SEDA QUARTER 2 PERFORMANCE INFORMATION PRESENTATION TO THE

SEDA QUARTER 2 PERFORMANCE INFORMATION PRESENTATION TO THE PORTFOLIO COMMITTEE ON SMALL BUSINESS DEVELOPMENT 20 NOVEMBER 2019

SEDA PRESENTATION OUTLINE 1. 2. 3. 4. 5. GOVERNANCE & COMPLIANCE PERFORMANCE REPORT HUMAN RESOURCES REPORT FINANCIAL INFORMATION CONCLUSION 2

1. GOVERNANCE & COMPLIANCE 3

GOVERNANCE & COMPLIANCE July to September 2019 COMMITTEE BOARD MEETINGS NO OF SCHEDULED MEETINGS (TOTAL OFQ 2) 2 DATES • 30 July 2019 • 29 August 2019 STRATEGY AND ORGANISATIONAL PERFORMANCE COMMITTEE (SOPC) 2 • 25 July 2019 • 15 August 2019 AUDIT AND RISK COMMITTEE (ARC) 1 • 25 July 2019 HUMAN RESOURCES & REMUNERATION COMMITTEE 2 • 24 July 2019 • 15 August 2019 (with SOPC members attending) 4

GOVERNANCE & COMPLIANCE July to September 2019 • The Board attended to the following priorities during this quarter: – Annual Financial Statement (AFS) for the year ended 31 March 2019 – Seda Quarter 1 Report (April 2019 – June 2019) – Annual Report 2018/19 – The Board held a Strategic Planning session on 15 and 16 August 2019. 5

2. PERFORMANCE INFORMATION 6

2019/20 MANDATE, STRATEGIC GOALS AND OBJECTIVES DSBD STRATEGIC GOALS/OBJECTIVES POLICY AND PLANNING COHERENCE IN THE 1. SECTOR, THAT PROMOTES AN ENABLING SEDA STRATEGIC OUTCOME ORIENTED GOALS 1. Implement programmes to improve sustainability of SMMEs and Cooperatives ECOSYSTEM FOR SMME’S AND COOPERATIVES. EQUITABLE ACCESS TO RESPONSIVE AND 2. TARGETED PRODUCTS AND SERVICES THAT 2. Increase Seda delivery underserviced areas network to reach ENABLE THE GROWTH AND DEVELOPMENT OF SMME’S AND CO-OPERATIVES. AN ENHANCED CONTRIBUTION TO THE SOCIO- 3. - sustainable partnerships to support the cooperatives 3. 4. ECONOMIC DEVELOPMENT OUTCOMES BY THE SECTOR SOUND GOVERNANCE AND THE OPTIMAL UTILISATION OF AVAILABLE RESOURCES - - development agenda. Sustainable partnerships to support the smme development agenda Organisational expectations responsiveness to Stakeholder 7

PERFORMANCE STATEMENT Seda’s performance information is structured in line with Seda’s approved Annual Performance Plan 2019/20. It gives information on performance against targeted indicators, both on outcome and output levels. In quarter 2 only 31 indicators were considered for review, the organisation performed well on 28 indicators, this reflect and organisational performance of 88%. Seda performance combines client support interventions implemented from the National Office, the Provincial Network and network partners including supported incubators

Client support interventions For survivalist and micro enterprises Entrepreneurship awareness Outreach Events, Entrepreneurship in Schools Business start-up training Business Skills Training, Business Management & Diagnostics Business registrations Compliance and IP Training, Business Planning For small and medium enterprises Access to markets Marketing Support, Corporate and Public Partnerships Incubation Technical support and technology transfer Manufacturing support, quality and standards, product Supplier Development testing & certification, product audits Quality and standards testing, advice and National Gazelles, Quality Management Systems implementation Business mentoring and Coaching Facilitation of access to finance, Jumpstart/Pitching For collectively owned enterprises Social facilitation and mobilisation Cooperatives development and registration Access to local and export markets Local and export opportunities, Pre and post exhibitions and trade fares training and product evaluations For people with disabilities Programmes with specialist associations and organisations All other relevant products and services still apply

Performance Statement Q 2: 2019 vs Q 1 : 2018 PROGRAMME ACHIEVED % NOT ACHIEVED % PROGRAMME ACHIEVED NOT ACHIEVED % % 2019 Q 2 2018 Q 2 PROGRAMME 1: ENTERPRISE DEVELOPMENT 36% 10% PROGRAMME 2: SEDA TECHNOLOGY PROGRAMME 3: ADMINISTRATION (Support services & Partnerships) TOTAL 34% 12% 22% 0% PROGRAMME 2: SEDA TECHNOLOGY PROGRAMME 18% 4% 0% PROGRAMME 3: ADMINISTRATION (Support services & Partnerships) 29% 3% 12% TOTAL 83% 17% 31% 88% 10

