Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698142172488.pdf (South Africa)
Thursday, 12 May 2022] No 69—2022] FOURTH SESSION, SIXTH PARLIAMENT PARLIAMENT OF THE REPUBLIC OF SOUTH AFRICA _____________________ ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS _____________________ THURSDAY, 12 MAY 2022 _____________________ TABLE OF CONTENTS ANNOUNCEMENTS National Assembly 1.

Membership of Assembly ................................................................................................ 2 TABLINGS National Assembly 1.
Speaker ............................................................................................................................. 2 National Council of Provinces 1.

Chairperson ...................................................................................................................... 4 COMMITTEE REPORTS 1 National Assembly 1.

2.
2.

Trade and Industry ........................................................................................................... 6 Tourism .......................................................................................................................... 50 ANNOUNCEMENTS National Assembly The Speaker 1.
Membership of Assembly (1) The vacancy, which occurred owing to Mr G G Hill-Lewis vacating his seat in the National Assembly, has been filled with effect from 25 April 2022 by the nomination of Mr C M Fry.

(2) The vacancy, which occurred owing to Mr J Selfe vacating his seat in the National Assembly, has been filled with effect from 25 April 2022 by the nomination of Mr F Essack.

TABLINGS National Assembly 1.


The Speaker (a) Letter dated 03 May 2022 from the Minister of Water and Sanitation to the Speaker of the National Assembly explaining the reasons for the further delay in the tabling of the Annual Report of the Breede-Gouritz Catchment Management Agency for 2020-21.
Dear Honourable Speaker BREEDE-GOURITZ CATCHMENT MANAGEMENT AGENCY: REQUEST FOR LATE TABLING OF ANNUAL REPORT FOR THE FINANCIAL YEAR 2020/21 In terms of Section 55(1) (d) of the Public Finance Management Act, 1999 (Act 1 of 1999) (PFMA) Schedule 3a public entities must submit within five months of the end of the financial year, their annual reports and financial statements to the Executive Authority, in this case the Minister of Water and Sanitation for scrutiny.
Within one month after receipt of the annual report, it must be submitted for tabling in Parliament in terms of section 65(1) (a) of the Act.

2 In accordance with Section 55(2) (a) of the PFMA, the annual report must reflect upon the performance of functions and must include audited financial statements which should, in all respects, reflect fairly the state of affairs of the entity.

There should be sufficient information within the report to enable the assessment of the performance of the entity.
The annual report and financial statements should be tabled in Parliament, as stipulated in section 55(3) of the PFMA.

The financial year for the Breede-Gouritz Catchment Management Agency (BGCMA) ended on 31 March 2021.

The annual report should have been submitted to the Minister by 31 August 2021 for tabling in Parliament by the end of September 2021 in order to comply with the rules of Parliament.

The BGCMA failed to submit the annual report within the prescribed period.
However, an explanatory letter was submitted with reasons why they are requesting the annual report to be tabled late.

This will result in a lapse with regards to the protocol of tabling the annual report to Parliament.

Upon failure to submit on the requested timeline, the Agency is requesting further extension to submit their annual reports and annual financial statements on 31 May 2022.
The reasons for requesting further extension are that the current auditors Pricewaterhouse Coopers (PwC) had difficulties to confirm the prior year comparative figures due to poor response from the previous auditors.

The external auditors Pricewaterhouse Coopers (PwC) expressed that they could not rely on the work performed by the previous auditors (Morar Incorporated).

The previous auditors have not furnished the current auditors (PwC) with all the required working papers.
The External Auditors are waiting for the confirmation letter from the office of the Auditor General South Africa to confirm whether they can proceed and conclude on the current year audit due to their irregular appointment The above has necessitated PWC to perform extensive additional procedures to satisfy themselves about the validity and existence of the debtors disclosed in the books of the BGCMA.

As a result, the BGCMA did not submit their annual financial statement as per the prescribed legislation.
It is anticipated that the audit process will be concluded by end of May 2021.

In terms of section 65(2)(a) of the PFMA, I must upon failure to table the annual report within 6 months of the end of the financial year, table a written explanation in Parliament to give reasons why the Annual Report was not tabled on time.

The annual report of the BGCMA will now be tabled in Parliament by the end of June 2022.
Yours sincerely signed MR SENZO MCHUNU, MP MINISTER OF WATER AND SANITATION 3 National Council of Provinces 1.

The Chairperson (a) Letter dated 03 May 2022 from the Minister of Water and Sanitation to the Chairperson of the National Council of Provinces explaining the reasons for the further delay in the tabling of the Annual Report of the Breede-Gouritz Catchment Management Agency for 2020-21.
Dear Honourable Chairperson BREEDE-GOURITZ CATCHMENT MANAGEMENT AGENCY: REQUEST FOR LATE TABLING OF ANNUAL REPORT FOR THE FINANCIAL YEAR 2020/21 In terms of Section 55(1) (d) of the Public Finance Management Act, 1999 (Act 1 of 1999) (PFMA) Schedule 3a public entities must submit within five months of the end of the financial year, their annual reports and financial statements to the Executive Authority, in this case the Minister of Water and Sanitation for scrutiny.
Within one month after receipt of the annual report, it must be submitted for tabling in Parliament in terms of section 65(1) (a) of the Act.

In accordance with Section 55(2) (a) of the PFMA, the annual report must reflect upon the performance of functions and must include audited financial statements which should, in all respects, reflect fairly the state of affairs of the entity.

There should be sufficient information within the report to enable the assessment of the performance of the entity.
The annual report and financial statements should be tabled in Parliament, as stipulated in section 55(3) of the PFMA.

The financial year for the Breede-Gouritz Catchment Management Agency (BGCMA) ended on 31 March 2021.

The annual report should have been submitted to the Minister by 31 August 2021 for tabling in Parliament by the end of September 2021 in order to comply with the rules of Parliament.

The BGCMA failed to submit the annual report within the prescribed period.
However, an explanatory letter was submitted with reasons why they are requesting the annual report to be tabled late.

This will result in a lapse with regards to the protocol of tabling the annual report to Parliament.

Upon failure to submit on the requested timeline, the Agency is requesting further extension to submit their annual reports and annual financial statements on 31 May 2022.
The reasons for requesting further extension are that the current auditors Pricewaterhouse Coopers (PwC) had difficulties to confirm the prior year comparative figures due to poor response from the previous auditors.

The external auditors Pricewaterhouse Coopers (PwC) expressed that they could not rely on the work performed by the previous auditors (Morar Incorporated).

The previous auditors have not furnished the current auditors (PwC) with all the required working papers.
4 The External Auditors are waiting for the confirmation letter from the office of the Auditor General South Africa to confirm whether they can proceed and conclude on the current year audit due to their irregular appointment The above has necessitated PWC to perform extensive additional procedures to satisfy themselves about the validity and existence of the debtors disclosed in the books of the BGCMA.
As a result, the BGCMA did not submit their annual financial statement as per the prescribed legislation.

It is anticipated that the audit process will be concluded by end of May 2021.

In terms of section 65(2)(a) of the PFMA, I must upon failure to table the annual report within 6 months of the end of the financial year, table a written explanation in Parliament to give reasons why the Annual Report was not tabled on time.
The annual report of the BGCMA will now be tabled in Parliament by the end of June 2022.

Yours sincerely signed MR SENZO MCHUNU, MP MINISTER OF WATER AND SANITATION (b) NOTICE OF NATIONAL INTERVENTION ISSUED IN TERMS OF SECTION 139(7) OF THE CONSTITUTION, 1996, READ TOGETHER WITH SECTION 150 OF THE LOCAL GOVERNMENT: MUNICIPAL FINANCE MANAGEMENT ACT, 2003 (ACT NO.
56 OF 2003) AT ENOCH MGIJIMA LOCAL MUNICIPALITY Referred to the Select Committee on Cooperative Government and Traditional Affairs, Water and Sanitation and Human Settlements for consideration and report.

COMMITTEE REPORTS National Assembly 5 1.

Report of the Portfolio Committee on Trade and Industry on Budget Vote 39: Trade, Industry and Competition, dated 11 May 2022 The Portfolio Committee having considered Budget Vote 39: Trade, Industry and Competition, reports as follows: 1.
Introduction In the State of the Nation Address (SONA) in February 2022, the President emphasised the need to build on initiatives of economic reconstruction and recovery, and to improve the business environment for all companies by reducing red-tape across all spheres of government.

The key priorities for the Department of Trade, Industry and Competition (DTIC), in this regard, is to contribute to growing the economy, consequently creating jobs, and reducing poverty and inequality.
This will be done by (i) attracting and retaining investment; (ii) facilitating increased localisation; (iii) increasing exports; and (iv) supporting regional integration, particularly capitalising on opportunities brought by the African Continental Free Trade Area (AfCFTA).
The sectoral master plans, localisation and beneficiation, spatial industrial development, regional integration, promotion of global trade, and the creation of a conducive business environment are some of the mechanisms that the DTIC plans to implement to achieve this.

There will also be a programme to reduce red-tape across the DTIC and its entities in support of the Presidency’s initiative on red-tape reduction.
The DTIC’s 2022/23 Annual Performance Plan (APP) builds on the joint key performance indicators (J-KPIs) introduced in 2021 to improve integration of the work of the DTIC and its entities.

Three succinct outcomes are introduced in 2022, namely (i) industrialisation to promote jobs and rising incomes, (ii) transformation to build an inclusive economy, and (iii) a capable state to ensure improved impact of public policies.
Each programme’s key performance indicators (KPIs) are therefore linked to one of these three outcomes.

The DTIC’s allocated budget remains under pressure due to fiscal constraints and the slow economic recovery.

However, the three outcomes are expected to focus its activities and ensure that non- financial policy tools and support measures across the DTIC are used effectively to maximise its impact.
Furthermore, the DTIC will continue to leverage the balance sheets of the development 1 6 finance institutions (DFIs) to expand off-budget financing opportunities and to increase resource efficiencies.

1.1.
1.1.

Constitutional Mandate of the Committee Portfolio Committees exercise oversight over their respective departments and agencies in line with their Constitutional mandate set out in section 55(2) of the Constitution of the Republic of South Africa, 1996, and section 27(4) of the Public Finance Management Act (Act No.

1 of 1999).

In addition, the Money Bills Amendment Procedure and Related Matters Act (Act No.
9 of 2009) also requires committees to consider and report on their department’s strategic plan and APP.

Portfolio committees may also recommend possible amendments, within a budget vote, for the Standing Committee on Appropriations in the National Assembly consideration.

1.2.

Purpose The purpose of this report is for the Portfolio Committee on Trade and Industry to report on its deliberations and consideration of the DTIC’s APP and budget vote.
Furthermore, to make recommendations regarding the approval, amendment or rejection of Budget Vote 39, as well as any other recommendation regarding the implementation of the APP of the DTIC.

1.3.

Process The Committee’s consideration of Budget Vote 39 involved an engagement with Mr E Patel, the Minister of Trade, Industry and Competition, Mr F Majola, the Deputy Minister of Trade, Industry and Competition, and Ms M Mabitje-Thompson, the Acting Director-General of the DTIC, on 19 April 2022.
Mr Patel engaged the Committee on the implications of the 2022 SONA and the 2022/23 Budget on the mandate of the DTIC.

The Acting Director-General, together with the Chief Financial Officer, proceeded to present on the DTIC’s Strategic and APPs and provided an overview of Budget Vote 39.

2.
2.

Policy priorities for the 2022/23 financial year The DTIC’s Strategic Plan for 2020 – 2025 and the APP for the 2022/23 financial year is informed by both the country’s imperatives to address high unemployment, poverty and inequality; and the urgent need to improve economic performance, and achieve inclusive 2 7 growth.

It builds on the innovation introduced in 2021, namely that of greater integration of the work of the Department, through J-KPIs.
In the 2022/23 financial year, the idea is taken further through the introduction of three succinct outcomes that replace the 17 previous outcomes, bringing greater coherence to the work of the DTIC.

The three outcomes are (i) industrialisation to promote jobs and improve incomes; (ii) transformation, to build an inclusive economy; and (iii) a capable state to ensure improved impact of public policies.

The national policy priorities that the DTIC contributes to are unpacked below.

2.1.
2.1.

State of the Nation Address In his SONA on 10 February 2022, President M C Ramaphosa highlighted the following key priorities relevant to the DTIC’s mandate, as these will contribute to growing the economy, consequently creating jobs, and reducing poverty and inequality:1 • Attracting and retaining investment; • Facilitating increased localisation; • Increasing exports; and • Supporting regional integration, particularly capitalising on opportunities brought by the AfCFTA.
Attracting and retaining investment: In line with this priority, a significant share of the budget, in the form of incentives, has been allocated to supporting businesses investing in South Africa.

The Industrial Financing Programme, which hosts the allocation, accounts for approximately 46,1 per cent (or R5,0 billion)2 of the total budget.
Through this programme, the DTIC supports the implementation of the Economic Reconstruction and Recovery Plan (ERRP) and the Re- imagined Industrial Strategy (RIS) by providing incentives through the Automotive Incentive Scheme, Black Industrialist Programme, Agro-Processing Support Scheme, Strategic Partnership Programme, Aquaculture Development and Enhancement Programme, and Clothing and Textiles Competitiveness Programme.
1 Ramaphosa (2022) 2 National Treasury (2022a: 801) 3 8 While Industrial Financing remains one of the DTIC’s core mandates and accounts for a significant share of the total budget, in the 2022/23 financial year, its allocation decreased by R1,79 billion3.

This does not appear to be in alignment with the priority of attracting and retaining investment.
However, this would also be dependent on the effectiveness of the DTIC’s Inward Investment Attraction, Facilitation and After-care Programme, as well as its ability to reduce the administrative burden of over-regulation on business through its red-tape reduction efforts across its programmes during the financial year.
Facilitating increased localisation: The second largest programme of the DTIC, the Industrial Policy Programme (formerly known as the Industrial Competitiveness and Growth Programme), supports the development and implementation of policies that facilitate diversifying the manufacturing sector, and promoting local production.

The R1,79 billion allocated to this programme is 2 per cent more than in the previous financial year4.
In addition, the Industrial Development Corporation (IDC) (an entity of the DTIC) through its funding vehicles will continue to support businesses that produce locally.

In the 2022/23 financial year, the IDC aims to facilitate localisation worth R7,5 billion5.

Over the medium-term, key focus areas include: • The implementation of interventions that support the RIS and the ERRP such as sector support through Sectoral Master Plans, providing industrial financing and developing industrial infrastructure.
• The implementation of interventions that support regional integration and the implementation of the AfCFTA.

2.2.
2.2.

