Black Industrialist Scheme, Support Programme for Industrial Innovation (SPII), and the Film and TV Production Incentive. Support to these youth-owned enterprises in rural areas is approximately R83,98 million.

The IDC has an annual funding target for youth-empowered enterprises and is targeting R900 million in the current financial year. This is complemented by targeted interventions and youth ecosystem support, youth business support, and concessionary finance for youth entrepreneurs. The IDC offers two bespoke interventions aimed at supporting Youth entrepreneurs:

 The Gro-E Youth Scheme is a finance scheme offering concessionary interest rates to youth-empowered and youth-owned enterprises demonstrating the ability and potential to create jobs: youth-empowered enterprises (25% – 50% youth ownership) up to Prime minus 2%; and youth-owned enterprises (greater than 50% youth ownership up to Prime minus 3%).

 The Gro-E Youth Scheme is further supplemented by the Youth Pipeline Development Programme offering pre-investment and post-investment

business support aimed at: supporting youth applications to become investment ready; assisting with meeting and satisfying conditions precedent; and ensuring the businesses’ sustainability. The Gro-E Youth Scheme and Youth Pipeline Development Programme have been recapitalised and extended for a further 5-year period.

Further, the IDC provides grant funding for development, focusing on rural areas, small towns and townships throughout the nine provinces of the country. This includes support to youth-owned and empowered businesses. The two specific funds looking at this are:

 Spatial Intervention Fund (SIF): Aims primarily in assisting entrepreneurs within communities by providing funding directed at projects with specific social outcomes. It also seeks to facilitate partnerships and collaboration between the private sector, public sectors and communities thus, bringing disadvantaged and marginalised groups and communities into the supply and value chain within the formal economy through catalytic grant funding.

 Social enterprise fund (SEF): This fund assists social enterprises to apply business solutions to social and environmental problems and challenges. The goal is to achieve sustainability by enabling these enterprises to support themselves financially in innovative ways

The NEF has pursued the support for youth-owned enterprises primarily through its five investment funds, namely iMbewu Fund for SME support, Rural, Township and Community Development Fund (RTCDF), uMnotho Fund for medium-sized enterprises, Strategic Projects Fund to develop black industrialists, and the Women Empowerment Fund. The latter cuts across all the four funds because the empowerment of black women is one of the strategic priorities of the country. The product offerings of these funds are geared towards unlocking value for youth entrepreneurs and those domiciled in rural areas and townships. The RTCDF even goes further in facilitating inclusivity of rural and township entrepreneurs whose beneficiaries are individual entrepreneurs, communities, and other groups formed to conduct business.

Through the ongoing investor campaign, the NEF reached over significant numbers of people by facilitating more than 300 investor education community seminars in rural and related areas on how to identify investment opportunities and access tools that will assist in converting those opportunities into tangible investments. From 2017 to date, business skills training has been provided to over 3100 entrepreneurs who attended 420 seminars.

 

Reply:

In the 2019 general election, the ruling party put forward a Manifesto committing to an Industrial Plan to Support Localisation as a key element of measures designed to drive investment, economic growth and create jobs. This Plan was endorsed by millions of voters and is the basis for government policy in this Administration. Research data outlined in previous replies to parliamentary questions (namely PQ 1880 and PQ 1881) set out in detail the evidence on which the specific targets were set as well as the extensive support from within the economy by business and workers for the policy stance, one increasingly being pursued in many different parts of the world.

-END-

 

Reply:

 

Price-fixing is a statutory offence under the Competition Act (part of cartel-behaviour by firms who collude). The Competition Commission therefore does not make recommendations in this respect to the Executive but instead the Commission prosecutes firms where there is evidence of price-fixing. During the review of the Competition Act in 2017, the Ministry identified measures to strengthen the penalties applicable to cartel behavior (including price-fixing) by firms in the SA economy. This has subsequently been incorporated into law by Parliament.

In respect of data prices, the Minister requested the Competition Commission in 2017 to undertake a market inquiry into data prices charged by mobile operators. The results of the market inquiry were publicly released by the Commission and the Ministry. Based on the outcome of the market inquiry, three mobile networks reached settlement agreements with the Commission or changed their prices on data for consumers.

The Commission has provided me with information that shows that prices have reduced substantially over 2 price changes – the first in April 2020 and the second in April 2021. Vodacom and MTN implemented deep price reductions ranging from 13% to 50%. The price reductions are a combination of direct price reductions on certain bundle sizes (see details below), increases in bundle sizes on certain price points (e.g. Vodacom increased the bundle size at R12 from 39MB to 50MB) or a complete replacement of bundles (e.g. Vodacom replaced the 300MB priced at R63 with 325MB priced at R55.

Vodacom prices of the monthly 1G data bundle reduced from R149 per month (original price) to R99/ month (April 2020) and then to R85 per month (April 2021) reflecting a - 43% reduction in prices overall.

MTN prices of the monthly 1G data bundle reduced from R149 per month (original price) to R99/ month (April 2020) and then to R85 per month (April 2021) reflecting a -43% reduction in prices overall.

The zero rating of websites is another major area of impact. Before the consent agreement was reached less than 100 websites were zero rated. This grew to 2 261 websites post the intervention. This growth was further substantially spurred by the DCDT gazzetting directions for the zero-rating of websites for education and health on 5 June 2020.

The number of users of newly zero-rated websites increased 22% over the last year from 3 266 895 In April 2020 to 10 744 224 in April 2021.

I am advised that the interventions saved consumers approximately R2.1 billion (annualized at R1.97 billion) for the first 13 months from April 2020.

To enable the Commission to undertake its work on areas such as data prices, the Ministry supports the budget requests of the Commission.

-END-

Reply:

The CEO of the NRCS, Mr Mamaditse, has provided the Department of Trade, Industry and Competition (the dtic) with the following information.

a) “Full Details of the Fraud Case:

There was fraud committed amounting to R4 501,488.21. The employee processed fraudulent refunds. The NRCS receive funds from clients for services rendered or levies. In some instances, the clients fail to indicate or include the correct reference number. These funds are treated as unallocated until they are traced and allocated to the correct client account. The employee allocated some of these funds to third parties with the intention to refund them to these fraudulent clients that were not the respective depositors of the funds. The wrongly allocated funds were subsequently refunded to third parties that were not the depositors of the said funds, thereby defrauding the NRCS.

Disciplinary Against the Implicated Employee:

The NRCS has initiated a disciplinary action against the implicated employee and the disciplinary process is still in progress. The disciplinary process against the employee commenced on the 15th of March 2021. Subsequently thereto the NRCS appointed Initiator of the disciplinary process passed on due to COVID 19 and another Initiator has now been appointed. The matter sat again on 14th of September 2021 and employee representative fell ill during the proceedings and matter was postponed to and proceeded on the 14th and 15th October 2021. Matter was further adjourned to the 18th and 19th of November 2021.

b) Who was involved?

Position: Accounts Receivable Manager

Employee Name:

c) A criminal case was opened on the 25th of March 2021 at Sunnyside Police Station and was transferred to the Commercial Crimes Unit on the 12th of April 2021. The respective case number is: CAS 685/3/2021.”

-END-

Reply:

The Maluti-A-Phofung SEZ (MAPSEZ) was designated in 2015; and subsequent to that, the SEZ License was issued in 2017 which formally designated MAPSEZ as a brownfield. The SEZ is managed by the Free-State Provincial Government. The department of trade, industry and competition’s role in this regard is to designate at the request of the province and to provide the financial support at the SEZ.

With all the new SEZ’s designated since 2020, the dtic is directly involved in the co-ownership and management of the zones. The new ownership model involves the national, province, and municipalities in the running of the SEZs.

Accordingly, the honourable member is encouraged to engage directly with the province and the SEZ Management to get more details about the project.

-END-

Reply:

The Maluti-A-Phofung SEZ (MAPSEZ) was designated in 2015; and subsequent to that, the SEZ License was issued in 2017 which formally designated MAPSEZ as a brownfield. The SEZ is managed by the Free-State Provincial Government. The department of trade, industry and competition’s role in this regard is to designate at the request of the province and to provide the financial support at the SEZ.

With all the new SEZ’s designated since 2020, the dtic is directly involved in the co-ownership and management of the zones. The new ownership model involves the national, province, and municipalities in the running of the SEZs.

Accordingly, the honourable member is encouraged to engage directly with the province and the SEZ Management to get more details about the project.

-END-

Reply:

The Maluti-A-Phofung SEZ (MAPSEZ) was designated in 2015; and subsequent to that, the SEZ License was issued in 2017 which formally designated MAPSEZ as a brownfield. The SEZ is managed by the Free-State Provincial Government. The department of trade, industry and competition’s role in this regard is to designate at the request of the province and to provide the financial support at the SEZ.

