Action (Cycle two report), briefing by the Honourable Minister of Trade and
Industry, Mandisi Mpahlwa
4 July 2007
1. Introduction
The Economic Cluster's programme seeks to increase the rate of growth and
employment in the economy and, focuses on ten priorities over the next three
years. These priorities are aimed at achieving the following outcomes:
a) Increase economic efficiencies: Interventions in this area are of a
cross-cutting nature and will have economy-wide benefits, such as improving
infrastructure or skills provision.
b) Promote dynamic growth sectors: These interventions include the
implementation of industrial policy and interventions to grow or strengthen
sectors that will advance the goals of the Accelerated and Shared Growth
Initiative for South Africa (AsgiSA).
c) Integrated small- and micro-enterprise service delivery: The interventions
of the Cluster in this area are focused on improving the opportunities for
small enterprises to participate in the economy.
In addition, the Cluster is focusing, as part of its work, on improving
institutional arrangements, such as monitoring and evaluation and government
capacity to ensure that our interventions have the desired impact.
It is within this framework that we present progress achieved in the second
cycle report in the implementation of the Cluster's programme of action.
2. Progress report
a) Increase economic efficiencies
As stated, most interventions within this area are aimed at developing a
more conducive environment to growth in the economy. The interventions are
therefore mostly of a cross-cutting nature, with successful implementation
supporting growth across the economy.
Government has continued to gradually implement reforms in the South African
telecommunications sector to address pricing and access issues. Policy
directives have been announced to start the local loop unbundling process. The
directives are an important step in enabling increased competition and thereby
cheaper broadband. The directives will be supported by new regulations to be
developed by the Independent Communications Authority of South Africa (Icasa).
Successful implementation of these directives will take forward the growth of
South Africa's service and knowledge-based industries. Regarding Infraco has
received initial funding to enable the roll out of the launch network to all
main commercial centres.
As evidenced by the example of Icasa's role in implementing information and
communication technology (ICT) directives, the need for a framework for
regulators in network industries is crucial. The target date for the
development of this framework is December 2007. The work of economic regulators
will be further enhanced by the Competition Policy Review, of which a first
draft has been finalised and amendments have been drafted for Cabinet
consideration.
With regard to the phased rollout of the public transport network, seven of
the twelve cities that are to be a part of the first phase of the rollout will
have implementing plans ready by August 2007. On the implementation of the
reformed bus subsidy system, the first draft of the National Passenger Road
Plan has been completed and presented to the Transport Lekgotla in June
2007.
The Ports and Rail Investment Plans have been finalised. The Department of
Public Enterprise is now conducting consultations within the Cluster
departments to bring on board all relevant perspectives.
The Cluster is investigating ways to increase integration of skills and
industrial priorities with a view to ensuring sufficient long-term planning for
the needs of industry. In this regard, the Department of Education (DOE) has
been co-ordinating the implementation of the National Human Resource
Development Strategy. A concept document has been developed and consulted with
the Cluster's Skills Focus Group and the Presidency. The DOE will be convening
a meeting of relevant government departments to discuss the proposed
co-ordination and integration proposals.
On Regulatory Impact Assessment (RIA) the implementation plan has been
completed and pilots are to commence after Cabinet Lekgotla.
b) Promoting dynamic growth sectors
Beyond the interventions mentioned above that are aimed at enhancing
cross-cutting efficiencies, the Department of Trade and Industry (dti) has been
leading a government-wide process aimed at developing sectors that we believe
have a potential to grow and enhance employment in the economy.
The Industrial Policy Action Plan has been completed and will be presented
to Cabinet for consideration. In terms of implementing Key Action Plans (KAPs)
for Business Process Outsourcing (BPO), discussions on developmental pricing
for telecommunications are being finalised including the benchmarking of
prices.
In tourism, work continues in various work streams, a baseline study on the
extent of the sector's transformation has been conducted and will form an
important part of Cluster deliberations to ensure that growth in the sector
will have broad-based impact.
Processes to finalise KAPs in biofuels, forestry, clothing and textile and
metals and engineering sectors are on track. A draft strategy for biofuels has
been finalised. A process to identify forestry potential beyond the provinces
of KwaZulu-Natal (KZN) and Eastern Cape is underway.
Led by the dti and the Presidency, the Cluster has been investigating
interventions in a number of sectors, namely: mining and beneficiation,
agriculture/ and agro-processing, white goods sector, retail, creative
industries, pharmaceuticals, and capital goods.
Implementation of the Export Strategy is underway. Research and analysis now
enables us to match specific products with export markets and this will be
further improved by the completion of the Export Portal, Exporters' Directory
and the Export Promoters' Strategy by July 2007.
The Department of Science and Technology (DST) has completed the first draft
of the Ten-Year Plan for Research and Development (including the Technology
Innovation Agency). The ten year plan is aimed at increasing the quality and
quantum of research and development in South Africa and to boost the
contribution of cutting-edge sectors. DST is undertaking consultations with
other departments on the plan.
In January 2007, Cabinet approved that current infrastructure expenditure be
leveraged to develop industrial capabilities in sectors such as capital goods.
To ensure that the current Capex benefits the growth of strategic sectors, a
Competitive Supplier Development Manual has been developed. Procurement
workshops have and are continuing with state owned enterprises (SOEs) that
report to the Department of Public Enterprises (DPE).
c) Integrated small enterprise service delivery
The Cluster has a number of interventions in this area designed to assist
small enterprises' participation in the economy. Interventions are focused on
improved regulation and support as well as mobilising finance for small
enterprises.
The roll-out of infrastructure to support small enterprises is near
completion. The Small Enterprises Development Agency (SEDA) now has eight
provincial offices, 39 branches and 102 enterprise information centres, and is
strengthening its product offering through this network. The work being done by
the dti and National Treasury on key goods and services to be procured from
small enterprises is complete. Work is also at an advanced stage regarding the
regulatory environment facing small enterprises and the Presidency is due to
release proposals in this regard.
The Cluster has also reviewed a framework for massifying Second Economy
interventions. In terms of communicating these programmes, the Cluster has
advertised a tender for a multi�media communication campaign on Second Economy
programmes of government and how to access them. The campaign pulls together
all programmes from government departments.
However there remain challenges. The integration of small enterprise
initiatives across government has posed significant co-ordination challenges.
In this regard integration of support across all levels of government is being
addressed as well as the adoption of funding protocols between national and
provincial departments and agencies.
Conclusion
The implementation of the current POA for the Cluster is on track and
important progress is being made. The Cabinet Lekgotla in three weeks will
allow us an opportunity to address those areas that require strategic
intervention going forward. These will be reported on after the Lekgotla has
been held.
Issued by: Government Communications (GCIS)
4 July 2007
