economic development department 2016/17 annual...
TRANSCRIPT
Economic Development Department2016/17 Annual Report
Presentation to the Portfolio CommitteeEconomic Development
10 October 2017
1
• The Annual Report period is 1 April 2016 to 31
March 2017
• The Annual Report sets out the details of activities
undertaken and performance of the Department
against the Annual Performance Plan
2
Introduction
This presentation highlights work on key areas covered in the
Annual Report and is not a detailed account of activities.
23 KPIs
170 products planned
202 products achieved
98.6% of allocated budget spent
Introduction
3
EDD’s 6
Strategic
Objectives
4
Outline of Presentation
Economic context
1. Highlight: Competition regulation
2. Highlight: Trade
EDD Strategic Objectives
3. Highlight: Infrastructure
5. Highlight: Building an inclusive economy
4. Highlight: Investment
Annual Performance Plan
Human Resource Management
Financial Performance
Auditor-General Report
0
0.5
1
1.5
2
2.5
3
2012/13 2013/14 2014/15 2015/16 2016/17
Pe
rce
nta
ge
Real GDP Percentage Growth
5
South African Economy - GDP
Lower growth rates than in previous years
1.6% in business services
1.3% in government
1.2% in personal services
- 4.0% in agriculture
-2.7% in utilities
- 1.4% in mining
6
Capital Spend
-1
1
3
5
7
9
11
13
15
2009 2010 2011 2012 2013 2014 2015 2016
Pe
rce
nta
ge o
f G
DP
Capital spend as a percentage of GDP
General Government Public Corporations
Private Sector
Total capital spend as a percentage of GDP
19.9%
0.7 % pointsIncrease in state
contribution from 2010
- 0.4 % pointsDecrease in private sector contribution from 2010
Inflation on all items from Jan 2009 – Aug 2017
7
Prices
0
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2
3
4
5
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MO
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17
Prices trend up with the drought
August 2017 CPI4.6% urban areas3.5% rural areas
CPI August 2017
-1.2% bread
5.7% food
15.0% meat
8
Jobs and the Labour Market in 2016/17
538 000 increase in
employment
15 675 000 to
16 212 000
66% of these were
formal non-agricultural
jobs
Labour force increased by 1 029 000, an increase of 5% in one year
491 000 more
unemployed at the end of
the financial year and the
unemployment rate
increased from 26.7% to
27.7%
Youth (15-34) jobs increased by
86 000, whilst there were 206 000 more unemployed youth.
The youth unemployment rate
increased from 37.7% to 38.6%
Quarter January-March 2017 saw the highest labour force participation rate
(60.5%) since the beginning of the current series in January 2008
Seven of the nine provinces saw job creation this financial year, creating a
total of 578 000 jobs
Two provinces, Free State and Northern Cape, experienced job losses
9
Jobs by Province 2016/17
Changes in employed by Province,
2016/17Changes in unemployed by Province,
2016/17
10
Jobs by Industry 2016/17
-150 000
-100 000
-50 000
0
50 000
100 000
150 000
200 000
Bu
sin
ess
ser
vice
s
Man
ufa
ctu
rin
g
Co
nst
ruct
ion
Tra
nsp
ort
Pri
vate
ho
use
ho
lds
Tra
de
Uti
litie
s
Agr
icu
ltu
re
Min
ing
Go
vern
me
nt
Ab
so
lute
ch
an
ge
Industry
Jobs by Industry, Absolute Change (2016/17)
5
7
8.8
10.5
31.6
-5.1
-2.8
-10 0 10 20 30 40
Private households
Transport
Manufacturing
Construction
Utilities
Mining
Government
Ind
ustr
y
Percentage Change
Jobs by Industry, Percentage Change (2016/17)
Most jobs were created in business services (152 000), followed by
manufacturing (145 000), and construction (143 000)
Relative to the number of existing jobs utilities performed best (31.6%),
followed by construction (10.5%), and manufacturing (8.8%)
• Provide strategic guidance to Department; & technical & administrative support to Ministry and Department to achieve strategic objectives 1
• Coordinate jobs drivers and implementation of the New Growth Path economic strategy in support of the National Development Plan 2
• Facilitate social dialogue and implementation of social accords 3
