11

 Strategic Goals
 Preliminary Key Achievements as at 31 March 2013
 Departmental Expenditure versus Budget
 Key Challenges

Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation
Build mutually beneficial regional and global relations to advance South
Africa’s trade, industrial policy and economic development objectives
Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth
Create a fair regulatory environment that enables investment, trade and enterprise development in an equitable and socially responsible manner
Promote a professional, ethical, dynamic, competitive and customer-focused working environment that ensures effective and efficient service delivery
3

44

SG 1: Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation
 Four(4) sector/subsector designation templates completed and submitted to National Treasury (solar water heater components,
 Facilitated the setting up and launch of first Small Scale Milling manufacture (Kuvusa investment) which will see the maize meal price being reduced by up to 20% for South African households
 Approval by the Minister, the Automotive Investment Scheme ( AIS ) amendments for people carriers segment of Medium and Heavy
Commercial Vehicle (MHVC)
 Support Programme for Industrial Innovation ( SPII ) approved for 53 projects to the total value of support of R203.5m (SPII contribution
R109m and industry contribution R94.5m)

SG 1: Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation
 780 students and 258 researchers approved for Technology and Human
Resources for Industry ( THRIP ) funding
 Special Economic Zone ( SEZ ) Bill was introduced in Parliament in
March 2013
 People-Carrier Automotive Incentive Scheme ( P-AIS ) was launched
 Manufacturing Competitiveness Enhancement Programme ( MCEP ) launched in May 2012; 189 enterprises approved for grants valued at
R992,2 m and 33 551 jobs are expected to be retained
66

Actual
Description
Number of firms/projects supported
Potential jobs supported
Investment leveraged
Automotive Incentive Scheme (AIS)
Industrial Financing
28 939
Business Process Services (BPS) 12 3 936
R1.8bn (for approved projects does not include payments)
R1.3bn
Film and Television
12 I
Critical Infrastructure Programme (CIP)
70
12
6
R2.5bn
R10.2bn
R 8.9bn
R4.bn
Manufacturing Competitiveness
Enhancement Programme (MCEP):
Production Incentive
189
-
1 357
5 696
33 551
(jobs sustained)
7

SG 2: Build mutually beneficial regional and global relations to advance South Africa’s trade, industrial policy and economic development objective
 Principles and modalities for Southern African Development Community
( SADC ) -East Africa Community ( EAC ) -Common Market for Eastern and
Southern Africa ( COMESA ) Tripartite - Free Trade Agreement ( T-FTA ) negotiations agreed and focus is now on tariff exchange and legal texts;
Progress in Economic Partnership Agreement ( EPA ) with focus on final exchange of tariff concessions and rules of origin, three(3) key textual issues and bilateral geographic indication agreement
 Africa Regional Development Programme - Progress on Southern Africa
Customs Union ( SACU ) programme on unified trade negotiations and
SACU institutions; Consolidation of Southern African Development
Community ( SADC ) Trade Protocol with focus on full implementation of tariff concessions, addressing non-tariff barriers, development of regional standards and trade facilitation

SG 2: Build mutually beneficial regional and global relations to advance South Africa’s trade, industrial policy and economic development objective
 Trade Policy and Strategy Framework (TPSF) was approved by Cabinet.
 Participated in the 3 rd Contact Group on Economic and Trade Issues
( CGETI ) meeting in Delhi, India to refine Terms of Reference (ToR) and action plans for Brazil, Russia, India, China and South Africa ( BRICS ) work programme on economic and trade issues
 Organised 22 National Pavilions of which most of them were on new high growth markets such as Asia, Africa, South America, the Middle East and large markets such as Europe and North America
 Organised five (5) International Trade Initiatives (ITIs) in Brazil, Russia,
India, Democratic Republic of Congo and Zimbabwe.

