Presentation to the Select Committee on Trade
and International Relations –
the dti’s 2011/12 Annual Report
Date :14 November 2012
Director-General
Mr Lionel October
Presentation outline
 Economic context
 Strategic objectives
 Achievements against planned targets
 Financial management
 Key challenges
2
Key highlights for
2011/12
 Industrial Policy gained traction in 4 key sectors
(Autos, Clothing, BPS and Film)
 Progress on reforming the Companies registrations
landscape; and
 Started key initiatives in the areas of co-operatives,
SMEs Incubators.
 Trade diversification
(China).
to
high
growth
markets
3
Economic context
 The global economic recovery still fragile since the
sovereign debt crisis continues to haunt Europe.
 The rate of the world’s real gross domestic product
(GDP) growth declined from 5,2% in 2010 to 3,8% in
2011. Negative impact on tradeable sectors
(manufacturing, mining and agricultural sectors)
 However, growth in developing economies was still
generally robust during the course of 2011, but was
moderated in the last quarter due to a deteriorating
global demand, which affected export performance.
4
Economic context
Manufacturing Real Gross Value-Added Growth 2006 – 2011
Source: Stats SA
5
Economic context
International Trade Performance
 Global economic growth slowed significantly from 3,7% in the third quarter of
2011 to 2,6% in the fourth quarter, mainly on account of slower output growth in
advanced economies.
 European trade narrowly avoided a technical recession in the first quarter of
2012. Real output was at zero percent in the first quarter of 2012, following a
contraction of 1,3% in the last quarter of 2011.
 South Africa’s exports to the BRIC countries have increased significantly, with
China being the main driving force behind this increase and India not far behind.
Exports to BRICS in 2011: 72% of exports were to China; 21% to India; 5% to
Brazil and 2% to Russia. Total trade with BRICS at R263,5 billion in 2011.
 The stagnation in world trade volumes in 2011 and the rising domestic
expenditure manifested itself in increasing imports in South Africa.
 This culminated in an annualised trade deficit of R17,1 billion in the fourth
quarter of 2011.
 14,3 % of RSA exports were to Africa of which 73,3 % were to SADC.
6
Economic context
Investment performance
 Real gross fixed capital formation grew steadily in 2011, showing an
annual rate of 4,4%, recovering from a decline of 1,6% in 2010.
 The fourth quarter recorded a particularly strong performance of
7,2%, with public corporations recording the strongest acceleration
in capital spending.
 The introduction of new amendments to the Companies Act, which
came into effect in April 2011 has contributed to improvement in the
investment climate.
7
Foreign Direct Investment cont..
8
Economic Context
Investment performance
 South Africa has improved its ranking on the ease of doing business
from ranking 74 in 2011 to 44 out of 183 countries in 2012. (Doing
Business 2012 by the World Bank)
 In the World Economic Forum’s 2012 Global Competitiveness
Report, South Africa moved up four places to number 50 out of 142
countries surveyed.
 Overall, South Africa was ranked number one in ease of obtaining
credit; number one in Auditing Standards; and number one in the
regulation of the securities exchange.
 In addition, it ranked number three in the protection of minority
stakeholders and number 10 in the strength of protection of foreign
investors.
9
Economic Context
Employment performance
 The weak global economic recovery, together with the prevailing
uncertainty about the global economy, is still negatively impacting
job creation.
 However, the economy managed to create 365 000 new jobs
between the fourth quarters of 2010 and 2011.
 This growth was supported by finance and other business
services contributing 145 000 jobs, trade contributing 85 000, and
community and social services 76 000. Manufacturing lost jobs in
second and third quarters and gained 52 000 in the fourth quarter
of 2011.
10
Structure of the dti‘s work
the dti’s work is organised in terms of the following
clusters:
 Industrial development;
 Trade, Investment and Exports;
 Broadening Participation;
 Regulation, and
 Administration and Co-ordination
11
Achievements against
planned targets
12
Industrial Development - highlights
 The implementation of the Automotive Production and
Development Programme (APDP) helped renew
confidence.
