ATC140324: Report of the Portfolio Committee on Economic Development on its activities undertaken during the 4th Parliament (May 2009 – March 2014), dated 11 March 2014

Economic Development

Report of the Portfolio Committee on Economic Development on its activities undertaken during the 4th Parliament (May 2009 – March 2014), dated 11 March 2014



he Economic Development Department (EDD) was established in July 2009, when President Zuma announced a restructured national executive after his inauguration. Subsequent to the establishment of this new Department, on the 27 th of May 2009, I was nominated as the Chairperson of the Portfolio Committee on Economic Development. Central to the work of the Committee was the renewed call to step up efforts to change the lives of our people for the better. The focus on education, health and the economy sent one clear message, that is, we could not continue with business as usual. The Committee therefore had a mammoth task ahead of it and being a new Committee meant it had to put in extra effort. High levels of unemployment, deepening poverty and growing inequality were acknowledged as the biggest challenges that the Committee had to deal with. I am glad to say that despite being a new Committee, the 4 th Parliament term of the Committee was a resounding success.

The achievements of the Committee would not have been possible without the support of a dedicated and resilient team. Great appreciation goes to my fellow Comrades from the African National Congress (ANC) who relentlessly ensured that we serve the nation and ensure attainment of national objectives. My appreciation also goes to the Honourable Members of the Opposition Parties that served in the Committee who ensured unity and professionalism throughout. Our Committee, like any democratic formation, allowed for debate and despite difference in opinion, it still remained conscious of the crucial importance of the task ahead.

To the support team, which ensured efficient and effective functioning of the Committee, I cannot thank you enough for all the support you gave to the entire Committee and individual Members.

To the Department and all the entities reporting to the Department, it was really great experience working with each one of you and one can not hesitate to say that as a Committee we also learnt a lot from the good work that each of the entities is doing.

I have the pleasure of presenting this Legacy Report, hoping it will ensure a smooth transition into the 5 th Parliament. Indeed, the Legacy Report for the 4 th Parliament continues to tell the good story of all the achievements of the Committee in the past 5 years of its term.

Thank You

Honourable Elsie Mmathulare Coleman


1. Introduction

The purpose of this report is to provide an account of the work of the Portfolio Committee on Economic Development’s work during the 4 th Parliament.

The report provides an overview of the way in which the Portfolio Committee undertook its oversight and legislative programme in relation to Executive actions, policies, budget, legislation and programmes as driven by the Department of Economic Development and its Entities. The report further identifies challenges that emerged during the period under review, makes recommendations and highlights issues for consideration and follow up in the coming 5 th Parliament.

1.1 Committee Members

The Committee on Economic Development like all other Committees is represented by Honorable Members of different Political Organisations. Some of the Members were changed during the years. However, the Committee Members as at closing of the term included the following members:






Coleman, Mrs EM - Chairperson

Motau, Mr SC

Ngonyama, Mr LS

Hlengwa, Mr M

Kwankwa, Mr NL

Ntuli, Mr ZC – (Whip

Van der Westhuizen, Mr AP

Beukman, Mr F

Chili, Ms DO

Mabasa, Mr X

Mohai, Mr S

Mohorosi, Ms MM

Tsotetsi, Ms D

Other members that have served in the Committee include:







Ms P. Bhengu

Mr R Coetzee

Mr SN Swart

Dr M Oriani-Abrosini

Mr BH Holomisa

Mr H Hoosen

Ms PM Daniels

Mr G Krumbock

Mr W Thring

Mr N Singh

Mr NE Gcwabaza

Mr JF Marais

Dr S.B. Huang

Mr KS Mubu

Ms H. Line

Dr P Rabie

Mr K Manamela

Mr E Nyekemba

Mr G Scheeman

Ms RM Sonto

Ms S van der Merwe

The change of Party Members is the prerogative of each party, thus most of the changes were as a result of Members being deployed and redeployed by their Parties.

2. Background on the establishment of the Committee

The Economic Development Department (EDD) was established in July 2009, when President Zuma announced a restructured national executive after his inauguration. The President stated on 10 May 2009 that “Cabinet has been reorganised to achieve better alignment between the structure, our electoral mandate and the developmental challenges that need to receive immediate attention from government”. In line with this, the President announced that “[a] new department of Economic Development has been established to focus on economic policy making”. Meanwhile, on 27 May 2009 the Committee unanimously voted Ms E.M. Coleman (ANC) as Committee Chairperson.

It is important to note that the EDD, being a new organisation, was indeed established in May 2009 together with the Committee. However, the EDD was formally established and operational in July 2009. This was to ensure that all systems, setting up of office and establishment of capacity was put in place, prior to formal establishment.

When the EDD was established six agencies were transferred from the dti to EDD: three Regulatory Bodies (the Competition Commission, the Competition Tribunal and the International Trade Administration Commission (ITAC)) and three Development Finance Institutions (the Industrial Development Corporation (IDC), Khula Enterprise Finance Limited (Khula) and the South African Micro-finance Apex Fund (Samaf)). Subsequently, in Parliament these entities were also transferred from the Portfolio Committee on Trade and Industry to account to the Portfolio Committee on Economic Development.

3. The Role of the Committee

Parliament, through committees such as the Portfolio Committee on Economic Development (the Committee), is tasked with:

· Making law;

· Maintaining oversight over national executive authority and any organ of state;

· Facilitating public involvement in the legislative and other processes of the Assembly and its committees;

· Participating in, promoting and overseeing co-operative government; and

· Engaging and participate in international participation (participate in regional, continental and international bodies)

The key role of Committees is to exercise oversight over the Departments and its Entities, ensure that Government organs are performing their functions and are delivering services that guarantee a good quality of life for citizens. The key reasons for oversight are to:

· Monitor the implementation of government policy by departments

· Conduct impact assessment of government policy on the lives of the citizens of the country

· Evaluate the performance of departments against the strategic plan of the departments and hold the Executive accountable for non-performance

· Hold departments accountable for the expenditure of departmental budget’s;

By and large the role of the Committee on Economic Development is to ensure that the Department and the Entities reporting to the Department are effectively implementing the key Government Policies, namely the New Growth Path (NGP); the Industrial Policy Action Plan (IPAP), the National Development Plan (NDP) and the National Infrastructure Plan. The Committee is also tasked with ensuring that the Department and its Entities are contributing to Governments imperatives of job creation, the reduction of income inequalities and eradication of poverty.

The Committee had to maintain constant monitoring of the actions, policies and activities of the Economic Development Department and the Entities.

In facilitating its work and oversight the Committee promoted that decent jobs be created, projects be completed within schedule, results be achieved and economic development projects be aligned with the National Policies and objectives.

In the execution of its oversight role, the Committee identified the following key priorities which informed and guided its programme:

· Ensuring thorough monitoring and evaluation, as well as participatory public consultation, that the economic policy developed by the Department of Economic Development results in the realisation of the objectives of the “Decent Work Agenda.”

· Encouraging the attainment of a low-carbon economy which is energy efficient and addresses the energy demands for economic growth.

· Following trends on the local impact of the global economic crisis and progress with the implementation and results of the Framework for South Africa’s Response to the Economic Crisis.