SG 2: Build mutually beneficial regional and global relations to advance South
Africa’s trade, industrial policy and economic development objective
 3 rd Brazil, Russia, India, China and South Africa ( BRICS )Trade Ministers ’
Meeting successfully held in Durban. Key outcome realised are amongst others include the BRICS Trade and Investment Cooperation Framework.
 The National Exporter Development Programme ( NEDP ) was presented and endorsed by the Economic Sectors and Employment Cluster (ESEC) of Cabinet
 Facilitated exports sales of about R3,19 billion
 Recorded R53.5 billion pipeline of investments in sectors such as
Manufacturing, auto and Agro Mining ; steel and cement , renewable energy as well as Service in particular BPOs .
 Assistance provided to 1084 enterprises participating in Exporting,
Marketing and Investment Assistance ( EMIA ) scheme

SG 3: Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth
 The Co-operatives Amendment Bill adopted by the National Assembly
 Aquaculture Development and Enhancement Programme ( ADEP ) and
Incubator Support Programme ( ISP ) launched to e ncourage private sector partnership with government to support incubators in order to develop SMMEs
 Broad Based Black Economic Empowerment ( B-BBEE ) Amendment Bill approved by the Cabinet and introduced into Parliament
 BBBEE Codes of Good Practice gazetted for public comment
 Hosted together with private sector partners the International Small
Business Congress in September;

SG 3: Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth
 seda Technology Programme (stp) - 10 new incubators were established; 1 258 of Small, Medium, Micro Enterprises ( SMME) supported and 376 SMMEs approved for assistance
 Implemented of some of the recommendations contained in the SMME
Review Report
 31 new projects approved for the Isivande Women’s Fund ( IWF )
 83 new contracts with new companies participating in the Workplace
Challenge Programme ( WCP )
 The National Strategic Framework on Women‘s Economic Empowerment was finalised and awaiting presentation to Cabinet

SG 3: Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth
 1 213 enterprises approved for Black Business Supplier Development
Programme ( BBSDP )
 314 enterprises approved for Cooperative Incentive Scheme ( CIS )
 Informal Sector Strategy draft has been developed and the Reference
Group has been established with the support of the International Labour
Organisation (ILO)
 Youth Enterprise Development Strategy ( YEDS ) approved by the Minister

Actual
Description Number of firms/projects supported
Potential jobs supported Investment leveraged
Enterprise Incentive
Programme (EIP):
Manufacturing Incentive
Programme (MIP) and Tourism
Support Programme(TSP)
EIP: MIP 546 12 269 R10.8 bn
EIP: TSP 125 1 357 R1.5bn
14

SG 4: Create a fair regulatory environment that enables investment, trade and enterprise development in an manner equitable and socially responsible
 Draft Policy Framework and Draft Bill on the Business Reform
Registration developed
 Final Policy Framework Intellectual Property produced incorporating
Copyright Review Commission Report
 Draft Policy and Bill for Licensing of the Businesses Act developed and presented to Cabinet for wider consultation process
 Regulatory Impact Assessments (RIA) on the National Credit Act and
Business Act Review developed

SG 5: Promote a professional, ethical, dynamic, competitive and customerfocused working environment that ensures effective and efficient service delivery
 Vacancy rate has been reduced to 8.04% as at 31 March 2013 (increase was as a result of newly created posts added to the establishment)
 The percentage of disability status is at 2.7% against annual target of 2.4%
 The percentage of women in Senior Management Service (SMS) is at
42.91.%
 All eligible creditors’ payments have been processed within 30 days

SG 5: Promote a professional, ethical, dynamic, competitive and customerfocused working environment that ensures effective and efficient service delivery
 Public awareness platforms and events:
18 Programme focused publications
16 Multimedia awareness campaigns
164 Events and outreach initiatives
 Held the Inaugural South African Premier Business Awards in collaboration in partnership with Brand SA and Proudly South African to recognise South African companies, their products and services and employees that promote the spirit of success, innovation and good business ethics in the economy amongst other objectives.