• Coordinate infrastructure development and strengthen its positive impact on the economy and citizens4
• Promote productive investment, industrial financing and entrepreneurship for jobs and inclusive growth 5
• Promote competition, trade and economic regulation in support of job creation, industrialisation and economic inclusion6
Strategic Objectives
11
Supporting job creation, industrialisation & social inclusion
EDD work included:
• Engaging large mergers to address public interest
conditions
• Advocacy work on competition & public interest
• Coordinating efforts with competition & trade regulators on
steel investigation
• Negotiating settlement in construction industry
• Ensuring promulgation of criminalisation provisions under
Competition Act
• Advocacy work against cartels & abuse of dominance
12
Competition Policy
13
Competition Highlights
Development Impact as a Result of Merger Conditions:
3 932 jobs created
44 655 jobs saved
184 jobs lost as a direct result
of mergers approved
Number of mergers with employment and public interest
conditions imposed by Competition Commission
19 mergers
R1.6m penalties imposes
385 total mergers
finalised
EDD raised public interest concerns in 2 large international
mergers that led, after negotiations, to seminal agreements with
SABMiller/ Coca-Cola and ABInBev/ SABMiller
14
Competition Highlights
Promoting
economic
development
for SA
• R1.8bn total funds for development
• Includes R1bn support for emerging farmers
• Headquarters located in SA
• Net employment to be maintained
• 10% of cooler space in spaza shops and taverns for competitors
• Increased localisation
•
• 20% of Appletiser equity to be sold to black South Africans
EDD has led innovative new agreements advancing public
interest
15
Competition: Case study
• Retain current jobs for a three year period7 500
• Funding to create new jobs in value-chainsR800* million
• Facility to support small emerging farmers & packaging companiesR400 million
• Support the opening of new spazashops and retail outletsR400 million
• Total BEE share of Appletiser since the merger21.5%
Highlights from agreement negotiated & agreed by EDD and
3 bottling plants to form the largest bottling plant in Africa
*The R800million includes two R400 million components set out below it
16
Competition: Case Study
• To promote new employment outside its core operationsR1 billion
• Facility to support small, emerging farmersR610 million*
• Retention of current jobs of workforce for at least five years6 000
• Total employment gain2 600
• New farmers will be developed800
Highlights from the agreement negotiated & agreed by EDD,
SAB Miller and ABInBev
* R610 million is included in the R1 billion Fund to promote employment
Competition: Case Study
Highlights from the agreement negotiated and agreed by
EDD and Edcon
• Jobs retained43 630
• Growth of new jobs planned2 000
• Actual growth of new jobs reported in AR2 226
• Replaced imports with 930 000 footwear units 930 000
17
More than 120 000 small spaza shops and retail outlets will
have the freedom to open part of their sponsored fridge space to
products that compete with the near-monopoly large suppliers
18
Impact of Work of Economic Development
19
Competition Highlights
Signed construction settlement agreement with the 7 major
construction companies found guilty of collusion on the 2010 World
Cup Projects
Transforming the construction industry
In addition to the competition penalty of R1.4bn, the agreement includes R1.5bn financial contribution to be spent over 12 years for engineering bursaries; enterprise development; training; mentorships; artisanal programmes; maths and science at schools; and agreement on significant empowerment in equity and partnerships
R233,2m already paid by companies to the National Revenue Fund
Raising the bar with respect to anti-competitive behaviour
20
Competition Highlights
Cartels and abuse of market dominance result in high prices, disadvantaging ordinary citizens and decreasing market efficiency