With all the new SEZ’s designated since 2020, the dtic is directly involved in the co-ownership and management of the zones. The new ownership model involves the national, province, and municipalities in the running of the SEZs.

Accordingly, the honourable member is encouraged to engage directly with the province and the SEZ Management to get more details about the project.

-END-

Reply:

The Maluti-A-Phofung SEZ (MAPSEZ) was designated in 2015; and subsequent to that, the SEZ License was issued in 2017 which formally designated MAPSEZ as a brownfield. The SEZ is managed by the Free-State Provincial Government. The department of trade, industry and competition’s role in this regard is to designate at the request of the province and to provide the financial support at the SEZ.

With all the new SEZ’s designated since 2020, the dtic is directly involved in the co-ownership and management of the zones. The new ownership model involves the national, province, and municipalities in the running of the SEZs.

Accordingly, the honourable member is encouraged to engage directly with the province and the SEZ Management to get more details about the project.

-END-

Reply:

The department has advised me of the following information regarding the assessment of defaults on loans by the following dtic entities, The Broad-Based Black Economic Empowerment (B-BBEE) Commission; Industrial Development Corporation (IDC); National Empowerment Fund (NEF); and the Automotive Industry Transformation Fund (AITF).

Over the period from 1 April 2015 to 31 March 2021, the IDC approved R45.6 billion for companies with more than 25% black shareholding. R40.2 billion was disbursed (including guarantees that were issued). The amount of R978 million (2.4%) was written off.

To date, the NEF has approved approximately R11.3 billion. Over R7.504 billion has been disbursed to majority black owned and managed businesses across all sectors of the economy. To date, over R3.9 billion has been repaid by investees. The cumulative impairment balance of R746 million has been provided for against the gross portfolio balance of R3,8 billion.

From January 2021 to September 2021, the AITF has approved R 82 136 304 to businesses that have a 51% or more shareholding.

R 6 619 462 has been disbursed to date. There are no current defaults or written off amounts to date.

The AITF begun processing funding applications in January 2021.

The B-BBEE Commission will be conducting an assessment through its panel of researchers. At this point the Commission has noted the decline of registered empowerment deals from 109 (2019) to 52 (2020) registered last year.

-END-

Reply:

(1) the dtic and other Government departments have worked together to build local capability in the production of Covid-19 vaccines. The actions included among others:

• Support to Aspen Pharmacare for the building of a world-class manufacturing facility in the Eastern Cape that was able subsequently to meet the technical standards to qualify as one of seven manufacturing plants globally for the completion of fill and finish contracts with J&J
• Initiating a request at the World Trade Organisation (WTO) in October 2020, together with India, for a waiver of certain provisions of the TRIPS agreement that regulates use of intellectual property. The effect of this would be to enable production of vaccines and use of technologies during the pandemic without the veto that patent-holders currently have. This has now secured the support of more than 100 countries, a number of former Heads of State and Nobel laureates as well as religious organisations, civil society formations, medical professionals and members of parliaments across the world; and holding bilateral meetings with a number of countries to secure their support
• Engagement with J&J that resulted in an agreement that the bulk of vaccines manufactured in SA would be for use domestically and elsewhere on the African continent
• Advocacy efforts to have licensing agreements between SA-based companies (including Aspen Pharmacare) and large global pharmaceutical companies, accompanied by transfer of technology. We refer the Honourable Member to the announcement by Aspen Pharmacare in respect of talks on a licensing agreement with J&J and the public statement by the dtic.
• Engagement with the German and French governments and BionTech regarding the transfer of technology and manufacturing rights in respect of the Pfizer vaccine to another SA company, namely Biovac, which h was followed by the announcement of a partnership agreement; and
• Discussions with Nantworks about Covid-19 vaccine development and the prospects of establishing a manufacturing facility in SA in future.

SA is now designated by the World Health Organisation (WHO) as one of the new production Hubs for COVID-19 vaccines using approved mRNA technology. We continue to engage with intellectual property patent holders for full access to the requisite technology under the Access to COVID Tools (ACT)-Accelerator initiative, launched by WHO and partners, and co-chaired by SA and Norway.

2. the dtic has completed extensive work on a draft Patents Bill (PB) that will be submitted to Parliament in due course, after it has been considered by Cabinet. The PB aims to update and reform SA’s patent legislation, bring it in line with new developments in the patent regime and ensure consistency with international best practice. Subject to the outcome of the consideration of the Bill within the executive, it is expected that it will provide for special measures to address use of patented products during a health crisis. As soon as the terms of the Bill is finalised and agreed, a public consultation process will commence.

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Reply:

The SA Government’s industrialisation and localisation policies aim to build and upgrade domestic production to supply domestic and foreign markets, support wider economic development and promote employment growth. As we build domestic production capabilities, we expect to see greater levels of value added exports to the rest of the world, including to other African markets as the African Continental Free Trade Area (AfCFTA) Agreement is operationalised and the tariff reductions specified under its terms are progressively implemented.

While Government, business and labour have together in Nedlac identified sectors that hold great potential for upgrading, all firms in SA continue to have access to the policy tools, incentives and programs offered by Government for upgrading and development. As indicated in a reply to a previous parliamentary question, localisation policies are entirely consistent with SA’s international trade obligations and building industrial capacity is the very purpose of the AfCFTA. Indeed, other African countries see the AfCFTA as an incentive to their programmes to build agricultural and industrial productive capacity for export under the AfCFTA.

SA is already integrated into global supply chains and our industrial policy, of which localisation is integral, seeks to ensure we move up the value chain to retain a greater share of the value created by participation in those supply chains. An important objective of the AfCFTA is to encourage the development of more value chains amongst African economies. Rules of origin are powerful instruments in this regard as they determine the level of African value in traded goods – both inputs and finished products – that must be met to benefit from the AfCFTA tariff preferences. In this way, the rules of origin incentivise both greater African production and the development of African value chains that underpin growth in intra-African trade.

There is ongoing monitoring of the impact of various localisation measures being implemented. In my address to Parliament during the Trade and Industry Budget Vote in May this year, details of the impact was shared with honourable members. As the localisation policies have been agreed with other social partners, both the business and labour constituency will be evaluating the impact of, and reporting on successes with localisation policies.

President Ramaphosa, as the previous Chair of the African Union (AU), oversaw important work leading to the establishment of the AfCFTA that is integral to the wider structural transformation agenda adopted by all AU Members in 2015 under “Agenda 2065: The Africa We Want”. This agenda is premised on an integrated work program built on market integration through the AfCFTA, building cross border infrastructure across Africa and through cooperation on African industrialisation.

Cooperative work on industrialisation is overseen by the AU Specialised Committee of Ministers of Trade, Industry and Mineral Resources. At its recent meeting, the Committee advanced work across a wide range of areas including: commodity beneficiation; developing an African fashion industry value chain; developing common product standards; strengthening trade facilitation, infrastructure and future work to map and develop existing continental and regional value chains.

On 15 October 2020, President Ramaphosa tabled before a joint-sitting of Parliament, an Economic Reconstruction and Recovery Plan (ERRP), aimed at stimulating equitable and inclusive growth in South Africa in the wake of the COVID19 pandemic. The ERRP was the culmination of work with social partners at Nedlac over a number of months. It reflects a consensus amongst the social partners that there should be substantial structural change in the economy that would unlock growth and allow for development. The plan has identified nine key policy interventions, one of which is localisation. It also supported the expansion of markets for SA manufactured products through the AfCFTA.

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Reply:

The Department has used virtual marketing tools to support local businesses to access export markets, in addition to more traditional means.

These included the following:

1. Trade Seminars

The department hosted thirteen (13) virtual trade seminars and business engagements with local and international partners.

• South Korean market initiative for the sale of South African alcoholic beverages at GS Retail Stores.
• UAE Virtual trade and investment webinar focusing on the food and beverage market.
• Inaugural South Africa – United States Black Business Summit
• Collaborated with WESGRO and the Swiss Import Promotion Programme (SIPPO) on two (2) key events:
  • Cape Agriculture Week Inward Buying Mission.
  • Biofach eSpecial (an organic virtual trade fair).
• Footwear and Leather Virtual Exhibition event, targeting the Middle East and Africa, with particular focus on UAE, Saudi Arabia, Ghana and Kenya.
• Webinar on Trade, Investment and Boat Buying Tourism Opportunities in the Boatbuilding Sector in South Africa.
• Webinar between Export Promotion: North America and USAID for funding opportunities for PDI’s, SMME and Women owned Enterprises.
• Webinar with the US Food and Drug Administration about information companies need to know to export food products to the USA.
• Brazil Agribusiness Trade and Investment webinar hosted in partnership with DIRCO.
• South African companies were introduced and received online training on a Russian e-commerce platform, OZON as a tool to further access the Russian market.
• South Africa-Argentina Webinar: Opening South-South Business Opportunities
• Undertook an outward investment mission to Côte d'Ivoire to assist a South African solar company to enter the energy sector.