· Engaging the department on progress with the implementation of its programmes and encouraging their integration with other economic development programmes across Government.

· Ensuring that the mandates of the agencies and Development Finance Institutions (DFI’s) reporting to the department are aligned and coordinated in order to ensure that their actions address the growth requirements of the productive sectors of the economy and contribute towards the expeditious reduction of unemployment.

· Determine where areas of poverty are located in the country which includes rural and urban areas and ensure that economic policy focuses on these areas.

· Participating in the development of the Comprehensive Rural Development Strategy as a key component of economic development in South Africa.

· Contribute towards South Africa’s global economic relations and standing in the community of nations.

· Contribute to policy co-ordination and coherence, by working in collaboration with other committees in the National Assembly (NA) and National Council of Provinces (NCOP) across portfolios.

· Promoting local economic development across the country.

· Contribute to efforts of the executive in creating a conducive environment for businesses in order to create jobs.

· Ensuring that the electoral mandate of government and the strategic plan of the EDD and the Entities are aligned.

· Participating and contributing to the development and implementation of the New Growth Path.

· Tracking progress with the implementation of IPAP I and II.

· Monitoring progress with international trade negotiations and bilateral investment agreements as well as the impact of tariff reforms on the economy.

4. Methods and Tools for Oversight

There are many assessment methods and tools that were used by the Committee to perform its oversight role. The key ones included:

· Quarterly and annual reports of the Department and entities;

· Briefings by the Department and the Entities

· Oversight visits, including visits to companies and DFI funded institute;

· Follow-up on oversight;

· Presentations by Experts in various fields

· Joint meetings with other Departments;

· Engaging stakeholders, including Non Governmental Organisations (NGOs) and Trade Unions;

· Summits and Conferences;

· Public hearings, feedback and advisory panels;

· Passing legislation; and

· Budget Review and Recommendations Reports –budget.

5. Resources and skills

As a newly established Committee, there were bound to be challenges at first. Thus the Committee initially had capacity constraints, especially in terms of having the appropriate staff support. It was until in the last term (2013) that the Committee had a full complement of support staff.

The support staff enables the Committee to do its work, coordinates the programme of the Committee, provide research and content on matters brought before the Committee. The support staff of the Committee included the:

· Research support;

· Content Advisor

· Committee Secretary

· Assistant Committee Secretary

· Secretary to the Chairperson

· Secretary to the Whip

6. Key Achievements

The table below provides an overview of the number of meetings held, legislation and the number of oversight trips and study tours undertaken by the committee during the 4 th Parliament:








Meetings held







Legislation processed

Comment: For the period under review, the EDD intended to introduce three Bills before Parliament. These were the Competition Amendment Bill, International Trade and Administration Amendment Bill and the Infrastructure Development Bill. However, only the Infrastructure Development Bill could be introduced and processed, resulting to the Committee only considering one Bill.







Oversight trips undertaken







Study tours undertaken

Comment : For the period under review, the Committee undertook a study tour to Brazil during the 2011/12 financial year. This was due to the fact that Committees were only allowed to undertake one study tour per parliamentary term.







During the first year of establishment, the Department had a small team and had to spend most of its time and focus on setting up corporate governance processes and structures and ensure filling up of critical posts. This also contributed to the slow take off in activities of the Committee.

There were no international agreements processed and statutory appointments made during the term of the Committee. However, the Department considered and reviewed contracts of the ITAC Commission in 2011 and in 2012; the Competition Commission Deputy Commissioner positions in 2012 and established the Board for SEFA in 2011.

7. Oversight visits undertaken during the term of the Committee

As per the Constitutional mandate, Committee’s have to conduct oversight visits so as to ensure that all executive organs of state in the national sphere of government are accountable to Parliament; and to maintain oversight on the national executive authority, including the implementation of legislation.

The oversight visits that were undertaken by the Committee focussed attention on the following areas:

· Infrastructure (Rail, harbours, roads, pipelines);

· Local Procurement;

· Manufacturing, Agriculture and Agricultural processing (with more focus on local content, beneficiation, clothing and textiles, machinery (industrial) consumer goods and agro-processing);

· Green Economy (with more focus on green jobs, Green jobs, waste management (recycling/manufactory), wind turbines, solar water heaters, hydro-electricity and nuclear power/energy);

· Regional development and integration (with more focus on border posts, ports) and Coordination, ensuring that the three spheres of Government, inter and intra-departments, government and social partners work in a more coordinated and aligned manner.

The following oversight trips were undertaken:

7.1 Oversight visit to South African Revenue Services Centres

On 17-19 November 2009, the Committee undertook an oversight visit to Durban, Mpumalanga and Gauteng Provinces. The objective of the oversight visit was to assess the extent of Customs fraud and its impact on trade and economic development. The visit focused more on the work of Customs and Excise, which is the section of the South African Revenue Service (SARS) responsible for the collection of revenue at all points of entry into the country. Revenues collected at points of entry include import tariffs, dumping duties and value-added tax (VAT) on imports. Customs and Excise is also responsible for the collection of other duties on certain goods produced locally or imported.

The Committee’s theme and focus for the 3 rd term of the 2009/10 financial year was on the “Economic Crises Response Framework”. Customs fraud has led to many job losses, which has a fundamental impact on the economic development of South Africa.

The Committee visited the following SA Revenue Service Centres:

· Komati Poort – Port of Entry between SA and Mozambique

· Durban Harbour – which is probably the busiest harbour on the African continent

· OR Tambo International Airport – the biggest and busiest airport on the African continent

The Committee noted that considerable progress had been made with regard to risk management at those points visited, especially at OR Tambo International Airport and Lebombo Border Post. However, the Committee acknowledged that there were still loop-holes in the risk management system particularly with reference to customs fraud in the air and land modality. The Committee therefore undertook to endeavour to assist SARS (and other departments) in addressing a range of critical issues that emerged during the oversight visit.

7.2 Oversight visit to Companies in distress

The Committee also visited Companies that were in distress as a result of the economic crises. The purpose of the visits was to investigate how the specific companies in distress had performed after the Industrial Development Corporation’s (IDC) financial intervention. Four companies that were said to be in distress and financed by IDC’s intervention fund were identified. The committee specifically set out to check the authenticity of these companies and investigate the impacts of such intervention by the IDC. These companies were:

· Vrede Textiles (Pty) Ltd (Western Cape)

· Laser CNC (Durban, KZN)

· The York Timber Organisation Ltd (Sabie, Mpumalanga).

· Automotive Leather Company Group (Pty) Ltd, Pretoria (Gauteng).

The evidence from the oversight visit on the four companies in distress showed that the financial assistance of the IDC had managed to save 4 696 jobs. The Committee was pleased to note the assurance by all the companies visited that they would in future re-employ those employees retrenched, once the respective companies became viable and self-sustainable. However, the delegation was concerned that there was little or no co-ordination between the activities of the IDC, the Departments of Trade & Industry and Labour. The Committee noted that even though there were successes with those interventions, the IDC still needed to strengthen and reinforce its interventions so that the intentions and objectives of the interventions could be fully realized.