Medium-term Strategic Framework The Medium-term Strategic Framework for 2019 – 2024 outlines seven priorities of government for the five-year term which are anchored in three pillars, namely; “driving a strong and inclusive 3 National Treasury (2022a: 803) 4 Ibid 5 National Treasury (2022a: 840) 4 9 economy, building and strengthening capabilities of South Africans, and achieving a more capable state”6.
These priorities are as follows7: • Priority 1: Economic Transformation and Job Creation, • Priority 2: Education and Skills Development, • Priority 3: Consolidating the Social Wage through reliable and quality Basic Service, • Priority 4: Spatial Integration, Human Settlements and Local Government, • Priority 5: Social Cohesion and Safe Communities, • Priority 6: Building a capable, ethical and developmental State, and • Priority 7: A better Africa and World.
The DTIC is the coordinating department in the implementation of interventions in Priority 1: Economic Transformation and Job Creation and a supporting department in Priority 7: A Better Africa and World.

It is also implementing and supporting Priority 6: Building a capable, ethical and developmental State, and Priority 4: Spatial Integration, Human Settlements and Local Government.
These are priorities from which the mandate of the DTIC is derived, in particular; facilitating the creation of an inclusive economy, broadening economic participation, contributing to regional integration, and creating a fair regulatory environment that enables investment, trade, enterprise development, and competition.

2.3.
2.3.

Sustainable Development Goals The DTIC would be primarily responsible for the second target of Sustainable Development Goal (SDG) 9: Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation, namely to “promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and gross domestic product, in line with national circumstances, and double its share in least developed countries”8.
In this regard, one of the DTIC’s core mandates is to facilitate structural transformation of the economy to promote dynamic industrial development, investment, competitiveness and employment creation.

It develops industrial strategies and provides incentives to improve the competitiveness of the manufacturing sector and increase market access and demands for locally manufactured goods.
6 Department of Planning, Monitoring and Evaluation (2020: 6) 7 Department of Planning, Monitoring and Evaluation (2020: 5) 8 United National Development Programme (n.d.) 5 10 Furthermore, in terms of SDG 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all9, the DTIC can support the improved access of black women and youth to employment and entrepreneurship opportunities.
In addition, in terms of SDG 10: Reduce inequality within and among countries10, the DTIC through its trade negotiations, initiatives to promote and facilitate investment, and the role of the International Trade Administration Commission of South Africa’s (ITAC) tariff line investigations and determinations plays a critical role to achieve this goal.

2.4.
2.4.

Agenda 2063 The work of the DTIC is aligned to aspiration 1 of the African Union’s (AU) Agenda 2063: “A prosperous Africa based on inclusive growth and sustainable development”11.

In line with this aspiration, the African continent committed to “eradicating poverty in one generation and build shared prosperity through social and economic transformation….”12.
One of the DTIC’s mandates is to facilitate structural transformation through broad-based economic participation and spatial industrial development.

It implements this mainly through Programme 3: Spatial Industrial Development, and Programme 6: Industrial Financing.

Programme 3 has been allocated a budget of R189 million13.

Incentives have also been allocated towards this for the development of Special Economic Zones (SEZs) and for black participation.
However, the DTIC’s incentives also have transformation criteria, which further facilitates this at a broader level.

2.5.
2.5.

Re-imagined Industrial Strategy and the Southern African Development Community Industrialisation Strategy The Southern African Development Community (SADC) Regional Infrastructure Development Master Plan (RIDMP) aims to “catalyze industrial development and reduce current high costs of doing business, including those related to Non-Tariff Barriers and local procurement of inputs for infrastructure development”14.
As a Member of SADC, South Africa has to align its 9 Ibid 10 Ibid 11 AU Commission (2015) 12 Ibid 13 National Treasury (2022a: 803) 14 SADC (2015) 6 11 national policies and strategies to complement that of the regional community.

The National Development Plan 2030 and the RIS therefore are broadly complementary policies to the SADC industrialisation strategy.

The RIS is the country’s plan involving the development of Master Plans for 12 priority sectors.
This sets out commitments and actions by government, organised business and organised labour in these sectors.

Similar to the SADC-RIDMP, the RIS aims to ensure industrialisation through its interventions, one of which is developmental tariff reform.

In the current budget, the DTIC provides for the development and implementation of seven Master Plans that it is the lead on.

3.
Department of Trade, Industry and Competition’s Strategic Plan, Annual Performance Plan and Budget The DTIC, as the lead department on economic development in South Africa, is the custodian of economic development policy formulation and planning.15 The DTIC’s mission is to16: • Promote structural transformation, towards a dynamic industrial and globally competitive economy; • Provide a predictable, competitive, equitable, and socially responsible environment, conducive to investment, trade, and enterprise development; • Broaden participation in the economy to strengthen economic development; • Continually improve the skills and capabilities of the Department to effectively deliver on its mandate and respond to the needs of South Africa’s economic citizens; • Coordinate the contributions of government departments, state entities, and civil society to affect economic development; and • Improve alignment between economic policies, plans of the state, its agencies, government’s political and economic objectives, and mandate.
In its 2022/23 APP, the DTIC has sought to strengthen its strategic focus to bolster its implementation and impact in alignment with government’s priorities as set out above.

This builds on and improves the seven J-KPIs introduced in its 2021/22 APP.

These seven J-KPIs 15 National Treasury (2022a: 801) 16 DTIC (2022: 14) 7 12 served as a stand-alone checklist to guide the work of the DTIC and its entities.
This APP thus sets three all-encompassing Outcomes within which the work of the DTIC and its entities will be placed and evaluated, namely industrialisation, transformation and capable state in terms of implementation or effective delivery.
These are described below17: • Outcome 1: Industrialisation – The goal is to build dynamic firms in the South African economy through a combination of efforts in partnership with the private sector, focusing on growth opportunities in the domestic market (through localisation, sector partnerships, beneficiation, promoting the green economy and fostering higher levels of investment) and building a wider export market (particularly in Africa) to assist with scale; and combining demand-creation with supply-side reforms at economy, sector and firm level to build industrial competitiveness and support job-creation.
It comprises of the following five focus areas: o Sector partnerships and social compact through master plans and firm/sector level initiatives; o Localisation, beneficiation and COVID industrial production initiatives; o Increased and diversified exports with African countries and to other global markets; o Green economy initiatives to shift to a less carbon-intensive industry; and o Investment initiatives to increase the level of investment.
• Outcome 2: Transformation – The goal is to build economic inclusion through transformation programmes in three broad areas: (i) addressing structural challenges to growth through active competition policies, particularly where concentration levels in the market limit new entrants and small and medium businesses; (ii) policies that promote spatial transformation, enabling more balanced growth between rural and urban and between provinces; and (iii) strengthening inclusivity/transformation in the quality of growth, including broadening ownership and more inclusive corporate governance models.
This comprises the following three focus areas: o Ownership transformation: Promoting a greater spread of ownership in the economy and worker empowerment; o Structural transformation: Addressing economic concentration and supporting small, medium and micro enterprises; and 17 DTIC (2022: 16-17) 8 13 o Spatial transformation: Promoting equitable spatial development through District Model Reporting and integration of work into 52 spatial units; and developing a new model for district spatial industrial initiatives and promoting the township economy.
• Outcome 3: Capable State – The goal is to build greater capacity to ensure that national objectives are achieved through a new culture of partnership in the economy, characterised by greater responsiveness and nimbleness by the DTIC and its entities, which includes promoting smart regulation and working closely with other parts of government to forge a social compact with business and labour.
It comprises the following five focus areas: o Building strong capacity in the DTIC and streamlining its work; o Building the entity staffing, governance capacity, quick-response; developing shared services; and rationalisation of functions and integration of work between entities and with the DTIC; o Addressing red-tape and compliance in internal processes and in legislation and regulations; enable fit-for-purpose regulations; o Ensuring effective support functions from other public entities to achieve the DTIC’s outcomes; and o Contributing to social compact with other social partners.
Each of the DTIC’s 10 programmes’ performance indicators are linked to one of these outcomes to ensure greater coordination within the DTIC to effectively contribute to the achievement of the outcomes.
The DTIC’s 10 programmes are collectively responsible for administering 45 pieces of legislation mainly in the areas of consumer protection, companies (corporate regulation), competition, industrial development, black economic empowerment, and international trade; and overseeing 16 entities, as well as the Broad-based Black Economic Empowerment (B- BBEE) Commission.

3.1.
3.1.

Performance targets for the 2022/23 financial year The section below details the purpose of each programme and its planned performance for the 2022/23 financial year as set out in its APP.

For the financial year, the DTIC has a total of 151 9 14 Output Indicators18.

In the previous financial year, it had 80 KPIs.

Therefore, most of the targets for the 2022/23 financial are new or amended.

3.1.1.
3.1.1.

Programme 1: Administration The Administration Programme is responsible for providing strategic support and management to the DTIC and its entities19.

For the 2022/23 financial year, the Programme has set itself 26 indicators/targets.

In the previous financial year, there had only been six targets under this programme.
Of the six targets, three remained, namely20: • 3,5 per cent representation of employees are people with disabilities (PWD); • 50 per cent representation of women in senior management; and • The appointment of 31 interns.

A total of 23 new targets have been introduced in the year under review.
These are as follows21: • Twenty-five per cent of procurement approved in favour of businesses owned by women, youth, and PWD; • Sixty per cent of fraud cases received to be completed up to the final report stage, by the end of the financial year; • Fifty Media stories on the work of the DTIC published; • Seven Factsheets on the DTIC services produced; • Two analysis plans identifying improvements to Information Technology (IT) performance developed; • Action Minutes outlining steps taken to improve the performance of the Monitoring and Evaluation Unit; • Finalisation, approval, and implementation of the oversight framework; • A Proposal for the operation and staffing of an Entity Oversight Unit and implementation of improved oversight; • A Proposal for rationalisation of entities submitted to the Minister for consideration; and • Reports on the following: o Recommendations to improve the structure of the DTIC; 18 DTIC (2022) 19 DTIC (2022: 31) 20 DTIC (2022: 35) 21 DTIC (2022: 33-36) 10 15 o The optimisation of financial resources that actively supports the work of the DTIC; o Implementation of the Organisational Structure and Annual Skills Development Project Plan; o Achievement of specified turnaround times for Contracts/Memoranda of Agreements/Service Level Agreements, Opinions and Litigation; o The annual client satisfaction survey conducted and a corrective action plan produced; o Availability of stable, fast backed-up internet connectivity and the facilities for the use of virtual communications tools; o Implementation of the Reporting Tool Project Plan to improve oversight of IT performance; o The capacitation and consolidation of anti-fraud measures into a fully functional anti- corruption unit; o The effectiveness of the DTIC communications in communities and in industry; o Support of Cabinet and Parliamentary processes; o Red-tape reduction in the internal and external systems and processes of the DTIC; o The implementation of the Shared Services Framework covering the DTIC and selected entities; o Cluster participation and provincial engagement, and District Spatial Industrial Initiatives; and o Implementation of social compact commitments; and engagements with National Economic Development and Labour Council (NEDLAC).
3.1.2.

Programme 2: Trade Policy The Programme was previously known as the Trade Policy, Negotiations, and Cooperation Programme; however, it has been renamed to the Trade Policy Programme in this financial year.

The purpose of the Programme is to facilitate the building of an equitable global trading system by strengthening trading and investment relations with key markets globally and fostering African development.
The sub-programmes are International Trade Development (bilateral and multilateral trade relations and agreements) and African Multilateral Economic Development (multilateral African trade relations for deepening regional integration).22 There are 24 outputs/targets for the current financial year from six in the previous financial year.
All 24 targets are new, and are as follows:23 22 DTIC (2022: 45) 23 DTIC (2022: 46-49) 11 16 • A tariff offer approved by the Southern African Customs Union (SACU) covering 90 per cent of tariffs submitted to the AfCFTA and implemented; • Finalisation and submission of the South African services offer in five priority sectors; • Three country-proposals on Draft Protocols on Investment, Competition and Intellectual Property; • One country-proposal on Rules of Origin (ROO) for clothing products and automobiles; • A progress report on bilateral engagement with 10 countries on Services Offer in five priority sectors; • A progress report on the Review of the SADC-European Union (EU) Economic Partnership Agreement (EPA); • Two progress reports on the African Growth and Opportunity Act; • Two progress reports on bilateral initiatives with selected Asian, Latin American, and Middle Eastern trading partners; • One progress report setting out support for State Visits and other international engagements; • Eight reports setting out progress in the engagements in the World Trade Organization (WTO), G20, and Brazil, Russia, India, China and South Africa Group (BRICS); • An evaluation report on tariff recommendations made by the ITAC; • A report on social compacts developed to promote the DTIC’s strategic objectives, such as competitiveness and jobs; • A report on legal support provided on issues of relevance to trade and international law; • An action brief to the Executive Authority on trade flows to identify challenges of illegal imports; • A report to the Executive Authority setting out progress in engagements at SACU; • A report on engagements with social partners at NEDLAC and sector level on trade offers; • Three draft regulations on anti-dumping, safeguard measures and tariff investigations; • Two reports on the red-tape reductions and streamlining processes; • A report setting out progress in review of the International Trade Administration Act; • A report evaluating the impact of trade policy on industrialisation and transformation; • A report on the contribution to trade policy strategy in emerging areas like the Green Economy; • A report considering the impact of trade policy decisions on firms located in different Districts and SEZs, townships, and industrial parks; • A Draft Bill on Patents and full Explanatory Memoranda submitted to the Executive Authority and taken through the Economic Cluster; and 12 17 • A Draft Amendment Bill on Designs and full Explanatory Memoranda submitted to the Executive Authority and taken through the Economic Cluster.
While all the targets under this Programme are cited as new targets, similar targets existed in the previous financial year in relation to reports on South Africa’s negotiating position and engagements in meetings of BRICS, G20, and the WTO.

In addition, in the previous financial year, the DTIC had a target on Border interceptions and other measures to reduce illegal imports in collaboration with the South African Revenue Service (SARS) and the ITAC.
This target is similar to the target of “An action brief to the Executive Authority on trade flows to identify challenges of illegal imports”.

3.1.3.

Programme 3: Spatial Industrial Development This Programme was previously known as the Spatial Industrial Development and Economic Transformation Programme.
The purpose of the Programme is to promote inclusive economic transformation and to industrialise the economy through developing and funding SEZs, Industrial Parks, and the Black Industrialists Programme.

The sub-programmes are Enterprise Competitiveness, Equity and Empowerment, and Spatial Industrial Development.24 A total of 17 targets are set for this financial year.

