Date: 14/04/2003
Source: Ministry of Trade and Industry
Title: Hendricks: Trade and Industry Dept Budget Vote 2003/2004
BUDGET VOTE SPEECH BY THE DEPUTY MINISTER OF TRADE AND INDUSTRY, LINDIWE HENDRICKS, National Assembly, 14 April 2003
Madam Speaker,
Honourable Members,
CEOs and Chairpersons of the dti family of institutions,
Other dignitaries, Ladies and Gentleman
The Department of Trade and Industry (the dti) has a very broad mandate of giving leadership in the economy as well as the implementation of service delivery, finance, regulation, training and development. As I have emphasised in the previous budget address, the work of the dti covers a wide range of economic activities and these can only be achieved through a number of different institutions. The challenge that we face as the dti is the alignment of each institution in a dynamic environment and globally competitive economy.
A key to the dti's success is the effective alignment and management of these agencies for policy coherence.
Madam Speaker, we were able to draw certain observations regarding the institutions that report to the dti. Certain overlaps and duplications in their workings were evident. Some of their mandates lacked clarity and this led them to pursuing activities that were not part of their mandates. As much as the agencies were successful in their ventures they did not achieved an equitable geographic spread in their outreach. Deficiencies in the operations of the institutions were apparent and easy access to their offerings was lacking. In addition, the criteria used by some of our institutions were inflexible.
In August 2000 the dti established the Council of Trade and Industry Institutions (Cotii) in order to align them behind the Microeconomic Reform Strategy (MERS), Integrated Manufacturing Strategy (IMS) and the dti's strategic objectives. In order to strengthen coherence and consistency between Cotii and the dti, four quarterly meetings are held and an annual leadership conference. Currently we are developing a common set of performance indicators within the dti and its family of institutions to ensure that the activities of these institutions do indeed meet the strategic objectives of the dti.
In recognition of the importance of these agencies, we are pleased that the Portfolio Committee is now calling them to present to the Committee in the manner structured by the dti.
Madam Speaker, honourable members, did Parliament know that there are 21 institutions that form part of Cotii? These agencies range from big to small, thus from the Industrial Development Corporation (IDC) to Proudly South African Campaign. The dti Group has 6000 employees collectively and constitute one of the most powerful potential forces for change in the South African economy. The dti group has an asset base of R30 billion, and they collectively receive 71% of the dti budget every year.
We have divided these institutions into three categories - Development Finance Institutions, Regulatory Agencies and Specialised Service Agencies. We have been working on ensuring that the mandates and programmes of these institutions are aligned and that they are co-operating and sharing information in an effort to effectively support the business community of South Africa. I believe that each of these institutions have made an impact on the South African economy and through better co-ordination and co-operation there will be great improvements in the products and support that they offer.
Firstly, in the area of development finance institutions we have the Industrial Development Corporation (IDC), Khula Enterprise Finance and the National Empowerment Fund (NEF). Each of these institutions focuses on a different aspect in the provision of finance to businesses, including small business finance, micro-business lending, credit guarantees, venture capital finance and black economic empowerment. These institutions are continually identifying new products to cater for the different needs in the marketplace. In our budget this year we have proposed that additional resources are transferred to Khula, and as already announced by my colleague the Minister of Finance in his budget speech, substantial resources will be transferred to the NEF as part of the financing mechanism for broad-based Black Economic Empowerment. The IDC requires no funding support, as it is a self-financing and profit-making organisation.
Some of highlights from these finance institutions include: the IDC has over the past five years facilitated the creation of 70 000 jobs, it has also approved projects responsible for generating more than R20 billion in export earning per annum, which has contributed significantly to the improvement in South Africa's export orientation. Over the same period the IDC has facilitated investments of more than R21 billion into South Africa and it has also made significant progress in the support of BEE through providing loan finance to the value of R1.4 billion to HDI businesses. It is important to note that almost 60% of the IDC projects were in rural and peri-urban areas and that 1200 SMEs have received loan finance from the IDC. In the last year Khula has also made a significant impact by providing 800 enterprises with R145 million worth of credit guarantees on their loans, providing wholesale loan finance to SMME lending agencies for R77 million and through these programmes have contributed significantly to SMME job creation. They have also implemented a rural micro-enterprise lending programme which has lent to over 26 000 micro-enterprises.
Secondly, in the area of regulatory agencies we have the Competition authorities, Gambling and Lotteries boards, Estate Agencies Board, the Micro Finance Regulatory Council, and the Companies and Intellectual Property Registration Office (CIPRO). Members of Parliament should be familiar with the workings of each of these institutions, as the dti has tabled legislation on them over the past few years. Some of the highlights from these institutions are improvements in the registration of enterprises by CIPRO, which facilitated over a hundred thousand (100 000) close corporations being registered in a single year. CIPRO has improved the availability of registration forms, simplified the procedures and improved their use of technology in the tracking and management of documents.