PERFORMANCE STATEMENT The organisation did not perform well in the following areas Quarter 2 Reason for non achievement Number of interventions implemented on SMMEs Staff focused on all outstanding assessments which are a pipeline for interventions. The latter should close the negative variance in the 3 rd quarter. Number of clients supported through National Gazelles The programme will be discontinued. The 3 rd Cohort will not be recruited. There will be a negative variance on this programme until the end of the financial year because the funding for it will be redirected to other key priorities. Number of clients supported through export, exhibition and training Lack of staff in other areas has resulted in insufficient assessments conducted to identify the export ready clients to attend export training and other exhibitions. The vacant position has since been filled. Number of informal business supported through Supplier Development Programme Delayed contracting with RMI has resulted in the low performance. However, a contract is to be signed between RMI and Seda in October 2019 to support 200 enterprises that have already been identified. 11

2019/20 Annual Performance Plan Programme 1: EDD Strategic Objective Improve Service Access Strategic Initiative Performance Annual Target Measure or Indicator Quarterly Milestones Actual Achievement Quarter 1 Quarterly variance Number of clients who attended entrepreneurship awareness (Briefing Sessions) 22, 000 11, 000 21, 452 10, 452 Number of diagnostic assessment conducted on clients businesses 11, 212 5, 390 5, 806 416 5, 000 2, 500 5, 996 3, 496 Number of interventions implemented on SMEs 4, 200 2, 100 2, 065 -35 Number of cooperatives assessed/ adopted 660 330 523 193 Increase number of enterprises Number of accessing Seda enterprises trained in services business management (Group training etc. ) 12

2019/20 Annual Performance Plan Programme 1: EDD Strategic Objective Improve Service Access Strategic Initiative Increase number of enterprises accessing Seda services Performance Annual Target Measure or Indicator Quarterly Milestones Actual Achievement Quarter 2 Quarterly variance Number of interventions implemented on adopted cooperatives 150 75 230 155 Number of cooperative assisted with access to finance 200 50 60 10 Number of clients supported through National Gazelles 70 50 39 -31 Number of clients supported through enterprise coaching 370 185 187 2 Number of learners participating in entrepreneurship in schools 12, 000 6, 000 11, 769 5, 769 13

2019/20 Annual Performance Plan Programme 1: EDD Strategic Objective Improve Service Access Strategic Initiative Increase number of enterprises accessing Seda services Performance Annual Target Measure or Indicator Quarterly Milestones Actual Achievement Quarter 2 Quarterly variance Number of clients supported through export, exhibitions & training 450 225 213 -12 Number of informal businesses supported (BESD) 350 176 405 229 Number of informal businesses supported through Supplier Development Programme ( SDP) 200 80 0 -80 Number of clients trained on national and international standards 850 400 696 296 Number of colocation points 65 60 80 20 14

2019/20 Annual Performance Plan Programme 2: STP Strategic Objective Improve Service Access Strategic Initiative Increase number of enterprises accessing Seda services Performance Annual Target Measure or Indicator Quarterly Milestones Actual Achievement Quarter 2 Quarterly variance Number of clients supported through Incubation 2680 1, 340 2, 140 800 Number of clients supported through pitching and innovation forums 230 116 158 42 Number of clients supported with quality interventions 160 80 202 122 Number of clients supported through Technology Transfer 30 0 44 44 Number of new SMMEs established 372 186 292 106 15

2019/20 Annual Performance Plan Programme 2: STP Strategic Objective Strategic Initiative Quarterly Milestones Actual Achievement Quarter 2 Quarterly variance 160 40 51 11 8 2 4 2 Performance Annual Target Measure or Indicator Number of SMMEs graduated Improve Service Access Increase number of enterprises accessing Seda services Number of new incubation centers established and supported 16

2019/20 Annual Performance Plan Programme 3: Administration Strategic Objective Strategic Initiative Performance Measure or Indicator Annual Target Quarterly Milestones Actual Achievement Quarter 2 Quarterly variance Improve strategic alignment Delivery on shareholders compact Percentage achievement of shareholders compact deliverables 100% 45% . Improve stakeholder engagement Implement stakeholder engagement plan Percentage of stakeholders engaged 70% 35% 40% 5% Jobs created Number of new jobs created by supported clients 3, 250 1, 630 3, 792 2, 162 Jobs sustained Number of jobs sustained by supported clients 8, 250 5, 000 10, 307 5, 307 Turnover increase Amount increase in turnover in supported clients 1, 5 Billion 750 Million R 866 166 941 R 116 166 941 Improve Organisational Performance 17