 This has been demonstrated through large investment
commitments of R15 billion made by original equipment
and component manufacturers.
 China’s First Auto Works (FAW) committed to an
investment of $100 million for a truck and car assembly
plant, and Toyota SA to assembling minibus taxis locally.
13
Industrial Development –
Public Procurement
 Amended PPPFA Regulations effective from 7 December 2011. the dti
empowered to designate sectors / industries from which govt
departments and state-owned enterprises (SOEs) must procure locally
 First round of sector (six) designations:
 Rail Rolling Stock: locomotives, wagons and carriages;
 Power Pylons;
 Buses;
 Clothing, Textiles, Leather and Footwear;
 Canned Vegetables; and
 Set Top Boxes.
 Second round designation included 70 pharmaceutical products (Oral
Dosage Tender)
 Instruction notes signed by NT. Issues with respect to the localisation
threshold in the RFP for STB’s subject of ongoing engagement.
14
Industrial Development - Highlights
 BPS – mega investments relate to customer call centres, e.g.
Amazon African customer service centre in Cape Town, with an
investment of R834 m, Entersite to the value of R845 m and
Mindpearl to the value of R356 m.
 Under Monyetla II Programme, 3 400 young people were trained,
70% of which were placed in employment by the Business Process
Outsourcing (BPO) consortium.
 On Clothing and Textiles Competitive Incentive Programme (CTCIP)
brought manufacturers and retailers such as Foschini, Truworths
and Edcon together to take advantage of the proximity, quality and
flexibility that domestic manufacturers offer. A total of R112 million
was disbursed of which R831 million supporting 208 companies.
15
BPS Mega Investments 2011/12
Investment: R 845m
Incentive: R 69m
Jobs: 5 131
Investment: R 834m
Incentive: R 32m
Jobs: 1 100
Investment: R 466m
Incentive: R 20m
Jobs: 2 300
Projects Approved: 23
Investment: R4bn
Investment: R 150m
Incentive: R 7m
Jobs: 540
Investment: R 149m
Incentive: R 2m
Jobs: 226
Grant: R1.8bm
Jobs: 15 149
Payments: R51m
Investment: R 121m
Incentive: R 5m
Jobs: 408
Investment: R 356m
Incentive: R 14m
Jobs: 891
Investment: R 119m
Incentive: R 1m
Jobs: 160
16
12I Mega Investments 2011/12
Investment: R 762m
Incentive: R 68m
Jobs: 1 924
Investment: R 533m
Incentive: R 191m
Jobs: 174
Investment: R 2bn
Incentive: R 904m
Jobs: 10 130
Investment: R 531m
Incentive: R 168m
Jobs: 204
Investment: R 1.5bn
Incentive: R 237m
Jobs: 309
Investment: R 2bn
Incentive: R 552m
Jobs: 194
Investment: R 8bn
Incentive: R 353m
Jobs: 1 163
Investment: R 1.4bn
Incentive: R 484m
Jobs: 2 394
Investment: R 1.8bn
Incentive: R 606m
Jobs: 2 145
*Note: Jobs include direct & Indirect
17
Film Foreign & Co-productions 2011/12
18
Overview of Incentive Schemes
ACTUAL
DESCRIPTION
NUMBER OF FIRMS
SUPPORTED
PROJECTED JOBS
INVESTMENT LEVERAGED
R'000
EIP -MIP
648 SMME
15 586
10 650 000
EIP –TSP
158 SMME
1 744
1 650 000
92
5 344
4 700 000
23 projects
15 149
4 100 000
72 productions
-
2 000 000
14
1 969
22 400 000
Co-operatives (CIS)
183
-
-
BBSDP
299
-
-
EMIA
896
-
-
CIP
6 projects
-
-
SPII
52
-
-
2 890
48 581
128 392 932
AIS
BPS
Film & Television
12 I Allowance Programme
TOTALS
19
Broadening Participation Highlights
Enterprise development and Women Empowerment

the dti through the Small Enterprise Development Agency (seda) has to date
established a network of 42 branches, 17 mobile units, 47 information kiosks and three
Enterprise Information Centres (EICs) countrywide.