7.3 Oversight visit to the North West Province

On the 29 – 30 July 2010 the Committee undertook an oversight visit to the North West Province. The aim of the visit was to:

· Investigate and ensure effective and efficient implementation of projects funded by Government, and assess the value for money on those projects;

· Establish whether the Provincial Growth and Development Strategies are aligned to the national plans, especially the New Growth Path objectives;

· Determine and explore the impact of Development Finance Institutions (DFIs) and Economic Regulatory Bodies (ERBs) in communities.

The Committee received a briefing from the Provincial Department of Economic Development that assisted in ascertaining that developments took place and progress was made with regard to Provincial Growth and Development Strategies (PGDS) of the North-West Province, relating to the following:

• The alignment of the PGDS with the national plans regarding a new Growth Path and the Industrial Policy Action Plan (IPAP2)).

• The relationship between the North-West Province and the Development Finance Institutions (Industrial Development Corporation (IDC), Khula Enterprise Finance Ltd, the South African Micro-Apex Finance (SAMAF) and the Economic Regulatory Bodies such as the Competition Commission, Competition Tribunal and the International Trade Administration Commission (ITAC);

The Committee also visited a project funded by the Provincial Department of Economic Development and met with the community and business in Rustenburg (Bojanala Platinum District Municipality) on the role and impact of the DFIs (Industrial Development Corporation, Khula and South African Micro-finance Apex Fund) and the ERBs (Competition Commission, Competition Tribunal and the International Trade Administration Commission of SA) with the focus on the creation of jobs and poverty alleviation.

The Committee appreciated the honesty of the North-West’s Provincial Department of Economic Development in its presentation regarding its Provincial Growth and Development Strategy (PGDS) where the Department acknowledged that Municipalities were not involved in the initial development of the PGDS. The Committee was however re-assured that efforts were underway to include Municipalities and all the other stakeholders in the review of the PGDS. The Committee noted that it became evident from the meeting with the community and business that the community was not aware of the existence of some of the DFIs and ERBs, or even on the services that they can provide.

The Committee recommended that the Economic Development Department needed to undertake, with the development finance institutions, to review the application processes for funding (limiting the “red tape”). The IDC, Khula and Samaf were to ensure that monitoring and evaluation process are strengthened and reinforced. The EDD also needed to ensure that the coordination between the DFIs and other departments were strengthened and reinforced in order to minimize the “silo” approach within government. The EDD was to assist Khula, to explore avenues of reinforcing their presence and accessibility in the local areas, where for example, offices might be shared in the local municipalities’ LED divisions. The EDD was further to ensure that the DFIs adapt and implement the Batho Pele principles.

7.4 Oversight visit to the Limpopo Province

On the 05 – 06 August 2010 the Committee undertook an oversight visit to the Limpopo Province. The aim of the visit was to:

· Investigate and ensure effective and efficient implementation of projects funded by Government, and assess the value for money on those projects;

· Establish whether the Provincial Growth and Development Strategies are aligned to the national plans, especially the New Growth Path objectives;

· Determine and explore the impact of Development Finance Institutions (DFIs) and Economic Regulatory Bodies (ERBs) in communities.

The Committee received a briefing from the Limpopo Provincial Department of Economic Development on the Provincial Growth and Development Strategy. The Committee also visited the Modomole Goat Cooperative and held a meeting with the public and business in Modimolle on the role and impact of the DFIs and ERBs, focusing on creating decent jobs and poverty alleviation. The Committee noted that it was evident from the meeting with the community and business in Modimolle that they were not aware of the existence of some of the DFIs and ERBs, and the types of services that they could provide.

The Committee therefore encouraged Economic Development Department to explore expanding the presence of the DFIs in the local areas where the communities are able to access the necessary information and guidance and the Provincial Department of Economic Development was also encouraged to conduct a road show to educate people on tender processes and the reporting of possible tender–rigging.

7.5 Oversight visit to the Western Cape (Khayelitsha Township) and KwaZulu-Natal Province (Durban, Newcastle and Harding Areas )

On 26–28 January 2011 the Committee visited the areas below with the aim of ascertaining the impact of SAMAF funding to the Financial Services Cooperatives (FSCs) and the impact of the finance support on poverty alleviation and job creation.

The Committee visited clients which were funded by these FSCs. In the Khayelitsha Township, the Committee visited the Sibanye Cape SACCO Limited and Tetla Development Services. In KZN, the Committee visited the KwaZulu Ladies Empowerment Financial Services Cooperative, the KwaMachi Financial Services Cooperative and Siqalumnotho Financial Services Cooperative. The Committee further visited clients of the above-mentioned FSCs.

From the clients visited (all of them are saving at the various FSCs), it was evident that the creation of a savings culture in South Africa was crucial for economic development. Clients (especially those in the rural areas) who save with an FSC were in a position to access funding to start their own business which leaded to an improvement in their socio-economic conditions. The money they borrowed was used to meet their basic needs, e . g. food, shelter, health, education etc. FSCs created a “second tier” in the banking industry. Members of the FSC were in a position to establish micro-businesses in both rural and urban areas which raised their standard of living. The capacity grants provided by Samaf enabled the members of the FSCs to gain knowledge and skills with regard to leadership and management, record keeping, the importance of savings and basic financial management. The development of FSCs provided financial service to vulnerable groups including women, the youth and the disabled. This helped to elevate their status in society through economic and social empowerment. Interests charged differed by the various FSCs, in other words there was no consistency in applying the interest rate charges, e.g. some charge rates per month and others per year. The implementation of Samaf rules and procedures differed from province to province. The recovery of bad debt remained a challenge in some of the FSCs visited. Samaf’s assistance contributed to the viability and sustainability of the FSCs visited. The Small Enterprise Development Agency’s assistance to the FSCs was minimal. FSCs faced significant competition for borrowers with good credit from formal lenders such as commercial banks, who offered a broader array of financial products and greater number of locations. Due to the high unemployment rate, most South Africans were entrepreneurs out of necessity rather than choice, and many were to switch to formal employment if it became available. Once members of the FSC found employment they left the FSC. During the oversight visit members observed that clients of the FSCs at certain times were afraid to converse with the committee. The committee commended some of the FSCs for the difference that they made to many of their members.

7.6 Oversight visit to Free State (Bloemfontein) and Gauteng Province (Soweto and Pretoria)

On the 03 - 05 August 2011the Committee visited the areas below with the aim of:

· Engaging with the Provincial Officials so as to assess the extent to which the Municipal and Provincial Economic Development strategic plans, programmes, projects and priorities are aligned with those of the national Department of Economic Development.

· Visiting some of the State Owned Entities’ funded projects to get a first-hand experience of the work of development finance institutions (DFI)and examine their impact on economic development

· Meeting the community of Soweto to establish the level of knowledge and awareness about the Economic Development Entities. Furthermore, the Committee wanted to educate and empower the community with information on the roles and responsibilities of the Development Finance Institutions and the Regulatory Bodies.