In the 2021/22 financial year, this Programme aimed to achieve eight targets.
All targets set for this financial year are new, namely:25 • Draft Framework Documents on reforms to the SEZ and Industrial Park models; • Document mapping the township economy and opportunities for support; • A report setting out progress with the development of the spatial industrial development framework; • Two reports on support provided to SEZs and Industrial Parks; • Two proposals for new SEZ designations, together with business plans, governance arrangements, and budget implications, assessed and submitted for consideration; • An Annual Report on SEZs and Industrial Parks; • A submission on SEZ and Industrial Parks funding prepared for National Treasury; 24 DTIC (2022: 59) 25 DTIC (2022: 60-63) 13 18 • Two progress reports setting out progress on strengthening the governance and performance of SEZs and Industrial Parks, including their attraction of private investment; • Four reports classifying the work of the DTIC at District level and work across 52 Districts/Metros; • Four reports identifying private sector industrial nodes at District level across 52 Districts/Metros; • A report on the review of the B-BBEE Framework, together with recommendations, submitted to the Executive Authority; • An annual report on the participation of B-BBEE beneficiaries in the economy including workers, women, PWD and youth; • Four reports setting out progress on monitoring and implementation of Equity Equivalent Investment Programmes, Sector Charters and BEE Codes; • A progress report on facilitating the participation of firms from different Districts, SEZs and Industrial Parks in trade and investment promotion initiatives; • A report identifying and facilitating localisation opportunities for Districts, SEZs and Industrial Parks; • A report on initiatives developed to support the Green Economy through SEZs and Industrial Parks; and • Two progress reports on red-tape reduction.
3.1.4.
Programme 4: Industrial Policy The Industrial Policy Programme, formerly known as the Industrial Development Programme, is responsible for the design and implementation of policies, strategies, and programmes to develop the manufacturing and related sectors of the economy to contribute to the creation of decent jobs, add value to manufactured products, and enhance competitiveness in the domestic and export markets.26 The Programme has 18 targets for the year under review, namely:27 • A total of 30 progress reports on the implementation of the Master Plans including the (i) Automotive Sector; (ii) Poultry; (iii) Sugar Value chain; (iv) Steel and Metal Fabrication; (v) Furniture, and (vi) Clothing, Textiles, Footwear, and Leather Master Plans.
A similar target existed in the previous year but only one progress report was to be produced on the six Master Plans; 26 DTIC (2022: 73) 27 DTIC (2022: 74-77) 14 19 • Thirty reports setting out progress against priority sectors not covered by a Master Plan, namely (i) Aerospace and Defence; (ii) Agro-processing and Resource; (iii) Electrotechnical Industries and White Goods; (iv) Chemicals, Cosmetics, Plastics and Pharmaceuticals; (v) Capital and Rail Transport Equipment; and (vi) Construction; • Inputs on the Draft Procurement Bill submitted to the Minister; • Two progress reports on engagements with Organs of State on an aligned Preferential Procurement Policy; • A Cabinet Memorandum with Localisation Dashboard compiled; • Two reports setting out progress on monitoring and evaluating the localisation impact of the DTIC initiatives; • Four reports on key beneficiation opportunities within identified value-chains and actions taken to promote the opportunities; • Two reports setting out progress in ensuring industrial capability and security of supply in strategic medical products required particularly for the COVID-19 virus; • Publish the New Energy Vehicle roadmap; • Publish Green Hydrogen Commercialisation Strategy; • Two reports setting out progress in greening of industrial sectors; • Develop a register of industrial projects and Programme initiatives by District; • Four reports setting out progress to foster greater spatial equity through industrial initiatives; • Four reports on building staff capability on industrialisation; • Two reports on red-tape reduction; • Four reports on improved efficiency of Technical infrastructure institutions, and sector desks; • A report on providing capacity building support to entities in supported sectors; and • Two reports on the development of partnerships and social compacts with entities inside and outside of the DTIC.
3.1.5.

Programme 5: Consumer and Corporate Regulation The Consumer and Corporate Regulation Programme is aimed at “developing and implementing coherent, predictable and transparent regulatory solutions that facilitate easy access to redress and efficient regulation for economic citizens”28.
28 DTIC (2022: 86) 15 20 The ten targets under this Programme are:29 • Two approved reports setting out the work completed on the Companies Amendment Bill towards corporate governance and worker protection; • Two reports on the development of the Companies Amendment Bill; • Two approved reports setting out the work completed on the National Credit Amendment Bill; • Two approved reports setting out progress on the development of proposed measures against alcohol abuse; • Two reports setting out the work completed on the National Gambling Amendment Bill; • Report setting out a proposal on legislation to be migrated; • Two reports on red-tape reduction; • A report on key legislation under review and preliminary proposals; • A report approved setting out steps taken on ease of compliance; and • A report setting out steps taken and the results thereof, on evaluating and improving the impact of the DTIC regulations on localisation, jobs, exports and investment.
3.1.6.

Programme 6: Industrial Financing The Industrial Financing Programme is responsible for, stimulating and facilitating “the development of sustainable and competitive enterprises, through the efficient provision of effective and accessible incentive measures that support national priorities”30.

For the financial year, 11 targets are planned, there had been nine targets in the previous financial year under this Programme.

Of the 11 targets, 10 are new targets.


The one target that existed in the previous financial year relates to the leveraging of investment from approved projects and enterprises, of approximately R24 billion worth of investment.

However, the target had been R23 billion in the previous financial year.
The new targets are:31 • Support packages to the value of R5 billion disbursed; 29 DTIC (2022: 87-88) 30 DTIC (2022: 94) 31 DTIC (2022: 96-98) 16 21 • Two Social Compact Documents on commitments by firms on local industrial outputs, export promotion, employment and transformation; • Two approved reports setting out progress with support packages developed/amended for the new master plans in collaboration with the DFIs; • Five reports on red-tape reduction including action minutes setting out progress on developing shared services model for the IDC, the National Empowerment Fund (NEF) and the DTIC, and on leveraging support packages with assistance provided by provincial and local government; • Two reports setting out progress on support provided to 30 Districts/Metros; • Two reports setting out progress in achieving R500 million per annum of industrial financing support towards black industrialists, women- and youth-owned enterprises, through the processing of at least 100 applications; • Two reports on the value of projected local procured goods and services across all approved support packages and disbursement including evaluation of localisation; • Five approved enterprises or projects supporting green economy initiatives; • Ten local productions of films and documentaries telling South African stories received, adjudicated, and approved; and • Ten approved implementation reports, setting out progress against the actions identified in the two Master Plans, namely Film Animation, and Global Business Services.
3.1.7.

Programme 7: Trade and Investment South Africa The Trade and Investment South Africa Programme is aimed at increasing export capacity and supporting direct invest flows through targeted strategies.

It also manages a network of foreign trade offices responsible for promoting value-added South African exports and South Africa as an investment destination.32 The targets under this Programme increased from six in the previous financial year to 13 in the current financial year.
The thirteen targets, mainly reports, are detailed below:33 • Four progress reports on targeted marketing efforts to African markets; • An impact report on successes with increased exports and data on exports to selected African markets; 32 DTIC (2022: 105) 33 DTIC (2022: 107-108) 17 22 • The development of a framework document on the work of Foreign Economic Representatives; • An impact report on the work of the export networks; • Four reports on hosting business forums in support of state visits; • An impact report on export partnerships; • Four progress reports on export council compacts; • Four Export Action Plans developed and approved for priority sectors and markets; • Four reports setting out progress with export promotion and capacity development support to 200 black-, women-, and youth-owned enterprises; • A report on progress on the development of a Cooperation Agreement with the Export Credit Insurance Corporation (ECIC), IDC, and NEF to provide structured support to emerging exporters; • Four reports setting out progress in undertaking targeted export promotion and capacity building activities in under supported Districts; • An impact report on red-tape reduction; and • Two reports setting out progress with reducing red-tape in the processes of the ECIC and Export, Marketing and Investment Assistance programme.
The targets under this Programme became mainly reports rather than the actual activities of the DTIC.

For example, the targets for the previous financial year were actual activities such as supporting 50 companies participating in export promotion initiatives including Women, Youth, and PWD; 300 individuals participating in training and capacity building initiatives to support the development of Women, Youth, and PWD; and processing of 60 barriers by the Export Barriers Monitoring Mechanism.

3.1.8.
3.1.8.

Programme 8: Invest South Africa The purpose of the Programme is to “support foreign direct investment flows and domestic investment by providing a one-stop-shop for investment promotion, investor facilitation and aftercare support for investors”34.

The sub-programmes are Investment Promotion, Investment and Interdepartmental Clearing House, and Investor Support and Aftercare.

34 DTIC (2022: 115) 18 23 A total of 12 targets are planned under this Programme.
In the previous financial year, there had been five planned targets.

The Programme’s 12 outputs are:35 • The facilitation or coordination of investment project pledges to the value of R120 billion.

In the previous financial year, the target was R50 billion; • Four reports on the value of pledged investment implemented by companies through construction, procurement of equipment, or similar activities; • Forty unblocking and fast-tracking of investor issues to provide post-commitment support to investors.
In the previous financial year, the target was to unblock and fast-tracking 24 investor issues; • Two reports on red-tape reduction; • A report setting out progress on the BizPortal enhancements and improved company registration process; • Four reports setting out progress on the selected regulatory reforms identified; • A report setting out progress on support to the Presidency Red-tape Reduction Office; • A report setting out progress on the evaluation of localisation, jobs, and export values created by supported investment projects; • A report setting out progress against the development of investor compacts that support black industrialists, women- and youth-owned enterprises, and small enterprises; • A report setting out progress against the investment promotion support provided to SEZs, industrial parks, district policymakers and for township enterprises; • A report setting out progress on support for and work with the Presidency Investment and Infrastructure Office; and • A report setting out progress on work undertaken with provinces and local government on investment promotion.
3.1.9.

Programme 9: Competition Policy The Programme focuses on developing and implementing policy interventions that promote competition.

The sub-programmes are Economic Planning and Advisory, Implementation and 35 DTIC (2022: 117-118) 19 24 Coordination, Investment and Development, and Competition Oversight.

The implementation of this Programme would result in nine outputs.
36 The targets for the output indicators are:37 • Five reports setting out progress with public interest conditions in mergers and acquisitions; • Five reports setting out progress in the implementation of merger commitments made in the past five years; • A report on the portfolio of sectors to be considered by the Executive Authority for market inquiries; • Two reports setting out progress with the recommendations and findings of Past market inquiries, the Economic Concentration Report, and in securing inputs from firms and government entities in market inquiries; • Two reports setting out progress with mainstreaming competition work in master plans, AfCFTA negotiations, green economy, exports and spatial development; • A report setting out the results of the Review of the Competition Policy framework and regulatory reforms; • Two reports on red-tape reduction; • Four reports setting out progress with oversight of competition entities; and • A report on implementation of the Social and Solidarity Economy policy framework.
3.1.10.

Programme 10: Economic Research The purpose of the programme is to “(u)ndertake economic research, contribute to development of trade and industrial policies and guide policy, legislative and strategy processes to facilitate inclusive growth”38.
The sub-programmes for this programme are Economic Research and Policy Coordination, Macroeconomic and Microeconomic Policy Development and Implementation, and Growth Path and Decent Work.39 For the financial year, the programme has 11 output targets, which are all new targets.
The targets for the output indicators are:40 36 DTIC (2022: 124) 37 DTIC (2022: 125-126) 38 DTIC (2022: 132) 39 Ibid 40 DTIC (2022: 133-134) 20 25 • Seventeen research reports or factsheets produced on Investment, Master Plan sector profiles, Localisation and Exports; • The development and maintenance of one Worker Ownership Register; • One localisation and jobs impact monitoring system supported; • Three policy research briefs produced at the request of the DTIC branches or the Executive Authority on areas such as the green economy, digital economy, and rationalisation of the DTIC entities; • Two reports on red-tape reduction; • Three impact assessments produced at the request of branches or the Executive Authority providing feedback on the efficacy and impact of the DTIC initiatives and measures; • The development and maintenance of 52 District-level dashboards of the DTIC and its entities’ interventions; • Two reports on work completed on integration of the DTIC efforts on industrialisation and transformation at district levels; • Three Knowledge Networks for capacity building of staff in relevant analytical fields convened; • Publish 10 opinion pieces; and • A Programme agreed with higher education institutions.
3.2.

Budget Vote 39: Analysis of the 2022/23 – 2024/25 financial period The allocated budget for the DTIC has decreased to approximately R10,9 billion in the 2022/23 financial year from R11,8 billion in the 2021/22 financial year.

While the budget has decreased by 8,1 per cent in nominal terms, the decrease is even greater in real terms at 12 per cent (adjusted for projected inflation of 4,5 per cent41).
Over the medium term, the DTIC’s budget is expected to decrease from R10,4 billion in the current financial year to R10,0 billion and R9,3 billion in the 2023/24 and 2024/25 financial years respectively in real terms.42 Figure 1 below shows the DTIC’s budget for the medium-term both in nominal and real terms (inflation- adjusted)43.
41 National Treasury (2022b: 24) 42 National Treasury (2022a: 801) 43 Projected inflation is 4,5 per cent for 2022/23, 4,4 per cent in 2023/24, and 4,5 per cent in 2024/25 (National Treasury (2022b: 24)) 21 26 Figure 1: Medium Term Budget Allocation of the Department of Trade, Industry and Competition n b 8 1 1 R , n b 8 , 1 1 R n b 9 0 1 R , n b 4 , 0 1 R n b 9 0 1 R , n b 0 , 0 1 R n b 6 0 1 R , n b 3 , 9 R ) n o i l l i b ' R ( e u l a V R14,0 R12,0 R10,0 R8,0 R6,0 R4,0 R2,0 R0,0 2021/22 2022/23 2023/24 2024/25 Nominal amounts (R'billion) Inflation-adjusted (R'billion) Source: National Treasury (2022a: 803) and Madalane (2022) Over the strategic five-year period from 2020 to 2025 and for the 2021/22 financial year, the DTIC’s budget is focused on the implementation of policies, strategies, programmes, and incentives aimed at promoting industrial development and broadening participation in the economy.
These are mainly implemented through Programme 6: Industrial Financing, Programme 4: Industrial Policy, and Programme 9: Competition Policy, as these programmes account for the largest shares of the allocated budget.

For the financial year under review, the three above-mentioned programmes account for more than 78 per cent of the total DTIC budget with Programme 6 accounting for 46,2 per cent, and Programmes 4 and 9 accounting for 16,6 per cent and 16 per cent respectively.
The Administration Programme is the fourth largest programme with 8,7 per cent of the budget.

The smallest programmes are Economic Research, Invest South Africa, and Spatial Industrial Policy Development, all accounting for less than 2 per cent each of the total budget.