31% of which are women-owned enterprises and 86% are black-owned entities.

34 incubators countrywide supporting SMMEs in various industrial sectors including
agriculture, agro-processing, construction, Information and Communication Technology
(ICT), manufacturing, mining and minerals beneficiation.

the dti has received 44 incubator proposals from private sector, science councils and
institutions of higher education. The Incubation Support Programme administered by
TEO has been allocated funds for 2012/13 to support PPP incubators.

The Strategic Framework on Gender and Women Economic Empowerment has been
finalised to affirm gender mainstreaming.
20
Broadening ParticipationHighlights
Co-operatives
 Initiation of a national pilot project to establish six provincial Red Tape
Reduction Forums.
 Workplace Challenge extended its scope to 396 small and medium
enterprises and co-operatives.
21
Broadening ParticipationHighlights
SMMEs
 Productivity support is now also provided to three industrial clusters specialising in
sawmilling, agro-processing and fishing in the Msinga and Doringbaai areas. Continuous
improvement interventions were extended to 149 companies, mainly SMMEs.
 In support of the National Skills Accord, the dti secured work experience placements for
unemployed graduates in partnership with the Department of Labour, Productivity SA and
the SA Graduate Development Association (SAGDA).
 Work is under way to secure a Memorandum of Understanding (MoU) with Majuba FET
College to establish a Centre of Entrepreneurship in Newcastle.
 Seda Technology Incubation Programme created 295 new SMMEs and supported 1 089
SMMEs.
 Hosted the SMME conference in October 2011.
 SMME Payment Hotline – since its inception in 2009, over R300 miilion has been
facilitated to SMMEs.
22
Broadening ParticipationHighlights
B-BBEE
The process to refine the B-BBEE Codes of Good Practice commenced
and was finalised in 2012.
• This refinement, together with the alignment of the B-BBEE Codes
with the PPPFA Regulations, which came into effect on 7 December
2011, is a major policy change for the country.
the dti has, in conjunction with University of South Africa (UNISA) and
University of the Witwatersrand (Wits) developed and launched a B-BBEE
Management Development Programme (MDP)
The B-BBEE MDP has 74 students graduate from the programme.
23
Provincial Spread: Broadening Participation Incentives
Gauteng:
North West:
BBSDP: 3
CIS: 14
EIP: 29
BBSDP: 133
CIS: 35
EIP: 272
Provincial Spread
Limpopo:
BBSDP: 57
CIS: 41
EIP: 49
Mpumalanga:
BBSDP: 5
CIS: 8
EIP: 49
Northern Cape:
BBSDP: 1
CIS: 0
EIP: 12
Kwa Zulu Natal:
BBSDP: 34
CIS: 46
EIP: 146
Free State:
BBSDP: 13
CIS: 2
EIP: 30
Western Cape:
BBSDP: 42
CIS: 22
EIP: 157
Eastern Cape:
BBSDP: 18
CIS: 15
EIP: 62
24
24
Provincial Spread: Investment Incentives
North West:
12I: 0
BPS:0
Film: 0
AIS: 0
CIP: 0
Gauteng:
12I: 5
BPS:4
Film: 48
AIS: 37
CIP: 4
Limpopo:
12I: 1
BPS: 0
Film: 0
AIS: 0
CIP: 1
Provincial Spread
Mpumalanga:
12I: 2
BPS: 0
Film: 0
AIS: 0
CIP: 0
Northern Cape:
12I: 0
BPS: 0
Film: 3
AIS: 0
CIP: 0
Kwa Zulu Natal:
12I: 1
BPS: 6
Film: 1
AIS: 16
CIP: 1
Western Cape:
12I: 1
BPS: 13
Film: 54
AIS: 1
CIP: 1
Eastern Cape:
12I: 2
BPS: 0
Film: 5
AIS: 33
CIP: 0
Free State:
12I: 2
BPS:0
Film: 0
AIS: 0
CIP: 0
25
Performance of the IDZs
ACTUAL
NUMBER OF
INVESTORS
JOBS
COEGA
7
7 803
East London IDZ
2
89
DESCRIPTION
INVESTMENT
LEVERAGED
R'000
4 100 000
71,000
Richards Bay IDZ The work covered bulk earthworks including fencing in Phase
1A. The work created 281 construction jobs and will enable the
IDZ to attract much needed investors to the zone.