2. Trade leads to businesses

It provided 122 trade leads to businesses.

To date, the Department through South African Embassies and Consulates has received and disseminated 122 trade leads linked to export opportunities in 34 territories, including China, Ghana, Tanzania, Ethiopia, UAE, Egypt, Turkey, Italy, Singapore, Russia, Saudi Arabia, India, Japan, Brazil, South Korea, Mauritius, France, USA, Thailand, Argentina and Zimbabwe

3. Assistance with market access

It assisted companies with two 2 market access interventions in terms of product certification in key markets.

• The Department intervened in assisting a BEE company to be certified for beef exports to China.
• The Department, together with the Department of Agriculture, Land Reform and Rural Development (DALRRD), assisted a company to overcome challenges related to the company’s exportation of live animals (sheep, goats and cattle) from South Africa to Kuwait.

4. Export training programmes

As part of growing and diversifying the exporter base, the department provided thirty (30) exporter awareness and capacity building sessions

• Twenty (20) Global Exporter Passport Programme (GEPP) sessions were held where 270 individuals were trained in the following districts:

City/Town	Province	GEPP Training Phase 1	GEPP Training Phase 2	GEPP Training Phase 3	Trained companies per city/town
Port Elizabeth	Eastern Cape	18	15	13	46
East London				9	9
Mbombela	Mpumalanga			5	5
Virtual Training (1)	National		11	18	29
Virtual Training (2)		32	15	25	72
Tshwane	Gauteng		16	15	31
JHB Sandton			11	8	19
JHB Constitution Hill		13	9	6	28
Tzaneen	Limpopo			11	11
Durban	KwaZulu-Natal		11	9	20
Totals		63	88	119	270

• Ten (10) Export Awareness sessions involving 224 individuals were held as follows:

Province	City/Town	Persons	Date Of Seminar	Platform
1 January 2021 – 30 March 2021
None
1 April 2021 – 30 June 2021
Gauteng	Alexandra	20	06-04-2021	Physical
	Midrand	23	21-04-2021	Virtual
	Johannesburg	17	09-06-2021	Physical
	Johannesburg	35	21-06-2021	Physical
Limpopo	Thohoyandou	9	26-05-2021	Physical
	Giyani	7	27-05-2021
	Polokwane	11	28-05-2021
Northern Cape	Kimberley	11	26-06-2021	Virtual
1 July 2021 – Current
Gauteng	Johannesburg	37	09-07-2021	Virtual
Mpumalanga	Ermelo	48	28-07-2021	Virtual
TOTAL		224

5. Incubation programmes

The Department coordinated an incubation programme for women entrepreneurs.

The Department has an agreement with the German Ministry and the German Agency for International Cooperation (GIZ) to collaborate on capacitating South African companies that wishes to do business in Germany with adequate understanding of the market and business culture. The programme is executed in a form of mentorship and incubation by German companies and is designed to assist companies to develop an in-depth knowledge of international trade, using access to the German market as a case the study.

So far in 2021, the programme has benefitted 65 South African companies (44 of which are women-owned) from the following provinces:

• Eastern Cape (6)
• Mpumalanga (1)
• North West (3)
• Gauteng (32)
• Western Cape (19)
• KwaZulu-Natal (4).

The continuing Covid-19 pandemic compelled the programme to be facilitated virtually for a period of 8 weeks. The total of 65 companies were divided into three groups which received training on the following dates:

• Group 1: 1 March 2021 until 23 April 2021
• Group 2: 2 June 2021 until 23 July 2021
• Group 3: 6 July 2021 until 27 August 2021.

6. Export marketing assistance

The Export Marketing and Investment Assistance (EMIA) funding rules were revised to support South African companies to also participate in virtual exhibitions and missions.

In addition to the existing EMIA support measures, the following support measures were approved for virtual exhibitions and missions:

• Procure and funding 100% digital platform (virtual space/ digital exhibition/ Virtual B-B platform, listing/registration).
• Procure and fund physical stand in a case of hybrid missions and complement with relevant ICT infrastructure, gadgets and related data.
• Assist with digital marketing content/profile development (Digital videos, Digital Profiles, Digital Catalogues, Destination advertising / material / branding and Website) limited to R5, 000 per company participating.
• Transportations of material and samples.
• Procure and provide translators for virtual Group Missions.
• Air time/ mobile data for internet access to qualifying companies (based on need assessment) limited to R200 per event.
• Digital sales lead management and tracking.

7. Unblocking obstacles for investors

Invest SA assisted with the following:

• BMW: Facilitated the unblocking of port clearance procedures that affected the production of the BMW X3 which is destined for the Domestic and Export Market. Due to the challenges at ports, an urgent shipment containing parts were delayed at the Cape Town Harbour. BMW were notified that a Detention stop has been put on these containers by Customs Border Control. The net impact of this would have been the shutdown of the plant which would have impacted their export commitments. InvestSA intervened by escalating the matter to Transnet and had the matter resolved.
• AMKA: Invest South Africa facilitated port clearance for raw materials required for the production of cosmetics for domestic consumption and for exports to markets in Africa.
• LULU Group: Facilitated the shipment of Lulu Groups, buying office containers which were delayed in the port of Cape Town with export products destined for Middle East market.

8. Sector support

The following are highlights of the assistance to local businesses in Footwear & Leather Goods sector through South African Footwear & Leather Export Council (SAFLEC) to access the export markets since 1 January 2021:

The exports Footwear & Leather exports by value to Middle East increased from R 1.5m value to over R 14 million, to USA by 20% and to UK by 6%. New Markets accessed in Poland, Rumania and Russia brought additional R 1.2m export revenue. Setting up of a New Virtual Show room on SAFLEC website and development of New Virtual Trade Platforms. Launch of new virtual platform for Trade promotion. Addition of 10 more companies to SAFLEC virtual show room. Conversion of 31 companies to virtual platform. This resulted in an increase in exports by 63% in comparison to the 2020 exports largely affected by Covid-19.

Due to the restriction on physical trade promotion resulting from COVID, SAFLEC continues to prioritize Africa, Europe, America’s as well as Australia as markets for South African footwear through virtual platforms to retain the awareness of South African manufacturers. Africa was prioritized as the low hanging fruit. Asia and Europe markets are looked at for Handbags and Leather Goods.

9. Industrial funding and support

The Industrial Financing Branch (IFB) has taken the following actions over the last few months to assist South African exporters:

• Twelve companies that received support from January to July 2021, reported export sales of R542 million. Seven of these companies are Black Industrialists, one is involved in the processing of oysters and is supported by the Aquaculture Development and Enhancement Programme and the other four are beneficiaries of the 12I Tax Allowance Incentive. Two of these 12I companies are operating in the food and beverage industry, one in the home and personal care products and the other in pharmaceuticals.
• On 26th August 2021, IFB through a SEDA online platform, conducted a virtual national SMME exporter development briefing session with SMME’s located across the country. Over 400 SMME across different economic sectors were invited.
• On 26th May 2021, the Branch in partnership with Wesgro conducted a briefing session on export incentive offerings.
• In September 2021, a digital export event support component for emerging exporters was introduced in the revised Sector Specific Assistance Scheme (SSAS) guidelines.

In addition. To the above, there are a number of projects supported y the NEF, IDC and ECIC which assist SA-based companies to increase their exports to the rest of the continent. To illustrate this, the ECIC is providing support to SA companies linked to the Amandi Rail Ghana and Amandi Hospital Ghana projects. This includes exports by Macsteel an SA supplier on the project. The involvement of Macsteel in this Project will advance the objectives of the Steel Master Plan of the dtic. The exports sourced from the South African exporters will have an impact on the South African economy.

10. Regulator efforts

The International Trade Administration Commission (ITAC) issues permits for exports of Covid-related products. This included

• Hand sanitisers
• Vaccines
• Face-masks and shields

ITAC assists SA exports by issuing rebate and drawback certificates based on the value of imported inputs to final export products. The main users are the agriculture and agro--processing, clothing and textiles, chemicals and plastics, and metals and machinery industries.

Rebate item 470.03 provides for rebate of customs duty upon importation of components and materials specified in the permits and are intended for use in the manufacture, processing, finishing, equipping or packing of goods exclusively for export:

• 98 certificates issued from January to August 2021, covering a wide variety of products.

Drawback item 521.00 provides for drawback of customs duty that was paid on imported components and materials used in the manufacture, processing, finishing, equipping or packing of goods already exported:

• 117 certificates issues from January to August 2021, covering a wide variety of products.