EDD promulgated relevant provisions of the Competition Act and
made it a criminal offence for directors or managers of a firm to
collude with their competitors or fix price
AMSA R1.5 billion fine - highest administrative penalty the
Commission has ever imposed on a single firm
AMSA, EDD, the dti, the Competition Commission and ITAC had
negotiations & reached agreement on investment, jobs and pricing
principles for pricing in the future*
*Pricing principles outlined in section on trade
21
Competition Commission
Market inquiries take place for the first time in South
Africa under the Competition Commission
Completed by the
end of the financial
year
Inquiry in progress
Inquiry in progress
during the financial
year
Gas industry (LPG)
Health sector
(private healthcare)
Grocery retail
22
Trade HighlightsEnsuring trade policy promotes employment, investment, beneficiation and competitiveness
EDD work included:
• Issued a trade policy directive to introduce reciprocal commitments on investments, jobs and innovation
• Defending the country’s right to beneficiate scrap metal locally, through successful defence of court challenges
• Research and data-analysis of SA trade relations with selected other African countries
• Approving changes to ITAC Import Control Regulations to ensure that goods under import control remain under import control when the World Customs Organisation adjusts tariff lines and introduces new tariff lines
• Reviewing the capacity of ITAC inspectors dealing with scrap metal and clothing
• Working with the industry to identify economic impact of trade tariff adjustments in the steel sector
23
Trade Policy
• South Africa is highly integrated into the global economy
• Exports were almost exactly the same in real terms in 2016/17 as in 2015/16
24
Trade: South Africa
28.5
29
29.5
30
30.5
31
31.5
Imports as a % of GDP Exports as a % of GDP
% G
DP
Imports and exports as % of GDP
2015/16 2016/17
Negative trade balance reduces from 1.5% to 0.7% in 2016/17
25
Trade Highlights
The Minister challenged companies to no longer simply rely on
tariffs or rebates for protection but to invest heavily in new
technologies, training of workers and product innovation
Challenging companies in relation to jobs, competitiveness
and trade
To give effect to this he issued a Trade Directive to ITAC
providing details on the factors it should consider when
companies apply for tariff amendments. This is an example of
how we can achieve the goals of our trade policy and national
development goals
Reciprocal commitments
26
Trade Highlights
AMSA commitments resulting from
negotiations between AMSA, EDD,
the dti, the Competition
Commission and ITAC*:
R4.6 billion additional
investment over 3 years
Preserve jobs
Not close plants
Abide by the pricing principles
Pricing cap
5 years
10% EBIT
Columbus Stainless commitments:
Only producer of flat stainless steel
Faces competition from imports and
has already cut jobs. Faces rising
costs of production and declining plant
use
Had invested R439 million 2013-15
R797 million additional
investment over 3 years
1 489 employed directly in
manufacturing stainless steel flat
products and will create 190 new
jobs over 3 years
27
Trade Highlights
Advancing beneficiation in the metals value chain – winning
the legal challenge up to the Constitutional Court
Directive on export of scrap metal
ITAC refuses SA Metal 2 export
permits
Metal Recyclers Case
SA Metals starts to litigate
State wins in Gauteng High Court
State wins in Western Cape High
Court
State wins in Supreme Court of
Appeal
Constitutional court declines leave to
appeal
After a 4 year legal battle in which the state won each court case, it is clear that rational decisions by the state in favour of job creation and industrialisation would be upheld by the courts
Government’s spend on infrastructure drives economic growth
and creates jobs locally
28
Key infrastructure Work
72 SIP reports
