briefing to the portfolio committee on trade and industry · briefing to the portfolio committee on...
TRANSCRIPT
Outline Of Presentation
• South Africa’s investment context
• South Africa’s investment climate
• Invest SA and set up
• Progress made on investment climate since 1
April 2015
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Introduction
Investment attraction remains a key priority for government:
Despite the current conditions, South Africa still receives investment and is regarded as a promising investment destination by Multinationals.
ISA Investment Pipeline for Q1 - Q4 of potential projects is R 93 bn, buoyed by commitments made by Chinese State Visit in December in automotive and infrastructure investment.
The Chinese government recently pledged R50-billion investment towards industrialisation in SA. The announcement was made by the Chinese Commerce department during its courtesy visit to the dti.
In the green economy, R 190 Billion of investment has been attracted due to the REIPPP, which is globally recognised as a model for renewable energy
This affirms that foreign investors believes in the potential of the South African economy.
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SNAPSHOT OF INVESTORS IN PIPELINE
Rio Tinto
Heibei Steel
BAIC
Acwa Power
BMW
Sumitomo Rubber Incorporated
Burgan Terminal
Oil Tanking
Kimberley Clarke
Johnson & Johnson
CIPLA 4
Investors & Launches in 2016
• Ford – R 2.5 bn in April, Gauteng
• Acwa Power – R 5 bn in March, Northern Cape
• Sumitomo Rubber Industries – R 2 bn in March, KZN
• Nestle – R 1.2 bn in April, KZN
• Toyota – R 5.7 bn in May, KZN
• Mpact – R 350 m in May, Gauteng
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The need for Investment • Critical analysis indicates a strongly positive correlation between
average ratios of gross fixed capital formation (GFC) to GDP and the rates of Economic Growth – with high growth economies (consistently achieving in excess of 5% real GDP growth
per year) having an average ratio of GFCF to GDP of more than 30%,
– those averaging between 3% and 5% real GDP growth a year have an average GFCF:GDP ratio of around 23%.
• The National Development Plan’s Vision 2030 notes that it will be necessary to increase the ratio of GFCF to GDP from current levels of 17% to 30%, – the contribution of public sector fixed investment should increase from around 7%
currently to 10% of GDP by 2030.
– in order to fund this increase in investment, the NDP assumes that the domestic savings rate will rise from 16 to 25% of GDP,
– which means that there is a presumption that net foreign funding will contribute the remaining 5% of GDP.
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President Zuma recently established an Inter-Ministerial Committee on Investment Promotion to further improve the investor climate and support. The IMC, which chaired by the President, assisted by the Minister of Trade and Industry, focuses on the following tasks: 1. Overall coordination, alignment and policy coherence on economic policy and regulatory framework, thereby providing clarity and certainty to investors. 2. Improvement in South Africa's investment climate in particular the ease of doing business and competitiveness of South Africa. 3. Coordination and roll out of the One Stop Shop Service across all levels in government. The One Stop Service will fast track, unblock and reduce red tape in government. All departments in the three spheres of Government need to commit to a continuous improvement and a service delivery ethos. 4. Overall coordination and alignment in terms of South Africa's marketing, communication, and media in terms of our messaging of South Africa as an investment destination both locally and abroad. 5. Scaling up private sector investment, higher impact Industrial Policy Action Plan, support for the black industrialist programme, SME development and the Township Economy. 6. Identification, packaging and implementing investment projects in terms of the national interest and economic development. 7. Regional integration and industrialisation of the African Continent. 8. Promoting cooperation and partnerships between government and the private sector. 9. Coordinate inputs into the task teams of the Presidential Big Business Working Group and the new BBBEEE Commission.
Response by President Zuma: IMC on Investment
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•
The members of the IMC comprise of the following: • Minister of Trade and Industry (alternate chairperson)
• Minister of Agriculture, Forestry and Fisheries
• Minister of Cooperative Governance and Traditional Affairs
• Minister of Economic Development
• Minister of Energy
• Minister of Environmental Affairs
• Minister of Finance
• Minister of Health
• Minister of Home Affairs
• Minister of Labour
• Minister of Mineral Resources
• Minister of Public Enterprises
• Minister of Rural Development and Land Reform
• Minister of Science and Technology
• Minister of Water and Sanitation
• Minister of Small Business
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• President Zuma announced an Intergovernmental Clearing House in the SONA 2015.