Thirdly, in the area of specialised service agencies we have a variety of different institutions. This includes institutions dealing with small business development, institutions dealing with quality, standards, technology and innovation, and institutions dealing with women in business.
In the area of small business development we have Ntsika Enterprise Promotion Agency and NAMAC. The programmes of these institutions complement each other in the provision of business development and support services to SMMEs. NAMAC, which was started by Ntsika as one of its sub-programmes has consistently offered quality support to SMMEs and the dti, proposes in Vote 32 that their allocation be increased from R43 million to R80 million in this financial year. This additional funding will see the expansion of the programme to all provinces in South Africa, extension of the business referral programme - BRAIN to 415 locations, increased support in the provision of franchise information and the establishment of one stop-shops for business support services. Some of the highlights from the National Manufacturing Advisory Centre (NAMAC) programme include support provided to 1 400 enterprises, 1 800 new jobs created in those enterprises and ensured that over 15 000 jobs were sustained through the interventions of the manufacturing advisory centres.
Ntsika has also made its impact felt by offering business counselling, advice, training and information through its network of 170 Local Business Service Centres. In addition to this the institution was also able to assist 78 guesthouse operators with opportunities and training during the World Summit on Sustainable Development, assistance and training to 100 emerging construction contactors and over a 100 crafters supported at the Craft Imbizo, with a further 40 crafters supported to attend an international craft exhibition in Italy. Through the successful Tender Advice Centre programme Ntsika has facilitated SMMEs winning tenders to the value of R87 million; this was done through the provision of advice on what tenders are available, how to complete tender documents, and accurate costing and pricing of tenders.
The institutions dealing with quality, standards, technology and innovation are the South African Quality Institute, South African National Accreditation System, CSIR, SABS, and the Technology and Human Resources for Industry Programme. These institutions will continue to play a critical role in the development of South African businesses to support them in their efforts to become internationally competitive. They will also continue to support innovation and improvements in technology so that South African firms can become world leaders in their field. As the Minister has outlined in his speech this focus on knowledge, new technology and innovation is the direction in which South Africa needs to move in order for us to successfully engage with the global economy. It is therefore necessary that dti institutions continue with the excellent work that they provide in these areas.
Finally, institutions dealing with women in business are the Technology for Women in Business (TWIB) and the South African Women Entrepreneurs Network (SAWEN). While SAWEN is not a Cotii institution, it receives substantial support from the dti and I am pleased to announce that in Vote 32 R2 million has been allocated to this programme. SAWEN was established to assist aspiring and existing women entrepreneurs in the small business sector to find solutions to the wide range of gender related obstacles that have an adverse impact on their businesses. The network will address these constraints by advocating appropriate policy changes, building capacity and facilitating the access of women to business resources and information.
More details on the Cotii institutions are available during the exhibition that the dti is hosting in the Old Assembly foyer at the conclusion of the budget debate. I would encourage you to visit this exhibition. The CEOs of these institutions have been invited to today's presentation and I am sure that there will be an opportunity to engage with them on their institutions and what they offer, I would like to request that all representatives from the Cotii institutions stand up so that the Members of Parliament can identify and speak to you during the exhibition. If you do not get the opportunity to speak to them today the information on these institutions and the products and services of the dti is available from our newly established parliamentary information centre on the 6th floor at 120 Plein Street.
At the exhibition there are a number of success stories of businesses that have achieved their success in part through the support of the dti. Before concluding I would like to recognise two entrepreneurs from this exhibition.
* Maria Garcia of MG Laboratories. Maria is the founder and owner of MG Laboratories, which manufactures, develops, and exports world-class skin care range and fragrances in the extremely competitive international cosmetics market, and
* Moses Singo the owner of Singoflora, which grows cut foliage (decorative green and cut flowers). Singoflora sells its products in South Africa and exports some to Switzerland, Singapore, Hong Kong, and USA markets. The company currently employs 31 people, 95% of whom are historically disadvantaged individuals and 46% are women. The flowers that brighten up the Old Assembly today bear testimony to his entrepreneurial spirit.
Madam Speaker, Members of Parliament, to conclude, the dti and its family of institutions are making an impact on South Africa and contributing to South Africa becoming a world-class and highly competitive nation where there is greater employment and equity amongst its citizens. To ensure that this continues to take place the dti will constantly review of the corporate governance practice and mandate of these institutions so that their strategies align with the dti policies.
I have only touched the surface of what we have achieved as a group of institutions, and with your support of Vote 32, the dti and its Council of Trade and Industry Institutions will continue to support the business community of South Africa and ensure that our plans for growth and development of this country are achieved.