7.6.1 Visit to Bloemfontein

In Bloemfontein, the Committee met with the Provincial Department of Economic Development, member of the legislature and representatives from Khula and South African Micro Apex Fund. While in Free State, the Committee visited two Khula projects and one SAMAF project. The Provincial Department gave a synopsis of economic opportunities and challenges faced by different regions in the Free State. The overarching issues were poverty, unemployment, under development of rural areas, ageing infrastructure, radiation from exposed uranium, the contamination of the land and water in affected areas and declining mining activity due to mines that are closing down. The Provincial department further presented on the progress made on the Growth and Development Strategy (FSGDS) and on emerging growth and development trends.

The Committee visited three businesses financed by Khula Enterprise Finance Ltd. namely A & R Creations, MJP Specialised Services cc, Tiro Procurement and BBT Electrical & Plumbing cc. The Committee also visited the Motheo Women’s’ Savings Group funded by SAMAF.

The Committee in its engagement with SAMAF and Khula clients, the following establishment that:

· The clients preferred to pay off the loans through monthly rather annual instalments.

· Clients were content with the financial services provided by the financial intermediary because they were able to access funds timeously to pay their employees when government department fails pay the businesses within 30 days.

· The intermediaries were concerned that the establishment of Khula Direct would pose unfair competition for their businesses.

· There was a need to grow SAMAF and other cooperative projects to an extent where they would able to alleviate poverty in a significant way.

7.6.2 Visit to Soweto

The Committee’s aim for the visit was to meet the community of Soweto and also establish the nature of the services offered by the entities that report to the Committee. Furthermore, the Committee used the opportunity as a platform to educate and empower the community with information on the mandate of the Development Finance Institutions (DFIs) and the regulatory bodies as well as accessing these services. The Committee held a meeting with the residents of Soweto at the Orlando Community Hall where officials of the DFIs and the regulatory bodies were introduced to the community. The Committee also visited two Industrial Parks in Orlando West and Emndeni townships.

The Community raised the following issues;

· Concerns that the Metro police raids did not take into consideration that there was difference between legal and illegal traders.

· The need to revive the vandalised empowerment zones and make effective and efficient use of abandoned buildings such as the former Pimville Technical College

· Dissatisfaction with government for allowing the importation of products that can be produced and manufactured in the country.

· Government failure to regulate the quantity of imported goods in the country.

· The view that unemployment is partly due to the fact that government allows foreign businesses to invest in the country and when profits have been made, citizens are left abandoned.

· Concerned that malls “kill” the SMME development in townships.

· The Department needs to assess the impact of on the SMME development in the townships.

· A lack of sufficient capital to bid for tenders.

· Complaints about cumbersome DFI processes.

· Skepticism that the meeting was just another talk shop but also a yearning for the beginning of a relationship between the entities and the Soweto community was expressed.

The Committee visited the small businesses zones in Orlando West and Emndeni townships. The zone in Orlando West is situated next to Orlando West Station. The Committee was briefed about the challenges in the Zone and these challenges were highlighted as being that:

· Only a few tenants paid rent.

· Vandalism of the public property.

· Potholes in the internal roads.

· Illegal sub-letting of the units by the tenants.

· Tenants refusing to sign lease agreements

· Tenants refuse to relinquish units in the hope of owning them.

· Tenants refused to sign lease agreements.

· Squatters in the yard.

· No tarred roads in between the property.

· Rental boycotts and refusal to sign lease agreements were common.

7.6.3 Visit to EDD offices in Pretoria

The Committee visited the offices of the Department of Economic Development and its entities at the Department of Trade and Industry Campus in Pretoria. The Committee’s intention was to familiarise itself with the offices of the Department and its entities. On the 5 th of August the Committee had a meet and greet session with Department and its entities at their respective offices at the DTI Campus in Pretoria. Of major concern was the shortage of office space, and related problems such as the non-adherence to security standards and impact on staff relations. The Committee was also disturbed to see that different sections of the department were placed in different buildings on the Campus.


The Committee recommended the following;

· Khula should look at the possibility of offering different repayment options based on discretion and client needs.

· The Department should ensure that the IDC, Khula, SAMAF merger is sufficiently equipped to create large cooperatives that are able to alleviate poverty and create wealth for the previously marginalised people.

· The Committee should conduct public hearings to establish the state of cooperatives and consider ways to overcome existing hurdles.

· The EDD and its entities should embark on a follow up community outreach programme in Orlando, in order to respond to the community’s plea for a meaningful relationship after the August parliamentary oversight visit in Soweto.

· The Municipality, Province and the relevant national department should come up with an integrated strategy for restoring the small business parks in Soweto to their full potential.

· The Provincial Department of Economic Development should invite and engage the National Department on strategies that could assist in unlocking the poverty and unemployment bottlenecks in the province.

7.7 . Oversight visit to the Eastern Cape Province (Port Elizabeth)

On 10–12 August 2011, the Committee undertook an oversight visit to Port Elizabeth and the aim of the visit was to:

· I nteract with Provincial officials in order to assess the extent to which the Municipal and Provincial Economic Development strategic plans, programmes, projects and priorities are aligned with those of the national Department of Economic Development;

· Ascertain the impact of Volkswagen SA’s investment of R500m on local economic development in the area; and

· Determine the impact of Coega Industrial Development Zone (IDZ) on job creation.

The Committee had meetings with the Provincial Government Officials. There were also visits to the Volkswagen plant and the Coega IDZ.

7.8. Oversight visit to the Northern Cape , Kwa-Zulu Natal, Gauteng and Mpumalanga Province s

On the 19-22 June 2012 the Committee undertook an oversight visit and the aim of the visit was to:

· I nteract with Provincial Departments of Economic Development on the alignment and coordination of plans and programmes, with the New Growth Path and IPAP2; and also assess the level of cooperation between the spheres of Government;

· Observe developments in key infrastructure projects, noting that the Committee had identified infrastructure as one of the key focus sectors;

· Assess the extent in which projects were attributing to creation of decent jobs, evaluate whether key projects were completed within schedule and whether the projects were aligned with NGP and IPAP2 objectives;

· Evaluate awareness levels on the roles and responsibilities of the Development Finance Institutions and the regulatory bodies.

7.8.1 Meeting with DFEAT, IDC, FABCOS, Westra Industry Projects in Kimberley , Northern Cape

In Kimberley the Committee interacted with the following key stakeholders: the Department of Finance, Economic Affairs and Tourism (DFEAT), Industrial Development Corporation (IDC), Foundation for African Business and Consumer Services (FABCOS) Griekwaland-Wes Korporatief (GWK) Beperk Limited and the Bed Manufacturer as well as the Westra Industry Projects.

The IDC, FABCOS and GWK Beperk Limited are shareholders of the Cape Malting House Project. The IDC owns 15%, FABCOS through FABVEST own 55% and GWK owns 35% of the Cape Malting Project. The main concern with the project was transformation. There was a shortage or lack of inclusion of black farmers. Given that the state owned entity IDC is a shareholder, it should drive the inclusion of black farmers in the project.

7.8.2 Oversight visit to Richards Bay in KZN

At the oversight visit to Richards Bay, the Committee met and interacted with the following key stakeholders: the Provincial Department of Economic Development and Tourism (DEDT), the Universal Services and Access Agency of South Africa (USAASA), and Sentech.