31 meetings providing full administrative & technical support for PICC Council, Manco, Secretariat &SIP coordinators
9 unblocking initiatives for infrastructure rollout
5 Cabinet decisions implemented
3 initiatives enhancing local procurement
29
Infrastructure Coordination
EDD work included:
• Spent on infrastructure projects –boosting growth and jobs
R1.1 bn per working day
• PICC monitored infrastructure projects 350
• Jobs in PICC monitored projects193 000
• PICC facilitation for loans for new BRICS bank $180 million
• New Infrastructure Technical Project Management Unit
1
30
Infrastructure - Highlights
PICC highlights from the year:
31
Infrastructure Highlights
276
481 612
822 1,002
766
976
2014/15 2015/16 2016/17 2017/18 2018/19
Buses Mar 2017
Buses Dec 2016
Example of industrialisation: buses
3
PREVIOUS ADMINISTRATION
929
CURRENT ADMINISTRATION
1 002
32
Infrastructure Projects: Highlights 2016/17
Eastern CapeProject: ASIDI SchoolNo of Schools built: 18
Spent: R615mnJobs : 3 178
Free StateProject : Ingula Pump Storage Scheme1 332 MW commissioned
Spent: R2.5 bnJobs : 1 265
GautengProject: IRTPN (Rea Vaya, Tshwane and Ekurhuleni)
Spent: R2.8 bnJobs: 416
KwaZulu-NatalProject: CornubiaIntegrated Human SettlementSpent: R581mn
Jobs : 1 643
MpumalangaProject: Kusile Coal Fired Power StationUnits MW under construction: 4 800 MW
Spent: R17 bnJobs : 18 206
Northern CapeProject: MeerKATAntenna completed/polarization:32
Spent: R619 mnJobs : 539
LimpopoProject: Medupi Coal Fired Power StationUnits MW achieved: 794 MW
Spent: R6 bnJobs: 16 505
Western CapeProject: Sunrise LPG
Spent: R129 mnJobs: 237
North WestProject: IRTPN (Rustenburg Integrated Rapid Transport System-YA RONASpent: R318 mnJobs: 180
33
Infrastructure Unblocking - Highlights
Water Use Licence Approval for the
Olien Karats 132kv transmission line
Funding for the N2 Wild Coast Project
Water Use Licence Approval for Blue Mountain Berries
Al Manara SOE Water Agreement
Makana Mayfield EIA
Avon Peaking Power Station
In the last year, 9 successful unblocking interventions were
made by PICC, some examples:
Avon Peaking Power Station
These have been reported through the year
34
Infrastructure - SIP 5 Highlights
SIP 5 created additional 920 construction jobs of which 296 were youth jobs (32%)
Clanwilliam Dam was raised to supply
irrigation water for emerging farmers
Completed Sunrise Energy Construction of
5 500 tonnes gas supply storage in
Saldanha for Western Cape market
35
InvestmentIncreasing IDC investment to the largest in its 76 year history
36
InvestmentEDD work included:
• Oversight of the IDC: setting investment and development
targets, appointing the Board and CEO and monitoring
progress with performance on a quarterly basis
• Meeting investors to provide context to the investment
environment & address challenges to ramping up investment
• Unblocking obstacles to increasing investment in specific
projects
• Helping to support infrastructure development that addresses
constraints to investment
• Engage stakeholders including organised labour and business
associations
• Promote localisation through PICC, EDD & IDC
Case study 1: EDD’s work linking competition policy and investment:
• EDD facilitated engagement between Massmart & IDC to look at
opportunities for joint funding of projects. Outcomes include:
1. ICASA Green which makes cooler boxes
2. Wagienience – a black youth owned business that invented and
manufactures valves for leakless toilet flushing
3. Geyster Industry (Pty) Ltd received a 5 year contract from
Massmart which resulted in a loan from the IDC
Case study 2: EDD facilitating investment through coordination:
• EDD connected a film-entrepreneur to the IDC resulting in the Sky Rink
Studio Investment in Gauteng
Case study 3: Using competition outcomes to promote local procurement:
• IDC is appointed by Coca Cola to implement the R400 million agricultural
funding: this resulted in a South African grape producer supplying
Grapetiser and displacing import of grapes
37