26
Trade, Investment & Exports Highlights
Investment and Export Promotion
 R40.91 billion in investment projects was facilitated.
 The investment initiatives include greenfield manufacturing plants by multinationals
such as Unilever(R650 Million Chemicals and R721 Million-Greenfields),Proctor and
Gamble(R560 Million), Kimberley Clark(R 227 Million , Nestle(R550 Million) , FAW
Motors(R469 Million), Kiran Global Silica (R595 Million) and LG(R90 Million).
 Exports of R6,42 billion were facilitated.
 Four Investment Trade Initiative (ITIs) were organised to Brazil, India, Russia and
Zimbabwe, in which 51 emerging exporters and 39 SMMEs participated. The total
number of companies funded was 149 i.e. Brazil (35); Zimbabwe (35); Russia (35)
and India (44)
 A major achievement was the Airports Company of South Africa (ACSA) winning a
concession to the value of R72 billion to operate and manage Guarulhos
International Airport in Brazil as a result of the dti’s efforts and ACSA’s participation in
the ITI to Brazil.
27
PROVINCIAL SPREAD : Financial Assistance on National Pavilions and
Missions under EMIA
North West:
PAV: R1,95 million
Mission: R0.099 million
Gauteng:
PAV: R17million
Mission: R 3,998million
PAV:R0,293million
Provincial
Spread
Limpopo:
Mission: R0,227million
Mpumalanga:
Pav:R1,39 million
Mission: R0,019 million
Northern Cape:
PAV: R0.073 million
Mission: R0,57 million
Kwa Zulu Natal:
PAV: R0,209 million
Mission: R0,288 million
Free State:
PAV: R0,688 million
Mission: R0.017 million
Western Cape:
PAV: R2,83 million
Mission: R1,181 million
Eastern Cape:
PAV R1,76 million
Mission: R0,194 million
28
PROVINCIAL SPREAD: Export Sales at National Pavilions and Missions
under EMIA
PAV: North West:R0m
Mission: R0, 267million
Gauteng
R4,327 million
Mission: R 222,5
million
Provincial Spread
Limpopo:
PAV: R18,1 million
Mission: R2,9 million
Mpumalanga
PAV: R130,95
Million
Mission: R0m
Northern Cape:
PAV: R4,35
million
Mission: R0m
Kwa Zulu Natal
PAV: R23,982
million
Mission: R3.1million
Free State
PAV: R2,134 million
Mission: R0m
Western Cape:
PAV: R1 248,4 million
Mission: R 237,8million
Eastern Cape:
PAV: R197,982 million
Mission: R2,9million
29
Provincial Spread: TISA Workshops
Gauteng:
North West:
0
Total: 216
Companies Trained
Provincial Spread
the dti Open Day:
Export
Development
Training (17)
Limpopo:
Export Awareness;
Tzaneen (56)
Polokoane (43)
Northern
Cape:0
Mpumalanga:
0
Kwa-Zulu Natal: 0
Free State:
Exhibition Training
(70)
Western
Cape:0
Eastern Cape:
Exhibition Training,
East London(30)
30
Provincial Spread: TISA Trade Lead Dissemination
Provincial Spread
North West:
40
Gauteng:
200
Limpopo: 16
Mpumalanga:
30
Northern
Cape: 0
Kwa-Zulu Natal:
60
Free State:
70
Western Cape:
100
Eastern Cape:
14
31
Trade, Investment & ExportsHighlights
Africa
Regional Integration
 Work programme on industrial development has been agreed to by the
SACU Council. Eight sectors have been identified for cross-border
complementarities and value-chains, with the agro-processing sector a pilot
 South Africa has met its obligations under the SADC Trade Protocol with
92,5% of tariffs at 0.