Issued by Deputy Ministry of Trade and Industry
14 April 2003
Source: Ministry of Trade and Industry
Title: Hendricks: Trade and Industry Dept Budget Vote 2003/2004
BUDGET VOTE SPEECH BY THE DEPUTY MINISTER OF TRADE AND INDUSTRY, LINDIWE HENDRICKS, National Assembly, 14 April 2003
Madam Speaker,
Honourable Members,
CEOs and Chairpersons of the dti family of institutions,
Other dignitaries, Ladies and Gentleman
The Department of Trade and Industry (the dti) has a very broad mandate of giving leadership in the economy as well as the implementation of service delivery, finance, regulation, training and development. As I have emphasised in the previous budget address, the work of the dti covers a wide range of economic activities and these can only be achieved through a number of different institutions. The challenge that we face as the dti is the alignment of each institution in a dynamic environment and globally competitive economy.
A key to the dti's success is the effective alignment and management of these agencies for policy coherence.
Madam Speaker, we were able to draw certain observations regarding the institutions that report to the dti. Certain overlaps and duplications in their workings were evident. Some of their mandates lacked clarity and this led them to pursuing activities that were not part of their mandates. As much as the agencies were successful in their ventures they did not achieved an equitable geographic spread in their outreach. Deficiencies in the operations of the institutions were apparent and easy access to their offerings was lacking. In addition, the criteria used by some of our institutions were inflexible.
In August 2000 the dti established the Council of Trade and Industry Institutions (Cotii) in order to align them behind the Microeconomic Reform Strategy (MERS), Integrated Manufacturing Strategy (IMS) and the dti's strategic objectives. In order to strengthen coherence and consistency between Cotii and the dti, four quarterly meetings are held and an annual leadership conference. Currently we are developing a common set of performance indicators within the dti and its family of institutions to ensure that the activities of these institutions do indeed meet the strategic objectives of the dti.
In recognition of the importance of these agencies, we are pleased that the Portfolio Committee is now calling them to present to the Committee in the manner structured by the dti.
Madam Speaker, honourable members, did Parliament know that there are 21 institutions that form part of Cotii? These agencies range from big to small, thus from the Industrial Development Corporation (IDC) to Proudly South African Campaign. The dti Group has 6000 employees collectively and constitute one of the most powerful potential forces for change in the South African economy. The dti group has an asset base of R30 billion, and they collectively receive 71% of the dti budget every year.
We have divided these institutions into three categories - Development Finance Institutions, Regulatory Agencies and Specialised Service Agencies. We have been working on ensuring that the mandates and programmes of these institutions are aligned and that they are co-operating and sharing information in an effort to effectively support the business community of South Africa. I believe that each of these institutions have made an impact on the South African economy and through better co-ordination and co-operation there will be great improvements in the products and support that they offer.
Firstly, in the area of development finance institutions we have the Industrial Development Corporation (IDC), Khula Enterprise Finance and the National Empowerment Fund (NEF). Each of these institutions focuses on a different aspect in the provision of finance to businesses, including small business finance, micro-business lending, credit guarantees, venture capital finance and black economic empowerment. These institutions are continually identifying new products to cater for the different needs in the marketplace. In our budget this year we have proposed that additional resources are transferred to Khula, and as already announced by my colleague the Minister of Finance in his budget speech, substantial resources will be transferred to the NEF as part of the financing mechanism for broad-based Black Economic Empowerment. The IDC requires no funding support, as it is a self-financing and profit-making organisation.
Some of highlights from these finance institutions include: the IDC has over the past five years facilitated the creation of 70 000 jobs, it has also approved projects responsible for generating more than R20 billion in export earning per annum, which has contributed significantly to the improvement in South Africa's export orientation. Over the same period the IDC has facilitated investments of more than R21 billion into South Africa and it has also made significant progress in the support of BEE through providing loan finance to the value of R1.4 billion to HDI businesses. It is important to note that almost 60% of the IDC projects were in rural and peri-urban areas and that 1200 SMEs have received loan finance from the IDC. In the last year Khula has also made a significant impact by providing 800 enterprises with R145 million worth of credit guarantees on their loans, providing wholesale loan finance to SMME lending agencies for R77 million and through these programmes have contributed significantly to SMME job creation. They have also implemented a rural micro-enterprise lending programme which has lent to over 26 000 micro-enterprises.
Secondly, in the area of regulatory agencies we have the Competition authorities, Gambling and Lotteries boards, Estate Agencies Board, the Micro Finance Regulatory Council, and the Companies and Intellectual Property Registration Office (CIPRO). Members of Parliament should be familiar with the workings of each of these institutions, as the dti has tabled legislation on them over the past few years. Some of the highlights from these institutions are improvements in the registration of enterprises by CIPRO, which facilitated over a hundred thousand (100 000) close corporations being registered in a single year. CIPRO has improved the availability of registration forms, simplified the procedures and improved their use of technology in the tracking and management of documents.