Investment – Examples of Integration
Case study 4: Leveraging global economic partnerships to promote local
economic development
• Minister promotion of BAIC investment and MOU signed at FOCAC by
President Jinping’s visit
Case study 5: Minister engaged the following public policy forums on jobs,
investments and social partnerships:
• Trade unions
• Business leaders
• Investors from the chemicals, retail, film, and energy industries as well as
from China
• Rating agencies
38
Investment
SECTION BREAK HEADER
39
IDC Funded Films Films made in South Africa
40
In October 2016, the Minister officially
launched a new film studio in Johannesburg
– Sky Rink Studios. It is located at the top of
the Carlton Centre. The development helps
to advance a number of goals
• Job creation: 150 permanent new jobs
and 450 part-time jobs
Investment Case Studies: Sky Rink Studios
The idea was developed by Mr Frank
Mohapi – to address shortage of
studio filming facilities in Gauteng
EDD introduced him to City Of Joburg
to include the Sky Rink project in their
inner city development plan. IDC
approved R 187 million
• Telling our stories: expand film-
infrastructure for local film-
makers
• Urban renewal: helps to develop
the Joburg inner-city and is part
of a wider city rejuvenation plan
• Building African infrastructure:
the facility can also be used for
television shows for other African countries
`
Planting the seeds
2009 : Global economic crisis NGP
2010: State visit to China
2014: IDC started exploratory talks with BAIC – testing appetite
2015: China state visit to SA
Agreement signed by President of BAIC & IDC
August 2016: Sod turning BAIC Automotive Assembly plant in the Coega IDZ
Commitment to partner to
industrialise SA & expand China’s investment in manufacturing
1st new light
passenger vehicle
assembly plant
built in SA in more
than 40 years
26 agreements
signed valued at
R94 billion
Investment Case Studies: Example of BAIC
41
1st phase of BAIC investment
• R4.3 billion will be
invested in the first phase
• 2 500 jobs will be created in
the construction of the plant
• 784 permanent jobs will be
created during the first phase
of the project
Significance of BAIC
investment Initiative: Marks a
move away from export of raw
materials to China, to inward investment into SA
42
Investment Case Studies: Example of BAIC
IDC funding* increased to R15.3bn
Investment – In The Last Year
43
142% increase in youth-empowered business funding 178% increase in women-
empowered business funding
20 881 jobs created and
saved, 37% increase
*Approvals ** Ownership of 25% or more
44
Investment – In The Last Year
104% increase in black-
owned & black empowered business funding
R4.7 billion (63% increase)
in transactions involving 77black industrialists
R19 billion BEE transaction value facilitated
45
Impact of the Work of Economic Development
IDC approvals to BEE empowered companies
Estimated value of transaction in equity over 7 years – construction industry
BEE component Coca-Cola merger
AMSA BEE partnership
46
IDC Investment In Provinces
Northern Cape
Funding Jobs
2015/16 R1 159 m 973
2016/17 R1 771 m 641Western Cape
Funding Jobs
2015/16 R1 440 m 1 086
2016/17 R1 606 m 829
Eastern Cape
Funding Jobs
2015/16 R785 m 1 963
2016/17 R2 065 m 2 423
Kwa-Zulu Natal
Funding Jobs
2015/16 R2 448 m 1 445
2016/17 R 347 m 2 419
Free State
Funding Jobs
2015/16 (R658) m (1 123)
2016/17 R300 m 363
Mpumalanga
Funding Jobs
2015/16 R408 m 2 107
2016/17 R2 182 m 4 060
North West
Funding Jobs
2015/16 R225 m 370
2016/17 R103 m 323
Limpopo
Funding Jobs
2015/16 R5 172m 6 712
2016/17 R1 896m 3 478
Gauteng
Funding Jobs
2015/16 R3 414 m 1 739
2016/17 R4 932 m 6 345
In the reporting period, EDD facilitated, fast-tracked or unblocked 17 investment initiatives which supported 1 081, some examples:
47
Investment: Enterprise Examples
Company /
Project name
Unblocking Jobs
Colibri Textile • EDD introduced Colibri Textile to Massmart who required a
local supply of face towels for their Game Stores.