 SA’s view that work should focus on consolidating the SADC Free Trade
Agreement (FTA), and extending regional markets through the T-FTA, rather
than moving towards a SADC customs union, is accepted
32
Trade, Investment & Exports Highlights
Africa
 Tripartite summit was hosted and the T-FTA was launched.
 Continental FTA: South Africa’s position regarding timing, scope
and broad principles to boost intra-Africa trade was accepted in
the African Union (AU) summit that was held in January 2012.
33
Trade, Investment & Exports Highlights
Bilateral:
 Co-operation memoranda of understanding (MoUs) were signed with
partner countries in Africa (Ghana, Benin, Burundi, Namibia and
Mozambique).
 Six trade and investment facilitation missions were undertaken(Angola, DRC, Zimbabwe, Southern Sudan, Malawi and Cameroon).
 Technical cooperation arrangements were facilitated with three African
country partners – (Cameroon, Mauritius, Zambia).
34
Trade, Investment & Exports Highlights
Multilateral
 South Africa’s membership of the BRICS alliance has been a major achievement in
strengthening South-South relations.
 the dti’s efforts to advance South Africa’s trade and investment interest at the BRICS
and IBSA summits, with respect to multilateral and bilateral economic collaboration,
yielded substantial results, which included:
 Coordination of business participation such as Business Unity South Africa
(BUSA) and Black Business Council (BBC)
 Work programme for the BRICS Contact Group on Economic and Trade Issues
(CGETI)
 Proposed BRICS-led Development Bank to support infrastructure projects in
BRICS and Africa
 2 major projects:
 BRICS Undersea cable – US $1bn
 BRICS reinsurance tool aimed at providing reinsurance for projects within
BRICS and other high growth markets
35
Trade, Investment & ExportsHighlights
 Top 10 investment projects and top 10 value-added export
products prepared and submitted to China. 70 companies
exhibited in China and R400 million in Export sales secured.
Progress in reducing trade deficit with China – over 50% from
R48 billion in 2008 to less than R18 billion in 2011.
 the dti continued to lead South Africa’s engagement in the
Economic Partnership Agreement (EPA) negotiations with the EU
to establish a trade-in-goods arrangement between SACU and
the EU.
36
Regulation - Highlights
Policy and legislative development
 Introduction of the Cooperatives Amendment Bill into Parliament in
2012.
 Gambling Review Commission Report (awaits Select Committee
feedback), Copyright Review Commission Report finalised and
released, and Intellectual Property Laws Amendment Bill tabled in
Parliament.
 SEZ Bill approved by Cabinet and public consultations finalised.
 B-BBEE Amendment Bill was tabled in Cabinet in the first quarter of
2012.
 Two major pieces of legislation came into effect, namely:
 Companies Act, 2008 (Act No. 71 of 2008).
 Consumer Protection Act, 2008 (Act No. 62 of 2008).
 Business Rescue successes - 652 business rescue applications
received and 104 business rescue practitioners accredited by CIPC.