• The dti established a full division in March 2015 to focus on investment promotion facilitation
and aftercare.
• Facilitation and aftercare is the One Stop Shop Intergovernmental Clearing House for all
Investors.
• On the 9th February 2016, the InvestSA One Stop Shop was presented to business and adopted.
• Role out of National One Stop Shop and 3 in the provinces in financial year 2016/17.
• Key government services will be identified and automated into a single window clearance over
the next 2-3 years.
• ISA functions as the Inter-Government Clearing House, an investment facilitation “window”
mechanism, where relevant government agencies are brought to a single cohesive structure
that coordinates and streamlines processes to provide prompt, efficient and transparent
services to investors.
• Improve the Investment Climate and Ease of Doing Business by identifying bottlenecks,
administrative barriers and have a plan of action to improve service delivery.
All Investments need to be coordinated and aligned through the InvestSA One Stop Shop
PROGRESS TO DATE
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Recap: the One Stop Shop
• Firstly, it will setup a physical National One Stop Shop and roll out in each of the provinces.
• It will be the focal point of contact in government for all investors to coordinate and facilitate the relevant government departments involved in regulatory, registration, permits and licensing.
• It will shorten and simplify administrative procedures and guidelines for issuance of business approvals, permits and licenses, thereby removing bottlenecks faced by investors in establishing and running businesses.
• Reduce the silo mentality, turnaround times , red tape and improve service delivery. ISA will fast track, unblock and reduce red tape in Government.
• ISA for Investors will provide: • Facilitation of the entire investment value chain; • Specialist advisory services to investors; • Co-ordination between the various line ministries; • Communication of these services to potential investors; and • Be the facilitation window of clearance for registration, licensing and permits. Investors are encouraged to contact ISA at the dti for these services.
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Business Engagements and Inputs into InvestSA
Business inputs through the five working groups of President Business Working
Group.
Business inputs via the task team appointed during the Investor Luncheon
headed by Minister of Finance and BUSA.
Business Inputs via the manufacturing circle headed by Minister of the dti
Business will have various engagements – representation in the One Stop Shop
through a number of Aftercare Forums and Stakeholder events on economic
matters.
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Presidency
Intergovernmental Clearing House-
IMC
Invest SA One Stop Shop
Govt Depts
Policy & Regulatory Permits & Licensing Infrastructure Finance & Incentives
MinMec
Technical MinMec
Agencies SEZs and
PIPAs
dpme, dti, Treasury, dha, DOL, DPME, Water & Sanitation, DEA, COGTA, Rural Development & Land Reform, DOE, DAFF, dst, DOH, dpe, EDD, dot, dtps
dti, dha, DMR, COGTA, dea, Rural Development & Land Reform, Water & Sanitation, DOL, dirco, DAFF, DOH, EDD, DOE, dpe, dot, dtps
EDD, dti, dpe, COGTA, Water & Sanitation, dot, dtps
dti, Treasury, DOE, DAFF, dst, EDD
Economic Sector Employment & Infrastructure Development
(ESEID) Technical Cluster
SOEs
PBWG
Ho
w w
ill it
fu
nct
ion
?
Technical Task Team of DG’s
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ONE STOP SHOP – OPERATIONAL CENTRE CORE
DEPARTMENTS dti dha DOL DMR DEA DOE DWS
COGTA RDLR
AGENCIES CIPC MISA SARS ITAC NRCS SABS
CORE FUNCTIONS 1. Business Permits 2. Licensing 3. Registrations
• DDG’s from core departments form an Operational Forum.
• Senior executives at the level of Chief Director or Director to be seconded to the One Stop Shop.
• Senior executives will be dedicated focal points to provide specialist advisory, receive applications and fast track, facilitate and reduce red tape in their departments.
Focal Points appointed will function as a virtual centre in the interim and seconded to the physical One Stop Shop in Q3.