The breakdown of each programme’s share of the total budget is shown in figure 2 below.
22 27 Figure 2: Share of Allocated Budgets per Programme for the 2022/23 Financial Year Industrial Policy; 16,6% Competition Policy; 16,0% Industrial Financing; 46,2% Administration; 8,7% Trade and Investment South Africa; 4,1% Consumer and Corporate Regulation; 3,2% Trade Policy; 2,2% Spatial Industrial Development; 1,7% Invest South Africa; 0,7% Economic Research ; 0,6% Source: National Treasury (2022a: 803) and Madalane (2022) 3.2.1.
Programme Analysis44 The decrease in the budget from the 2021/22 financial year to the 2022/23 financial year is R953 million in nominal terms.

This decrease has filtered through to the Industrial Financing Programme.

The Industrial Financing Programme’s budget decreased by R1,2 billion compared to the previous financial year.

While the Economic Research Programme decreased by R10 million and the Trade Investment South Africa Programme decreased by R2 million.

All other programmes’ budgets increased.


Table 1 below shows the budget for the 2021/22 and 2022/23 financial years as well as changes in each of the programmes in both nominal and real terms.

The largest budgetary increase is in the Administration Programme where the budget will increase by R88 million or 10,3 per cent of the Programme’s budget.
This is followed by an increase in the Competition Policy Programme 44 National Treasury (2022a) 23 28 (R87 million); the Industrial Policy Programme (R36 million); and the Spatial Industrial Development Programme (R21 million).

Table 1: Budget Allocation by Programme (R’ million) Programme Budget Nominal Percent Real Percent 2021/22 2022/23 change in 2022/23 change in 2022/23 1.

Administration 2.

Trade Policy 3.

Spatial Industrial Development 856 227 168 944 241 189 4.

Industrial Policy 1 763 1 799 5.


Consumer and Corporate Regulation 332 351 10,31% 6,38% 12,42% 2,05% 5,80% 5,56% 1,80% 7,58% -2,34% 1,24% 6.

Industrial Financing 6 230 5 011 -19,56% -23,02% 7.

Trade and Investment South Africa 8.

Invest South Africa 9.

Competition Policy 10.

Economic Research TOTAL 443 69 1 655 70 441 80 1 742 61 11 812 10 859 -0,42% -4,71% 15,84% 5,26% -13,52% -8,1% 10,86% 0,73% -17,25% -12,02% Source: National Treasury (2022a: 803) and Madalane (2022) 3.2.2.
Economic classification45 In terms of the economic classification, of the total budget of R10,85 billion for the 2021/22 financial year, approximately R1,9 billion (18 per cent of the total budget) is the operational budget of the DTIC and the bulk of the budget, R8,9 billion (82 per cent of the total budget), is allocated to transfers and subsidies to departmental entities, private enterprises, and other institutions.
The operational expenditure mainly accounts for the compensation of employees (R1,0 billion or 55,5 per cent of the operational budget or 9,3 per cent of the DTIC’s total budget) and the procurement of goods and services (R876,6 million).

It is worth noting that the compensation of employees’ budget will decrease by 2 per cent between the 2022/23 and the 2023/24 financial years due to the estimated reduction in the number of employees.
It is estimated that employees will decrease by 27 employees, from 1 346 employees in 2022/23 to 1 319 in 2023/24.

The DTIC’s budget by economic classification is shown in the table below.
45 National Treasury (2022a) 24 29 Table 2: Budget Allocation by Economic Classification (R’ million) Economic Classification Revised estimate Appropriation Share of the 2022/23 2021/22 2022/23 Appropriation Current payments Compensation of employees Goods and services Transfers and subsidies Departmental agencies and accounts Foreign governments and international organisations Public corporations and private enterprises Non-profit institutions Households Payments for capital assets Machinery and equipment Software and other intangible assets R1 735,9 R1 023,6 R712,4 R9 954,7 R1 290,5 R1 923,9 R1 047,3 R876,6 R8 911,6 R1 320,7 R40,5 R41,3 R8 464,6 R157,9 R1,3 R36,4 R20,7 R15,7 R7 392,5 R156,2 R1,0 R23,8 R20,1 R3,7 17,7% 9,6% 8,1% 82,1% 12,2% 0,4% 68,1% 1,4% 0,0% 0,2% 0,2% 0,0% Total R11 727,0 R10 859,3 100,0% Source: National Treasury (2022a: 803) The transfers and subsidies will decrease from R9,9 billion in the previous financial year to R8,9 billion in the 2022/23 financial year.
This results mainly from the decrease in transfers and subsidies to public corporations and private enterprises.
The R8,9 billion of transfers and subsidies will be distributed as follows: • Public corporations and private enterprises (83 per cent or R7,4 billion); • Departmental agencies and accounts (14,8 per cent or R1,3 billion); • Non-profit institutions (1,8 percent or R156,2 million); • Foreign governments and international organisations for membership fees (0,5 per cent or R41,3 million); and • Households will be R1,0 million.

25 30 3.2.2.1.

Transfers to Entities The DTIC has 16 entities.


Of these, three are self-funded, namely the Companies and Intellectual Property Commission, the NEF, and the National Lotteries Commission (NLC).
Approximately R3,6 billion is for transfers to the DTIC’s entities, as shown in the table below: Table 3: Transfers to entities (R’million) Entity 2021/22 2022/23 Companies Tribunal Competition Commission Competition Tribunal Export Credit Insurance Corporation of South Africa International Trade Administration Commission National Consumer Commission National Consumer Tribunal National Credit Regulator National Gambling Board National Metrology Institute of South Africa (NMISA): Capital NMISA: Operations National Regulator for Compulsory Specifications South African Bureau of Standards South African National Accreditation System Industrial Development Corporation • Industrial financing • Sector programmes • Regional Industrial Development • Downstream steel industry competitiveness fund • Tirisano construction fund trust • Social employment fund Source: National Treasury (2022a: 804) R20,3 R439,5 R36,9 R208,1 R112,5 R58,5 R53,5 R82,6 R35,9 R140,6 R121,1 R144,1 R328,8 R32,9 R24,5 R449,5 R42,3 R213,9 R108,6 R59,4 R54,7 R83,2 R36,5 R145,7 R122,8 R147,5 R336,2 R33,8 R1 800,0 R0 R587,4 R599,5 R0 R37,7 R51,2 R15,0 R39,5 R53,7 R800,0 R861,6 26 31 The NMISA has been receiving additional funding for its infrastructure upgrades.
This was approved in the 2016/17 financial year.

In the current financial year, NMISA has been allocated R145,7 million in this regard.

The IDC receives transfers for incentives for various activities and incentives.

It administers some of the incentive programmes on behalf of the DTIC.

4.
4.

Key issues raised by the Committee during its deliberations The Committee raised a number of concerns during its deliberations, including: 4.1 An integrated approach: President M C Ramaphosa in his 2022 SONA, identified three pillars that formed the foundation for addressing unemployment, poverty, and inequality, and ensured improved economic performance and inclusive growth.
These three pillars are industrialisation that would stimulate job creation and increase income levels, transformation through building an inclusive economy, and building a capable state through an integrated social compact to improve better outcomes with regard to public policies.

Although the Committee welcomed the new approach, it cautioned against focusing on only one of the pillars at the expense of the others.
The Committee enquired what measures are in place to ensure greater synergy between the three core pillars.

The DTIC informed the Committee that the deliverables in the APP centre around the three pillars, which are: Industrialisation, Transformation and Capable State.

It is of the view that all of its outputs collectively are designed to ensure that Industrialisation, Transformation and Capable State outcomes are realised.
This, in its opinion, would also be achieved, through integration between the work of the Department and its Entities.

Furthermore, its APP provides a clear outline on how each of the outputs link to the three pillars.
4.2 The realisation/actualisation of investment pledges: The government’s recognition that the scarcity of financial resources in the South African economy was impeding sustained economic growth, prompted an initiative from President M C Ramaphosa to raise funds to inject much needed capital into the South African economy.

To date, these investment conferences had resulted in pledges of investment to the amount of R773 billion.
The most recent investment conference held in March 2022 resulted in pledges of R336,8 billion in new investment.

27 32 However, not all previous pledges had been honoured due to the recent economic challenges facing the world.

In this regard, the Committee enquired what measures the DTIC were implementing to ensure that investment pledges were realised and resulted in new operational projects.
The DTIC informed the Committee that 79 entities had made new investment announcements to the value of R332,2 billion at the Conference.

Since the first South African Investment Conference (SAIC) in 2018, a number of companies have expanded on or increased their original announcements to the value of R47,6 billion.
However, due to the impact of the COVID-19 pandemic and economic conditions, some companies have also had to cancel their projects or reduce the original investment value, this amounted to an investment value loss of R12,9 billion.

The final tally for SAIC 2022 is thus R366,8 billion.
Furthermore, of these new announcements, a number were from companies that had already made commitments in previous years and were now expanding on those investments including Proctor & Gamble (2018, 2020); Teraco (2019, 2020); SA Steel Mills (2020); Aspen (2018); Telkom (2019, 2020); Scaw Metals (2019, 2020); Renergen (2019); Anglo American (2018); Ivanhoe Mines (2019, 2020); and Defy (2019).
Therefore, after the 2022 SAIC, the 5-year investment mobilisation drive commitments stood at R1,14 trillion; 95 per cent of the investment value target of R1,2 trillion.

Of the 231 announcements, 57 projects to the value of R69,3 billion had been completed and were fully implemented, and had created 22 548 jobs.

4.3 Export promotion activities: The promotion of goods and services of South African companies abroad is vital to ensure a good trade balance and the overall growth of the economy.
In its 2022/23 APP, the DTIC identified that there was a weak export promotion connection in relation to industrialisation, which required a new innovative approach to ensure maximum benefits to the South African economy.

Furthermore, a concern had been raised about the impact of Russia’s invasion of Ukraine on South Africa’s exports.

The Committee enquired how the DTIC intended to navigate this export challenge given the current global economic environment, worsened by the Russian invasion into Ukraine.
The DTIC informed the Committee that Russia’s war with Ukraine presents inherent risks for the world economy, which has not yet fully recovered from the impact of the COVID-19 pandemic.

The impact of the war on the overall global economy appears to be relatively minimal, since Russia and Ukraine are not economic powerhouses.
The DTIC recognised the importance of both countries as exporters of energy, precious metals, wheat and other commodities; however, they only accounted for 28 33 less than 2 per cent of the world’s gross domestic product.

Although the DTIC acknowledged that South African exports to these specific markets might be affected, it was of the view that at a broader level the 2022/23 APP aims to improve the total value and composition of South African exports by supporting firms to reach strategic export markets.
Furthermore, the DTIC informed the Committee that in this regard, the priority would be to unlock the opportunities in Africa linked to the AfCFTA.

At the same time, a more targeted approach would be adopted to access opportunities in the United States, Asia, Europe, the Middle East, and Latin America.
In support of these objectives, dedicated plans and networks would be developed to create a framework for companies to succeed in complex markets, while making it easier for companies to access export finance, marketing avenues, and a flexible basket of advice and support suited to their unique needs.
4.4 Need for synergy and intergovernmental cooperation: Given the importance of industrialisation to develop and grow the economy, cooperation and alignment among the relevant government departments and entities would be critical to address structural reforms needed to attract and retain both foreign and local investment.

Therefore, a seamless, inter- governmental approach across the three spheres of government was critical.
The Committee enquired what measures are in place to facilitate this degree of cooperation.

The DTIC responded that, after the 2019 election, government had introduced the RIS to drive industrialisation, investment and job creation.

The RIS is effected through the development and implementation of master plans.
The master plans adopt the co-creation methodology where all relevant social partners such as government agencies - across all spheres of Government - business, labour and academic institutions, all work together to develop and implement sector specific strategies.

In the view of the DTIC, the master plan methodology cements inter- governmental and inter-sectoral co-operation; where all relevant stakeholders would be part of the solution and contribute to the development of their respective sectors.
In this regard, the DTIC has championed the development of Master Plans for the Automotive; Retail-Clothing, Textiles, Footwear and Leather (CTFL); Steel and Metal Fabrication; Furniture; Poultry and Sugar industries.
Furthermore, the DTIC informed the Committee that the District Development Model (DDM) plays a significant role in fostering inter-governmental co-operation where all Government 29 34 Departments and Entities work together to develop and implement the District One Plans (DOPs) for each district.

These DOPs effectively serve as joint Programmes of Action by government agencies from all the three spheres of Government for the 52 districts including the eight Metros.
4.5 Municipal support: SEZs and Industrial Parks are important vehicles implemented by government to contribute to the development of local and rural economies.

These vehicles are intended to stimulate local and regional economies by creating economies of scale and jobs, particularly for the surrounding areas/communities.
A major challenge to the success of these initiatives is the inability of local government to consistently provide the necessary basic infrastructure support for these initiatives at a competitive price.

The Committee enquired what measures were being considered by the DTIC to address these challenges that would fundamentally affect the success of these initiatives.

The DTIC informed the Committee that pursuant to the enactment of the SEZ Act (Act No.
16 of 2014), it provides a funding mechanism under its Industrial Financing Branch, called the SEZ Fund.

Together with the Industrial Parks Revitalisation Programme, these funding units aim to catalyse the development of pro- industrialisation platforms (such as bulk infrastructure and top structures); which are critical for enabling the crowding-in of private sector investments within SEZs and Industrial Parks.
The adopted collaborative implementation framework of the DDM seeks to further address various challenges by promoting efficiencies in planning, construction and delivery of infrastructure systems.

The DTIC, through both the SEZs and Industrial Parks Programmes, co-ordinates various technical support platforms that plan and monitor implementation and performance of these projects, especially through its Industrial Project Management Unit based at the IDC.
Furthermore, the DTIC informed the Committee that it also introduced social compacts or agreements with the other two spheres of Government on the delivery of SEZs.

These agreements help clarify roles and responsibilities as well as making sure that commitments are secured from all partners.

To this end, two agreements have already been developed for the Tshwane Automotive SEZ (already signed) and the proposed Fetakgomo Tubatse SEZ (ready to be signed).
30 35 4.6 Industrial financing: The provision of financial support to qualifying enterprises in support of core national priorities are key for economic growth and the creation of new sustainable jobs.

The role of the Industrial Financing Branch at the DTIC is to provide such support that would stimulate economic activity among various sectors of the economy.
While Industrial Financing remains one of the DTIC’s core mandates and accounts for a significant share of the total budget, its allocation will decrease by R1,79 billion in the 2022/23 financial year compared to the previous financial year.

This, according to the Committee, does not bode well for attracting and retaining investment.

The Committee enquired what the impact of the reduced allocation would be on the DTIC’s ability to leverage investment and economic growth.
In response to the current economic climate, the DTIC informed the Committee that it would review current industrial financing interventions for all sectors to maximise impact.

Even though the current allocation is under considerable pressure, it would seek to reprioritise funds for the implementation of economic recovery packages, as well as to increase support of other pressurised programmes.