The Committee was shown the National Fibre-Optic Network Project and also visited the Thambolini Project which Sentech, the state owned entity, reportedly supplied with broadband. The Committee was taken to the computer laboratory and shown computers that had been connected with broadband network, only to discover that the computers had not been used for about six months due to connectivity problems. The School reported that attempts had been made to request reconnection to the Department of Education in Pretoria.

The Committee was dissatisfied with Sentech for not monitoring and maintaining connectivity at the school. Furthermore, for the school to have to report connectivity problems in Pretoria, while there were Sentech offices in KwaZulu-Natal, was cumbersome. This is an indication that the different Departments are working in silos making access services difficult for the school.

On the National Fibre Optic Network Project, the Committee saw a gallery with photos of the construction work that was done when contractors were installing pipes, carrying optic fibre, in the sea. Although the visit was interesting, the Committee would have benefitted from obtaining information from all the role players during construction. In light of the Presidential Infrastructure Coordinating Commission (PICC ) projects, the Committee should ensure that it undertakes sight visit during and after construction. This approach will enable the Committee to track progress, identify and address pertinent issues that will influence the success of the projects before completion. Thus assist the Committee to play a more effective oversight role over the PICC projects.

The Department of Economic Development and Tourism in KwaZulu-Natal initiated the government’s first Broadband Deprivation Index setting an example for the whole country. The index identifies municipalities that are least to most deprived of broadband coverage and infrastructure. The Department of Economic Development could encourage all the provinces to conduct the Broadband Deprivation Index survey which will speed up the country’s broadband roll out plan, particularly because there is no Communications Department at Provincial or Municipal level.

7.8.3 Meetings with Provincial Departments in Northern Cape, Mpumalanga and Gauteng

The Committee also had meetings with the Department of Finance, Economic Affairs and Tourism in Northern Cape, Department of Economic Development, Environment and Tourism in Mpumalanga and Department of Economic Development in Gauteng. These departments were in existence and had developed their own programmes and priority areas long before the national Department of Economic Development was established. In their presentations it was evident that the Provincial Departments had set their job targets in accordance with the National Department’s economic strategy the New Growth Path. However the Committee identified a need to align the national programmes and other priority areas at Provincial and Municipal level.

7.9 Oversight visit to KZN, Gauteng, Limpopo and North West Provinces

On the 27 November – 07 December 2012, the Committee undertook an oversight visit to the areas below and the aim of the oversight visit was to:

· I nteract with Provincial Departments of Economic Development on the alignment and coordination of plans and programmes, with the New Growth Path and IPAP2; and also assess the level of cooperation between the spheres of Government;

· Assess the impact of the financial intervention by Khula and SAMAF prior to the merger; and

· Evaluate the impact of economic programmes on creation of decent jobs and other NGP and IPAP 2 targets.

7.9.1 Visits to the Durban Sheltered Employment Factories (SEF) Mtunzini and Mabandla in Pietermaritzburg, KwaZulu-Natal

The Committee undertook the oversight visit to various economic projects namely, the Sheltered Employment Factories;

During the visit, the Committee observed that SEF employees were predominantly white and many were almost due for retirement therefore, raising concerns regarding the missed opportunity for skills transfer in particular to the black youth living with disabilities. The SEFs complained that they were in competition with Black Economic Empowerment (BEE) companies for government tenders which they lost most of the time. However, the SEFs reported that some BEE companies would buy products from them to then sell to Government Departments, instead of buying direct from SEFs. The BEE companies would therefore serve as a middleman between a government entity and a Government Department.

7.9.2 Visit to Mtunzini Telkom Cable Station

The project is capital intensive and employs very few people and even fewer women. There are six people employed at the cable station. There are no learnerships in the project but people are trained through the system as an ongoing exercise.

7.9.3 Visit to Mabandla Forestry Project

Due to travel distance, the Committee did not sufficient time to observe all the work done at Mabandla Forestry and this did not reflect well to the communities. Nonetheless, the Committee was impressed to note that the IDC was involved in supporting projects in remote areas. The Committee was told that, with more funds, the project had a potential to generate more income and create more jobs in that rural area. .However, the Committee was concerned about the relatively small amount of money with which the IDC assisted the project. In response the IDC reported that the project did not have security of tenure because the land was held by the government for use by the communities.

7.9.4 Industrial Parks in Sebokeng

The Committee visited Sebokeng, Zone 10, Phase 2 and Residential Phase 1, Industrial Parks at the Vaal and Lenasia on the 29 November. 2012 and Pennyville Industrial Hive in New Canada, Johannesburg on 30 November 2012. The industrial parks are owned by the Small Enterprise Finance Agency (sefa). In engagements with the Committee, the lessees who are running their small businesses at the Industrial Parks expressed concern about the maintenance of assets (including land) and properties (structures); and the possibility of converting lease agreements into ownership. The Committee was also informed that the industrial parks are managed by a third party.

The Committee noticed that many tenants – who are Small Medium and Micro Enterprises - were unaware of SEFA and the services that the entity provides to small businesses, despite the fact that the industrial parks are owned by SEFA. The Committee saw this as a missed opportunity for SEFA to extend its footprint and deliver on its mandate. The Committee was also concerned about the financial implications of hiring a middleman to manage the industrial parks.

7.9.5 Visit to SAMAF projects in the North West

In the North West province the Committee visited South African Apex Fund’s (SAMAF’s) projects, namely, Boikago Savings & Credit Co-operative (Sacco), Lotlhakane Financial Services Cooperative and Ditsobotla. The Committee noticed that the cooperatives had made some strides establishing themselves in the financial services sector but were still relatively small businesses. The Committee would have preffered to see the cooperatives develop into large entities that would be more effective, efficient and able to create more jobs. Furthermore, the Committee wanted SAMAF involved in new ventures, particularly youth owned ones. The Members felt that SAMAF could do more not only financially but also in terms of mentorship to help the cooperatives grow into bigger businesses.

The Committee also had meetings with the Limpopo Economic Development, Environment and Tourism (Ledet) Department, and the North West Department of Economic Development, Environment, Conservation and Tourism.

The Limpopo Economic Development, Environment and Tourism laid out its challenges to the Committee. These include the fact that insufficient efforts had been made to place the Provincial economy on a sustainable developmental path capable of delivering decent work and sustainable livelihoods on a scale that will enable the province to achieve the target of halving unemployment by 2014.

North West is spatially a medium-size province, which is home to approximately 3.7 million people that constitutes 8.2% of the South African population and contributes approximately 7% to the national economy. The challenges facing the province are that; it has a low population density and inadequate infrastructure, especially in the remote rural areas. The Province has inherited an enormous backlog in basic service delivery and maintenance that will take time to eradicate. The population is predominantly poor with high levels of illiteracy and dependency that seriously affect their productivity and ability to compete for jobs. The Province is characterized by great inequalities between the rich and poor as well as disparities between urban and rural. The Province is faced by HIV/Aids as a social and economic challenge. Available resources are unevenly distributed and offer limited potential for improved delivery of services and growth.