One Stop Shop
Secretariat
Contact Centre
Investor Service & Aftercare
Stakeholder Management
Du
e D
ilige
nce
, In
cen
tive
Fac
ilita
tio
n,
Fun
din
g &
Fin
ance
Inte
r- G
ove
rnm
en
tal
Faci
lita
tio
n
Investor Information
Immigration, Labour &
Talent
Licensing, Permits &
Registrations
Marketing, Communication, Operations , Legal & Financial
Management
IT and CRM
Regulatory & Compliance
Monitoring & Evaluation
Envi
ron
me
nta
l Im
pac
t A
sses
sme
nt
How will it be operationalized?
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Investment South Africa - ISA
Deputy Director General
CD: Investment Promotion
CD: Inter-Departmental
Clearing House OSS
CD: Investor Support and
Aftercare
CD: Investor & Int Marketing
CD: Outward Investment
COO
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South Africa in the Global Competitiveness Index We welcome the World Economic Forum’s Annual Global Competiveness Report 2015/16 in which South Africa climbed up 7 places from 56 to 49 countries of 140 countries. South Africa’s biggest improvements come in the areas of: health and primary education (up 6 places), efficiency (up 6 places), technological readiness (up 16 places), and innovation (up 5 places). South Africa has also improved in the areas of: macro-economic environment (up 4 places), higher education and training (up 3 places), and business sophistication (up 2 places).
Source: World Economic Forum
SA improving in 2015 world competitive rankings 20
Ease of Doing Business Rankings 2016
1. Singapore
2. New Zealand
3. Denmark
Top three countries
32. Mauritius
62. Rwanda
72. Botswana
73. South Africa
131. Egypt
139. Tanzania
Top African Countries
Ease of Doing Business Rankings 2016 South Africa
ranked 73 from 189 countries dropping from 69 in 2015
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Government Departments in all spheres need to improve on these rankings and turnaround times.
SUB NATIONAL RANKINGS – EASE OF DOING BUSINESS
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Recommendations by World Bank to improve the ease of doing business across South Africa
RECOMMENDATIONS RELEVANT MINISTRIES/ AGENCIES*
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Recommendations by World Bank to improve the ease of doing business across South Africa
RECOMMENDATIONS RELEVANT MINISTRIES/ AGENCIES*
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Recommendations by World Bank to improve the ease of doing business across South Africa
RECOMMENDATIONS RELEVANT MINISTRIES/ AGENCIES*
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• In addition to the reforms highlighted by the World Bank ease of
doing business, investors have highlighted the following:
Environmental Impact Assessments
Mining Permits
Visa and Work Permits
Water Licenses
Land Zoning and Transfers
Company Registrations
Municipal Services
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• Although we have made progress in the World Competitiveness Report moving up
rankings from 56 to 49, more needs to be done.
• South Africa is falling in the ease of doing business ranking 2016 from 189 countries,
69 in 2015 to 73 in 2016.
• In order to achieve our NDP target of 30% of GFCF we need to be more competitive
and our ease of doing business rankings need to be in the upper quartile,
• South Africa needs to improve its investment climate through regulatory reform,
procedures, business processes and turnaround times.
• These are also impediments highlighted in President Business Working Group, in
consultations with investors, in forums such as WEF and in the recent investors
launch.