-END-

Reply:

I have been furnished with a reply to the question submitted, by Ms Thabang Mampane, Commissioner of the National Lotteries Commission.

Ms Mampane says the following:

“ In terms of section 2A (3) which states that: The Commission may, upon request by the Minister, board or on its own initiative in consultation with the board, conduct research on worthy good causes that may be funded without lodging an application prescribed in terms of this Act.

a) In compliance with section 2A (3) the NLC allocated and disbursed R 140 923 864,10. In addition to that, the NLC compiled a Report on COVID-19 Funding outlining the integrated response to Covid – 19 relief funds. The report is attached as Annexure A for reference.

b) The list of funded organisations and the amounts is attached as Annexure B.

c) The balance of unallocated funds amounting to R9 076 135,90 will be disbursed in the current financial year as the pandemic is still on-going and the Commission is assessing needs in relation to worthy good causes relating to the pandemic.

d) All the grants that were awarded under the Covid Relief Fund fell under the small grants category as such the reporting shall be done in terms of Regulation 10 of 2015 which states that:

“An applicant to whom a small grant is made must, at such period as may have been imposed at the time when a grant is made submit to the National Lotteries Commission a report detailing how the grant funds were used, together with all supporting invoices and any other relevant documents for the purposes of financial accounting.”

Considering the above, the NLC is awaiting reports from the beneficiaries for the Commission to compile a consolidated Monitoring and Evaluation Report.”

Attachments:

Annexure A

Annexure B

-END-

Reply:

In terms of the Lotteries Act, the appointment of the new Chairperson of the NLC requires that Parliament must put recommendations to the Minister of Trade, Industry and Competition before a decision is made, following which the Minister must consider the matter and make an appointment. The matter of the appointment was referred to Parliament in November 2020. The Ministry awaits the recommendations from Parliament as required by the legislation.

The court proceedings referred to in the question relates to an entirely different issue, namely the appointment of an acting chairperson pending finalisation of a decision on the Chairperson.

-END-

Reply:

The South African Government’s industrialisation and localisation policies aim to build and upgrade domestic production to supply domestic and foreign markets, support wider economic development and promote employment growth.

I draw the Honourable Member’s attention to the fact that localisation policies are not simply that of the DTIC. Localisation is a policy framework that enjoys resounding support among South Africans who recognize the need to industrialise our economy. It is the policy of the Administration and follows the commitment in the Manifesto of the ruling party to stronger localisation as a pillar of its industrial policy. The commitment to localisation is included in the Economic Reconstruction and Recovery Plan of government.

The approach on localisation has also been unanimously endorsed by the business, labour and community representatives at Nedlac. They represent a large number of firms and entrepreneurs, workers in different sectors of the economy and organisations made up of representatives of various community interests. Indeed the agreement at Nedlac specifically provides for a quantitative target and a list of sectors and products. In these circumstances, the consultations on the South African approach to localisation were at the appropriate level at which consultations on policy matters normally take place, namely with social partners and with other Government policy-makers.

I further draw the Honourable Member’s attention to local industrialisation policies of governments across the world, in both developed and developing countries. It is what governments do to enable achievement of national objectives and indeed there is today a growing consensus on the value of carefully targeted and well-implemented industrial policy measures. I will be happy to brief the Portfolio Committee in due course on these developments should the Committee so request. There is also a growing literature on the subject which is easily accessible to the public.

In respect of trade, the localisation policies are consistent with South Africa’s international trade obligations and building industrial capacity is the very purpose of the African Continental Free Trade Agreement in order to reduce the over-reliance by countries on the continent to imports of manufactured products from elsewhere in the world. The localisation policies followed by the SA government (with the support of business, labour and community organisations) represents inter alia the plan to build South Africa’s industrial capacity within the framework of the AfCFTA.

I also draw attention to the Policy Statement on Localisation for Jobs and Industrial Growth as well as the Trade Policy for Industrial Development and Employment Growth, available on the DTIC’s website.

-END-

Reply:

The Economic Reconstruction and Recovery Plan, to which the DTIC contributed, sets out the overall approach by Government to boost exports, promote investment and create decent work opportunities as part of the response to Covid-19.

Within that framework, the Annual Performance Plan of the Department tabled in Parliament this year sets out a more detailed set of actions covering trade, investment and industrial development. This was further complemented by the package of measures announced recently to address the damage caused by the unrest in parts of KZN and Gauteng in early July 2021.

The work programme cover inter alia the following

• Progressing the work on the African Continental Free Trade Agreement, specifically focused on completion of a set target on rules of origin on industrial products; and conclusion of discussions on services.
• Implementing a number of sector growth plans, covering core industrial activities (steel and autos), food security (poultry and sugar) and consumer goods (clothing & textiles and furniture).
• Expanding levels of private sector investment in the economy to boost economic output, including through support to firms in implementation of pledges made at South African Investment Conferences.
• Improving the business environment through providing an efficient company registration service and addressing unnecessary regulatory requirements applicable in DTIC public entities;
• Promoting opportunities for a larger number of South Africans through competition and empowerment policies, which include the work of development finance institutions; and
• Supporting equitable development in different parts of the country through a new focus on district development and compiling economic information on each district municipality.

-END-

Reply:

The CEO of the NRCS, Mr Mamaditse, has provided the Department of Trade, Industry and Competition (the dtic) with the following information.

(1) A case of fraud was detected in the NRCS in December 2020. The NRCS reports that it commissioned a full investigation of the matter which confirmed that fraud amounting to R4,501,488.21 was committed. The disciplinary process is underway and a criminal case has been opened. The NRCS insurers have been notified and are currently assessing the claim. The NRCS reports that it has also reviewed its procedures to mitigate the risk of this type of fraud recurring.

(2) Six hundred and seventy-two (672) illegally imported television sets were handed over to the NRCS on 4 July 2017. The NRCS reports that 641 were stolen and the theft was discovered in December 2018. A criminal case was opened. The NRCS Legal Services unit has been tasked with investigating the matter and is assisting the police investigation.

(3) (i) Losses Due to the Unrest in Durban

One of the NRCS rented warehouse in Durban was looted during the unrest and the full extent of the loss is still in the process of being determined. The warehouse was used to store Electro-technical, Automotive and Chemicals, Materials and Mechanicals products.

(ii) Reported and confirmed Losses over the past 12 Months, excluding the loss arising from looting in Durban.

Premises	a) Product	Quantity	b) Value
Port Elizabeth	Safety Shoe	21	R8 400
Port Elizabeth	Paraffin heaters	110	R55 000
Total			R63 400

The NRCS reports that it is actively addressing the challenges experienced with regard to products being stolen. To this end, the NRCS has appointed a panel of service providers to destroy non-compliant products. In addition, it advises that it has undertaken a review of its storage facilities and will shortly issue a tender to source more secure storage facilities.

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Reply:

I have been advised by the Commissioner of the National Lotteries Commission that the NLC has not funded the individual or the named company.

-END-

Reply:

I have been furnished with a reply to the question submitted, by Ms Thabang Mampane, Commissioner of the National Lotteries Commission.

Ms Mampane advises as follows:

“ (1)(a) Venalor NPC applied to the National Lotteries Commission in the 2018 and 2020 financial years in terms of section 2A (4) Lotteries Act No 57 of 1997 as amended (“the Act”) and the application was adjudicated by the ACNHDA in terms of section 26 of the Act and related regulations.

The first application for the 2017/18 financial year was for an amount of R4 672 180.00 and the second application was awarded in the 2019/20 financial year for an amount of R2 292 300.00.

The National Lotteries Commission funded Venalor NPC to host the annual awards ceremony that recognise the contribution of South African female artist in their respective genres and facilitate a platform in which up and coming aspiring artists can have access to a larger audience and to perform alongside established artists in the industry in line with the funding focus areas.

(b) The funding covered amongst others workshops, marketing and communications, women summit, mbokodo awards and other logistical matters such as transport, security.

(2) The NLC conducted a site visit with regards to the grant for the R4 672 180.00 to ascertain whether funds are being used according to the conditions stated on the Grant Agreement. The site visit reports found that the funded organisations utilised the funds in line with the conditions of the grant. Following submission of a satisfactory progress report, the project has been closed.

The NLC conducted a site visit with regards to the grant for the R2 292 300.00 to ascertain whether funds were utilised in accordance with conditions stated in the Grant Agreement. To date the funded organisation has submitted a satisfactory interim progress report for the first tranche that was paid. The NLC continues to enforce the Grant Agreement.”

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Reply:

I have been furnished with a reply to the question submitted, by Ms Thabang Mampane, Commissioner of the National Lotteries Commission. The reply states that the NLC received “a formal anonymous complaint” relating to Mr Raymond Joseph having direct or indirect interest in eight NLC funded organisations. The NLC provided a list of the organisations, which did not contain the details of the alleged link. I have requested that such information be supplied and will prepare a supplementary reply after receipt of the information.