• Colibri received R2.7 m from the Massmart Supplier
Grant to buy 30 industrial sewing machines
• The project will be housed in a separate company and will
be 66% black and women owned
• 30 new jobs will be created
30
MPAC water
license
• MPAC had challenges with a very old WULA application for
their factory in the rural area of Piet Retief
• EDD unblocked the challenges which will result in short
term investment of R60 million for plant upgrade and a
likely investment of a further R200 million in 5 years
48
Investment: Enterprise Examples
Company /
Project name
Unblocking Jobs
Working for
Water project
• EDD arranged for the Working for Water project of the
Department of Environmental Affairs via San-Park to sell
outdoor furniture to Makro
• Initial order was for 350 units of furniture
• The initiative helped to sustain 90 jobs
90
AMSA
Highveld
Steel
• EDD facilitated an engagement between the Business
Rescue Practitioner of Highveld Steel, IDC and AMSA to
recommission the structural steel factory at Highveld
• Following the engagements AMSA entered into a contract
agreement with Highveld to produce structural steel
• The initiative will result in import replacement and create
approximately 400 jobs
400
49
Investment: Enterprise Examples
Company /
Project
name
Unblocking Jobs
Karoshoek
Solar One
• IDC has 20% equity in Karoshoek Solar One project, set up in
Emvelo in the Northern Cape to develop a 100 MW Solar
Power Plant.
• The project could not go ahead because of administrative
bottlenecks. EDD:
• unblocked the lease agreement with the Department of
Public Works
• tracked original source documents required from the
Department of Rural Development to register at the
deeds office
80
AMSA/Duferco • Duferco were importing much of their HRC (hot rolled coil)
• Following a series of meetings arranged between the parties,
Duferco agreed to buy all of its HRC from AMSA’s Saldana
Mills, thus displacing approximately 24 tons of imported HRC
per month
EDD work included:
• Work with provinces to promote economic development
• Promoting black farmer participation in agro-processing value-chains
• Using competition policies to bring new players into the economy, support black industrialists and save and expand jobs
• Ensuring trade policies save industries, promote empowerment and employment
• Drive new interventions to assist youth employment and entrepreneurship
• Use investment opportunities to broaden ownership in the economy
• Partner with local stakeholders to stimulate new economic activities
50
Building an Inclusive Economy
51
Inclusive Economy: Youth, Training, Local Partnerships
Broadening participation in the economy
52
Inclusive Economy: Provincial Partnerships
Review and develop the alignment of economic development
policies aimed at broadening participation in the economy
Signing of MOU between Gert SibandeTVET College &SASOL with a special focus on youth entrepreneurship
& development Assisted Youth
Chamber t pilot a Youth Portal where youth entrepreneurs are
registered.
Mbombela municipality use portal for
identifying young entrepreneurs for
incubation programme
Assisted the Youth Chamber in facilitating direct export market in
the Asian market
Assisted Youth Chamber to develop a
Youth Entrepreneurship Framework for 3
provinces prioritising Mpumalanga
53
Youth Entrepreneurship Development
Used by Eskom
and Mpumalanga
Provincial &
National Treasury
• Had consultations with youth and other stakeholders in various fora on challenges they face in implementing the Youth Employment Accord
• Did research on youth unemployment
• At Ministerial level and Departmental level, EDD worked with other government departments and the Presidency to address youth issues
• Completed the draft report on Youth Employment Accord for consultation
– It showed weaknesses in private sector reporting given that individual businesses don’t report to business associations
– Appointed an intern to help address this by collecting information from individual businesses
• Developed draft new proposals for Youth Employed Accord II for discussion
54
Youth Employment
Example of Sutherland Economic Road Show
Inclusive Economy – Local Entrepreneurship
55
• Ministerial visit to support investment in local and township economies as
part of the potential astronomy corridor between Sutherland & Carnarvon
• EDD organised Economic Road Show in Sutherland
• Participants received support from: SARS, sefa, seda, South African
Astronomic Observatory, Municipality, EDD and Department of
Environmental Affairs
• Shop set up in the Observatory selling local goods – food items and
souvenirs
• Observatory funded R800 000
– upgrading the hostel using local business
– developing the science laboratory at the secondary school at
Sutherland