7.10 Oversight visit to Gauteng, North West, KwaZulu-Natal and Limpopo Provinces

On 22 July–02 August 2013, the Committee undertook an oversight visit to the following areas and the aim of the oversight visit was to:

· Evaluate the progress made in the development of transport infrastructure in Gauteng, more specifically Rail transport and the Gautrain and the development of the modal transport system

· Follow up on the visit made by the Committee in 2009 so as to assess the progress made by SARS, specifically the Customs division in terms of controlling fraud, illegal imports in the major Ports of entry since and evaluate the interventions implemented by Customs since the Committee’s previous visit. The Committee also wanted to assess how customs was managing the congestion at the Durban Harbour.

· Conduct round tables for Small Medium Micro Enterprises (SMMEs) and Co –operatives.

· Assess progress on key infrastructure projects such as Medupi Power Station

· Assess the impact of projects visited on key national objectives such as job creation, SMME and development of Co operatives, localisation and rural development

The theme of the oversight was “Development of SMMEs, Co operatives, Youth, Infrastructure and Rural Development”, and the named sectors formed the key focus of the oversight.

7.10.1 Oversight visit to Gauteng Province

In Gauteng, the Committee met with the Gauteng Legislature, specifically the Portfolio Committee on Economic Development. The meeting with the Legislator involved presentations by transport agencies, namely PRASA, Rea Vaya and Gautrain who gave an overview on their transport integration plans and developments.

The Committee observed that the modal transport system had been highly effective in improving transport needs of the people of Gauteng, thus making it easy for them to get to work. The Committee had an experience of travelling on the Gautrain and appreciated the standard of security provided by the Gautrain.

The Committee also visited the Transnet at Koedespoort in Pretoria. The mandate of Transnet is to assist in lowering the cost of doing business in South Africa thus enabling economic growth. The Committee observed that Transnet had established a new division known as Transnet Engineering (TE). TE is the backbone of South Africa’s railway industry and has been responsible for the development of the most innovative locomotives and is dedicated to the maintenance, repair, upgrade, conversion and manufacture of freight wagons. The Committee was impressed with the contribution of Transnet with TE on promoting localisation, skills development and introduction of new technology.

The Committee also visited the Nissan Plant in Roslyn. The Automotive sector is one of the key sectors in terms of job creation. Nissan like many of the automotive companies is benefiting from the Automotive Production Development Programme (APDP) an industry incentive that is administered by one of the Regulatory entities, ITAC. The Committee noted the contributions made by Nissan in job creation and it was indicated that Nissan was planning to double employment as it was planning to introduce a new assembly line which would required that it works double shift. The Committee recommended that there be a follow up visit to Nissan to assess progress on its plan to expand and to assess the impact of the expansion on job creation.

7.10.2 Round table for SMMEs and Co operatives and Road show

The Committee had round tables in Johannesburg, Rustenburg, Durban and a Road show in Limpopo. The focus of the round tables was to engage with SMMEs and Cooperatives with the aim of ascertaining successes and challenges in the advancement of their businesses or entrepreneurship development initiatives. The Committee further wanted to establish whether SEFA was being effective in the advancement of enterprise development, whether SEFA was reaching out to the SMMEs, Cooperatives, Youth, People Living with Disabilities and Women Enterprises especially following the merger of Khula and SAMAF.

In Limpopo, the Committee had a road show where the economic development entities made presentations about their products, offerings and services. The purpose of the road show was to ascertain the extent in which the entities are reaching out to the rural communities and also raise awareness about the entities.

During the round tables, the Committee ascertained that there were still challenges with the merger of Khula and SAMAF as a result SMMEs were still confused about who SEFA was, the lack of accessibility of SEFA and the slow turnaround time for applications.

During the road show, the Committee ascertained that there was still a need for the entities to ensure that they reach out to the rural communities and also simplify the language used in the promotion of their products, services and offerings.

During the round table in Rusternburg, a small mining, the Amava Mining Investments (AMI) had made an appeal to the Committee to visit its mining project. The Company had raised concerns about how their funding application had been handled by SEFA and also made recommendations that SEFA should be flexible to the needs of different SMMEs and also improve its turnaround time.

7.10.3 Oversight visit to the IDC funded projects for Nguni Cattle in Rustenburg, North West Province

The Committee visited two Nguni Cattle projects, namely, the Bafokeng Nguni Cattle Project and the Khuduthate and Kgolagano Agricultural Cooperative. The aim was to assess how the Nguni project had improved the livelihoods of the beneficiaries and the communities where the projects are.

The Committee noted the good intentions of the Nguni Cattle project. However, there were concerns regarding the long term sustainability of these projects, noting that the profits were quite minimal and the input costs were high. The Committee recommended that the IDC should consider looking at what additional support the project needed, so as to ensure long term sustainability.

7.10.4 Visit to the Customs Office in Durban and the Durban Harbour

The Committee received a detailed presentation on the interventions and mechanisms that had been put in place by Customs to deal with customs fraud and illegal imports. The Committee noted that as much as a number of good control mechanism had been put in place to mitigate customs fraud and illegal imports and SARS was doing a good job but the challenges were still there. The Committee recommended that Customs should consider doing a benchmark study on how other countries faced with a similar challenge were dealing with the problem and the mechanisms used thereof.

7.11 Oversight visit to the Norjax Tomato Farm in Tzaneen, Limpopo

During the road show in Limpopo, Norjax had raised concerns about how their funding application was being handled by the IDC and requested that the Committee visit their project. The Committee consented to the request and visited the project on the 17 th of September 2013. The aim of the visit was to show support for SMME and Cooperative development in the agriculture sector, assess what challenges the business was facing especially with regards to the application for funding and also to ascertain the impact of tariff instruments administered by ITAC on the development of small enterprises and job creation.

The Committee noted that Norjax had made an application for tariff support to ITAC, one of the regulatory entities. The application had been partially approved by ITAC, thus the company was protected against cheap imports from China. The Committee however was concerned that despite all the tariff support, Norjax was still not competitive and was struggling thus the need for financial support. It was also not clear how Norjax was structured as a company and whether the funding being solicited from IDC was going to be helpful in light of the company not being competitive.

7.12 Oversight visit to EDD, IDC and SEFA offices in Gauteng

On 29 January 2014, the Committee visited the above offices with the aim of familiarizing the new Members of the Committee, on the operations of the Economic Development Department and its Entities.

8. International study tour to Brazil

On 29 Nov–10 Dec 2011, the Committee undertook a study tour to Brazil. As the SMME sector had been identified as a catalyst for improving the lives of ordinary citizens and lifting millions from the poverty line, the Committee had seen it necessary to learn from best practice as to how best this sector could be supported. The aim of the tour was to under-study how the Brazilian Government and various institutions in Brazil were supporting and promoting enterprise development and what legislations and policies they had to advance the development of the SMME sector.

The Committee visited institutions in four cities, namely, Rio de Janeiro, Fortaleza, Brasilia and Sao Paulo. The Committee’s objective for the tour was to acquire more understanding of the driving factors behind the significant role played by the Brazilian Small Medium Micro Enterprise (SMME) sector in poverty alleviation and job creation; and Brazil’s remarkable growth in the middle class in less than ten years. In essence, the Committee sought to;

· Critically evaluate how the Brazilian policies, intervention and implementation strategies in the SMME sector, have led to creating a better life for its people – to an extent of lifting millions of citizens out of poverty into the middle income group and reducing unemployment.