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Reply:

(a) The Department does not keep a register of all chicken suppliers. According to SA Poultry, there are 1 117 chicken and egg suppliers in South Africa, the vast majority of which would be South African owned.

(b) The Department does not keep a register of rice suppliers.

(c) It is not clear whether the question on car accessories is intended to refer to items that are solely ‘accessories’ i.e. dash covers, mirrors, car seat covers, phone mounts etc, for which details are not kept; or whether it covers auto components too. The Department has furnished me with the number of local component manufacturers they are aware of – once the question is clarified, the number can be provided.

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Reply:

The DTIC, together with the IDC and NEF developed a relief package for businesses covered by the recent unrest in parts of KZN and Gauteng and full details of the measures were made public shortly after they were finalised and further details were subsequently provided to Parliament through the Portfolio Committee on Trade and Industry, on 24 August 2021.

Funding was reprioritised from the budgets of the three entities and this was further supplemented by a fiscal transfer from the National Treasury. The components of the funding covered ddifferent kind of support, often as a ‘blended’ product comprising:

• Grants: this portion is not repayable and is normally granted based on need or developmental objectives being achieved
• Loans: granted at concessionary terms and it is typically for working capital, machinery, repairs to premises, fitment replacement, etc.
• Bridging finance: covers ‘cash-flow’ challenges until SASRIA payouts are made.

The Critical Infrastructure Reconstruction Programme aims to leverage investment by supporting damaged infrastructure. This is a cost-sharing grant of 50% of the total qualifying infrastructure costs with a maximum cap of R30 million.

The Manufacturing Competitiveness Enhancement Programme (MCEP) Economic Stabilisation Fund that provides funding to companies affected by the unrest and associated supply chain disruptions. This will be achieved through financing uninsured businesses not covered by insurance or those with funding insurance shortfalls. The fund offers concessionary funding through interest-free loans with a maximum investment of R50 million.

The NEF Economic Recovery Fund supports affected businesses in all sectors of the economy focused on manufacturing, retail and services businesses. The support targets building improvements and fittings for premises, replacement of machinery, equipment, commercial vehicles and replenishing stock and working capital shortfalls owing to supply chain disruptions. A maximum of R10 million in loan funding will be provided.

In particular, IDC Support Package totalling R1.5 billion from its own balance sheet, made up of R800 million developmental grants and R700 million concessionary loans. To focus the implementation efforts on the delivery of this package, the following essential institutional arrangements were put in place:

• Refined investment guidelines and simplified evaluation process.
• Multidisciplinary deal teams including Business Development Managers, Risk Analysts, and Legal Advisors who meet daily to drive transaction delivery.

Applications are approved by a special Exco committee, composed of IDC Divisional Executives and Senior Professionals, which meets daily.

IDC is also administering the dtic’s R400-million Manufacturing Competitiveness Enhancement Programme (MCEP) Economic Stabilisation Fund that supports manufacturing companies affected, including those impacted by supply chain disruptions. Fund offers concessionary funding through interest-free loans.

The IDC is participating in physical visits to the affected companies. Together with the dtic the IDC is conducting coordinated publicity events to ensure that the funding packages are well advertised to the affected enterprises. This includes roadshows, webinars, virtual and physical site visits to affected clients.

The IDC is also providing Post-funding Business Support to offer non-financial advisory support aimed at restoring the long-term resilience and competitiveness of the affected businesses.

On 24 August 2021, the Department provided information on the approvals made as at that date through the IDC and NEF funding. Since then, a number of further transactions have been approved. The Department will be releasing the updated figures within the next five days and I will provide a copy of the updated data in a supplementary reply.

-END-

Reply:

As indicated in the Localisation Policy Statement, in a society with extraordinary levels of unemployment and poverty, all efforts will need to be made to find commercially sustainable ways to create new jobs in the private sector, to complement what can be done through public employment opportunities. New job growth will be stimulated by demand for the products and services so produced – these can come from a combination of expanded domestic demand and increased levels of exports. To create jobs on scale, both these drivers of new private sector job growth must be pursued.

Localisation must focus on strategic industries, defined by their capacity to be labour-absorbing or providers of critical goods or significant export earners. Localisation can provide such strategic industries, as well as other infant industries, with the space and opportunity to develop and to become globally competitive. This strategy has been followed in a number of countries, including in East Asia, where advanced manufacturing sectors have flourished under a focused strategy to direct and focus demand for goods and services towards those produced locally. The drive to create competitiveness is thus key to ensuring that investment in localisation provides the long-term dividend the South African economy recovers.

The process followed to set a target for localisation and finalise a list of products involved inter alia research on import levels, a comparative analysis of global import levels in leading economies, a number of meetings with business executives in specific sectors or from firms in specific product markets, review of the Master Plans applicable for sectors, consideration of the products that have been designated by the state for local procurement by public entities in terms of applicable legislation and engagement with social partners at Nedlac, resulting in agreements on targets and products.

First, from June 2020, Government commenced discussions with a number of different business groups, such as the Consumer Goods Council of SA and CEOs of different sectors. Separate meetings were held inter alia with CEOs of the following sectors:

• Fast-food operators;
• Grocery retailers;
• Food and beverage manufacturers;
• Clothing, textile, footwear and leather retailers and manufacturers;
• Hardware retailers; and
• Construction companies.

Discussions also took place with Business Unity SA leaders and with firms.

These discussions focussed on ways to develop a partnership between the private sector and the public sector to promote the deeper industrialisation of the SA economy, through a significant reduction in the level of imported products and considered what would be pragmatic and achievable targets over a reasonable period of time; and the identification of potential products that could be localised.

Second, the Department compiled and evaluated data on the import levels of different products and in a number of cases, shared data with business representatives, to help identify products that could be localised.

For example, the research showed that SA imported R9,1bn of edible-oils during 2019. Work was done on the local capacity in SA to be able to supply the market. Consideration was given to the decision by a large importer to refine a significant quantity of palm oil locally, adding at least 20% local value in the process.

Research was conducted on the comparative position of other leading economies, in respect of imports measured against GDP. The results of the study showed that South Africa has an over-propensity to import goods which could otherwise be produced in South Africa. Every year, the South African economy spends approximately 25% of the national wealth created, on goods imported from other countries. (See TABLE below.)

 

This propensity is far greater than in other similar countries and is out of line with our developmental needs, and impedes the opportunity for South Africa to develop its manufacturing capacity across carefully-identified selected strategic industries to take advantage of the enormous export potential, particularly in the context of the African Continental Free Trade Area.

Third, the work done with firms and associations at sector level that led to industry Master Plans being developed, were used to identify both specific products and opportunities to localise.

By way of example, the auto industry set a target to localise the components used in SA-assembled vehicles, from 39% to 60% over a 15 year period. In the sugar industry, the parties agreed to improve local sourcing from 60% to initially 80% and thereafter to improve it further. In the poultry industry, R1.5 billion was committed by local producers to expand production, with an additional more than 1 million chickens produced in South Africa per week during 2020, when compared to the prior year. In the clothing industry, retailers committed to improving the level of local procurement by 21 percentage points over a 10 year period to 2030.

Fourth, the Department undertook a review of products included in the designated public procurement list to identify further products which the private sector could be encouraged to localise. These products had been designated over a number of years and the demand available from the public sector can be enhanced by collaboration with the private sector. For a complete list of designated products, see http://www.thedtic.gov.za/sectors-and-services-2/industrial-development/industrial-procurement/.

Fifth, Government engaged social partners at Nedlac in August and September 2020 in an economic recovery plan, which resulted in a Nedlac Agreement reached in October 2020, that contained a number of pillars, including localisation.

The Agreement provided inter alia as follows:

Strategic localisation for jobs and growth

Social partners recognise that localisation and import replacement have significant potential for job retention and creation, the development of new SMMEs and start ups and the initiation of new technology platforms that can strengthen South Africa’s human resource endowment. Further, import replacement lowers South Africa’s vulnerability to global value-chain disruptions in strategic sectors.

The social partners agree to work jointly to:

• Reduce the proportion of imported intermediate and finished-goods;
• Improve the efficiency of local producers; and
• Develop export competitive sectors that can expand the sales of South African made products on the continent and beyond. They thus commit to:

…  Implement measurable and significant increases (by volume and value) in public and private-sector procurement from local manufacturers across value-chains set out in Annexure B by, inter alia:

• 1. Establishing targets for improvement of current levels of localisation in value chains, with the first set of targets to be announced within six weeks; and subsequent targets to be materially completed by the end of November 2020;
  2. Establishing supplier development programmes, as appropriate, on a sectoral or large firm basis;
  3. Expanding the platform used to locally manufacture personal protective equipment (PPE) to other targeted sectors and large volume items where practical and feasible; and
  4. Ensuring that public and private sector infrastructure investment is underpinned by the procurement of locally-manufactured inputs and capital equipment where practical and feasible.

