Economic Development Department 3rd Quarterly Report

Presentation to the

Portfolio Committee on Economic Development

08 February 2012

Presentation

• 3rd Quarter performance– Economic Policy Development– Economic Planning and Coordination– Economic Development and Social Dialogue

• Progress against ENE targets

• Human Resources

• Financial performance

• Concluding remarks

2

Economic Policy Development (1)

• Mid-term report on Employment and Inclusive Growth submitted for inclusion in January 2012 Cabinet Lekgotla discussions:– Review of progress in achieving targeted outcomes;– Assessment of policy successes and shortfalls; and– Prospects and actions to mitigate the risks.

• Survey on employment reporting for state departments and agencies conducted:– System developed in collaboration with DPME and the ILO;– Survey demonstrates the need to improve systems for

assessing impact of government actions on employment.

3

Economic Policy Development (2)

• Policy Platforms

– Proposed multi-pronged Strategy on Youth Unemployment work shopped on 23 November 2011

– Developed draft discussion document - Addressing Inequality. A workshop will be held in the 4th quarter.

– Asset ownership and inequality - workshop held with Friedrich Ebert Stiftung and Studies in Poverty and Inequality Institute.

– Infrastructure planning (PICC) engagement with McKinsey

4

Economic Planning andCoordination (1)

• New Growth Path - engagements with provincial and local government:– KZN Regional and Local Economic Development;– Limpopo Department of Economic Development, Environment

and Tourism Strategic Planning;– Deputy President’s Anti-Poverty Campaign visit to Blouberg

Local Municipality in Limpopo province;– Western Cape Department of Economic Development and

Tourism;– Free State Local Economic Development;– Participates in DRDLR-led initiative focusing on prioritising high

impact projects in 22 rural districts;– Presidential Intervention in Diyatalawa and Makgolokoeng

municipalities in Free State province;

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Economic Planning andCoordination (2)• Sector plans

– This function now resides with the Economic Policy and Development Branch – see slide p.4 referencing multipronged Youth Unemployment Strategy proposals.

• Spatial plans– Employment Creation Fund approved funding for Rise Up

Cooperative Bakery Holdings. Pilot in Matzikama-Dooringbaai municipality;

– Fisheries unit of DAFF approved aquaculture EPWP project for Doringbaai - MOU initiated;

– Spatial economic planning framework and guidelines are underdevelopment in consultation with CSIR;

– Various projects in the Eastern Cape and Western Cape.

6

Economic Planning andCoordination (3)• Green Economy Strategy and Interventions

– Green Jobs report submitted through the IDC;– Engagement with DOE on REIPP program;– Engagement with NT, DRDLR, DPE, DOE on rollout of Solar

Water Heaters;– Engagement with Blue IQ to discuss establishment of provincial

green economy unit focussing on local economic development and SMME development; and

– Workshop with COSATU and Cape Business Chamber.

• Prepared concept paper on harnessing partnerships to promote agricultural development for small and medium scale black farmers.

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Economic Planning andCoordination (4)• Special financing

– A total of R2 361 914 000 was disbursed during this quarter:• IDC Distress fund: R184.4 million• UIF Bond: R343.4 million• Transfers to SAMAF: R22.5 million• Transfers to IDC: R17 million• IDC disbursements: R1.8 billion

• Leveraging state expenditure and procurement– SABS technical specifications finalised and published for public

comment.

• Engagements with DFIs and ERBs– Governance – meeting to discuss quarterly reports;– Small business financing merger – reported to PC on 1 February

2012.

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Economic Developmentand Dialogue (1)• Social dialogue and capacity building engagements:

– Training Layoff Scheme and Distress Funding - Implementation of Framework Agreement presentations in KZN, EC, NC and Limpopo;

– Meeting with Community Constituency to discuss joint working programme with stakeholders; and

– Turn-around strategy for Dimbaza Foundry - presentation in EC.