• All three spheres of government need to commit to continuous improvement yearly,
improving our rankings and attractiveness as a destination of choice for doing
business. 29
In SA more than 18 National Government Departments plus Provincial, Local, SOE’s involved in policy regulatory, permits, licensing, registration
of business. Hence a greater need for coordination, alignment
and facilitation on investment. Focal unit to unblock, fast track and reduce red
tape in Government through One Stop Shop
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dti
• HO
• TISA
• IDAD
• ITED
• IDD
• CIPC
• NEF
• NCR
• NRCS
• ECIC
• BPD
• CCRD
• FOREIGN OFFICES
• SABS
• NEF
dha
• HO
• FOREIGN OFFICES
• PERMITS
• CIVICS
DIRCO
• HEAD OF MISSIONS
• FOREIGN OFFICES
• SUPPORT OF VISAS
COGTA
• HO
• MUNICIPAL & LOCAL GOVERNMENT
• INFRA-STRUCTURE DELIVERY
TREASURY
• HO
• DBSA
• PIC
• SARS
• CUSTOMS
• SARB
EDD
• HO
• ITAC
• IDC
• COMPETITION COMMISSION
• PICC
DOC
• HO
• BROADBAND INFRACO
• SENTECH
• ICASA
• TELKOM
DMR
• HO
• REGIONAL OFFICES
• STATE DIAMOND TRADER
• STATE MINING COMPANY
• PROSPECTING & MINING
DEA
• HO
• REGIONAL OFFICES
• EIA
WATER & SANITATION
• HO
• REGIONAL OFFICES
• TCTA
• WATER BOARDS
• LICENSES
DAFF
• HO
• REGIONAL OFFICES
• FOREIGN OFFICERS
• LAND BANK
• PERMITS
DRDLR
• HO
• PROVINCIAL OFFICES
• TRANSFER & ZONING OF LAND
DOH
• HO
• MCC/SAHPRA
DOL
• HO
• EMPLOYMENT SERVICES
• UIF
DST
• HO
• TIA
• CSIR
• NRF
• SANERI
• SKA
DOE
• HO
• REIPP
• NERSA
• NECSA
• LICENSING
DPE
• ESKOM
• TRANSNET
DOT
• HO
• LICENSING
• INFRA-STRUCTURE
• PRASA
National Government Departments Coordination
SA has 18 government departments involved in policy regulatory, registration permits and licensing. Need for strategic re-alignment
According to research by investment specialists, as much as 70% of new investments are re-investment/expansion of existing companies
– which means investor aftercare is paramount.
Investor Challenges alluded to in SONA 2015 Municipalities Licensing Zoning Permits Environmental Impact Assessments Electricity Water Home Affairs ITAC SARS CIPC Finance Incentives
In current economic environment a greater focus on retention, expansion and investment facilitation. President Zuma announces
Intergovernmental Clearing House in SONA 2015 32
InvestSA work in progress between National Treasury, the Cities and the World Bank, on a peer review and capacity building program for cities. Working together with the dti, National Treasury and COGTA, key processes will be mapped out and automated to improve the cities rankings and turnaround times in the next World Bank Cities Report in 2018.
InvestSA Work in Progress No City out performs the others in all areas
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BUSINESS FACILITATION PROJECT TO IMPROVE INVESTMENT CLIMATE THROUGH AN ONLINE PORTAL • The Department of Trade and Industry (DTI) is requesting technical assistance from UNCTAD's Business Facilitation Program to promote investment and entrepreneurship in South Africa by clarifying, simplifying and automating investment-related administrative procedures, and improving information on investment opportunities.
• The Business Facilitation Project (BFP) aims at overhauling South Africa's services for investors and entrepreneurs through the creation of a Virtual Integrated Investment Portal (VIIP) combining innovative user-oriented online services:
• eRegulations: a step-by-step guide on investment related procedures including information on all requirements and forms, norms and laws, contact persons and recourses
• eRegistrations: a transactional system enabling investors to apply online to start a business, obtain business visas, work permits, tax incentives and key licenses to operate a business in South Africa
• iGuide: objective and up-to date information on the investment climate in SA and a comprehensive database of investment opportunities.
• Furthermore, an iSimplification program will be deployed to assist the Government's efforts to streamline the regulatory environment for investors.
• Project to begin in 16/17 over a period of 2 years.
WH
AT
WE
AR
E G
OIN
G T
O D
O A
UTO
MA
TE INTO
A SIN
GLE
WIN
DO
W TO
CO
MP
LIMEN
T OSS
SERV
ICES
CORE DEPARTMENTS SELECTED NEED TO COMMIT TO STREAMLINING PROCESSES WHICH WILL IMPROVE OUR EASE OF BUSINESS AND INVESTMENT CLIMATE 35
CIPC aims to create greater accessibility to its services by having a presence through different channels. These are:
• Partnering with Provincial Economic Development Departments, interested government entities such as Transnet, big business representatives such as the JSE and Chambers of Commerce – having CIPC self-service terminals at partner locations
• Third Party Model – through which we make our technology available to interested government and private sector stakeholders (currently we are testing the project with the South African Institute of Black Auditors, ECDC and a private accounting firm) to register and maintain company registration services using the Department of Home Affairs’ fingerprinting (biometric verification) services
• Banks – Nedbank, Standard bank and FNB have built platforms which enable entrepreneurs to apply for business bank accounts and company registration in one seamless process.