• Tourism grew in the area and this has supported systematic growth in one
of the black-owned B&Bs
Inclusive Economy – Emerging Farmers
56
• Soya farmers: 38 black farmers were supported to enter soya-
production for the first time, to supply a local crushing plant
– 2005 hectares of land under cultivation
• Barley and hops: 800 black farmers will be supported by ABInBev
to enter into commercial production to provide inputs for beer-
making in South Africa and to promote exports of value-added
malted products
– 2 600 workers will be employed over the next five years
• Grape production: black farmers are being brought into the supply-
chain for making Grapetiser cooldrinks in the Northern Cape area
– The company moved from 11% local supply to 25% and the
target is to move this progressively up
57
Inclusive Economy - IDC five years (2013/14 – 2016/17)
Direct and indirect jobs impact
344 006
Supporting decent jobs in a sustainable and inclusive economy while meeting social need
58
Building an Inclusive Economy - Social Economy
EDD’s MOU with the Government of Flanders and the International Labour
Organisation will assist to develop a Social Economy Framework for South
Africa to support the growth of the social economy sector and decent jobs
The MOU provides for funding of about R19m and is being implemented in 2017/18
• The Annual Performance Plan (APP) provides
basis for the annual audit against pre-determined
objectives
• The tables in the published Annual Report provide
an overview of the number of achievements and
reasons for variation
Annual Performance Plan
59
Annual Performance Plan: Overview
Overall Performance Level
Budget Programmes Total Key
Performance
Indicators
(KPIs)
KPIs with
achieved
targets
KPIs with
exceeded
targets
KPIs not
achieved
against
targets
Administration 2 2 0 -
Growth Path and Social
Dialogue
6 4 2 -
Investment, Competition and
Trade
15 7 8 -
Total 23 13 10 -
60
EDD had 170 targeted products for its frontline work, and
achieved 202 deliverables (32 exceeded products)
Details of actual work are contained in the Annual Report. Where specific products were not produced as required explanations for deviation are provided
2017/10/11 61
Governance and Administration
Improved Governance and Accountability (G&A)
Management Performance Assessment Tool (MPAT)
level obtained
• The Department employs staff on a permanent basis, aswell as through fixed term contracts for specific projectsand secondments to access specific scarce skills andknowledge for its programme including for the PICCtechnical unit.
• The EDD had a ratio of 48.5% women in SeniorManagement positions as at 31 March 2017 ascompared to 51.5% men. Twenty (20) Interns wereenrolled during the 2016/17 financial year for a period ofa 12 months internship Programme and they wereinducted accordingly. A Workplace Skills Plan wasdeveloped, submitted to PSETA, and is regularlymonitored on a monthly basis.
Overview of Human Resources
62
• Eighteen (18) Policies were reviewed of which four of them
were approved. Furthermore, more than 6 Plans were
developed which include amongst others, the Employment
Equity Plan, Human Resource Development Plan, Human
Resource Development Implementation Plan, Implementation
Plan for Job Access, Implementation Plan for Gender Equality
and others. The Collective Bargaining structure is fully
functional.
• The Employee Assistance Programme performed by an
outside service provider (on behalf of EDD is rendered as a
24-hour service to support all employees and their families).
The HIV/AIDS counselling and testing campaigns were
conducted in partnership with GEMS under the health
promotion programme.
Overview of Human Resources
63
Personnel Expenditure by Programme
64
Programme Total
expenditure
(R’000)
Personnel
expenditure
(R’000)
Training
expenditure
(R’000)
Professional
and special
services
expenditure
(R’000)
Personnel
expenditure
as a % of
total
expenditure
Average
personnel
cost per
employee
(R’000)
Administration 90 416 39 877 808 19 293 49 604
Growth Path and
Social Dialogue27 797 25 909 - 110 93 997
Investment,
Competition and
Trade
546 869 14 993 - 1 347 3 577
Total 665 082 80 779 808 20 75013 685
Salary band Personnel
expenditure
(R’000)
As % of total
personnel cost
No. of
employees
Average annual
personnel cost
per employee
(R’000)
Skilled (Levels 3-5) 1 389 2 8 174
Highly skilled
production (Levels 6-8)9 790 12 32 306
Highly skilled
supervision (Levels 9-
12)
23 540 29 41 574
Senior management
(Levels 13-16)46 060 57 37 1 245
Total 80 779 100 118 684
Personnel Costs by Salary Bands
65
Introduction to Finance
66
Application of appropriated funds 2016/17
Rm
Appropriated Funds 674.7
sefa 213
Competition Commission 208
Department 146
ITAC 87
Competition Tribunal 20
%
Institution
Figures rounded.