• Economic Development Agreements– Local Procurement Accord signed on 31 October 2011; and– Green Economy Accord signed on 17 November 2011.

• Organised labour capacity building– 4 workshops held in KZN, EC, NC and Limpopo.

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Economic Developmentand Dialogue (2)

• Engagements on productivity– Workshop with ILO, Proudly South Africa, Organised Labour and

Communities.

• Interventions to create or save jobs– Meeting with Clothing Bargaining Council to discuss possible

projects and interventions; and– Interactions with Ceppwawu and COSATU and the employer to

discuss interventions in light of proposed job cuts in the paper sector.

• Engagements with stakeholders– Participation in panel discussion on job creation at Fedusa

Congress.

10

Economic Developmentand Dialogue (3)

• Implementation of Framework Agreements and Social Pacts– Presentation at ILO / Labour Jobs Pact workshop

ENE targets for 2011/12 (1 of 2)

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Indicator 3rd Q target

3rd Q actual

Annual target

Number of reports on the implementation of the NGP 1 1 4

Number of reports on interventions to reduce cost drivers - - 2

Number of policy and analytical papers on economic policy challenges 3 3 12

Number of engagements with provincial and/or local government 2 10 10

Number of strategic engagements with development finance institutions and/or economic regulatory bodies

- - 12

Value of special financing facilitated for small businesses, targeted growth sectors and companies in distress

R1.25bn R2.362bn R5bn

ENE targets for 2011/12(2 of 2)

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Indicator 3rd Q target

3rd Q actual

Annual target

Number of sector plans produced or reviewed 2 0 8

Number of spatial plans produced or reviewed 3 4 12

Number of interventions in relation to promoting economic development through leveraging state expenditure and procurement

3 4 12

Number of reports on the implementation of the green economy strategy - 1 2

Number of interventions to create or save jobs 1 2 4

Number of policy platforms, social dialogue and capacity building engagements

3 4 10

Number of economic development agreements (sectoral, workplace and national) facilitated with social partners

3 2 10

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Staff Complement(31/12/2011)Programme # of Funded

Posts# of Posts Filled -

Permanent# of Posts Filled -

ContractsTotal

ADMINISTRATION 62 43 21 64

POLICY DEVELOPMENT

20 5 4 9

PLANNING & COORDINATION

33 9 10 19

SOCIAL DIALOGUE 14 4 4 8

TOTAL 129 61 39 100

% 62% 38%

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Employment EquityStatistics (31/12/2011)

DesignationWhite Black Disability Sub-Total Total

M F M F M F M F

SMS 5 3 13 8 18 11 29

MMS 2 1 13 22 15 23 38

Level 1-8 0 0 8 24 1 8 24 33

Sub-Total 7 4 34 54 1 41 59 100

TOTAL 11 88 1 100

% 11% 88% 1% 41% 59%

Summary Statistics (31/12/2011)

All Staff Male Female Total %

PERMANENT 24 37 61 61%

CONTRACTS 17 22 39 39%

TOTAL 41 59 100 100%

% 41% 59%

PERSONS WITH DISABILITY = 1%

SMS Members Male Female Total

%of total staff

PERMANENT 15 8 23 23%

CONTRACTS 3 3 6 6%

TOTAL 18 11 29 29%

% of SMS Members

62% 38%

Recruitment

• Strategy and plan in place to recruit relevant and skilled staff by end of the 2011/12 financial year;

• Report monthly progress to EA and DG• Progress in 3rd Quarter

– 11 x Appointments (3 x permanent and 8 x contract)– 7 x terminations (3 x contract expiry, 1 x transfer, 3 x resignations)– 1 x Posts Advertised (Principal Personnel Officer)– Interviews conducted to fill the following positions:

• Economist = 3 posts• Senior Economist = 2 posts• Policy Analyst = 8 posts• Senior Administrative Officer = 1 post• Accounting Clerk = 3 posts• Director : IT = 1 post

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Financial Performance

Overview of Expenditure

• The information based on December 2011 IYM reports or section 40(4)of PFMA reports;

• Signed by the Accounting Officer and sent to National Treasury;• Total adjusted budget of R 598.3 million for 2011/12 financial year;• Expenditure in the first nine months of 2011/12 is R 449.9 million or

75% of the adjusted appropriation of R 598.3 million;• Spending rate equal to the 75% norm on straight forward projections

where annual total budget is expected to be spent equally through the year.