• CIPC Service Centres – having Self Service Terminals in Pretoria, Johannesburg and Cape Town
• Website- offering e-services.
Work in Progress Reforms & Improvements and service delivery by the
Companies and Intellectual Property Commission (CIPC)
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Besides the TED's, CIPC is engaging with all previous partners as well as the local economic development departments in each province to ensure a presence. The strategy is to have a presence in each province and the number of terminals will be dependant on the demand and volume. For SMME, which requires simple registration, process is now 100% automated . SSTs are available at major banks and for investors at the JSE
April 2016 Eastern Cape
Transnet Enterprise
Development Hub (4 SST’s)
August 2016 Limpopo Transnet
Enterprise Development Hub (4 SST’s)
June 2016
Northern Cape Economic
Development and Tourism
(1 SST)
October 2016 Mpumalanga
Transnet Enterprise
Development Hub
(Bushbuckridge)
Bloemfontein and Northern
Province (Pending Partnership
Agreements with Local Economic Departments and other prospective
partners)
Work in Progress CIPC Rolled out 44 SST’s in 2015 & plans to roll out a further 12 in 2016
turnaround time has improved from 2 to 3 weeks to 2 to 3 days
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InvestSA Work in Progress
• DHA is implementing the outcomes of the October 2015 recommendations of the IMC on immigration regulations
• Long term visas for multiple travel for frequent travellers for 3 months up to 3 years is been implemented
• DHA will increase Visa Facilitation Centres (VFC) in China, India, United Kingdom, Nigeria, Democratic Republic of Congo, Angola, Ghana, Kenya and Uganda. DHA will fast-track the opening of VFCs in Zimbabwe, UAE and Botswana
• Tourism arrivals the foreigners increased to 7.6 %. with more than 5 million moving through our borders
• Smart ID cards have rolled out to 140 offices including banks with improved turnaround times
• DHA already operates an office at the Gauteng Growth and Development Centre (GGDA) a provincial one-stop-shop centre of the Gauteng Provincial Government
• DHA plans to open additional premium visa centres in Port-Elizabeth and Kwazulu-Natal in the third quarter of the new financial year 38
• BBC TV • Heineken • Toyota • EXL • Warner Borthers • Cipla • ASPEN • SITES • HVH Gold • Beta Steel • CBMI / PPC Cement • Warner Brothers • Bosch
• Eveready • Rotek • ARM Cement • Viviere International • STEAG Energe Services GmbH • Walt Disney • Moonlighting • Triggersfish • AMSA • Four Seasons • Unilever • Amazon • Samsung
Snapshot of Business and Work Permit Facilitation Successes as of 1 April 2015
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Tega Industries - Energy facilitation at
Ekurhuleni Municipality
Nestle 4 plants in Babalegi,
Escourt, Harrismith and East London
- Municpal facilitation, Energy facilitation, phytosanitation and
infrastructure
Unilever Community engagement in Lordsview, Incentives
and phytosanitary
Broadway Sweets Incentives facilitation
mPact Energy facilitation,
Municipal facilitation and incentives
Samsung Registration with CIPC,
SARS, NRCS, Customs, incentives and SEZs
SMA Technology ITAC, SARS and
customs
AVK Access to funding,
Designation & incentives facilitation
InvestSA Work in Progress Fast-Tracking and Red Tape Reduction
Examples of companies assisted as of 1 April 2015
Investment pipeline of R 93 Billion of potential projects Q1 – Q4. Potential new investments BAIC, CIPLA, J & J, Sumitomo Rubber
Industries 40
Contact Details Y. Hoosen
Tel: +2712 394 1032 / 394 1895 Email: [email protected] / [email protected]
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