18

Summary of Projections vs Expenditure as at 31 December 2012
Programmes
Administration
ITED
BPD
IDPD
CCRD
IDIA
TISA
TOTAL
Revised budget YTD
2012/13 YTD expenditure
R'000 R'000 R'000
693,008
134,663
476,623
87,430
444,673
89,212
943,501
1,493,395
248,143
4,560,870
277,506
8,351,086
724,246
1,364,893
203,578
3,421,846
180,851
6,459,467
716,985
1,370,803
182,940
3,248,574
175,369
6,228,557
Variance
Value
R'000
Percentage
%
31,950
-1,782
6.70%
-2.04%
Available
Budget
R'000
248,335
45,451
7,261
-5,910
20,638
173,272
5,482
230,910
1.00%
-0.43%
10.14%
5.06%
3.03%
3.57%
226,516
122,592
65,203
1,312,296
102,137
2,122,529

Expenditure per economic classification as at 31 December 2012
Economic classification
Variance
Revised budget
R'000 R'000 R'000
Value Percentage
R'000 %
Available
Budget
R'000
Compensation of employees 735,953 511,965 489,668 22,297 4.36% 246,285
685,678 451,164 423,724 27,440 6.08% 261,954 Goods and services
Interest and Rent on land
Payments for Financial
Assets
Payment for capital assets
Transfers & subsidies
TOTAL
66,441
6,863,014
8,351,086
0
0
19,046
5,477,292
6,459,467
0
0
487
2,123
-487
-2,123
10,381
5,302,175
8,665
175,117
6,228,557 230,910
0.00%
0.00%
45.50%
3.20%
3.57%
-487
-2 123
56,060
1,560,839
2,122,529
NB: The expenditure based on the YTD projection of R6, 5 billion is
96.4% or R6,2 billion, implying an under-spending of R231 million (3.6%).

Reasons for material expenditure variance as at 31 December 2012
Economic classification
Compensation of employees
Good & Services
Capital
Payments for financial assets
Amount
(R’000)
Reasons for under/(over) expenditure
The under spending is largely due to vacant posts. As at 31
December 2012, there were 116 vacancies (8.4%) of the
1,374 posts.
22 297
Under spending occurred largely on business and advisory consultants due to the following:

Delays in the commencement and finalization of projects

Bills and Acts that are still in the process of being drafted and were expected to be published.
27 440
Hardware and software for the Integrated Electronic
Management System (IEMS), which could not be finalized due to the pending appointment of a service provider.
8 665
-2 123 The unexpected over expenditure is the result of a court judgment against the dti (R1,7 million arbitration award to
Philip Knight) as well as debts written off.

Reasons for material expenditure variance as at 31 December 2012 (cont)
Economic classification Amount
(R’000)
Reasons for under/(over) expenditure
Transfer & subsidies
INTSIMBI: National Tooling Initiative
Companies Tribunal
Richards Bay Industrial Development Zones
Company
Manufacturing Competitiveness Enhancement
Programme (MCEP)
-11 100 The over expenditure is due to a payment made to INTSIMBI:
NTI. The original cash flow was scheduled for January 2013; however funding was required earlier due to a commitment. It should be noted however, that although the expenditure is more than the YTD projections it is still within the allocated budget.
10 000 The payment to the Companies Tribunal could not be effected due to outstanding compliance issues.
10 000 Of the R50 million projected for the Richards Bay Industrial
Development Zones, only R40 million was paid, as per the funding agreement approval.
30 000 R30 million on the MCEP could not be disbursed due to certain procedures not being in place, i.e. the electronic claim form and the Factual Finding Report that had not yet been finalized by the Independent Regulatory Board of Auditors.
Enterprise Investment Programme
Business Processing Service Incentives
19 553 12 claims under this incentive programme could not be paid due to outstanding compliance issues.
23 040 5 claims under this incentive programme could not be paid due to outstanding compliance issues.

Reasons for material expenditure variance as at 31 December 2012 (cont)
Economic classification
Transfer & subsidies - continued
Film & TV Production Incentive
Automotive Production and Development
Programme
Export Market and Investment Assistance
Black Business Supplier Development Programme
Critical Infrastructure Programme
Amount
(R’000)
Reasons for under/(over) expenditure
10 368 7 claims under this incentive programme could not be disbursed due to an outstanding ruling from the Department of Arts and
Culture.
-29 266 More claims were received than anticipated. It should be noted however, that although the expenditure is more than the YTD projections it is still within the allocated budget.
35 046 Fewer claims were received than anticipated.
-12 548 More claims were received than anticipated. It should be noted however, that although the expenditure is more than the YTD projections ,it is still within the allocated budget.
72 357 2 claims under this incentive programme could not be paid due to outstanding compliance issues.