37
Regulation - Highlights
Policy and legislative development
 According to StatsSA, fewer companies closed down in 2011 than in
2010, with the total number of liquidations for 2011 falling 10,8% (from 3
992 in 2010 to 3 559 in 2011)
 The Security Regulatory Panel, which is now the Takeover Regulation
Panel, was established with the extended mandate under the
Companies Act
 The Financial Reporting Standards Council has also been established
in terms of the Companies Act to advise the Minister on standards in
line with international requirements
 Improved monitoring of liquor distributors and macro manufacturers in
terms of the Liquor Act of 2003
38
Provincial Spread: Liquor Distributors and Manufacturers
North West:
No of registrations: 101
Approved registrations: 55
Cancelled registrations: 53
Gauteng:
No of registrations: 729
Approved registrations:142
Cancelled registrations: 121
Limpopo:
No of registrations:129
Approved registrations: 44
Cancelled registrations: 42
Provincial Spread
Mpumalanga:
No of registrations: 104
Approved registrations:32
Cancelled registrations: 30
Northern Cape:
No of registrations: 51
Approved registrations: 7
Cancelled registrations: 6
Kwa-Zulu Natal:
No of registrations: 327
Approved registrations: 83
Cancelled registrations: 58
Free State:
No of registrations: 130
Approved registrations: 34
Cancelled registrations: 33
Western Cape:
No of registrations: 582
Approved registrations: 89
Cancelled registrations: 79
Eastern Cape:
No of registrations: 145
Approved registrations: 55
Cancelled registrations: 53
39
Administration & Co-ordinationHighlights
 the dti managed to reduce its vacancy rate from 18% to 8,45%.
 95% of all eligible payments were processed within 21 days as required by
legislation pertaining to the payment of creditors within 30 days.
 Percentage of women occupying senior management positions is 43.8%
(DDGs – women is 50%).
 Percentage of People With Disability is 2.6%, which is above 2% target set
for the entire public service.
 The department had several engagements with the public through the
“Taking the dti to the People” programme, which is championed by
Deputy Minister Elizabeth Thabethe.
 The programme gives communities the opportunity to come face-to-face
with the dti and to familiarise themselves with services the department and
its public entities have to offer.
40
Provincial Spread: Taking the dti to the People
Provincial Spread
Gauteng: 5
North West: 1
Limpopo: 2
Mpumalanga:
2
Northern
Cape: 3
Kwa-Zulu Natal:
5
Free State: 4
Western Cape:
3
Eastern Cape:
1
41
Vacancy report
Vacancy reduction
Vacancies as at 31.03.2012
113
Vacancy rate as at 31.03.2012
8.45%
Vacancies as at 30.06.2012
99
Vacancy rate as at 30.6.2012
7.39%
Recruitment efforts
2011/12
Quarter 1
(1.4.11 – 30.6.11)
2011/12
Quarters 1 - 4
2012/13
Quarter 1
(1.4.12 – 30.6.12)
Posts filled through
appointments
42
293
68
Posts filled through
promotions
27
169
31
Total recruitment efforts
*
69
462
99
* Includes posts additional to the establishment
42
Governance & Oversight of the dti’s entities
 As part of strengthening relations between the dti and its entities, the
Minister continuously engaged with Accounting Authorities through
individual engagements with the Commissioners and their deputies as
well as the Chairpersons of Boards and/or Tribunals to discuss strategic
priorities and key challenges.
 The Policy Framework on governance and oversight on the entities was
finalised – it is aimed at bringing a uniform approach to the oversight of
entities.
 Critical interventions were made at EAAB, National Regulator for
Compulsory Specifications (NRCS), National Credit Regulator (NCR) and
the National Consumer Commission (NCC).
 the dti also intervened in situations where governance problems were
identified as a risk in some entities and worked collaboratively with them
to stabilise the situation.
