Government’s nine point plan

Business response to TIC strategic session

2 November 2015

Elements of nine point plan

Drivers: Revitalisation of the Agriculture and Agro-processing value-chain,

More effective implementation of a higher impact IPAP,

Advancing beneficiation (adding value to our mineral wealth),

Unlocking the potential of SMMEs, co-ops, township and rural enterprises,

Growing the Oceans Economy,

Enablers:Resolving the energy challenge,

Managing workplace conflict, ( not part of this presentation)

Scaling up private-sector investment,

Cross-cutters:ICT, Transport infrastructure, Science and Technology, and Water.

Revitalisation of the Agriculture and Agro-processing value-chain:

Roll-out of Agri-Parks across SA – 44 sites prioritised,

Comprehensive Producer Support Policy Framework & Integrated Agriculture

Development Finance Policy are being developed for Cabinet, and

Nine Strategic value-chains have been identified in collaboration with Business for

additional support.

More effective implementation of a higher impact IPAP:

Progress has been made and important policy platforms have been established in

sectors such as Autos (investment of R25,7 billion), Clothing & Textiles (jobs saved

and jobs created), Renewable Energy, Business Process Services and Film.

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Productive sectors

More effective implementation of a higher impact IPAP:

New growth sectors such as in Oil & Gas; Metal Engineering & Capital Equipment,

and Agro-processing will be targeted for more intensive support.

Recalibration of industrial finance will aim to strengthen the package of Government

and DFI support for the productive sectors (against greater conditionalities).

In view of the severe distress that some parts of the Metals & Engineering sectors

are in, R300m has been earmarked from the dti’s MTEF allocation.

Important progress has been achieved in analysing the demand for the

infrastructure build programme to maximise localisation, this needs to be built on.

Introduction of the Black Industrialists policy and programme to transform the

manufacturing sector and unlock the potential of black entrepreneurs.

SEZ programme is being rolled out.

SA must move up the value-chain, innovate and locate production in high value-

added production so as to reduce our dependence on volatile commodities. 4

Productive sectors (2)

Advancing beneficiation (adding value to our mineral wealth):

Beneficiation is a medium to long-term initiative, but need to make decisions now

for us to see the results in the medium to long-term.

Five value-chains are being worked on (1) PGMs including catalytic converters and

fuel cells, (2) Iron and Steel, (3) Titanium, (4) Polypropylene, and (5) Capital

equipment for the mining sector.

Mining Phakisa is in the preparation phase and Business is requested to be a full

and active partner in the process.

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Productive sectors (3)

Unlocking the potential of SMMEs, co-ops, township and rural

enterprises:

Public Sector Procurement – implement 30% set-aside policy.

Building Market Access – Supplier Development Programmes.

Access to Finance – developmental DFIs.

Support to Township and Rural Enterprises – through business infrastructure.

Policy and Regulatory environment – Red Tape Reduction, review Small Business

Act.

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Productive sectors (4)

Growing the Oceans Economy:

Marine Transport and Manufacturing:

Saldanha Bay proclaimed as an IDZ so as to develop the oil and gas hub: Total

scope - R9.2 billion investment (public and private).

Adoption of a Public- Private -Partnership (PPP) model to finance new

Operation Phakisa infrastructure by Transnet National Ports Authority (TNPA) &

Transnet- R7 billion committed.

For new port infrastructure (Saldanha Bay, East London, Richards Bay)

Transaction Advisors appointed; business case advanced; and funding model: 70%

completed.

Working vessels designated for local procurement, for example - public fleet

subjected to 60% local content.

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Productive sectors (5)

Resolving the energy challenge:

Electricity supply challenges in line with War-room Five Point Plan:

o Immediate Measures (Improve Eskom Maintenance and Operational

Practices), Co-Generation, Gas-to-power, coal and other IPPs, and Demand

Side Management.

Addressing broader Energy Mix issues

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Enablers

Scaling up private-sector investment:

Overall investment level is too low (GDFI is 20% of GDP vs NDP target of 30%) but

SA continues to attract lion’s share of FDI going to Africa and a pipeline of R45bn

shows significant numbers of foreign investors believe in the ‘Africa Story’ and see

SA as pivotal to Africa’s industrialisation.

A central nodal operational structure will be established at national level to act as

a One-stop Shop.

Improve the Investment Climate and ease of doing business by identifying

bottlenecks, administrative barriers and have a plan of action to improve service

delivery. The focus will be on reducing regulatory inefficiencies, setting up norms

and standards, turnaround times, coordinate, fast track, unblock and reduce red

tape for all investors.

One-stop Investment Centres will be established in the SEZs.

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Creating environment for growth

⑨ ICT, Transport infrastructure, Science and Technology, and

Water:

ICT

o Phase 1 Broadband roll-out: Aggregation of public sector demand to address gaps by connecting schools, clinics, police stations and other government facilities in 8 District Municipalities in 7 Provinces.

o Phase 2 Broadband Roll-out: Nominal Planning to cover the entire country has been finalised. SITA’s bandwidth migration roadmap to align government connectivity with South Africa Connect targets will deliver increased bandwidth to 4457 client sites.

Transport

o Improve ship register and enhance cargo volumes.

o Establish rolling stock factory in Nigel,

o Maintenance of provincial roads (S’hamba Sonke),

o Develop Infrastructure Funding and private-sector participation framework.

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Cross cutters

Science & Technology

o Develop sector innovation funds and improve efficiency of the R&D Tax incentive,

o Provincial/ local government funds to be ring fenced for RDI based service delivery solutions,

o Innovation/ entrepreneurial skills development programmes to be implemented,

o Industrial financing for full scale commercialisation developed.

Water

o Maintain and upgrade existing water and sanitation infrastructure,

o Build new dams and develop ground water resources,

o Improve water quality,

o Enhance an integrated regulatory regime (e.g. water use licensing), and

o Implement SMART technologies for water and sanitation information management.

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Cross cutters (2)

Thank you