…

Ramp up buy-local campaigns through inter alia:

• • Joint public awareness, education and social media campaigns;
  • Retailer promotions;
  • Clearer labelling of South African manufactured products;
  • A commitment to promote ‘buy local’ statements;
  • Training of procurement entities in the public and private sector; and
  • Working with buyers and procurement entities to support and develop programmes to maximise orders with local producers.

The Agreement contained the following value-chains in Annexure B, which the parties agreed should be the primary focus of localisation:

“[NEDLAC-AGREED] VALUE CHAINS FOR PRIORITY ACTION IN RESPECT OF LOCALISATION

Agro-processing value chain, including poultry, sugar, oils, grains, juice concentrates and dairy products used in the food and grocery industries.

Health-care value-chains: pharmaceuticals, personal protective equipment and medical equipment, (e.g. ventilators) used in public and private healthcare facilities.

Basic consumer goods: clothing and footwear, home textiles, consumer electronic products and appliances (including televisions, mobile phones, and white goods like fridges, stoves and washing machines), household hardware products, packaging material, furniture.

Capital goods: equipment and industrial inputs particularly used in infrastructure projects, mining, agriculture, the green economy and digital infrastructure.

Construction-driven: value-chains, such as cement, steel, piping (plastic and steel), engineered products and earth-moving equipment.

Transport rolling stock: automobile and rail assembly and component production, in preparation for the African Continental Free Trade Area.”

A working group with senior representatives of the Nedlac constituencies was composed, led by the CEO of BUSA and the general secretaries of some of the largest labour federations, which considered proposals on localisation. In addition, a number of bilateral meetings took place between Government and BUSA, which worked on establishing a quantitative target on localisation. A number of product-specific suggestions and proposals were considered. Discussions took place with organised labour, who generally favoured a robust and ambitious target. The discussions identified those products that were regarded as capable of implementation or where significant opportunity existed.

The results of the bilateral discussions were shared with the other Nedlac parties and the Nedlac working group was also able to draw on the work on trade flows, compiled by Government. Finally, a pragmatic target was agreed based on all the available information, the value of a metric against which progress could be measured and a recognition that the parties will need to approach implementation with flexibility, with the first two years setting the platform for greater localisation in subsequent years.

On 14 December 2020, Nedlac agreed to a Localisation Targets and Modalities Plan, which contained the following:

“Overview: the framework for the common commitment to promote localisation is set out in the Nedlac Economic Recovery Plan. This document sets out the agreed approach following discussions between BUSA, Government, [Organised labour/Community].

It covers the implementation of the commitments made by social partners, based on:

• A set of targets
• A set of products
• Private sector Champions
• A simple and effective monitoring and reporting arrangement.

Targets (macro):

It is agreed that the parties would use their best efforts to reduce imports of all products (excluding crude oil) into SA by 20%, to be achieved over a 5 year period. Based on the 2019 import data of R1,1 trillion (non-oil imports), this target would entail a reduction of R220 billion and an indicative annual target of R45bn a year in current prices. 

List of Products

The following products, contained in the Nedlac Economic Recovery Plan, will form the list where immediate efforts will be undertaken, with parties adding to the list as further products are identified.

Agro-processing value chain, including

• poultry,
• sugar
• edible oils
• grains
• juice concentrates
• dairy products

Health-care value-chains:

• pharmaceuticals
• personal protective equipment
• ventilators
• other medical equipment

Basic consumer goods:

• clothing
• footwear
• home textiles
• televisions
• mobile phones
• other consumer electronics
• fridges,
• stoves
• washing machines
• household hardware products
• packaging material
• furniture.

Capital goods

• agriculture equipment
• mining equipment
• green economy inputs and components
• digital infrastructure inputs, components and equipment

Construction-driven value-chains, such as

• cement
• steel products
• plastic piping
• steel piping
• engineered products
• earth-moving equipment.

Transport rolling stock:

• automobile assembly
• auto components
• rail assembly
• rail components

Product targets:

In order to achieve the overall goal of a 20% reduction in total non-oil imports, some products will need to have a target above 20% and some will be below this target, based on what is practicable.

To enable the process to start, the parties agree that the general goal will be 20% and this will be adjusted based on the work undertaken, provided they are able to still achieve the overall goal of a 20% reduction.

The targets in this document are indicative and seek to provide a set of goal posts to galvanise social partners towards greater levels of localisation across the value chains identified.”

Subsequently, at the request of the private sector, additional products were added, namely

• wheelie bins
• personal care products
• cleaning materials
• oil and gas value chains
• fire engines
• boats.

To facilitate a partnership, Chief Executive Officers and other senior leaders have agreed to serve as product champions across a number of the product areas (“Localisation Champions”).

The localisation programme will help to stimulate aggregate demand and strengthen support for the local manufacturing sector. This is an added incentive for both domestic and foreign direct investment in the production sectors of the economy.

The government’s policy in this matter is encapsulated in the Policy Statement on Localisation for Jobs and Industrial Growth, which was released on 18 May 2021. The policy is aimed at building local industrial capacity for the domestic market and for export markets. It is not a turn away from engaging in global markets, but it is about changing the terms of the engagement to one where we are no longer mainly an exporter of raw materials.

Implementation of the strategy will not be without challenges – and finding the policy blend and careful execution required to promote deeper levels of localisation, will require drawing on the skills and expertise in the private and public sectors. SA can build on a number of successes with localisation, draw the lessons and scale these up.

-END-

Reply:

I have been furnished with a reply to the question submitted, by Ms Thabang Mampane, Commissioner of the National Lotteries Commission.

Ms Mampane’s reply is as follows:

1.. “ The Uprising Youth Development file is in the custody of the Special Investigating Unit and was seized and has been in the custody of the SIU since 8 December 2020 with other files which are under investigation as per Proclamation No. R. 32 of 2020. The application form as requested by the Mr M J Cuthbert is in the file with SIU. The record has been requested from the Special Investigation Unit and will be provided in response to PQ 1900 as soon as available.

2. The organisation was funded in the period covered by the scope of the Special Investigations Unit’s Proclamation No. R. 32 of 2020 and related documents seized by the SIU on 8 December 2020.”

-END-

Reply:

I have been furnished with a reply to the question submitted, by Ms Thabang Mampane, Commissioner of the National Lotteries Commission.

Ms Mampane’s reply is as follows:

a) “ The National Lotteries Commission is required to fulfil its mandate and ensure that the Commission performs its functions efficiently and effectively in compliance with this Act and any other applicable law. The NLC applies the principles of openness and transparency to advise the Minister on the efficacy of legislation pertaining to lotteries and ancillary matters, exercises its power to institute legal proceedings to properly discharge its functions and responsibilities and approach any court for any order the board deems appropriate for effective regulation and enforcement of the Lotteries Act.

In order to fulfil the above legislative requirements, law firms are chosen on the basis of expertise, skills, availability, capacity and urgency of the matters amongst others. The principle of rotation is always one that plays a part in which firm gets the brief, however the above criterion should not be viewed in isolation as capability of executing the work together with proven track record becomes key.

b) Ndobela Lamola Inc has been duly appointed through an SCM processes to serve on the NLC legal panel for two consecutive terms. The firm would have been issued with instructions that have overlapped to other financial years resulting in protracted matters that inevitably incur legal costs equivalent to the time spent on each matter. This firm specialises in conducting investigations and a bulk of the matters they have been instructed to do would commence as investigations and thereafter lead to labour and/or litigation matters which they would be requested to continue with such instructions due to it being a more efficient and effective manner of managing the brief.

Fees paid to Attorneys vary and include disbursements that would relate to travel and accommodation and those that would have been paid to other professionals outside the firm, for instance, in cases where consultants were utilised to advice in complex matters, the brief of junior and senior counsel and/or expert witnesses called in to testify. The notion of Attorney’s fees needs to be understood in context of how legal practice works.

c) (i) The Makatse matter commenced as a purely labour relations matter wherein a Disciplinary Hearing was held, thereafter the matter was subsequently referred to the CCMA situated in East London. The employee opted to abandon the CCMA process and lodged proceedings in the High Court situated in East London. The NLC defended and the matter is still ongoing. It is worthy to note that the NLC was successful in the High Court proceedings, and costs were awarded in favour of the NLC, such costs will be duly recovered. An application for an appeal was subsequently lodged by Makatse and the outcome of those proceedings are still pending.

(ii) Legal fees were spent on chairperson and evidence leader’s fees, attorney’s fees, counsel fees both junior and senior counsel, expert witnesses, travel and accommodation for trial that was held in the East London High Court for 5 days that included over 10 witness and counsel travelling outside of East London to attend the trial. Numerous postponements that were outside of the NLC’s control would have contributed to the escalation in cost.