0%
5%
10%
15%
20%
25%
30%
35%
Sefa CompetitionCommission
Department ITAC CompetitionTribunal
22%
Financial Performance: Overview
67
For the year under review the
department spent 98.6% (i.e. under
spending of 1.4%) and obtained an
unqualified audit opinion
Financial Performance: Per Programme
68
Programmes
2016/17 2015/16
Annual
BudgetExpenditure Variance
Annual
BudgetExpenditure Variance
R'000 R'000 R'000 % R'000 R'000 R'000 %
Administration 92 431 90 416 2 015 2.18 83 223 83 144 79 0.09
Growth Path
and Social
Dialogue
29 887 27 797 2 090 6.99 27 889 26 705 1 184 0.42
Investment,
Competition
and Trade
552 343 546 869 5 474 0.99 774 666 773 884 782 0.10
Total 674 661 665 083 9 578 1.42 885 778 883 733 2 045 0.23
Financial Performance per Economic Classification
69
Programmes
2016/17 2015/16
Annual
BudgetExpenditure Variance
Annual
BudgetExpenditure Variance
R'000 R'000 R'000 % R'000 R'000 R'000 %
Compensation of
employees 93 930 84 990 8 940 9.5% 79 534 79 398 136 0.2%
Goods & services 48 489 48 475 14 0% 50 897 48 988 1 909 3.7%
Transfers to Entities 528 781 528 781 0 0% 750 245 750 245 0 0%
Households 65 65 0 0% 151 151 0 0%
Payments for capital
assets 3 396 2 772 624 18.4% 4 949 4 949 0 0%
Totals 674 661 665 083 9 578 1.42% 885 778 883 733 2 045 0.2%
Transfers to Entities
70
Description2016/17 2015/16
R'000 R'000
Competition Commission 208 541 231 045
Competition Tribunal 20 115 19 102
International Trade Administration Commission 87 001 88 701
Sefa 213 124 406 397
IDC (PICC) - 5 000
Total 528 781 750 245
For the financial year under review 78% of the budget was transferred to the
department’s entities.
Financial Performance: Revenue
71
Description2016/17 2015/16
R'000 R'000
Sales of goods and services other than capital
assets30 35
Fines, penalties and forfeits (Construction Cartel Settlement Agreement)
117 000 -
Interest, dividends and rent on land 20 259 50 278
Transactions in financial assets and liabilities 47 (17)
Total 137 336 50 296
• EDD no longer reports on penalties collected by the Competition Commission in line with reporting requirements reflected in the Accounting Manual issued by OAG.
1. In 2016/17 R248 million was received from Competition Commission forfines and penalties imposed by the Competition Tribunal. This was paid overto the National Revenue Fund.
2. In 2015/16 R676 million was received and paid over to National RevenueFund.
3. Dividends are received from Industrial Development Corporation.
72
Cash received (Not EDD revenue)
Name of entity Amount
received
R’000
Amount paid to
Revenue Fund
R’000
Balance
R’000
Competition Commission 247 982 247 982 247
Total 247 982 247 982 247
Auditor–General Report
73
Audit Outcome
The department obtained an unqualified auditopinion.
Improved management report - less findingscompared to the last financial year.
In Annual Report, the misstatements raised by AGwere subsequently corrected and no materialfindings were made on reported performanceinformation.
74
THANK YOU
SIYABONGA