· Examine South African development finance institutions and processes against the benchmarks set in Brazil, an emerging economy with many challenges similar to those faced by South Africa but in many respects has made headway in this regard.

The tour was necessitated by the fact that at the beginning of the year the President identified SMMEs as a crucial driver of job creation and made a call to restructure the Development Finance Institutions (DFIs) that report to the Committee, in order to raise the level of assistance that they offer to SMMEs.

The Committee visited the following institutions in Brazil:

8.1 Banco Nacional Do Desenvolvimento/Brazilian Development Bank (BNDES)

BNDES is a state owned bank which is the main provider of long-term finance in Brazil and a key instrument for the implementation of government’s industrial and infrastructure policies.

8.2 Banco Do Nordeste (BNB)

BNB is the largest regional development bank in Latin America. Its goal is to promote integrated and sustainable development through microfinance. The bank operates in nine states and its clients are SMMEs, Co-operatives, and subsistence farmers.

8.3 Conselho Administrativo De Defesa Economica (CADE)

In Brazil three agencies are in charge of competition policy. These are; the Secretariat for Economic Monitoring and the Secretariat for Economic Law. Economic Monitoring falls under the Finance Ministry. This agency takes instructions and prepares cases on mergers.

8.4 Ministry of Social Development and the Brazil without Extreme Poverty Plan

Brazil established a special secretariat for the eradication of extreme poverty. The decision-making body of the secretariat has representatives from the Department of Social Development, the Finance Ministry, and the Presidency. Other ministries which are involved include Education, Cities, Labour, Health, Rural and Agricultural Development, National Integration and the Secretary General in the Presidency. The 8 Ministries are responsible for the implementation of the “Brazil Without Extreme Poverty Plan.”

8.5 The Economic and Social Development Council – CDES

The CDES was created in 2003 by President Lula to promote dialogue and concentration towards Brazilian development, identifying high inequality rates and low economic growth rates as the main problems facing the country. CDES is equivalent to NEDLAC in South Africa.

8.6 The Brazilian Micro and Small Business Support Service - SEBRAE

In 1972 SEBRAE was created by the Department of Planning of the Presidency of the Republic of Brazil. However, in 1990 it was made into a non-profit, public interest private institution by a Federal law. The company’s mission is t o promote competitiveness and sustainable development among micro and small businesses and to foster entrepreneurship in the country. SEBRAE develops initiatives in support of SMEs. The initiatives include courses, information and consultancy, publications, event promotion , awards in areas like access to markets, entrepreneurial education, access to technology, support to innovation, access to financial services, among others.

8.7 Price Waterhouse and Coopers (PWC)

PWC made an enlightening presentation on the Brazilian tax system and its impact on the small business environment. The presenters stated that the Brazilian tax system is a complex net of taxes, contributions and social charges.

8.8 Itau-Unibanco

Itaú-Unibanco is a private bank with headquarters in São Paulo, Brazil. The bank is listed at Brazil’s Stock Exchange in São Paulo and NYSE in New York. It is the second biggest Brazilian bank by assets, after Banco do Brasil. The Bank made a presentation which summarises the history and the status quo of the economy in Brazil.

Having had an opportunity to engage with the Brazilian institutions and agencies, the committee made the following observations:

· It would be critical for the South African government to have policies that are similar to the Brazilian Bolsa Familia programme of providing assistance with an emphasis on improving access to education.

· There is a need to strike a balance when providing financial assistance, for example, too much financial assistance may lead to overdependence while too little may defeat the purpose of providing assistance.

· South Africa still has a long way o go in as far as stimulating entrepreneurial culture within its citizens

· For most of the developmental initiatives to succeed, government, business sector and civic society must work together

· There is a need for South Africa and Brazil to use various partnership platforms already created to enable institutions of both countries to share knowledge and experiences.

· Partnership between SEBRAE of Brazil and SEDA of South African has a potential to unlock many barriers which face South Africa through exchange of information.

· There is an urgent need to regularise informal entrepreneurs by bringing them into the main economy and offering them support to be sustainable.

· The Brazilian method of capturing data and progress tracking mechanisms could be something South African can replicate for most of its developmental projects.

· Access to funding is still a challenge in South Africa. Most developing entrepreneurs in Brazil have easy access to funding compared to their South African counterparts

· Communication played a key role in reaching out to SMMEs in Brazil and as a result many were able to realise opportunities that were at their disposal for their businesses.

The study tour shed light on the socio-economic challenges confronting Brazil and the solutions implemented to improve the lives of Brazilians. Furthermore, the Committee gathered invaluable information on how Brazil has intervened in providing SME’s with access to credit through its institutions.

9. Key challenges

The following challenges emerged during the term:

a) Lack of a monitoring or resolution tracking mechanism: The Committee tends to have a number of presentations from the Department and Entities within a short space of time, thus creating a challenge in ensuring that there is follow up on all resolutions taken during the meetings. The Committee was still in the process of devising an appropriate resolution tracking mechanism.

b) Lack of control over the Parliamentary Programme : Changes in Parliamentary Programme resulting in changes in the Committee Programme always meant some meetings had to be postponed or cancelled.

c) Inconsistency in Membership : Constant change of Committee Members by the respective Political Parties also affected the consistency of discussions.

d) Delayed availability of minutes and reports: Lack of timeous availability of reports and minutes for adoption meant that some minutes would go un-adopted for longer periods and often this would result in loss of track on the key issues.

e) Technical Capacity: The work of the regulatory entities, more especially ITAC, requires enhanced understanding of the technical work and this created a challenge in the initial establishment of the Committee. However, as the Committee continuously engaged with ITAC and had workshops to ensure understanding of the instruments, there was improved understanding.

f) Insufficient time to deal with all matters : Time was always of essence and was often not enough to be able to deal with the content of reports, especially that of entities.

10. Key achievements

Despite the Committee being new, it made notable achievements over the 5 years of its term. In terms of its oversight function, the following were identified as key achievements for the Committee:

a) The Committee was quite instrumental in the establishment of the Small Enterprise Finance Agency (SEFA). This was a merger to bring coherence to small business financing, merging Khula Enterprise, South African Micro Apex Fund (samaf) and the Industrial Development Corporation.

b) In relation to the Competition Law Amendment Act No. 1 of 2009, the Department facilitated the promulgation by the President of Section 6 of the Competition Law Amendment Act, which came into effect on the 1 April 2013. The section deals with market enquiries to be conducted by the Competition Commission if it has reason to believe that any feature or features of a market for any goods or services prevents, distorts or restricts competition within that market.

c) In October 2010, Cabinet adopted the New Growth Path which was developed by the Department as a strategy to promote decent work and inclusive growth in the country. The NGP sets a jobs target of 5 million new jobs by 2020 and directs that economic policy should actively pursue jobs goals. The NGP and Outcome 4 of the Service Delivery Agreement became the Committee’s reference documents for guiding the oversight and strategic work of the Committee and for evaluating the performance of the Department and the five entities.