24

Programmes
Administration
ITED
BPD
IDPD
CCRD
IDIA
TISA
TOTAL
Summary of Projections vs Expenditure as at 31 March 2013
Adjusted budget
R'000
670,573
Annual cash flow
R'000
670,573
Annual expenditure
R'000
627,213
134,663
951,258
134,663
951,258
132,269
929,495
1,515,495
234,721
4,560,870
283,506
8,351,086
1,515,495
234,721
4,560,870
283,506
8,351,086
1,504,887
221,909
4,519,012
266,165
8,200,951
Variance
Value
R'000
43,360
Percentage
%
6.47%
Available
Budget
R'000
43,360
2,394
21,763
1.78%
2.29%
2,394
21,763
10,608
12,812
41,858
17,341
150,135
0.70%
5.46%
0.92%
6.12%
1.80%
10,608
12,812
41,858
17,341
150,135

Expenditure per economic classification as at 31 March 2013
Variance
Economic classification
Adjusted budget
R'000
Annual cash
R'000
Compensation of employees 704,575 704,575
Annual expenditure
R'000
666,743
Value Percentage
R'000 %
37,832 5.37%
Available
Budget
R'000
37,832
Goods and services
Interest and Rent on land
Payments for Financial
Assets
Payment for capital assets
Transfers & subsidies
TOTAL
657,838
490
0
60,276
6,927,907
8,351,086
657,838
490
0
60,276
6,927,907
8,351,086
587,484 70,354
487 3
2,207 (2,207)
40,557
6,903,473
19,719
24,434
8,200,951 150,135
10.69%
0.61%
0.00%
32.71%
0.35%
1.80%
70,354
3
(2,207)
19,719
24,434
150,135

Overview of expenditure for the 2012/13 financial year
 the dti’s annual expenditure for the 2012/13 financial year is 98.2% or
R8,201 billion of the total adjusted budget of R8,351 billion.
 The provisional under-spending is R150 million (1.8%) before taking the following into consideration:
Interdepartmental claims from the Department of International
Relations and Cooperation ( DIRCO ) are still to be journalised to the relevant objectives
R120 million General Export Incentives Scheme ( GEIS ) debts to be written off
 A roll-over request for the Integrated Electronic Management System
(IEMS) will be submitted to National Treasury (R 17 m)

28

Interventions to address AG Audit Findings
Finding
•
Material misstatements in financial statements that were subsequently corrected
• Goods and services with a transaction value below
R500k procured without obtaining the required price quotations
Management interventions
To improve the quality, financial statements are being produced more regularly. Quarterly financial statements are now being produced, however processes are currently being implemented to produce monthly financial statements. The June, September and December interim financial statements were completed and submitted to National Treasury. The third quarter financial statements were audited by Internal Audit with no material misstatements being identified.
These relate to transactions where three quotations could not be obtained and the delegations of authority did not specifically provide for these deviations. The delegations have since been amended to include the deviations.
• The Accounting Officer did not take steps to prevent irregular and fruitless and wasteful expenditure.
Regular refresher sessions on the requirements for procurement for the staff have been implemented, including communication via financial circulars.
29

Interventions to address AG Audit Findings
Finding
• Employees performed remunerative work outside the public service without the relevant approvals
•
Proper control systems to safeguard and maintain assets not implemented.
Management interventions
A circular on remunerative work outside the public servicewas circulated to all staff. All staff were required to obtain approval for remunerative work by 15 December 2012. Awareness-raising presentations are being presented to all divisions, to ensure a proper understanding and compliance.
Findings raised in this area were due to the exact locations of assets not being reflected in the asset register. There are limitations in this regard with the current transversal system being used, however the department has since implemented an asset management system parallel to LOGIS which is able to record the location of the assets.
Divisions are now requested to conduct monthly asset verifications with departmental verification being conducted on a bi-annual basis
.
30

Interventions to address AG Audit Findings
Finding
• A written policy on overtime was not in place
Management interventions
The Overtime Policy was approved and is being implemented.
31

The economic slowdown in traditional markets limits export growth;
Managing expenditure incurred by other government institutions who procure goods and services on behalf of the dti .
Managing external risks.
Rolling-out the dti programmes and services to the second economy.
Continuous oversight on public entities
32