4.7 Review of the SADC-EU EPA: Currently, the SADC-EU EPA is being reviewed.
While the current non-reciprocal tariff lines are expected to be maintained, government aims to expand on the possible trade benefits within this Agreement.

The Committee enquired whether South Africa’s neutral position on the Russian invasion into Ukraine could compromise its ability to achieve the best possible outcome for South Africa during the review process.

According to the DTIC, the review of the SADC-EU EPA is a formal process, provided for under the terms of the Agreement.
South Africa, as part of the SACU would advance proposals to improve its terms in ways that support increased exports to the EU.

These would include agreement on the electronic certification of wine exports; increases in tariff rate quotas for wheat, wine, and sugar; agreement to cumulate with: Botswana, Lesotho, Namibia, Eswatini and the United Kingdom, in exporting to the EU; and addressing undue constraints on export taxes.
The DTIC informed the Committee that it anticipates that the EU would also advance issues in its interests that, together with South Africa, would constitute a work program and agenda for negotiation.

4.8 Scrap metal: The importance of ensuring the supply of affordable scrap metal to the domestic steel industry cannot be underestimated.

Regulatory measures have been introduced to curtail the export of scrap metal.
However, the recent rise in public infrastructure theft has once again amplified the call for a total ban on the export of scrap metal as a measure to address this 31 36 challenge.

Although prudent regulation with regard to scrap metal is important, it is not clear whether the enforcement authorities at ports and borders have the ability to determine whether illicit scrap metal is being exported.
The Committee enquired whether the DTIC has considered any other measures, including a possible collaboration with the South African Police Service (SAPS), to combat this.

The DTIC indicated that government is concerned with the pillaging of public infrastructure for sale as scrap metal.

The DTIC was engaging with other State authorities such as the Department of Public Enterprises; the SAPS; the National Intelligence Co-ordinating Committee; and National Treasury to ensure an adequate policy response.
It would, therefore, only be in a position to provide more details in this regard once the evaluation of the situation has been concluded.

4.9 Outstanding matters regarding the AfCFTA: The underlying principles of the AfCFTA is to accelerate intra-African trade and boost Africa’s trading position in the global market by strengthening Africa’s common voice and policy space in global trade negotiations.
Furthermore, it seeks to reduce tariffs among members and to cover policy areas such as trade facilitation and trade in services, as well as regulatory measures such as sanitary and phyto- sanitary standards, and technical barriers to trade.

The President in his 2022 SONA stated that trading can now begin under the AfCFTA and encouraged South African companies to take up these new business opportunities.
However, the Committee enquired what the remaining issues with regard to ROO and draft rules with respect to localisation were, and what benefits South Africa had derived from the implementation of the AfCFTA.

The DTIC informed the Committee that it leads South Africa’s negotiations on ROO at the AfCFTA on the basis of the mandate obtained through consultations in the NEDLAC.
Its overall objective would be to preserve and enhance the African produced content of products traded under preferential AfCFTA trade.

Furthermore, South Africa would advance product specific rules that aim to protect and encourage the expansion of the South African and Continental industrial base.

According to the DTIC, 87,7% of all tariff lines have been agreed to in terms of the ROO.

However, negotiations with regard to textiles and clothing, sugar and the automotive sectors are ongoing.
The SACU is close to finalising its own tariff phase down offer on 90% of its tariff lines.

Once the tariff offer has been submitted and verified by the AfCFTA Secretariat, and provided the 32 37 conditions set by the December 2020 Extraordinary Summit have been met, SACU would be able to trade on preferential terms with other AfCFTA parties that also meet the requirements.
South African exporters would obtain new market access opportunities in the markets of East, West and North Africa, as Southern African countries already trade amongst themselves on preferential terms under the SADC Trade Protocol.
4.10 Status of the Special Investigation Unit (SIU) report on allegations at the NLC: At a meeting held on 2 March 2022 with the SIU, the Committee resolved that once the SIU has submitted its Phase 1 report to the Presidency, the Committee would enquire whether the report may be made available to it.

If the report is available, the Committee would schedule a further briefing on the report.
The Committee enquired whether the interim report of the SIU with regard to alleged maladministration and corruption at the NLC had been submitted to the Office of the Presidency, and when the report would be shared with the Committee.

The DTIC informed the Committee that it had not yet received the report and was not aware whether it had already been submitted to the Presidency.

The It endeavoured to keep the Committee abreast of any new developments in this regard.
4.11 Innovation and technology: The Support Programme for Industrial Innovation (SPII) as one of the programmes of the DTIC, is designed to promote technological development in South Africa’s industry, through the provision of financial assistance for the development of innovative products and/or processes.
The Committee enquired whether the DTIC has considered increasing its budget to support innovative and technologically advanced industries, notwithstanding that the current focus is on absorbing unskilled and low skilled workers into the economy.

In addition, whether the DTIC has considered investing in these industries in order to create the economic growth and jobs required.
The DTIC reported that, through its Industrial Financing Branch, it offers support under the following programmes to encourage innovative and technologically advanced industries: • Technology and Human Resource for Industry Programme aims to boost South African industry by supporting the development of technologies and increasing skilled technical labour; and • SPII aims to promote technological advancements through the provision of financial assistance to develop innovative products and processes.
33 38 4.12 Re-imagined Industrial Strategy: After the 2019 election, Government outlined the RIS that seeks to focus on the development of competitive industries.

This would involve the development of competitiveness plans across key industries – known as Sector Master Plans – to create resilient and dynamic businesses able to compete in the global marketplace.
The Committee enquired whether the current iteration of industrial policy would contribute towards structural transformation and whether it would secure inclusive growth, and if not, what were the reasons for not achieving these objectives.

The DTIC confirmed that the current Industrial Policy iteration is the RIS endorsed by Cabinet in 2019.
The RIS re-emphasises the role of the State in changing the growth trajectory of the South African economy by supporting improved industrial performance, dynamism and competitiveness.

It identifies five areas that will drive growth in the economy and these engines of growth include: (i) industrialisation, (ii) investment and infrastructure, (iii) innovation, (iv) integration, and (v) inclusion.
A key pillar of the RIS is the development of Master Plans where each social partner commits to implement concrete interventions to transform and build the economy.

According to the DTIC, the Master Plans would be key drivers to attract investment, build capable local industries and create jobs.
Implementation of these Master Plans cannot happen without strong financial support from a range of DFIs such as the IDC and the NEF, and various incentive schemes offered by the DTIC, as well as loan and equity financial support.

Other policy measures that are in place include trade policy; export and investment promotion; competition policy and business regulation.
Further, the ERRP, launched by the President in 2020, reinforces industrialisation and thus seeks to place the economy on a new path by supporting massive growth in local production that would make South African exports much more competitive.

In the view of the DTIC, together, all these measures support and reinforce one another in their efforts to foster structural transformation and also bring dignity to millions of South Africans through the creation of job opportunities.
4.13 Impact of the Black Industrialist Programme: Since 1994, Government, through various policy initiatives, has invested in a systematic effort to transform the South African economy with the objective of achieving an inclusive economy within the strategic framework of black economic empowerment.

The introduction of the Black Industrialist Policy placed specific emphasis on the need to strengthen and increase black participation in the mainstream economy.
34 39 Therefore, the Committee enquired whether the DTIC was measuring the impact/contribution of the Black Industrialist Programme on the transformation of the economy.

The DTIC informed the Committee that it monitors the impact/contribution of the Black Industrialist Programme on the transformation of the economy.
Preliminary data (inclusive of the 2021/22 financial year) shows that the DTIC disbursed approximately R2,5 billion to 111 Black Industrialists to start new projects or expand existing projects.

These Black Industrialists operate across all nine provinces and in 19 municipalities, including 12 district municipalities.

It is expected that progress in the supported projects would create a ripple effect with growth and employment being catalysed in more rural areas and outside of the urban hubs.
A range of sectors were supported including automotive parts, chemicals and plastics, renewables, the health economy, steel and metal fabrication, and clothing and textiles.

This is indicative of a manufacturing sector that is not only moving towards a diversified range of industries but also one that is racially transforming the ownership and management of these sectors.
The Black Industrialists have reported the retention and/or creation of approximately 19 000 jobs of which 50 per cent are black employees.

4.14 Status of outstanding legislation: The DTIC highlighted a number of pieces of legislation in its 2022/23 APP that it was either in the process of developing and/or reviewing.

Some of this legislation, such as the Liquor Amendment Bill and the Companies Amendment Bill, are longstanding and are yet to be tabled to Parliament after a number of years.
The Committee requested the DTIC to provide it with a status update on the various pieces of legislation that it was dealing with and when the Committee could expect these to be tabled in Parliament.

The DTIC informed the Committee that the first Companies Amendment Bill was looking at amendments to remuneration disclosures, disclosures of shares in company ownership, and other amendments including to address red-tape to update the Companies Act (Act No.

71 of 2008) that came into effect in 2011.


The Bill was published for public comment in October 2021.

However, it had been delayed because there had been several areas of disagreements among stakeholders within NEDLAC at the end of its processes in 2020, so the Bill was being reviewed and there had been further consultations at NEDLAC in 2021.

There had been substantive issues that emanated from the consultations and the Bill had to be re-advertised for public comment.
The dates for introducing the Bill to Parliament are not determined currently, however, the plan is to introduce it in this current financial year.

35 40 The focus of the second Companies Amendment Bill is on worker participation in the board structures of companies.

It looks at how workers could benefit from being part of decision- making in companies’ board structures.
The Bill would ensure the inclusion of labour and workers in the board structures of companies so that they could enjoy participation and benefit from their roles in companies.

The Bill would be developed in the 2022/23 financial year.

The Liquor Amendment Bill had been developed prior to the pandemic, but during the pandemic, the DTIC recognised the massive abuses of liquor in the country and realised that the magnitude of the challenge is much greater than initially anticipated.
As a result, it had determined that the current provisions in the draft Bill may be insufficient.

Therefore, the Bill is currently being reviewed with the aim to strengthen its provisions.

It was also considering a coordinated government approach with other government departments to review and consider inter-governmental issues within the Bill and consider other approaches.
Through the Minister of Trade, Industry and Competition, the aim is to consult other relevant Ministers in Cabinet to bring their respective Departments on board on measures to address this challenge.

The aim of these consultations would be to find a solution and address the liquor abuse situation in South Africa, which requires a more comprehensive approach from Government.
4.15 Concentration in the economy: Recent research by the Competition Commission had found that the economy remained highly concentrated 15 years since the Competition Act (Act No.

89 of 1998) was promulgated.

As a result of continuous high levels of concentration, the Competition Amendment Act (Act No.
18 of 2018) was promulgated in 2019 with the specific aim of adequately equipping the Commission to address “two persistent structural constraints on the South African economy, namely; the high levels of economic concentration in the economy; and the skewed ownership profile of the economy”46.

The Committee enquired what measures were being considered by the DTIC to address the high level of concentration in the economy as it continues to be an impediment for its structural transformation.
In addition, it enquired what progress had been made in implementing the recommendations made in the report on the levels of concentration of the economy.

The DTIC informed the Committee that the Competition Commission’s Report, which measured increasing levels of concentration over 80 sectors of the economy, had been published in November 2021.
It affirms the case made in 46 Competition Commission (2021: 6) 36 41 2018 for the amendments to the Act, which actively promote reducing concentration in the economy; broader participation and a greater spread of ownership; and improvements in competition.
Key amendments include strengthened provisions to address abuse of dominance; addressing dominant firm conduct that undermines the participation of small and medium-sized enterprises and firms owned by Historically Disadvantaged Persons in addition to merger control; and actively promoting transformation of the economy using exemptions.

A second area of implementation is the work being done on the Online Intermediation Platform market inquiry, which would be concluded this year.
The Commission has also published terms of reference for a market inquiry into Fresh Produce for public comment.

The Competition Commission’s Concentration Report has been presented to various departments and structures in government for information and discussion to assist with the development of a more co-ordinated approach.

This would be further developed in the 2022/23 financial year as part of the DTIC’s APP.
4.16 Unemployment and job creation efforts: High levels of unresolved unemployment and poverty create high risks for economic stability, as seen in the July lootings in KwaZulu-Natal and Gauteng.

In this regard, the official unemployment rate had reached 35,3 per cent in the fourth quarter of 202147.

The Committee enquired the reasons why the number of jobs being created was not one of the DTIC’s key performance targets in its APP, as this was critical for the stability of the country.
The DTIC informed the Committee that its primary mandate is industrialisation and transformation of the economy and whilst these contribute to job creation, it is of the view that it could not have targets relating to number of jobs created in its APP as these are outside its mandate and control.

4.17 Creation of new industries: The President in his 2022 SONA highlighted the significant employment potential of the hemp and cannabis industries.
However, the regulatory framework must ensure that an inclusive approach is adopted that would ensure equal access for all at the primary level and throughout the value chain.

The Committee enquired what the DTIC’s role would be in ensuring a transformational approach in the development of these industries.

The DTIC indicated that it forms an integral part of the team tasked with the development of a 47 Statistics South Africa (2022) 37 42 national cannabis master plan for South Africa.
This plan would serve as a broad framework for the development and growth of the South African Cannabis industry in order to contribute to economic development, job creation, inclusive participation, rural development, and poverty alleviation.

In relation to the DTIC’s role in improving the regulatory framework on cannabis, it has been tasked to develop a policy and legislation to guide regulation on cannabis commercialisation as part of this Master Plan that is being developed.
To date and in order to give effect to the above, the DTIC has consulted key stakeholders, who are also members of the Inter-Departmental Committee on Cannabis, on key policy principles that should be included in the cannabis commercialisation policy.

A policy discussion document on cannabis commercialisation is currently being prepared by the DTIC for consultation.

Furthermore, potential cannabis investors are being introduced to different DTIC funding schemes including those under the IDC.
In light of the above, the role of the DTIC would be to ensure that there is a transformation plan, which is integral to the Master Plan, and would be guided by transformation policies including the B-BBEE policy; the Black Industrialist Programme; the consultation process; as well as available information about the industries.

The main objective would be to enable meaningful participation of previously disadvantaged individuals and marginalised groups throughout the entire value chain.
4.18 Reduction in illegal imports: During the Committee’s quarterly engagement with respect to the financial and non-financial performance of the DTIC, it had indicated that it had a target on reducing illegal imports in collaboration with the SARS.

The Committee enquired what the target was, and whether the DTIC and SARS had been able to significantly reduce illegal imports into South Africa.
The DTIC informed the Committee that it works, together with the SARS and the ITAC, in an Inter-Agency Working Group to combat illegal imports and under- invoicing.

The work focuses on textiles and clothing, scrap metal, poultry meat, and gold; but is not limited to these sectors.

Progress has been made thus far and this work continues.

