economic development strategic plan

Economic Development Strategic Plan

Presentation to the Portfolio Committee

5 March 2010

Presentation outline

• Background and context

• Mandate and mode of service delivery

• Aim and focus of EDD

• Programmes, sub-programmes, outputs and activities

• Agencies for which EDD is responsible

• The implementation plan

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This Strategic Plan

• First Strategic Plan of the EDD

• Strategic Plan mandated by legislation

• The Strategic Plan is not the growth plan of the economy

• It is a plan for the Department: structure, work areas, outputs, activities and partnerships

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A new department

• EDD established following the announcement of the new Cabinet

• President Zuma on 10 May 2009:– “A new Department of Economic Development has been

established to focus on economic policy-making.”

• President Zuma SONA 3 June 2009: – “The creation of decent work will be at the centre of our

economic policies”

• President Zuma in Budget Vote speech 24 June 2009:– “The Economic Development portfolio will have a strong

domestic focus and will address, amongst others, matters of macro and micro-economic development planning.”

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Strengths we build on

• Many positive achievements since 1994

– Peace, stability, nation-building

– Built institutions of democracy

– Enshrined human rights

– Advanced gender equality and worker rights

– Made strides in rebuilding the economy

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Challenges & context

• But recognise the challenges –– Huge challenges of poverty, income and wealth inequality,

unemployment and rural underdevelopment– Deep global economic crisis and recession

• … the responses– Social pact on responding to the crisis developed by

government, business, labour and community– Government has a new political mandate that has been

endorsed by the electorate

• And the external context– South Africa cannot isolate itself from the global economy and its

location on the African continent

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Key elements of the electoral mandate • Decent work opportunities and sustainable livelihoods• Economic growth, broad-based industrialisation, reduced income inequality • Industrial policy that leads to the transformation of the economy• Manufacturing sector programmes embracing industrial, trade and other measures

backed by adequate resources and beneficiation programmes• Transformation and diversification of financial sector • Promote the important role of mining and agriculture in employment, meeting basic

needs and community development• Support tourism and other services to expand work opportunities• Programme to create large numbers of 'green jobs'• Mandates of development finance institutions to be developmental• Massive public investment programme for growth and employment creation• Expanded public works linked to infrastructure and meeting social needs• Address quality of employment issues and labour vulnerability• Labour-intensive production methods and procurement policies that support local

jobs and public-private partnerships• Implement broad-based economic empowerment and affirmative action policies• Launch a much larger national youth service programme

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Policy, planning and service delivery models

• Policy – set of principles or objectives intended to influence and guide actions

• Plan – operational guide to the implementation of policy (outcomes and resources)

• Service delivery models– Administration – support services to all programmes in EDD– Service delivery programme – direct delivery of services to the

public– Enabling programme – facilitates other programmes to provide

for direct service delivery or performance8

Partnerships

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•The Presidency (including National Planning Commission and Monitoring and Evaluation)•The dti•National Treasury•Labour•Rural Development and Land Reform•Cooperative Governance and Traditional Affairs•Higher Education•Basic Education•Public Enterprises•Public Works•Women, Children and People with Disabilities•Communications•Human Settlements

•Public Service and Administration•Social Development•Water and Environmental Affairs•Science and Technology•Agriculture, Forestry and Fisheries•Mineral Resources•Tourism•Energy•Health•Transport•Home Affairs •International Relation and Cooperation•Development Finance Institutions•Economic Regulatory Bodies•Provinces•Municipalities

Aim of EDD• The aim of the Economic Development Department is to

promote economic development through participatory, coherent and coordinated economic policy and planning for the benefit of all South Africans

– Coordinate economic development contributions of government departments, state entities and civil society

– Contribute to coherence between government objectives and the public sector economic policies and plans

– Promote government’s ability to achieve its goals of advancing development with decent work opportunities

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Focus of EDD• The Department will be responsible for –

• Administration (Programme 1)

• Developing economic policy with a broad, cross-cutting focus so that macro and micro-economic policy reinforce each other and are both aligned to the electoral mandate (Programme 2);

• Economic development planning and will work collegially with other departments to ensure coordination around a programme that places decent work at the centre of government’s economic policies in order to secure better employment outcomes (Programme 3); and

• Facilitating social dialogue as a means to address the economic development challenges facing society, build a common national vision and enhance partnerships in the workplace and in the broader society (Programme 4).

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Economic Policy Development

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Economic Policy Development outputs and activities

• Developing the growth path and consulting on it, and drafting other policy papers, including analytical papers

• Convening policy platforms to improve knowledge of policy options and challenges

• Establishing an economic database and knowledge repository on the real economy

• Establishing an economic development index

• Producing policy papers on strengthening the coherence and alignment of macro and micro policies and promoting opportunities for decent work

• Developing a formal and quantified framework to help establish synergy between various policies

• Developing policy frameworks on BEE and the second economy

• Establishing the Economic Development Institute

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Economic Planning and Coordination sub-programmes

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Economic Planning and Coordination: outputs and activities• Submitting economic planning proposals to the National Planning

Commission, Cabinet and the provinces• Coordinating sector plans for key sectors• Developing proposals for the harmonisation of national, provincial

and local economic plans• Developing spatial economic development action plans in key and

distressed areas• Exercising policy, strategy and budgetary oversight over identified

development finance institutions and economic regulatory bodies• Developing an economic development strategy to enhance

investment for economic development• Publishing research papers on government’s developmental

priorities and procurement processes• Engaging with international agencies and multilateral institutions.