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Financial Performance

19

Total Economic Development Department2011/12 YTD EXPENDITURE

Act Act Act 2011/12 Budget

Per Programme QUARTER 3 YTD % Spent Main Adj. Post Adj.

ADMINISTRATION 16,761 43,524 77% 55,031 1,300 56,331

ECONOMIC POLICY DEVELOPMENT 1,505 8,610 37% 23,327 173 23,500

ECONOMIC PLANNING AND CO-ORDINATION 164,057 395,024 79% 499,898 2,173 502,071

ECONOMIC DEVELOPMENT AND DIALOGUE 1,717 2,753 17% 16,284 173 16,457

TOTAL INCL. TRANSFERS 184,041 449,912 75% 594,540 3,819 598,359

TOTAL EXCL. TRANSFERS 24,028 64,531 49% 129,717 1,819 131,536

Per Item Classification

COMPENSATION OF EMPLOYEES 12,951 36,150 45% 79,200 519 79,719

GOODS AND SERVICES 11,027 27,437 61% 44,022 1,300 45,322

DEPARTMENTAL AGENCIES AND ACCOUNTS 160,013 385,381 83% 464,823 2,000 466,823

PAYMENT OF CAPITAL ASSETS 50 944 15% 6,495 - 6,495

TOTAL INCL. TRANSFERS 184,041 449,912 75% 594,540 3,819 598,359

TOTAL EXCL. TRANSFERS 24,028 64,531 49% 129,717 1,819 131,536

Financial Performance

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Overview of Revenue• Revenue collection in first nine months of 2011/12 is R 500.4 million

or 205% of budgeted revenue of R 243 million;• Main revenue generator is fines from penalties from Competition

Commission and dividends from IDC; and• Revenue projections exceeded due to Pioneer Food settlement

Departmental Receipts

Act Act Act 2011/12

Departmental Receipts QUARTER 3 YTD % of Budget Budget

Sale of goods and Services 5 12 0% -

Fines, penalties and forfeits 267,825 500,347 337% 148,400

Interest, dividends and rent on land 7 126 0% 95,400

TOTAL 267,837 500,486 205% 243,800

ACTUAL RECEIPTS 2011/12

Financial Performance

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• CommitmentsAs at the end of December 2011 - R4.3 million.

• Earmarked Projects / SpendingTotaling R36 million for the remainder of the 2011/12 financial year.

Including:– Support for a Credit Bureau for small business;– Support for a shared service centre in support of small business;– Business incubator for the social economy;– Costs towards the Khula / samaf / IDC Small Business merger;– A SMME index on regulatory constraints;– A 30-day payment campaign;– Support for a green village pilot project in partnership with the Department of

Environmental Affairs;– Wits Capacity Building Programme for Local Government; and– Labour, Government and Civil Society Workshops.

Concluding Remarks

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• 4th Quarter– Good work is being done and in the 4th quarter special attention to

be paid to youth unemployment, the Green Economy, Inequality, Implementation of the Accords and special financing.

• COP 17– EDD successfully participated and through the EDD/IDC exhibition

stand raised R750 000 for the roll-out of solar water heaters. Donating approximately 500 solar water heaters to the community of Groutville

• Establishment of EDD– Progress is being made, but challenges remain in finding people

with the correct level of skill to deliver the quality of work required to drive job creation

– EDD Website launched [www.economic.gov.za]

Siyabonga