(iii) The history of the Makatse matter is articulated in (i) above which informs reasons for costs incurred. Costs related thereto were in line with reasonable costs associated with professional services rendered for successful pursuance of instituting legal proceedings to properly discharge our functions and responsibilities in the best interest of the National Lotteries Commission. The Commission was successful in the High Court proceedings, and costs were awarded in favour of the NLC, such costs will be duly recovered.”

-END-

Reply:

Government has designated 27 products for local production and content through the Preferential Procurement Regulations. Some of the products already designated are rail rolling stock, boats/ working vessels, power pylons, bus bodies, valves, pumps, certain pharmaceutical products, furniture products as well as the Textile Clothing Leather and Footwear sector.

For a complete list of designated products, see http://www.thedtic.gov.za/sectors-and-services-2/industrial-development/industrial-procurement/.

the dtic conducts research before a product can be designated for local production, including on procurement trends, local industrial capacity jobs implications and import profiles. During the research stage, there is consultation with the industry (associations and local manufacturers) as well as procuring authorities. Designated products have different thresholds for local production informed by the research studies looking at the economic variables aimed at supporting the manufacturing sector. Once the research is completed, the dtic reviews the designation proposals before the Minister of Trade, Industry & Competition approves it. Thereafter, the designation is forwarded to the Minister of Finance for consideration and publication of the instruction notes/circulars and implementation by organs of state.

-END-

Reply:

A focus on localisation is at the heart of Government’s strategy to create sustainable jobs for South Africa and build the economic base for long-lasting prosperity. The reliance on imports is a challenge to the South African economy in that it makes our business and consumers vulnerable to supply shocks in other parts of the world, amply demonstrated in the Covid-19 pandemic. The undue reliance on imports also means longer lead times to get the necessary goods; and it results in South African businesses being price-takers in international markets. It undermines our strategic autonomy, and it means that we create fewer jobs at home.

At the same time, it is not desirable nor feasible to seek to manufacture all goods in a local economy – there are considerable advantages in a global trading system where countries play to inherent strengths (and create or enhance these). The issue is about an appropriate balance of locally-made and imported goods. In South Africa, it is clear the balance has not been struck at a level that enable sufficient jobs and entrepreneurial opportunities, particularly for young people.

The process followed to set a target for localisation and finalise a list of products involved inter alia research on import levels, a comparative analysis of global import levels in leading economies, a number of meetings with business executives in specific sectors or from firms in specific product markets, review of the Master Plans applicable for sectors, consideration of the products that have been designated by the state for local procurement by public entities in terms of applicable legislation and engagement with social partners at Nedlac, resulting in agreements on targets and products.

First, from June 2020, Government commenced discussions with a number of different business groups, such as the Consumer Goods Council of SA and CEOs of different sectors. Separate meetings were held inter alia with CEOs of the following sectors:

• Fast-food operators;
• Grocery retailers;
• Food and beverage manufacturers;
• Clothing, textile, footwear and leather retailers and manufacturers;
• Hardware retailers; and
• Construction companies.

Discussions also took place with Business Unity SA leaders and with firms.

These discussions focussed on ways to develop a partnership between the private sector and the public sector to promote the deeper industrialisation of the SA economy, through a significant reduction in the level of imported products and considered what would be pragmatic and achievable targets over a reasonable period of time; and the identification of potential products that could be localised.

Second, the Department compiled and evaluated data on the import levels of different products and in a number of cases, shared data with business representatives, to help identify products that could be localised.

For example, the research showed that SA imported R9,1bn of edible-oils during 2019. Work was done on the local capacity in SA to be able to supply the market. Consideration was given to the decision by a large importer to refine a significant quantity of palm oil locally, adding at least 20% local value in the process.

Research was conducted on the comparative position of other leading economies, in respect of imports measured against GDP. The results of the study showed that South Africa has an over-propensity to import goods which could otherwise be produced in South Africa. Every year, the South African economy spends approximately 25% of the national wealth created, on goods imported from other countries. (See TABLE below.)

This propensity is far greater than in other similar countries and is out of line with our developmental needs, and impedes the opportunity for South Africa to develop its manufacturing capacity across carefully-identified selected strategic industries to take advantage of the enormous export potential, particularly in the context of the African Continental Free Trade Area.

Third, the work done with firms and associations at sector level that led to industry Master Plans being developed, were used to identify both specific products and opportunities to localise.

By way of example, the auto industry set a target to localise the components used in SA-assembled vehicles, from 39% to 60% over a 15 year period. In the sugar industry, the parties agreed to improve local sourcing from 60% to initially 80% and thereafter to improve it further. In the poultry industry, R1.5 billion was committed by local producers to expand production, with an additional more than 1 million chickens produced in South Africa per week during 2020, when compared to the prior year. In the clothing industry, retailers committed to improving the level of local procurement by 21 percentage points over a 10 year period to 2030.

Fourth, the Department undertook a review of products included in the designated public procurement list to identify further products which the private sector could be encouraged to localise. These products had been designated over a number of years and the demand available from the public sector can be enhanced by collaboration with the private sector. For a complete list of designated products, see http://www.thedtic.gov.za/sectors-and-services-2/industrial-development/industrial-procurement/.

Fifth, Government engaged social partners at Nedlac in August and September 2020 in an economic recovery plan, which resulted in a Nedlac Agreement reached in October 2020, that contained a number of pillars, including localisation.

The Agreement provided inter alia as follows:

Strategic localisation for jobs and growth

Social partners recognise that localisation and import replacement have significant potential for job retention and creation, the development of new SMMEs and start ups and the initiation of new technology platforms that can strengthen South Africa’s human resource endowment. Further, import replacement lowers South Africa’s vulnerability to global value-chain disruptions in strategic sectors.

The social partners agree to work jointly to:

• Reduce the proportion of imported intermediate and finished-goods;
• Improve the efficiency of local producers; and
• Develop export competitive sectors that can expand the sales of South African made products on the continent and beyond. They thus commit to:

…  Implement measurable and significant increases (by volume and value) in public and private-sector procurement from local manufacturers across value-chains set out in Annexure B by, inter alia:

• 1. Establishing targets for improvement of current levels of localisation in value chains, with the first set of targets to be announced within six weeks; and subsequent targets to be materially completed by the end of November 2020;
  2. Establishing supplier development programmes, as appropriate, on a sectoral or large firm basis;
  3. Expanding the platform used to locally manufacture personal protective equipment (PPE) to other targeted sectors and large volume items where practical and feasible; and
  4. Ensuring that public and private sector infrastructure investment is underpinned by the procurement of locally-manufactured inputs and capital equipment where practical and feasible.

…

Ramp up buy-local campaigns through inter alia:

• • Joint public awareness, education and social media campaigns;
  • Retailer promotions;
  • Clearer labelling of South African manufactured products;
  • A commitment to promote ‘buy local’ statements;
  • Training of procurement entities in the public and private sector; and
  • Working with buyers and procurement entities to support and develop programmes to maximise orders with local producers.

The Agreement contained the following value-chains in Annexure B, which the parties agreed should be the primary focus of localisation:

“[NEDLAC-AGREED] VALUE CHAINS FOR PRIORITY ACTION IN RESPECT OF LOCALISATION

Agro-processing value chain, including poultry, sugar, oils, grains, juice concentrates and dairy products used in the food and grocery industries.

Health-care value-chains: pharmaceuticals, personal protective equipment and medical equipment, (e.g. ventilators) used in public and private healthcare facilities.

Basic consumer goods: clothing and footwear, home textiles, consumer electronic products and appliances (including televisions, mobile phones, and white goods like fridges, stoves and washing machines), household hardware products, packaging material, furniture.

Capital goods: equipment and industrial inputs particularly used in infrastructure projects, mining, agriculture, the green economy and digital infrastructure.

Construction-driven: value-chains, such as cement, steel, piping (plastic and steel), engineered products and earth-moving equipment.

Transport rolling stock: automobile and rail assembly and component production, in preparation for the African Continental Free Trade Area.”

A working group with senior representatives of the Nedlac constituencies was composed, led by the CEO of BUSA and the general secretaries of some of the largest labour federations, which considered proposals on localisation. In addition, a number of bilateral meetings took place between Government and BUSA, which worked on establishing a quantitative target on localisation. A number of product-specific suggestions and proposals were considered. Discussions took place with organised labour, who generally favoured a robust and ambitious target. The discussions identified those products that were regarded as capable of implementation or where significant opportunity existed.