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Economic Development and Dialogue sub-programmes

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Economic Development and Dialogue: outputs and activities

• Promote social dialogue and productivity, entrepreneurship and innovation in the workplace by:– Convening and participating in national social dialogue

forums on economic development

– Facilitating social pacts at workplace, sector and national levels

– Facilitating, monitoring and reporting on the implementation of framework agreements and social pacts

– Hosting learning events for economic development knowledge networks

– Hosting an annual economic development conference

– Establishing an advisory panel on economic development.

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Development Finance Institutions

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Industrial DevelopmentCorporation

• Primary object: support industrialisation in SA and Africa

• Strategy is geared to achieving SA’s developmental outcomes through its funding, including:

– Creating sustainable employment opportunities;

– Growing sectoral diversity;

– Supporting new entrepreneurs entering the economy;

– Supporting BBBEE;

– Promoting regional equity; and

– Supporting export focused enterprises

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Khula Enterprise Finance Ltd

• DFI focussing on growing small business

• Khula’s strategic objectives are to:

– extend its outreach and impact;

– build an effective institution that achieves its mandate in a financially sustainable manner;

– invest in human resources development and create and retain high performance teams;

– establish good processes to support operational activities;

– increase awareness of Khula and its products in its target market; and

– achieve high client satisfaction levels.24

South African Micro-finance Apex Fund (SAMAF)

• DFI focussing on micro-finance for micro and small business

• Operational since 2006

• Provides wholesale funding and capacity building to on-line financial intermediaries which provide financial services to the micro entrepreneurs in SA

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Economic Regulatory Bodies

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Competition Commission

• Responsible for promoting competitive market conditions through – Investigation, prevention and prosecution of restrictive practices– Investigation and prosecution of abuse of dominant positions– Merger reviews and analysis– Analysis of exemption applications– Advocacy work on competition issues

• Current priorities: – financial services– food and agro-processing – infrastructure and construction

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Competition Tribunal

• Competition Tribunal is the adjudicative agency

– All large mergers and alleged restrictive practices are brought before the Tribunal by the Competition Commission and interested parties for adjudication.

– The Tribunal may also hear appeals from certain decisions which the commission is empowered to make.

• Strategic Objectives:

– Policy and legislation– Enforcement and compliance – Education and awareness

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International Trade Administration Commission

• ITAC’s objective – to foster economic growth and development in order to raise incomes

and promote investment and employment in South Africa and the Southern African Customs Union area by establishing an administration system for international trade.

• ITAC’s core functions – customs tariff investigations– trade remedies– import and export control

• Strategic objectives– contribute to economic growth and development by applying

international trade instruments– ensure strategic alignment and continued relevance with government’s

agenda – ensure organisational efficiency and effectiveness through business

support services 29

Outcomes approach

• Electoral mandate identifies five over-arching priorities

• Medium Term Strategic Framework outlined 10 priorities

• Presidency developed an outcomes based approach and identified 12 outcomes

• Outcomes were discussed at the January Cabinet Lekgotla, including on “Decent Employment through Inclusive Economic Growth”

• For this outcome there are a number of measurable outputs which are currently being refined by the Economic Cluster

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A phased approach

• Strategic plan sets out the medium term framework for the EDD

• Requires a phased, step-by-step implementation plan

• Building an initial capacity in each programme

• Outputs and activities phased in over the full MTEF period

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Year 1: 2010/11

• Establish basic capacity in the 4 programmes• Basic policy work and planning in each of the areas• Limited number of sub-programmes created initially and

progressively expanded• Key posts will be filled, particularly high-level ones

Targets for 2010/11

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Indicator Programme 2010/11

Number of policy and analytical papers on economic policy challenges EPD 10

Number of policy platforms on economic policy challenges EPD 10

Number of engagements with provincial and/or local government EPC 10

Number of strategic engagements with development finance institutions and/or economic regulatory bodies

EPC 6

Value of special financing facilitated for small businesses, targeted growth sectors and companies in distress

EPC R2bn

Number of sector plans produced or reviewed EPC 5

Number of spatial plans produced or reviewed EPC 10

Number of interventions in relation to promoting economic development through leveraging state expenditure and procurement

EPC 10

Social dialogue and capacity building engagements ED&D 10

Number of economic development agreements (sectoral, workplace and national) facilitated with social partners

ED&D 10

Year 2: 2011/12

• Expanded operational staff capacity in each of the sub-programmes

• Level of policy work and planning significantly enhanced – would cover the full range of areas within the mandate of the department

• Stronger focus on areas that have been prioritised

Targets for 2011/12

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EPC 12


EPC R3bn




EPC 20



ED&D 20

Year 3: 2012/13

• Full staff capacity in each of the sub-programmes

• Full range of policy and planning services set out in the Strategic Plan

• Ramped-up targets across all programmes and sub-programmes

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Targets for 2012/13

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EPC 12


EPC R5bn




EPC 25



ED&D 30

Internal Strategic Priorities

• As a newly created department, EDD must ensure the structures, systems and processes needed for it to become fully functional:– the implementation of the recruitment plan; – building corporate services capacity that includes

human resource management, finance and IT management; and

– establishing sound corporate governance practices, including internal audit capacity and planning and reporting systems.

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Cost effective service delivery

• Building cost-effectiveness into its mode of operation

• Recruitment– Emphasis on professional and specialised skills while

minimising support staff

• Capital expenditure– Purchasing outright over leases to reduce long-term or

medium-term costs

• Goods and services– Partnering with other institutions to host policy platforms

– Procurement costs such as travel will be addressed

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Concluding remarks

• Mandate and Framework constitute a bold economic vision

• Strategic Plan is the focus of EDD contribution to realise this vision

• Will be complemented by operational plans in each programme

• Annexure contains a set of key outputs and activities and will be improved in the light of experience

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Thank you

economic development strategic plan

Documents

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legislationthe strategic

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