The SARS had reported that over the last year there had been a significant increase of declarations in the CTFL sector that were above the reference prices.
During this period, almost 99% of CTFL lines monitored had been imported at prices above the reference prices.

In the most recent months, goods monitored below the reference prices declined further to less than 1% of consignments.

This reflected significantly improved compliance by traders.

In the CTFL sector, according to the DTIC, the SARS conducted 545 interceptions and 83 seizures for the period April 2021 to March 2022.
38 43 4.19 Intangible targets: The 2022/23 APP refers to the development of progress reports as a target for industrial financing for black industrialists, as well as for women- and youth-owned businesses.

The Committee enquired what the reasons were that the impact of this industrial financing could not be quantified in terms of outcomes related to job creation and economic growth.
The DTIC informed the Committee that the progress reports would provide information about the number of Black Industrialists as well as women- and youth-owned businesses.

The information provided would also include the number of jobs created and maintained by those funded businesses.
4.20 Efforts to address the burden of over-regulation and unnecessary bureaucracy: In his 2022 SONA, the President highlighted the creation of dedicated capacity with the Presidency to focus on reducing red-tape across government and improve the business environment for all companies; as this is considered an impediment to business and economic growth.
This team had been specifically tasked to unblock specific impediments to investment and business growth and to simplify processes that would promote investments across all departments and government agencies.

The Committee enquired what measures had been taken by the DTIC to address unnecessary red-tape in all its entities and its practices, and to provide concrete examples of such new practices.
The DTIC indicated that all its programmes are expected to reduce red-tape within its scope of work and produce reports in this regard during the 2022/23 financial year.

5.

Conclusions Having considered the information shared and reports from the DTIC with respect to its budget, and strategic and annual performance plans, the Committee has reached the following conclusions: 5.1 The Committee welcomed the government’s strengthened three-pronged approach to address the challenges facing the country.
The focuses on industrialisation, transformation, and building a capable, ethical and developmental State are key to unlocking the potential of the South 39 44 African economy.

However, the Committee recognised that greater cooperation among all spheres of government is essential to achieve this desired outcome.

5.2 The success of the Re-imagined Industrial Strategy is central to achieving the government’s objectives of reducing unemployment, poverty and inequality.
The Committee welcomed the focus on Sectoral Master Plans in the development of globally competitive industries.

The process of developing these plans also highlights the challenges with regard to transformation and provides an opportunity to overcome these challenges within specific industries.
5.3 The Committee welcomed government’s support for the creation of new innovative industries, especially in the hemp and cannabis sectors, and encouraged the DTIC to work in collaboration with relevant sister departments to ensure that the regulatory framework enables broad participation across the entire value chain.
5.4 The Committee recognises that investment, both by government and the private sector, as well as the development of a regulatory environment that would attract investment is critical to address South Africa’s economic challenges.

Therefore, it encourages government to work towards realising the recent investment pledges and continually assess that the impact thereof translates into job creation.
5.5 The development of Special Economic Zones and Industrial Parks are key components of government’s approach in developing local, regional and rural economies.

The Committee welcomed the gains made in certain Special Economic Zones, such as the Tshwane Automotive Special Economic Zone, among others.

However, it remains concerned by the inconsistent and/or poor service delivery from some provinces and municipalities to support the achievement of these objectives.
It encourages the DTIC to fast-track the development and implementation of the new model to strengthen the coordination among all spheres of government.

5.6 The Committee supports government’s initiatives such as the Black Industrialist Programme that seeks to structurally transform the economy through increased black participation in the mainstream economy.
It highlighted that the DTIC and its entities should ensure that there is 40 45 adequate ongoing non-financial support to ensure that the Black Industrialists remain sustainable.

5.7 The Committee welcomes the review of the Economic Partnership Agreement with the European Union and supports the maintenance of the current tariff lines, but would welcome greater trade benefits for the Southern African region.
5.8 The Committee noted that the DTIC had identified a weak export promotion alignment with its industrialisation efforts as a major concern.

It therefore urged the DTIC to ramp up its promotion initiatives in line with its industrialisation drive.

The Committee also noted that exports of South African goods and services were vital to ensure a healthy trade balance and the overall growth of the economy.
5.9 A decrease in the Industrial Financing Programme’s budget is of major concern to the Committee, as this Programme provides financial support to stimulate economic activity within various sectors of the economy.

In the Committee’s view, this budgetary cut may compromise the DTIC’s ability to leverage investment and stimulate economic growth.
Given the fiscal constraints, the Committee encouraged the DTIC to find innovative ways to continue to provide the necessary support to stimulate economic activity.

5.10 The Committee welcomed that trading under the African Continental Free Trade Agreement had commenced with its concomitant benefits to both South Africa and countries on the African continent.
This represents significant growth opportunities for the African market, provides for the elimination of 90 per cent of tariff lines over time, and encourages industrial development through diversification.

According to the Committee, this would enhance Africa’s competitiveness both regionally and globally.

5.11 The Committee recognises the importance of scrap metal, as a resource into the manufacturing process for steel products that plays an essential part in construction or downstream manufacturing.
Given the recent rise in infrastructure being stolen and sold as scrap metal, the Committee urged the DTIC to utilise all measures at its disposal, including engaging National Treasury and law enforcement agencies, to ensure that the illegal export of scrap metal is significantly reduced.

In addition, it was of the view that the scrap metal export regulations 41 46 should also be efficiently enforced to ensure the sufficient availability of scrap metal for the local industry at an affordable price.
5.12 The Committee remains concerned about the increasing levels of economic concentration and its implications for the participation of small and medium enterprises in the long-run, and as an impediment to structural transformation of the economy.

It encourages the DTIC to work with other departments to ensure that the recommendations of the Competition Commission’s Report on Measuring Concentration and Participation in the South African Economy: Levels and Trends is effectively implemented.
5.13 The Committee recognises that over-regulation and unnecessary bureaucracy adds an administrative burden on business; thus, impeding investment and economic growth.

Therefore, it welcomes the President’s commitment to ease the regulatory burden by simplifying processes that would promote investments across all departments and government agencies.
While the Committee acknowledges the DTIC’s targets to reduce red-tape across all its programmes, it is concerned that specific practices and/or measures have not yet been identified that should be addressed in this regard.
5.14 The Committee was concerned that most of the DTIC’s output indicators and targets were in the form of reports or action minutes being produced and not targeting specific outcomes such as the amount of financial support aimed at specific incentives, value of disbursements or jobs created.

The lack of quantification creates a challenge in effectively holding the DTIC accountable and measuring its impact.

6.
6.

Acknowledgements The Committee would like to thank Mr E Patel, the Minister of Trade, Industry and Competition, Mr F Majola, the Deputy Minister of Trade, Industry and Competition, and Ms M Mabitje-Thompson, the Acting Director-General of the DTIC, for their cooperation and transparency during this process.
The Chairperson wishes to thank all Members of the Committee for their active participation during the process of engagement and deliberations and their constructive recommendations reflected in this report.

The Committee also wishes to 42 47 thank its support staff, in particular Mr A Hermans, the Committee Secretary, Ms M Sheldon, the Content Advisor, Ms Z Madalane, the Researcher, Ms Y Manakaza, the Committee Assistant, and Ms T Macanda, the Executive Secretary, for their professional support.

7.
7.

Recommendations The Portfolio Committee on Trade and Industry, having considered the 2022 proposed Budget Vote 39: Trade, Industry and Competition, recommends that the House adopts Budget Vote 39: Trade, Industry and Competition.

The Democratic Alliance, the Economic Freedom Fighters, the Freedom Front Plus and the African Christian Democratic Party abstained.

Report to be considered.

References African Union Commission (2015).

Agenda 2063: The Africa We Want.

[Internet].


Available from < https://au.int/en/agenda2063>.

Competition Commission (2021) Measurement of Concentration and Participation in the South African Economy: Levels & Trends.

Department of Monitoring, Planning and Evaluation (2020) Medium Term Strategic Framework 2019 – 2024.

Government Printers: Pretoria.

Department of Trade, Industry, and Competition (2020) Strategic Plan for 2020 – 2025.

Internet.
Internet.

[Accessed on 20 October 2021 from http://www.thedtic.gov.za/media- room/publications/].

Department of Trade, Industry and Competition (2022) Annual Performance Plan 2022/23.

43 48 Madalane, Z.

(2022) Analysis of the Department of Trade and Industry’s Budget (Vote 39) and a Summary of the Annual Performance Plan for the 2022/23 Financial Year.

Research brief.

Parliament of the Republic of South Africa.


National Treasury (2022a) Estimates of National Expenditure: Vote 39 – Trade, Industry, and Competition.

Government Printers: Pretoria.

National Treasury (2022b) Budget 2022: Budget Review.

Government Printers: Pretoria.

Ramaphosa, C. (2022) State of the Nation Address.

10 February 2022.

Parliament, Cape Town.

Southern African Development Community (2015).

SADC Industrialization Strategy and Roadmap 2015 – 2063.
Statistics South Africa (2022) Quarterly Labour Force Survey (QLFS) – Q4:2021, Media Statement: 29 March.

United Nations Development Programme (n.d.) Sustainable Development Goals.

[Internet].

Available from: <http://www.za.undp.org/>.

44 49 2.
44 49 2.

REPORT OF THE PORTFOLIO COMMITTEE ON TOURISM ON OVERSIGHT VISIT TO MOPANI AND VHEMBE DISTRICT MUNICIPALITIES, LIMPOPO PROVINCE, DATED 10 MAY 2022 The Portfolio Committee on Tourism, having undertaken an oversight to Mopani and Vhembe Districts, Limpopo Province from 19-22 April 2022, reports as follows: 1.
Introduction The Department of Tourism (Department) is funding and managing the implementation of tourism infrastructure and skills development projects through the Working for Tourism Programme (WfT) which is aligned to the Expanded Public Works Programme (EPWP).

The WfT funding is exclusively appropriated to EPWP compliant projects.

Government objective of the WfT Programme is job creation through the provision of a range of tourism services and infrastructure.
Funding is for both infrastructure and training projects.

The Committee has consistently raised a number of concerns in relation to the implementation of the tourism infrastructure projects.

Some of the challenges included inter alia, poor workmanship, poor project management, no value for money, project location, operational deficiencies and others.

During the engagements with the new Minister of Tourism, Hon.
Lindiwe Sisulu, the Committee expressed a view that given an opportunity, it would like to visit some of the tourism infrastructure projects.

This was after the Department had assured the Committee that they have changed the implementation method and identified an implementation agent that will assist in correcting all the past mistakes identified in the infrastructure projects.
The Department reported to the Committee that the Development Bank of Southern Africa (DBSA) had been identified and appointed as project managers for the projects that were given a go ahead by the Government Technical Advisory Centre (GTAC) process.

The focus of the Committee on the infrastructure projects is premised on its view that enhanced implementation and management of these projects are key to the contribution of tourism to fighting poverty and unemployment at local community level.
The Committees were given an opportunity by the National Assembly to utilise the week of 19-22 April 2022 for oversight work.

The Portfolio Committee on Tourism welcomed this opportunity, and undertook a provincial oversight visit to Mopani and Vhembe Districts in Limpopo Province in that week 1 50 to assess the state of the tourism infrastructure projects implemented by the Department of Tourism.

2.
2.

Background As early as 2013, the Committee made a recommendation to the Department of Tourism to develop a turn-around strategy for all the Working for Tourism infrastructure projects, then called Social Responsibility Initiative (SRI) projects.

These were projects that had a number of challenges, and some were not operational.

Parliament had recommended the development of the turn-around strategy before the end of 203/14.
However, little progress was achieved in this regard with many projects still experiencing varying challenges to date.

After persistent recommendations by the Committee for the Department to improve the implementation and develop internal capacity, the Department acquired the services of the Government Technical Advisory Centre (GTAC).

This culminated in a list of projects to be discontinued and those to be retained for further implementation and maintenance.
However, the internal incapacity in implementing infrastructure projects persisted.

The erstwhile Portfolio Committees raised these matters with the Office of the Auditor- General (AG).

It was only in the 2018/19 financial year that the Auditor-General undertook to conduct the performance audit for the tourism infrastructure projects.

The AG findings confirmed what the Committee had been raising over a number of years.
The following issues were identified by the Auditor-General as matters of concern in how the Department was implementing the infrastructure projects: (a) Project management • Lack of standardised infrastructure project management practices.

• Standard construction industry contracts not used (SLAs and memorandums of agreement).

• No standard project management documentation such as variation orders and extension of time requests, etc.
2 51 • Instructions from the department to stop projects are ad hoc and not formalised.

• No payment certificates versus progress payment reports (% completion certification by professionals).

(b) Supply Chain Management process • Identification and appointment of implementers not formalised through a procurement process and some implementing agents have no construction industry experience.
Due to the severity of these challenges, the Department has since appointed the Development Bank of Southern Africa (DBSA) as an implementing agent for all its infrastructure projects throughout the country.

The Committee has been advised that the DBSA will support the implementation of 29 community-based tourism projects (accommodation development / upgrading) of which 10 are in Limpopo.
The following projects are earmarked for Limpopo Province: - Phiphidi Waterfall, Thohoyandou - The Oaks Lodge, Maruleng Local Municipality - Matsila Lodge, Makhado Local Municipality - Vha Tsonga, Makhado Local Municipality - Ngovhe project, in Giyani - Tisane, near Jane Furse - Nandoni Dam, Vhembe District Municipality - Tshathogwe Game Farm, Makhado Local Municipality - Mtititi Game Farm, Collins Chabane Local Municipality - Mapate Recreational Social Tourism Facility, Thulamele Local Municipality The Committee would, therefore, visited Ngovhe and Phiphidi Waterfall projects as a sample of how the Department wants to move forward with the implementation of infrastructure projects.
This was meant to compare what actually exists on the ground against what had been reported by the Department on paper.

3 52 3.

Objectives The Committee requested to undertake the provincial oversight visit to Limpopo Province to assess the state of the tourism infrastructure.

The primary purpose was to make a follow up on some of the tourism projects funded by the Department of Tourism in Mopani and Vhembe District Municipalities.
The focus areas of work included, but was not limited to: • Visitor information services / centres; • Accommodation establishments; • Youth / women tourism programmes; • Attraction enhancement; and • Homestays and incubators; and • The general state of provincial tourism and recovery plan.

4.
4.

Committee attendance The House Chairperson approved for the Committee to undertake the oversight visit, and after the approval was received, other members submitted apologies due to a number of reasons ranging from health to party commitments.

The delegation comprised of the members and support staff as indicated in Table 1 below.

Table1: Committee attendance Political Party Members African National Congress Hon.

LS Makhubela-Mashele, MP (Acting Chairperson) Hon.

MM Gomba, MP Hon.

S Maneli, MP Hon.


