Action (Cycle four report), Briefing by the Minister of Trade and Industry, Mr
Mandisi Mpahlwa, Parliament
14 November 2006
Introduction
During the course of 2006 the Economic Cluster has found that greater focus
and prioritisation of projects has been a critical success factor in fostering
better co-ordination among Cluster departments and spheres of government. This
has been enabled by the Cluster's organisation of its work through the
Accelerated and Shared Growth Initiative for South Africa (AsgiSA) framework
and of the "focus group" or "Task Team" method of work adopted at the beginning
of the year. The Cluster will continue to make use of this approach in the
coming period.
A key challenge has been that most of the planned actions contained in the
programme of action required a higher level of interdepartmental and
inter-governmental co-ordination than ever before, and 'united' effort and time
to foster this; and this will remain a key challenge going forward.
The Cluster is also processing other outcomes of the July Cabinet Lekgotla,
such as the development of an integrated service delivery for small
enterprises, a Second Economy Framework and the development of integrated
infrastructure investment plans. We will, where possible, integrate this work
into the Critical Growth Path.
Update on Programme of Action items
Building a competitive and labour-absorbing economy
The Biofuels strategy will be finalised by Cabinet soon. It is an important
strategy in terms of job creation, energy security and environmental
sustainability. Besides comprehensive regulation the strategy also suggests
that to stimulate underdeveloped areas specific support incentives and projects
are required to integrate emerging producers into the value chain. The industry
may also require an equalisation levy to mitigate risk.
The National Industrial Policy Framework (NIPF) will form an important basis
for the Cluster's Critical Growth Path. The Department of Trade and Industry
(dti) has completed an intensive process of ensuring that all departments
contribute to the Framework, scheduled for completion before the end of the
year.
To help bring down the costs of Information and Communications Technology
(ICT), we are targeting interventions to resolve challenges such as the costs
of communication, the need to upgrade ICT infrastructure, the scarcity of ICT
skills, low levels of ICT usage and limited local content development capacity.
Besides the much-publicised cellular phone number portability initiative, the
New Partnership for Africa's Development (NEPAD) broadband network (including
Eastern Africa Submarine Cable System) protocol was signed by seven countries
on 29 August 2006. The remaining countries will sign before the end of
November. From March 2007 mobile operators will be authorised for the
self-provisioning of international connectivity. By July 2007 Municipal ICT
broadband is to be linked to Under Serviced Area Licences. To identify
opportunities for new entrants a frequency spectrum audit will be done by July
2007.
In addition to these initiatives, Department of Communications (DOC) and
National Treasury (NT) are discussing the better resourcing of the Independent
Communications Authority of South Africa (ICASA) to implement the Electronic
Communications Act.
For business process outsourcing and offshoring (BPO&O), since the last
update, the DOC and the dti have engaged in research into a developmental
pricing model for telecommunications for BPO. The research should be completed
by January 2007.
In terms of accelerating growth in tourism the skills demand in the sector
is a challenge. The Department of Environmental Affairs and Tourism (DEAT), the
Tourism and Hospitality Education and Training Authority and the National
Business Initiative are currently conducting a comprehensive skills audit,
which will culminate in the revision of the Sector Skills Plan. A successful
skills conference involving all major stakeholders was held on the 19 and 20
October 2006.
Mechanisms to ensure that the second economy benefits from tourism growth
are currently being investigated by the task team responsible for this
work.
In our project to promote Research and Development (R&D) by increasing
public sector R&D, and increasing total R&D spending to 1% of Gross
Domestic Product (GDP), a draft ICT Research and Development Strategy has been
finalised and will soon be presented to Cabinet for approval.
Massively increase public investment
The Cluster is reviewing the capital expenditure procurement of State Owned
Enterprise (SOEs), seeking ways to build the local capital equipment industry.
Good progress has been made in this project with a Procurement Strategy and
Policy for SOE supplier development endorsed by the Department of Public
Enterprises's (DPE's) SOEs.
With regard to Olifants River System, on 13 October 2006 the Minister of
DEAT issued a revised Record of Decision (ROD) taking into account some of the
concerns expressed by the appellants. Consequently this development can proceed
with an adequate and proper mitigation of the potential impacts. The revised
ROD will inform the Environmental Management Plans. The Department of Water
Affairs and Forestry (DWAF) will also formalise off-take agreements with
mines.
Sentech's business plan to DOC for the roll-out of Sentech's wireless
broadband network has been finalised. A committee of consisting of DOC, DPE,
dti, NT and the Presidency is to finalise the financial arrangements for the
rollout. As reported previously, this will be co-ordinated with other
initiatives in broadband.
Equity and development
In approaching targeted procurement for Small Medium and Micro Enterprises
(SMMEs), the ten most procured products have been identified and will be
considered by Cabinet soon.
In the area of improving access to finance for SMMEs (R10 000 � R 250 000)
the Apex Fund has disbursed R23 million to 27 partner organisations between May
2006 and 30 September 2006. This is in addition to the R12 million disbursed in
2005/06. The disbursement plan is being rolled out across all nine
provinces.
In order to facilitate intensified implementation of the Expanded Public
Works Programme (EPWP) additional funds will be allocated to provinces through
the Infrastructure Grant for Provinces for use in the labour-intensive
construction and maintenance of access roads. A modality for structuring large
EPWP projects has been developed and will be piloted in three
municipalities.
Ensure priority skills for the economy
In terms of achieving the National Skills Development Strategy annual
targets, all government departments have agreed upon and signed off on a common
definition of scarce and critical skills. The Department of Home Affairs (DHA)
will implement the quota list pending an independent verification project led
by the Department of Labour (DOL), and including dti, DHA, the Presidency and
the Human Sciences Research Council (HSRC).
Inputs for the Employment Services System (ESS) have been consolidated
through an extensive consultation process. The ESS includes the registration of
work seekers and Sector Education and Training Authority (SETA) performance
management. A finalised project plan detailing three phases of implementation
over three years has been completed and is being implemented.
In terms of the Joint Initiative for Priority Skills Acquisition (JIPSA)
strategies to address intermediate priority skills have been developed and
proposals to address town and regional planning, planning and management
capacity in the public health system and ICT are to be finalised in early
2007.
Conclusion
In conclusion, the Cluster has made key progress on key initiatives to
support AsgiSA, which will reinforce the attainment of government's economic
goals over the long term. Through focusing on key infrastructure delivery,
progress has been made in increasing economic efficiency. We have also focused
on providing a more supportive and enabling environment for small enterprises
and supported the development of dynamic and labour absorbing sectors of the
economy. To determine the Cluster's Programme of Action for next year, we will
be seeking to build on those areas where we have made good progress and to
address areas where delivery can be improved. Improved monitoring and
evaluation of Cluster projects will assist in this regard.
Issued by: Department of Trade and Industry
14 November 2006