The results of the bilateral discussions were shared with the other Nedlac parties and the Nedlac working group was also able to draw on the work on trade flows, compiled by Government. Finally, a pragmatic target was agreed based on all the available information, the value of a metric against which progress could be measured and a recognition that the parties will need to approach implementation with flexibility, with the first two years setting the platform for greater localisation in subsequent years.

On 14 December 2020, Nedlac agreed to a Localisation Targets and Modalities Plan, which contained the following:

“Overview: the framework for the common commitment to promote localisation is set out in the Nedlac Economic Recovery Plan. This document sets out the agreed approach following discussions between BUSA, Government, [Organised labour/Community].

It covers the implementation of the commitments made by social partners, based on:

• A set of targets
• A set of products
• Private sector Champions
• A simple and effective monitoring and reporting arrangement.

Targets (macro):

It is agreed that the parties would use their best efforts to reduce imports of all products (excluding crude oil) into SA by 20%, to be achieved over a 5 year period. Based on the 2019 import data of R1,1 trillion (non-oil imports), this target would entail a reduction of R220 billion and an indicative annual target of R45bn a year in current prices. 

Product targets:

In order to achieve the overall goal of a 20% reduction in total non-oil imports, some products will need to have a target above 20% and some will be below this target, based on what is practicable.

To enable the process to start, the parties agree that the general goal will be 20% and this will be adjusted based on the work undertaken, provided they are able to still achieve the overall goal of a 20% reduction.

The targets in this document are indicative and seek to provide a set of goal posts to galvanise social partners towards greater levels of localisation across the value chains identified.”

Chief Executive Officers and other senior leaders have agreed to serve as product champions across a number of the product areas (“Localisation Champions”).

The localisation programme will help to stimulate aggregate demand and strengthen support for the local manufacturing sector. This is an added incentive for both domestic and foreign direct investment in the production sectors of the economy.

The government’s policy in this matter is encapsulated in the Policy Statement on Localisation for Jobs and Industrial Growth, which was released on 18 May 2021. The policy is aimed at building local industrial capacity for the domestic market and for export markets. It is not a turn away from engaging in global markets, but it is about changing the terms of the engagement to one where we are no longer mainly an exporter of raw materials.

Implementation of the strategy will not be without challenges – and finding the policy blend and careful execution required to promote deeper levels of localisation, will require drawing on the skills and expertise in the private and public sectors. SA can build on a number of successes with localisation, draw the lessons and scale these up.

-END-

Reply:

Price controls on cooking oil is not part of the country’s legal framework. However, we are concerned at spikes in food prices, including what was witnessed recently. For this reason, the Competition Commission has been monitoring prices to determine whether these increases are a result of the existence of monopolies or dominant firms abusing market power or through cartels colluding to raise prices.

The Competition Commission has recently noted global reports relating to oil producing crop shortages internationally, including sunflower, palm, soya and canola. It has provided me with a briefing on its observations, which I reflect in this reply.

In the Competition Commission’s preliminary view, the increases currently seen in the prices for cooking oil in the local market could be influenced by the global developments. Domestic wholesale prices for vegetable oil and retail prices for cooking oil (sunflower and canola), as seen from StatsSA data, shows a recent increasing trend in these prices.

Various commodity outlook reports have cited reasons for the recent surge in global oil prices including slow production and supply shortages in the large oil crop production regions including Malaysia and Indonesia (driven by poor weather and pandemic-led worker shortages), as well as stronger-than-expected consumption patterns from the main consumer nations of oil seed products such as China and India, further adding to global supply strains. In terms of soy oil, prices have risen off the back of global soybean shortages and shipment delays mainly due to the drought being experienced in the primary soybean crop areas like Argentina and Brazil. Furthermore, reports note that some countries have also lowered import tariffs or raised export tariffs on domestically produced vegetable oils in order to lessen the higher costs for vegetable oils.

Within the context of oil crop prices rising in global markets for the reasons outlined above, these price increases are feeding into domestic markets which appears to be flowing through into higher retail prices for cooking oil as South Africa imports a substantial portion of its oil seed requirements. In this regard, the Competition Commission will continue to monitor developments and may institute enforcement action should the information point to abuse of market power in the pricing.

In addition to the above, I have also asked the Consumer Commission to consider the rising prices and provide me with a report on its causes and any remedial action that may be required.

-END-

Reply:

I have submitted the question to the National Lotteries Commission for a reply.

In a letter dated 14 May 2021, NLC Commissioner, Ms T Mampane advised me that “The report is a confidential disclosure to Parliament in terms of Regulation 8 of the Lotteries Act, No. 57 of 1997, as amended. This document is intended for the internal use of NLC only and may not be distributed externally or reproduced for external distribution in any form without express written permission of the NLC and the service provider”.

The Department will be securing advice on the approach of the NLC on the Parliamentary Question.

-END-

Reply:

I have been furnished information of the 3 replies. Below are the supplementary replies received by the Commissioner of the NLC, Ms Mampane:

PQ 196 - Reply from the National Lotteries Commission:

“1 (a) The NLC can fully account for the R13 332 300 that was granted to the beneficiary. With reference to Parliamentary Question 2803, the NLC responded to the direct questions posed by honourable member wherein he enquired specifically around the accountability for funding for workshops and infrastructure.

• The NLC responded that the amount that was utilised for workshops was R801 000 accounted for as detailed in PQ 2803.
• In terms of infrastructure, it was confirmed that no infrastructure was funded under this project number.

With respect to PQ 196, the NLC responds as follows:

• The remaining amount of R12 531 300 was for project activities related to the Cape Minstrels Carnival.
• The NLC funded the following project activities amongst others Sound and Stage, Transportation, Apparel, Security, Catering and Administration.

(b) The NLC received a progress report from the beneficiary and it was found to be satisfactory and all requirements pertaining to the grant that was made to the organisation have been fulfilled and the project was subsequently closed. The funds were accounted for inline with what was reported in paragraph 1(a) above, therefore no missing funds identified.

(c) There was no funding for infrastructure.

2 (a) Reporting requirements for beneficiaries are contained in the signed Grant Agreement. The NLC received and reviewed the interim and final progress report in line with the signed Grant Agreement. The amounts were spent as indicated in paragraph 1(a) above.

(b) The NLC does not audit the finances of beneficiaries however conduct reviews as stipulated in the Grant Agreement in relation to the funded project. The NLC reviewed all interim reports and final report that were submitted by the beneficiary on the following dates:

• 13 January 2013
• 29 April 2013
• 4 June 2013
• 24 June 2013
• 8 August 2013

(c) The NLC found that all reporting requirements pertaining to the NLC grant were fulfilled. This is supported by the letter from NLC to the beneficiary.”

PQ 197 – Reply from the National Lotteries Commission:

“(1)(a) With reference to answer provided to Parliamentary Question 2802, the NLC indicated that an amount of R 5 000 000 was allocated for the building of Carnival Heritage Museum out of a grant of R 27 320 758, 64. The R 22 320 758 was accounted for as the allocation included amongst others the following: Minstrel Carnival Planning; Minstrel Carnival Rehearsal; Minstrel Carnival; and Minstrel Carnival New Year.

(b)(i) R1 700 000.00

(ii) R1 700 000.00

(c) The Cape Town Minstrel Carnival Association.

(2) a) The spending for the project was for the following main line items: Minstrel Carnival Planning; Minstrel Carnival Rehearsal; Minstrel Carnival; and Minstrel Carnival New Year. The total spending was R 27 320 758, 64.

(b) Information on the current rental being paid is not available as the project currently closed and a closeout report was issued.”

PQ 198 – Reply from the National Lotteries Commission:

“(1)(a) The National Lotteries Commission does not audit the financial statements of the funded organisation. It conducts monitoring and evaluations on funded projects and assess the progress reports submitted to ascertain whether the project yielded the envisaged return on that investment. Three (3) reports were submitted by the organisation in question on the following dates:

• 5 May 2014;
• 25 June 2014; and
• 24 August 2015

In terms of the report submitted, a total amount of about R 8 290 000.00 was spent on the magazine. The amount includes amongst others the procurement of transport equipment, marketing costs, printer costs, cost of operational equipment, design and publishing, distribution and logistics.

(1)(b) The report submitted does not provide the number of publication and only quantifies the costs associated with the publishing of magazines

(1)(c) The report submitted does not provide the number of copies printed and only quantifies the costs associated with printing of the magazine

(2) a) The report submitted did not have the copies of each magazine and project. After receipt of a satisfactory progress report, the project was subsequently closed.

(2)(b) The National Lotteries Commission does not audit the financial statements of the funded organisation. It conducts monitoring and evaluations on funded projects and assess the progress reports submitted to ascertain whether the project yielded the envisaged return on that investment. In terms of the report submitted, indicated that a total of about R 5 460 000.00 was spent in conducting the socioeconomic cohesion symposium. The amount is inclusive of all operational costs and personnel costs for the project.”

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