43
Financial management
44
Budget vs. expenditure for the 2011/12
financial year – per programme
2011/12
Programme
Final
Appropriatio
n
Actual
Expenditure
Variance
R’000
R’000
R’000
Expenditure as
% of final
appropriation
Unspent as % of
final
appropriation
Administration
569,917
563,873
6,044
98.9%
1.1%
International Trade and
Economic Development
139,238
132,920
6,318
95.5%
4.5%
Empowerment & Enterprise
Development
896,245
887,513
8,732
99.0%
1.0%
1,333,129
1,321,671
11,458
99.1%
0.9%
225,447
218,564
6,883
96.9%
3.1%
The Enterprise Organisation
3,301,230
3,283,549
17,681
99.5%
0.5%
Trade and Investment South
Africa
330,102
317,388
12,714
96.1%
3.9%
Communication & Marketing
81,205
75,502
5,703
93.0%
7.0%
6,876,513
6,800,980
75,533
98.9%
1.1%
Industrial Development
Consumer and Corporate
Regulation
Total
45
Budget vs. expenditure for the 2010/11 financial
year – economic classification
Economic classification
2011/12
Final
Appropriation
Actual
Expenditure
Variance
R’000
R’000
R’000
Expenditure as
% of final
appropriation
Unspent as %
of final
appropriation
Compensation of Employees
588,389
566,988
21,401
96.4%
3.6%
Goods & Services
634,395
593,730
40,665
93.6%
6.4%
73
73
-
100%
-
Departmental agencies
1,058,599
1,058,599
-
100%
-
Manufacturing incentives,
including:
1,862,247
1,861,159
1,088
99.9
0.1%
951,548
951,457
91
99.9%
0.1%
1,432,584
1,424,109
8,475
99.4%
0.6%
Infrastructure incentives
844,403
844,335
68
99.9%
0.1%
Export incentives
311,011
310,965
46
99.9%
0.1%
70,562
68,946
1,616
97.7%
2.3%
Payments for capital assets
38,662
36,490
2,172
94.4%
5.6%
Payment for financial assets
35,588
35,586
2
99.9%
0.1%
6,876,513
6,800,980
75,533
98.9%
1.1%
Interest and rent on land
Transfers to:
**Automotive Production &
Development Programme
Incentives to industry
Other
Total
46
** Amounts in respect of AIS are already included under the manufacturing incentives
Five Year Comparison of budget
vs Expenditure – R’000
8 000 000
7 000 000
6 000 000
5 000 000
4 000 000
3 000 000
2 000 000
1 000 000
0
2007/08
2008/09
2009/10
2010/11
2011/12
Budget
5 479 433
5 126 893
6 402 076
6 194 208
6 876 513
Expenditure
5 295 250
5 057 064
6 237 955
5 796 741
6 800 980
Unspent
184 183
69 829
164 121
397 467
75 533
% Unspent
3.36%
1.36%
2.56%
6.42%
1.10%
47
Overview of expenditure
 The expenditure based on the annual projections of R6,876 billion
is 98.9% or R6,801 billion, implying an under-spending of R75
million (1.1%).
 The under-expenditure is as a result of:
Compensation of Employees (R21m) - Due to vacancy rate
of 8.4%;

Goods and Services (R41m) – Creditor invoices totalling
R4,5m and DIRCO claims totalling R29,1 that were only
received after financial year end; and

Incentives (R10m) – claims for approved incentives not
received timeously from private companies for processing in
the financial year under consideration.
48
AG’s Report
 Unqualified Audit Opinion.
 Matters successfully dealt emanating from previous audit
- 2010/11


Performance information – improved performance
indicators to SMART criteria- zero findings; and
Asset management – monthly asset reconciliations
conducted. All losses were investigated and reported.
 Current matters raised
– Contingent liabilities in respect of lawsuits and incentive
grants approved by the department but not paid.
49
AG’s Report cont..

Current Matters raised
– Irregular expenditure relates to:
 The irregular expenditure is of a technical nature and the department did receive
value for money.
 The absence of at least three comparable quotations for expenses in excess of
R10 000 (in most cases three quotes requested but not all received).
 The use of single source service providers without obtaining the required
approval, e.g. training, conferences, media and publishing etc.
 The expenditure should have been authorised by the Accounting Officer or the
delegated officials. The view of the department is that this was inherent in the
delegations of power for expenditure. Such deviations are required to be specific
in the delegations which have since been updated.
50
Key Challenges
 Global slow down and its impact on tradeable sectors.
 Management and governance of the dti entities.
 Inter-governmental coordination.
 Mainstreaming and/or formalisation of co-operatives/
small black business and increasing demand for 10 set
asides for small businesses procurement.
 Short vs Medium- term job creation.
51
Thank you
52