Thirdly, in the area of specialised service agencies we have a variety of different institutions. This includes institutions dealing with small business development, institutions dealing with quality, standards, technology and innovation, and institutions dealing with women in business.
In the area of small business development we have Ntsika Enterprise Promotion Agency and NAMAC. The programmes of these institutions complement each other in the provision of business development and support services to SMMEs. NAMAC, which was started by Ntsika as one of its sub-programmes has consistently offered quality support to SMMEs and the dti, proposes in Vote 32 that their allocation be increased from R43 million to R80 million in this financial year. This additional funding will see the expansion of the programme to all provinces in South Africa, extension of the business referral programme - BRAIN to 415 locations, increased support in the provision of franchise information and the establishment of one stop-shops for business support services. Some of the highlights from the National Manufacturing Advisory Centre (NAMAC) programme include support provided to 1 400 enterprises, 1 800 new jobs created in those enterprises and ensured that over 15 000 jobs were sustained through the interventions of the manufacturing advisory centres.
Ntsika has also made its impact felt by offering business counselling, advice, training and information through its network of 170 Local Business Service Centres. In addition to this the institution was also able to assist 78 guesthouse operators with opportunities and training during the World Summit on Sustainable Development, assistance and training to 100 emerging construction contactors and over a 100 crafters supported at the Craft Imbizo, with a further 40 crafters supported to attend an international craft exhibition in Italy. Through the successful Tender Advice Centre programme Ntsika has facilitated SMMEs winning tenders to the value of R87 million; this was done through the provision of advice on what tenders are available, how to complete tender documents, and accurate costing and pricing of tenders.
The institutions dealing with quality, standards, technology and innovation are the South African Quality Institute, South African National Accreditation System, CSIR, SABS, and the Technology and Human Resources for Industry Programme. These institutions will continue to play a critical role in the development of South African businesses to support them in their efforts to become internationally competitive. They will also continue to support innovation and improvements in technology so that South African firms can become world leaders in their field. As the Minister has outlined in his speech this focus on knowledge, new technology and innovation is the direction in which South Africa needs to move in order for us to successfully engage with the global economy. It is therefore necessary that dti institutions continue with the excellent work that they provide in these areas.
Finally, institutions dealing with women in business are the Technology for Women in Business (TWIB) and the South African Women Entrepreneurs Network (SAWEN). While SAWEN is not a Cotii institution, it receives substantial support from the dti and I am pleased to announce that in Vote 32 R2 million has been allocated to this programme. SAWEN was established to assist aspiring and existing women entrepreneurs in the small business sector to find solutions to the wide range of gender related obstacles that have an adverse impact on their businesses. The network will address these constraints by advocating appropriate policy changes, building capacity and facilitating the access of women to business resources and information.
More details on the Cotii institutions are available during the exhibition that the dti is hosting in the Old Assembly foyer at the conclusion of the budget debate. I would encourage you to visit this exhibition. The CEOs of these institutions have been invited to today's presentation and I am sure that there will be an opportunity to engage with them on their institutions and what they offer, I would like to request that all representatives from the Cotii institutions stand up so that the Members of Parliament can identify and speak to you during the exhibition. If you do not get the opportunity to speak to them today the information on these institutions and the products and services of the dti is available from our newly established parliamentary information centre on the 6th floor at 120 Plein Street.
At the exhibition there are a number of success stories of businesses that have achieved their success in part through the support of the dti. Before concluding I would like to recognise two entrepreneurs from this exhibition.
* Maria Garcia of MG Laboratories. Maria is the founder and owner of MG Laboratories, which manufactures, develops, and exports world-class skin care range and fragrances in the extremely competitive international cosmetics market, and
* Moses Singo the owner of Singoflora, which grows cut foliage (decorative green and cut flowers). Singoflora sells its products in South Africa and exports some to Switzerland, Singapore, Hong Kong, and USA markets. The company currently employs 31 people, 95% of whom are historically disadvantaged individuals and 46% are women. The flowers that brighten up the Old Assembly today bear testimony to his entrepreneurial spirit.
Madam Speaker, Members of Parliament, to conclude, the dti and its family of institutions are making an impact on South Africa and contributing to South Africa becoming a world-class and highly competitive nation where there is greater employment and equity amongst its citizens. To ensure that this continues to take place the dti will constantly review of the corporate governance practice and mandate of these institutions so that their strategies align with the dti policies.
I have only touched the surface of what we have achieved as a group of institutions, and with your support of Vote 32, the dti and its Council of Trade and Industry Institutions will continue to support the business community of South Africa and ensure that our plans for growth and development of this country are achieved.
Issued by Deputy Ministry of Trade and Industry
14 April 2003
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