P Mpushe, MP Support staff: Mr. JM Boltina, Committee Secretary Dr. PS Khuzwayo, Content Advisor Ms. S Loni, Researcher Ms. N Mnyovu, Committee Assistant Table 2: Provincial Legislature 4 53 Political Party Members African National Congress Hon.
SD Selamolela, MPL (Chairperson) Support staff: Ms. M Malabi, Committee Coordinator Ms. J Shibambu, Committee Coordinator Mr. K Neluheni, Committee Researcher Ms. M Seloana, Communications Officer Ms. S Govender, Parliamentary Communication Service Table 3: Department of Tourism Name of delegate Organisation Designation Ms. S Chettiar Department Deputy Director General, Destination Development Ms. L Matlakala Department Chief Director, Destination Mr. T Netshidzani Mr. B Canham Ms. M Moshokoa Development Department Project Manager Department Sustainability Manager Department Programme Management Ms. Petra van Niekerk Department PLO, Director General’s Office Ms. Lerato Theko Ministry PLO, Deputy Minister’s Office Table 4: Department of Economic Development, Environment & Tourism Name of delegate Organisation Designation Hon.
Mookone Ms. RD Makhubela Ms. AE Maisha Ms. N Khathutshelo LEDET LEDET LEDET LEDET MEC, LEDT Tourism Official Tourism Official Tourism Official 5 54 Mr. TS Tshisikhawe Ms. TN Luvhengo LEDET LEDET Tourism Official Tourism Official Table 5: Development Bank of Southern Africa (DBSA) Name of delegate Organisation Designation Mr. NP Rammek Mr. Thulani Nxumalo Mr. Isaac Motsoari Mr. Gouse Schoeman Mr. AE Tshikondela DBSA DBSA DBSA DBSA DBSA Board Chairperson Acting Programme Manager Chief Procurement Manager Board member Board member 5.
Site Visit and briefing by stakeholders at Ngovhe Tourism Project 5.1 Background to Ngovhe Lodge According to Government Technical Advisory Committee (GTAC) assessment, the Ngovhe project is one of the stalled project based on request for additional funds.

The project consists of accommodation, conference facilities and a cultural centre and begun in 2010.

The project is located about 4 kilometres from Giyani near the village of Ngovhe.
The turn off to the Lodge is approximately 1.5 kilometres from R81 main Giyani-Polokwane Road.

To date R29.3 million had been spent in the project.

The GTAC recommended that the Department should proceed with the project in parallel with addressing the sustainability model at an estimated cost of R17.7 million.

The Department accepted the recommendation and agreed to proceed with project in parallel with addressing sustainability model.
5.2 Input from the Department of Tourism Ms. Shamilla Chettiar, Deputy Director-General: Destination Development, indicated that the Department appreciated the honest engagement with the stakeholders.

The Department had brought a technical team from the Development Bank of Southern Africa to assist.

From 2015, the Department had been engaged with the GTAC process to ensure that the project can stand 6 55 the test of time.
Currently, the Department was waiting for permission by the National Treasury to proceed with appointing a service provider.

In 2009, there were about 106 projects that were ceded to the Department of Tourism from the erstwhile Department of Environmental Affairs and Tourism (DEAT), in the form of Social Responsibility Initiative (SRI).

One of the challenges was that detailed feasibility studies were not developed before implementation of projects.

The projects were run from the national government.
As a result, the Province was not involved.

There was a missing link between national and provincial spheres of government.

The Ngovhe project is one example of those ceded projects.

After the technical assessment, the Department had to consider the long term sustainability, because a lot of projects were running out of money, and needed more money.

In 2016, the Department took a decision to stop all these social responsibility projects.
Ngovhe project was stopped because it required more additional funding.

GTAC indicated that poor planning was the reason over R20 million was spent on the project.

5.3 Input by the Member of the Executive Council Hon.

Mookone, MEC for Economic Development, Environment and Tourism confirmed that it was his first time to see the Ngovhe project.

The Shangoni Gate needed some serious interventions as well, as there were traditional authorities squabble over the ownership of that project.
Communities around the projects must be given opportunity to be participants.

Limpopo Province has 57 projects of this nature which are government owned (budget resorts).

The projects are all not doing well, and there was a concern about future prospects of the Ngovhe project.

The Department of Environmental Affairs is doing a study to rationalize the community projects.

The visit by the Portfolio Committee and findings and Ngovhe Lodge showed that the province that there was a need to clean its house.
He raised a need for coordination of projects implemented by the three spheres of government in the province.

5.4 Limpopo Provincial Legislature Hon.

Selamolela, Chairperson of the Portfolio Committee on Economic Development, Environment and Tourism, complained about lack of signage for the project and other tourism facilities in general.

There was no signage that shows indicating one was approaching a tourism project.

The Committee had to take a turn at a school and come back.
The reason for getting lost was the Committee of the Legislature did not know about the Ngovhe project.

Provincial 7 56 committee had never been briefed nor visited that project.

The question that needed to be asked was what is the future of Ngovhe project?

The Minister needed to give a full account of the project, as to why the project went horribly wrong.

South Africa has a unitary government and must work together as such.
It was disheartening that the national government was implementing the project without informing the provincial and local government.

The legislature will make a follow up on the Ngovhe project.

The Province will develop its own report on this project as collective wisdom is needed and important to take the project forward.
5.5 Chief of the Ngovhe Area Ndabezitha Gonwe, Chief of the Ngovhe area appreciating the presence of the Committee, said that it was fortunate that the country has a structure that can follow the tax payers money.

It was for the first time in the history of the project to see the District Councillors.

District Municipality is 5 or 10 kilometres from the project, but had never set foot in the project.

The community was tired of talking about the project as progress was made.
Before DG Chettiar joined the Department about 6 years ago, the community was never properly involved in the implementation of the project.

He put it on record that the community was never asked to make an application however, it was out of community volition.

At that time, the budget required was about R6 million.

The Implementing Agent was asked to do feasibility, and market studies.
During the implementation of the project, the service provider had litigations with the Department in court for other projects.

The service provider was then pulled out of the project and another one was appointed.

As a result, the initial R6 million was increased to R9 million.

The community realized that R9 million was going to be used in the mountain only for earthworks.

The initial project proposed and applied for from the Department was a Cultural Village and Community Centre.
Unfortunately, due to am inclined terrain that needed a lot of money to prepare the project site was changed.

The service provider and the Department then unilaterally changed the project concept into a lodge and conference facility without consulting the community.

The project was then moved to a former SISAL project site.

The Department then refurbished the structures already existed in the project site, except the new doors, and aluminum windows.
There was already electricity supply in the area, that was done by the community on its own.

It was put on record that the project in its current form was imposed on the community but the community had to go along with it as they did not have money to implement their original 8 57 concept.

The assets on site are now overgrown by grass and trees and inaccessible.

The conclusion done by GTAC was positive, but the condition on site was untenable.

Feasibility study was not done for the new project.
What is important to community is the sustainability of the project.

Former Directors-General were told that the project was not sustainable.

The Department wanted to hand over the project.

As a Traditional Council, the community had to reject the hand over as the project was not finished and not operational.

The project requires ablution facilities and electricity needs to be fixed.

The damage that has been done through vandalism is too big and requires more money to be fixed.
The unemployed youth in the community had a hope, ten years ago when the Ngovhe project commenced but that hope is no longer there due to delays.

Both the GTAC and SISAL reports say the location is good, and relevant for tourism.

The community is looking forward to improved implantation and coordination for the project moving forward.

The Chief bemoaned the broken promises by the Department in one of its youth programmes.
He indicated that he was approached by the Department to recruit unemployed youth for a tourism training programme.

He then went on a recruitment drive and got the number required by the Department.

However, the Department never came back to him about that project.

He indicated that it reflected badly on the image of his traditional council as the youth had to forego other opportunities for a tourism programme that never took place.
He asked for better coordination and respect of traditional communities in this regard.

Chief Gonwe concluded that the project was supposed to talk expansion and networking.

The next meeting should be on tangible variables, not discussing diagnosis 5.6 Development Bank of Southern Africa (DBSA) Mr. Nxumalo, Acting Procurement Manager, Development Bank of Southern Africa indicated that the Bank had been appointed and signed a Memorandum of Understanding with the Department of Tourism.
DBSA had already with its technical started with technical analysis work and identified what needed to be done.

Khuma Engineers had been appointed to do an investigation.

The work is at an advanced stage.

The scope of the work has been identified.

The work will include, the refurbishment of the chalets, fix the source of power, installing double volume, water reticulation system need to be fixed, landscaping, guard houses must be refurbished, and others.
9 58 The DBSA estimates that the work may commence by the end of May 2022.

It is hoped that work will proceed once the National Treasury gives a go ahead.

At this stage, there is a moratorium on procurements.

6.

Site Visit and briefing by stakeholders at Phiphidi Waterfall Project 6.1 Background to Phiphidi Waterfall Project The Phiphidi Waterfall project consists chalets and require the upgrading of existing day visitors’ facilities to include chalets and refreshment kiosk.
The project is operational and started in 2017.

The Lodge is located approximately 35 kilometres from Giyani, and is near the village of Mahlathi and the fence line of Kruger National Park.

To date, R16.2 million has been spent on this project.

The GTAC assessment report recommended that the Department of Tourism should proceed with the project and address all the condition of the feasibility assessment.
The Department accepted the recommendation and agreed to proceed with the project the project in parallel with addressing conditions of the feasibility assessment.

6.2 Community Board Chairperson Mr. Phillip Ramela, the Community Trust Board Chairperson welcomed the Committee.

He indicated that the project is managed by a Trust, and capacity building is needed to skill the Board members and the community.

Their main challenges are: • The project has no operational budget.
• There is a laundry at the site but there is no equipment inside.

• Administration block needs to be upgraded.

• Restaurant and dining room need upgrading.

• Access road to the project needs to be improved.

• There are security personnel working in the project.

• Changing room needs improvement.

• The Contractor left the project without completing the work.

• The community hall has no ablution facility for events, such as weddings.

• Need a hiking trail.


10 59 • The Community has some ideas on how to sustain the project for community beneficiation.

• The Trust made an undertaking to the Committee that money spent in the project will be done so wisely.

• The Trust Board has constituted by 15 members, 10 women and 5 men.

6.3 Development Bank of Southern Africa (DBSA) Mr. Thulani Nxumalo from Development Bank of Southern Africa indicated that the Phiphidi Waterfall project is one of the project allocated to the Bank.
DBSA will do upgrades and refurbishments in the projects.

DBSA will do the following: • Renovation to chalets.

• Changing rooms.

• Storm water reticulation.

• Upgrade the Administration block.

• Guard house.

• Install the retaining wall.

• Access road will be improved.

• Project is still in the planning stage, discussion and consultation are still ongoing.

• Tender documents are expected to be finalised before the end of May 2022.

• Pool and generator will form part of the plan.


• Kids facility will be looked into so that this project can be a family facility.

• DBSA can take about 8-12 months to complete the work.

6.4 Concluding remarks by the local authority In closing, Mr. Dzivhaluwani, headman of the Phiphidi area, thanked the Committee for finding time and visit their project.

Hoped all the plans of the DBSA would be realized.

The community is ready to get involved and help in the development of the project.
The Chief asked Mr. Nxumalo to make a solemn undertaking to the Community that all the work that DBSA had stated will be done to refurbish and upgrade the facility will actually be delivered.

Mr. Nxumalo made an undertaking that DBSA will deliver on all the work that was communicated to the community.

11 60 7.

Committee observations The observations made by the Committee are twofold.

Firstly, general observations were made in relation to the general state of tourism support services in Limpopo Province.
Secondly, there were specific observations made in relation to Ngovhe loge and Phiphidi Waterfall projects.

7.1 General observations The general observations are as follows: 7.1.1 Condition of the roads The general observation wat that road in Limpopo province are not in a good condition appropriate for a tourism destination.

The potholes are ubiquitous, and in some places in a close proximity to one another, which makes roads untraversable.
This conditions make it difficult to drive and navigate the dangerous roads.

The Committee physically experienced what could possibly go wrong with tourists visiting the Limpopo province.

The vehicle of the Limpopo Highway Patrol officers which was escorting the Committee got into a pothole and had a puncture.

All the cars had to stop and allow the police officers to change the tyre in their vehicle.
This incident was a clarion indication of what can happen to tourist vehicles visiting the province of Limpopo.

The roads condition is a bomb waiting to explode and has a potential to further damage the already ailing image of South Africa as a tourism destination.

The Committee is concerned that if a tourist incident caused by the potholes may occur, not only the Limpopo Province, but South Africa as a whole will suffer a tremendous dent in its reputational image.
Such incidents have a tendency to attract negative publicity and reporting by international media.

The Committee is also concerned about the danger posed by such roads to the people of Limpopo on daily basis as they traverse such dangerous roads riddled with potholes.

The Committee would therefore urge all road authorities in Limpopo to attend to the conditions of the roads in order to prevent possible road calamities involving tourists.
12 61 7.1.2 Signage The Committee observed that there is poor road signage in Limpopo, especially for the tourism facilities.

This may make it difficult to for potential tourists to identify the tourism attractions and sites in the province.

The products or projects visited by the Committee also do not have proper and clear signage.

This calls for the national, provincial and local authorities to provide appropriate road and tourism signage.
7.1.3 Intergovernmental relations There is glaring poor coordination between the spheres of government in relation to tourism infrastructure projects implemented in the Limpopo Province.

At the Ngovhe Lodge, the Committee learned that the Member of Executive Council (MEC) and the Portfolio Committee responsible for the Limpopo Economic Development, Environment and Tourism portfolio were not aware that the Department was implementing this infrastructure project.
The Committee also learned that it was for the first time that the district and the local municipalities were visiting the project during the site visit scheduled by the Committee.

This is a cause for serious concern as it depicts poor intergovernmental relations and lack of conscientious efforts to coordinate tourism development amongst the three spheres of government.
It was observed that intergovernmental relations were somehow better at the Phiphidi Waterfall project as the provincial government and local municipality were aware of, and supporting the project.

This points to poor project management by the Department as there is dissimilar approach to how they communicate with provincial and local government counterparts on infrastructure projects implemented in provinces.
7.1.4 Moratorium on government tenders The Committee noted that on the 25 February 2022, the Office of the Chief Procurement Officer (OCPO) issued the treasury note stating that: • Tenders advertised before 16 February 2022 be finalised in terms of the Procurement Regulations; • Tenders advertised on or after 16 February 2022 be held in abeyance; and • No new tenders be advertised.
13 62 The Committee noted that the prevailing moratorium on tenders imposed by the tender suspension imbroglio caused by the Constitutional Court judgement on the 2017 Tender Regulations has a potential to delay and derail the implementation of tourism infrastructure projects.