The Committee in its engagement with the Department and the entities and during oversight visits ensured that strategies and programmes to advance attainment of the NGP targets were being implemented. Thus reports to the Committee always addressed job creation.

d) Through its interactions with EDD, the Portfolio Committee has been able to give greater political/policy direction. The communication with EDD improved with time, with the Committee being proactive and actively engaging with EDD. This enabled the Committee to oversee the work of the department, and enquire and make recommendations about the department;

e) The Committee ensured increased awareness about Competition and Unfair trade issues, to an extent of intervening in the intervention in Massmart and WalMart merger.

f) The Committee played a strategic role in ensuring successful development and buy in with regards to the conclusion of four key Social Accords namely the Skills Development, Basic Education, Local Procurement, Green Economy and the Youth Employment Accord by the Department.

g) The Committee brought to the attention of the Department information that helped to improve the functioning of EDD. Through their interactions with EDD and other Departments, the Committee has brought out socio-economic challenges faced by South Africa citizens for consideration to decision makers within the department;

h) On a number of occasions, the Committee had the opportunity to engage with the public on economic issues in all the provinces. At these meetings the Committee engaged with key stakeholders who included SMMEs and co-operatives. This feedback mechanism provided even greater insight into the challenges faced by the populace when dealing with the department and its entities;

i) The Committee conducted Provincial visits, which helped in understanding the core needs of the communities, SMMEs and Co-operatives. This also ensured that the voices of the people are heard and their needs taken into account when exercising oversight over the Department and the entities.

j) The Committee was able to proactively influence the work of the EDD and its entities in ensuring that its work has broader impact on the lives of people.

k) The Committee focused on the development and financing of SMMEs and Co-operatives ensuring that support for enterprise development was enhanced and effective. Thus the Committee had successful round-table discussions on SMMEs and co-operatives support, and access to finance. These discussions increased the effectiveness of the Committee in contributing to plans and projects of the finance entities and ensuring that there was more targeted support for the needs of enterprises development, more especially by SEFA.

l) During 2012/13, the EDD drafted the Infrastructure Development Bill and submitted the draft to Cabinet. The objects of the Bill are to provide facilitation and coordination of infrastructure development which is of significant economic or social importance and to ensure the prioritisation of infrastructure development in all state planning. The Committee published the Bill for public comment, held public hearings and ensured timeous finalization of the Bill which was passed by the National Assembly on 25 February 2014.

m) Towards the end of 2010, the Committee decided to conduct hearings on the SMME and micro-finance sector. A key objective of conducting the hearings was to highlight the challenges faced by role players and to formulate a way forward that is intended to begin a process of addressing the structural constraints faced by the sector within a context of economic development, job creation and poverty alleviation, particularly after the industry was hit hard by the 2008/09 global financial crisis.

n) The Committee had also attended training on international trade agreements facilitated by the Trade Law Centre (TRALAC) from 05-07 September 2012. The training included coverage of the South Africa’s current trade negotiations agenda, including the Southern African Customs Union (SACU), the Southern African Development Community (SADC), Tripartite free trade area (T-FTA), the Economic Partnership Agreement (EPA) negotiations with the European Union and SACU-India negotiations.

11. Strategic Management Issues

The Committee was not able to hold any Strategic Plan sessions during the first two years of its formation. A strategic plan session was held in the 2011/2012 financial year, however, no report could be availed by the Consultant who was the facilitator. Only two Strategic Plan documents could be developed and reports availed and these were the Strategic Plan for the 2012/13 and 2013/14 financial years.

11.1 Strategic Plan for 2012/13 financial year

During the period under review, the Committee held its strategic planning workshop in the Arabella Hotel and Spa in Kleinmond from 22-24 March 2012. The workshop was facilitated by Mr Douglas Reeler from the Community Development Resources Association. The workshop was to plan the work of the Committee for the 2012/13 financial year.

For the 2012/13 financial year, the Committee identified six focus areas for its oversight of the Department and these were the following:

· Infrastructure;

· Local procurement;

· Manufacturing, agriculture and agricultural processing;

· Green Economy;

· Regional development and integration; and

· Coordination.

The detailed Strategic Plan Report is available from the Committee Secretary.

11.2 Strategic Plan for 2013/2014 financial year

During the period under review, the Committee held its strategic planning workshop in the Pepper Club Hotel and Spa in Cape Town, Western Cape Province from 18-19 April 2013. The workshop was facilitated by Mr Saul Levin, Mr Evans Chinembiri and Ms Katleho Bohloa from the Trade and Industrial Policy Strategies (TIPS). The workshop was to plan the work of the Committee for the 2013/14 financial year.

The workshop looked at the performance of the Committee in the 2012/13 financial year. It was indicated that the Committee achieved a number of accomplishments in the 2012/13 financial year. These achievements were broken down in three categories namely, Personal skills and capabilities, Effectiveness of the oversight role, and Administration.

The workshop further looked at the performance of the EDD and its entities. The performance of the EDD was measured by the Committee on a number of criteria, which took into account the different aspects of the work of the department.

For the 2013/14 financial year, the Committee identified the following strategic objectives:

Conducting oversight over the EDD performance: The EDD’s priorities for the 2013/14 financial year which the Committee identified to oversee were:

· Continued technical support as the secretariat for the Presidential Infrastructure Coordinating Commission;

· Working with other departments to increase efforts to encourage growth, industrialisation and job creation in productive sectors of the economy. This includes greater local procurement, streamlining regulations, using infrastructure to attract productive investment;

· Strengthening mechanisms and projects to support emerging enterprises and job creation, and supporting the implementation of the youth employment strategy; and

· Enhanced support for economic development and transformation through social dialogue.

· Conducting oversight over the EDD entities: The Committee aimed to be more effective in their oversight role of entities. In the 2012/13 financial year, their focus was on SEFA and IDC and not much time was devoted to the economic regulatory entities, namely Competition Commission, Competition Tribunal and ITAC. The reason could be that the committee had a key focus on the development of SMMEs and co-operatives, especially in less privileged communities. Conducting roundtable discussions so as to be able to assess the development and financing of SMMEs and co-operatives.

The detailed Strategic Plan Report is available from the Committee Secretary.

12. Issues for follow-up

The following are recommendations for consideration during the 5 th Parliament:

· A number of oversight visits were undertaken and the reports compiled on each oversight had recommendations. Implementation of the Committee recommendations in the oversight reports would be important;

· Follow up on the work of SEFA, especially on the impact on SMMEs. Issues of small enterprise development required close oversight with SEFA and a number of issues around the merger, staff related matters and redrafting of a strategy for intermediaries will require close follow up.

· Ensuring alignment of the work between the Department, the Provincial and Local Governments

· There are outstanding Bills which the Department had indicated would be presented during the term of office of the Committee. Only the Infrastructure Development Bill was finally presented. Outstanding Bills as indicated by the Department included the Competition Commission Act and International Trade Administration Act.

· Training on the technical aspects of the work of the Regulatory Entities, especially ITAC. Training was to be coordinated by the Content Advisor.

In conclusion, the Committee being a fairly new Committee made notable progress and achievements. In the strategic plan of the 2012/2013 financial year, the Committee did an analysis and evaluation of the Committee’s work. The results were that despite its work being constrained by lack of resources, especially at its initial stage, the Committee was able to deliver on its mandate.

Report to be considered


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