The Committee noted that if the current situations prevails, the implementing agents may not be appointed on time to implement departmental projects in general, and the completion of Ngovhe Lodge and Phiphidi Waterfall in particular.
The prevailing tender regulation regime will have serious implications for the implementation of the 2022/23 annual Performance Plan tabled by the Minister in parliament, and will delay the implementation of the undertakings made in respect of the Ngovhe lodge and Phiphidi Waterfall projects.

This may create further polarisation with disgruntled local communities who are beneficiaries of the projects implemented by the Department.
7.2 Observations in relation to Ngovhe Lodge 7.2.1 Protracted time to implement the project The Committee made a serious observation that the project was first conceptualised by the Ngovhe community and application made to the erstwhile Department of Environmental Affairs and Tourism in 2003/4.

The project was then inherited by the Department of Tourism in 2009.

Since then, the project has undergone tedious and unsuccessful processes of trying to complete and operate it as a tourism enterprise.
The Committee learnt that there was a dispute with the initial company appointed to implement the project due to inferior and shoddy workmanship done on site.

This culminated in the contract lapsing between the Department and the implementing agent.

The Department also appointed Sivest to determine the feasibility and demand of the product to be offered by the Ngovhe Lodge.

This process did not yield better results as nothing was done after that process.
The Department later appointed the Government Technical Advisory Centre (GTAC) to determine whether the implantation of this project should be continued, and the process yielded a go ahead.

Now the Department has appointed the Development Bank of Southern Africa (DBSA) as an implementing agent to finalise the implementation of the project.

Since 2003/4 the Ngovhe community has been waiting for the completion of the project.
The current chief is the only remaining founding member of the original Community Trust Board that made the application, as some have been discouraged by the delays and lost interest in the project.

The Committee is of the view that it has taken too long for the community to reap the 14 63 benefits from this project.

The Committee is also of the view that the project, in its current state, cannot be operated as a tourism business.
This means that the Ngovhe community is still going to wait for some time to realise the benefits of this project.

The situation is exacerbated by the National Treasury note that has put tender advertising in abeyance.

The Committee is, however, confident that the appointment of DBSA as the implementing agents will expedite the process of completing the project.

7.2.2 Value for money The Committee was concerned about escalation in the amount of money needed to implement the project over the years.
Initially, the project fees were at R6 million.

This was meant to finalise phase one.

After the delays the project amount increased to R9 million and later to R20 million.

This amount also did not complete project implementation as it left the project inoperational.

The Committee was informed by DBSA that the amount of money needed to complete the project is estimated at R30 million.
This amount was, however, inconclusive as DBSA was still in the planning phase and more money may still be needed to render the facility operational.

The Committee is seriously concerned that a project that could have cost R6 million might now be over R50 million.

The Committee also learned that the current value of the project is above R20 million which is the amount that has been invested in the facility.

This seems like the value of the facility has appreciated over time.
However, this is misleading as the value of the facility cited by the Department did not take into account the pre-existing structures that were inherited by the Department and incorporated into the project.

The Committee learned that that facility used to be a SISAL project site with structured erected by the then government of Gazankulu.

Most of the work done on site was the refurbishment of existing structures.
This meant that the Department achieved more by using less money on refurbishing existing structures.

7.2.3 Project conceptualisation and relevance The Committee learnt that the initial project was conceptualised as a cultural village.

This was meant to provide a unique tourism experience to international tourists and harness the market that is already attracted by the neighbouring Kruger National Park.
The site was identified in the mountain and upon project costing by the appointed implementing agent, it became apparent that about 70 percent of the project was to be utilised for earthworks and providing 15 64 bulk water and electricity supply.

The Department then unilaterally changed the project concept and imposed on the community the current Lodge and Conference Centre business idea.
The community did not have a choice but to go along with the idea as the Department was providing funding, but the concept remains the business model imposed by the Department onto the community.

The Committee noted that the community would still like to incorporate the aspect of cultural attributes as they deem this a unique selling proposition in the area.
The Committee is of the view that the Department should consider incorporating the original concept of a cultural village as proposed by the community.

7.2.4 Neglect and Vandalism The Committee observed with dismay the extent to which the existing facilities at Ngovhe Lodge have been neglected.

It was observed that the facility is inaccessible and overgrown with vegetation and there is no maintenance whatsoever of the existing buildings.
The Committee was also disappointed by the extent to which vandalism has bedevilled the facility.

The fittings made to various chalets have been removed and stolen.

These include items such as television sets, air conditioners, sliding doors, electricity fittings; kitchen fittings, tiles, ceiling boards, and others that have been removed from the facility.

This happened despite availability of security personnel stationed at the facility.
The observation was that the facility is dark at night whilst expansive to conduct dangerous night patrols.

Night patrols might present security threat to life and limb of the security personnel as it is completely dark with no form of lighting at night.

The Committee learnt that a number of cases had been opened with the South African Police Services whenever an incident of theft and vandalism was identified.

However, all the reported cases have yielded no arrest of perpetrators as vandalism continues.
7.2.5 Completion of the project The Committee learned with optimism that plans are afoot and at an advanced stage to complete the Ngovhe Lodge project.

The representative of DBSA informed the Committee that they have signed a Memorandum of Understanding with the Department for projects that were given green light for further implementation and completion by the GTAC process.

The Committee appreciated that DBSA has appointed a service provider to conduct technical work to quantify what needs to be done.
The project is thus still in the planning phase, with optimism injected by the appointment of DBSA.

If all goes well, the contractor will be appointed by the end of Quarter 1 of the 2022/23 financial year (June 2022).
The work will include, amongst others, 16 65 the refurbishment of the 10 standard chalets and 4 executive chalets; roof canopies; providing effective and efficient source of power such as solar energy; double volumes; kitchen; laundry; completion of the function halls; restoration of the water reticulation system; fencing; installation of the edges; landscaping; and others.
The Committee was emboldened by the undertaking made by DBSA that all the planned work will be done within 12 months after the commencement date.

The planned work was estimated at R30 million additional funding to the project costs.

7.3 Observation with regard to Phiphidi Waterfall The Committee was generally satisfied with the progress made at Phiphidi Waterfall project.
The following observations were made: 7.3.1 Current state of the project The Committee noted that the Phiphidi Waterfall project was initiated in 2011 and consists of 8 chalets.

The project is currently operational, albeit not in full capacity.

The project was funded for R6.5 million in 2011.

A total of 8 chalets were constructed, with a kitchen, restaurant and laundry facility.

The kitchen, restaurant and laundry facility are not operational currently as they are small and have no equipment.
The community trust has constructed 2 swimming pools from their own funding.

The project employs 15 people who are paid from gate entrance fees.

The concern was that the facility has no operational costs hence staff salary payment from gate takings.

The Committee was, however, pleased to learn that the project is fully patronised by local day trip visitors on weekends and public holidays.

It is anticipated that the further work to be done on site will render the project more sustainable.
7.3.2 Sustainability intervention The Department has also appointed the Development Bank of Southern Africa to complete and improve the facilities at Phiphidi Waterfall project.

The Committee noted that the next phase of the project will cost around R28 to R30 million.
The work to be done will include, amongst others, refurbishing the chalets; expansion of the kitchen and restaurant; construction of 10 additional units; completion of electricity and plumbing work; construction of braai area; construction of a change room at the swimming pools; construction of the storm water and soil drainage system; upgrade of internal access roads (though these still need more investigation 17 66 to blend with the natural attributes of the site); refurbishment of guard room and administration block.
The Committee was pleased to learn that the tender for doing all this work will be advertised in the second term of the 2022/23 financial year.

However, this also depends on how the National Treasury deals with the note that has put advertising new tenders in abeyance.

The Committee noted the requests put forward by the community to improve the conference hall so that it is in a good state to host events.
The required improvements include electricity; adding ablution facilities; installing air conditioners; buying function chairs and other improvements to be derived from technical assessment of the place.

A request was also put forward to assist with ensuring that the facility is graded through the national tourism grading system.
Other improvements needed on site include fencing; construction of the retaining wall between the administration block and the conference hall; construct steps that lead to the waterfall; construct/ refurbish the guard rails that lead to the waterfall; construction of a Kid’s Park.

7.3.3 Community involvement The Community involvement at the Phiphidi Waterfall project is highly commendable.

As alluded earlier, the community has added value to the project through constructing swimming pools.
It was reported that the swimming pools have made a huge impact as the numbers have increased as local day visitors are attracted to this new addition to the facility.

The Committee was enthused that the staff employed by the community trust are prepared to earn a salary that depends on gate takings as there is no operational budget.

It was also good to learn that the Board comprises 15 members with 10 females and 5 males.
The Board of the community trust made an emphatic undertaking to the Committee that they will safeguard the property and make sure that it yields good value for money as they understand the project is funded from tax payers’ money.

They want the facility to be profitable and provide stable and gainful employment to the community.

7.3.4 Natural attractions and tourist activities The Committee was impressed by choice of project site as it boasts five pristine and active waterfalls.
This makes the site attractive to both local and international tourists.

The project site also has a potential for a 10 kilometre hiking trail that has proven to be popular with the locals.

The project is also in the close proximity of Nandoni dam which is a compatible tourist 18 67 attraction.

The site has tranquil natural canopy of trees which makes it cool throughout the year.

This is a plus for the site as it provides locals with a reprieve from the scorching summer temperatures in Limpopo.
The Committee was therefore pleased with the project site as it has a potential of becoming a thriving tourism facility once completed.

8.

Recommendations Having conducted an oversight visit to tourism infrastructure projects in the Limpopo Province and made the aforementioned observations, the Committee makes the following recommendations to the Minister of Tourism for responding within three months after adoption of the report by the House.
8.1 General Recommendations It is recommended that the Minister of Tourism: 8.1.1 Appraises her Cabinet colleagues about the state of disrepair and poor maintenance of the roads in Limpopo province and urge the national, provincial and local road authorities to ensure that the roads falling in their jurisdictions are properly maintained at all times for the general safety of locals and visiting tourists.
8.1.2 Urges her Cabinet counterparts to provide and improve road signage in the Limpopo Province, both green road signage and brown tourism signage.

8.1.3 Should implement deliberate and conscientious interventions to foster and improve intergovernmental relations amongst the three spheres of government in tourism projects implemented in Limpopo Province.
8.1.4 Incorporates all the tourism projects implemented in Limpopo Province in the District Development Model to harness full project support for all the projects implemented in the province.

19 68 8.1.5 Provides clear service delivery implications of the continued National Treasury tender regulation regime which has implications of delays in appointing service providers to implement tourism infrastructure projects.
8.1.6 Ensures that the Ngovhe Lodge and Phiphidi Waterfall projects are implemented on time and within budget.

8.1.7 Ensures that further work to be done at Ngovhe lodge and Phiphidi Waterfall projects will render the two facilities operational and competitive in the market.

8.1.8 Ensures that the community trusts/ boards are capacitated to effectively manage the facilities as business enterprises once work has been completed.
8.1.9 Makes certain that the staff of the Ngovhe Lodge and Phiphidi Waterfall projects are taken through departmental training programmes to ensure effectiveness, efficiency and service excellence.

8.1.10 Ascertains that the facilities are universally accessible and can be enjoyed by all sectors of the population.
8.2 Recommendations with regard to Ngovhe Lodge It is recommended that the Minister of Tourism ensures that: 8.2.1 There is consequence for: i) The deviation without community consultation from the original concept of the cultural village to a lodge and conference centre at the Ngovhe facility, ii) The wasteful and fruitless expenditure for the escalation of project costs over the years.
8.2.2 A repeat visit is undertaken by the Portfolio Committee and the Minister to Ngovhe Lodge to engage the community on the successful implementation of the project.

20 69 8.2.3 The Department and the Development Bank of Southern Africa appears before the Committee to account for the Ngovhe Lodge project and future implementation of the project.

8.2.4 The project is incorporated in the district and local municipality plans through the District Development Model.
8.2.5 There is improved cooperative governance amongst the three spheres of government in the implementation and support given to Ngovhe Lodge Project.

8.2.6 That provincial and local road authorities are engaged to improve access to the project at the main road off ramp to improve safety for road users and visitors to the facility.

8.2.7 A sustainability plan with detailed operational support interventions is developed to ensure that the facility holds its own once transferred to the community.
8.2.8 The community is involved and taken along in the Development Bank of Southern Africa process to enhance transparency and ownership of the development by the community.

8.2.9 The original concept of the cultural village is incorporated into the plans of refurbishing and completing the facility.

8.2.10 A temporary security measure is put in place to augment current safety provisions whilst further work is being planned for the facility to avert further vandalism and theft of materials at the facility.
8.2.11 The Committee is kept abreast through quarterly reports on the progress made in the implementation of the Ngovhe Lodge project.

8.3 Recommendations with regard to Phiphidi Waterfall Project It is recommended that the Minister of Tourism ensures that: 21 70 8.3.1 A sustainability plan is developed for the Phiphidi Waterfall project to guarantee successful operations and market competitiveness.

8.3.2 All the work to be done on site will render the project fully operational and sustainable.
8.3.3 The site guides are trained and certified according to the provisions of the Tourism Act (Act No.3 of 2014).

Recognition of Prior Learning be applied to the community site guides who have insightful knowledge about the facility and its natural endowments.

8.3.4 The facility is assisted through the departmental grading support programme once work has been completed on site.

8.3.5 The facility is included in the hidden gems programme of South African Tourism and exposed to marketing platforms.

9.
9.

Conclusion The oversight visit to Limpopo Province presented the Committee with an invaluable direct experience of how the infrastructure projects are being implemented by the Department.

The Committee could link the information presented on paper and verbally by the Department to the actual physical facilities on the ground.

It was apparent that in the past the Department has struggled with implementing infrastructure projects.
There was glaring evidence of poor project management and lack of value for money on the projects visited.

The protracted time taken to implement infrastructure projects was also a concern.

The lack of operational support and sustainability of projects was also a glaring discovery by the Committee.

This confirmed the issues that have been raised by the Committee to the Department over a period of time.
The lack of cooperative governance amongst the three spheres of government was another discovery that is seen as hampering the successful implementation of community infrastructure projects.

The non-involvement and non-participation of district and local municipalities was shocking and defies logic in the context of Local Economic Development mandate of municipalities.
Given the focus and prioritisation of the Villages, Townships and Small Towns/Dorpies (VTSDs), the Committee was not generally satisfied about the support that has been given to 22 71 community projects.

Tax payer’s money has been spent on projects that have not yielded a change in peoples’ lives at a community level.

The introduction of DBSA, however, is seen as an important intervention to support and professionalise community projects.
The Committee is optimistic that all the projects that have been incorporated in the DBSA process will become beacon of hope for the intended beneficiaries and will change the life of local communities for better.

Report to be considered.

23 72