2019/20 Annual Performance Plan Programme 3: Administration Strategic Objective Strategic Initiative Performance Measure or Indicator Annual Target Quarterly Milestones Actual Achievement Quarter 2 Quarterly variance Increase funding Improve partnering with stakeholders Value of support leveraged from partners R 35 million R 17, 5 million R 19 845 086 R 2 345 086 Improve cost efficiencies Allocating most of financial resources to core service delivery Percentage of Seda budget allocated to core delivery 75% 78. 49% 3. 49% Improve Customer satisfaction Measure customer satisfaction Customer satisfaction index 4 on a scale of 1 -5 4. 55 0. 55 Reduce the vacancy rate Percentage of vacancy rate in funded positions 5% 5% 2. 4% 2. 6%

CLIENTS SUPPORTED PER SECTOR: Q 2 Seda is supporting clients in the following sectors , as part of the response to market and for our SMME’s demand SECTORS § Chemicals § § § § § Metals fabrications Mixed high Tech Manufacturing Agriculture and Agro- processing Renewable energy Construction Automotive Tourism Mining & beneficiation 19

HIGHLIGHTS FROM ACCESS TO MARKETS PROGRAMME • Seda assisted 113 Supplier Development clients to access contracts to the value of R 1, 8 million during quarter 2. • Bathlako Temo, a large-scale Cooperative that is based in Brits shipped its first export of oranges to the Taiwan and the Middle East. Seda facilitated mentorship by the Citrus Growers’ Association, which is assisting them with the management of the farm. • Black Tiger, a client of Seda in the Northern Cape was assisted with an EIA. The latter was approved and resulted in the client getting 51% black shareholding in the grape and pecan nut farming business. Seda assisted the client to secure R 62 million from the Land Bank to secure this business. The business is based 30 km from Upington towards Kakamas. • Supporting small scale cotton-producing Cooperatives in Mpumalanga and North West in partnership with Cotton SA. The latter will assist with technical skills and access to markets. 20

VALUE ADDING PARTNERSHIPS - HIGHLIGHTS Access to Skills Training and Targeted Support • A total of 105 Cooperatives were trained in Mpumalanga, Limpopo and Northern Cape as part of the Seda’s partnership with the Health and Welfare Seta. • Seda branches leveraged client support to the value of R 10 million from stakeholders and accessed more than R 64 million rand in funding and grants from financial institutions and stakeholders. • Working with Operation Phakisa in the Department of Agriculture to support Cooperatives in this sector. • Trained Umngeni Water suppliers on Tendering to Secure Business • Trained 29 suppliers on the Empretec programme, 15 of which were from Anglo American 21

VALUE ADDING PARTNERSHIPS - HIGHLIGHTS Ecosystem Coordination and Capacity Building • Partnerships with LED offices and the private sector are being driven to ensure that service delivery capacity is expanded through third parties. • To date, 268 external stakeholders have been trained on Seda tools • Piloted NQF level 5 on Business Advising on Services Seta’s Service Providers. The qualification was developed by Seda’s Learning Academy and is awaiting accreditation by the Services Seta. It will be rolled out to the municipalities & other Stakeholders • Seda in the Northern Cape is actively participating in the Invest SA One-Stop-shop that is spearheaded by NCEDA in the Northern Cape. Services will range from regulatory compliance to pre and post investment screening for investors • 7 new colocations were established in Quarter 2 as follows: ü EC - Mquma Local Municipality – Butterworth ü FS – Kopanang Local Municipality ü FS – Destea Service Centre in Thaba Nchu ü NC – KAI !GARIB Local Municipality ü NW – Barokologadi ba ga Maotwe Tribal Authority ü NW – Ratlou Local Municipality 22

VALUE ADDING PARTNERSHIPS - HIGHLIGHTS Expanding the Incubation Footprint • A new CFERI was approved for establishment in partnership with Ikhala TVET College. The establishment is in progress and the building is located in Ezibeleni Township, Queenstown. • The Kwa-Mashu digital hub is in establishment phase and will be operational by end of Quarter 3. Ethekwini Municipality has provided a building. • Automotive hub in partnership with Ethekwini Municipality, building is completed, awaiting installation of equipment. The location is UMlazi Township. of entrepreneurs will be completed in November. Ethekwini Metro Recruitment provided a building, equipment and R 1 Million funding. • Gibela incubator establishment has progressed and site identified in (Kwa. Thema Business Park) in Nigel and agreed with the City of Ekurhuleni to utilize their building with discounted rental. 23

VALUE ADDING PARTNERSHIPS - HIGHLIGHTS Enhance value to Innovative entrepreneurs • SANAS and STP concluded a 3 year funding agreement of R 200 000 per annum. The SANAS funding is to assist SMMEs from designated groups who are operating in the ‘conformity assessment’ space to acquire equipment, access training and develop and implement laboratory techniques. • A partnership with Cell-C on innovation challenge have been agreed on and project will start in October. R 17 Million funding support will be made available to innovative start-ups and access to technical support. • Seda partnered with the Manufacturing indaba and facilitated Industry 4. 0 readiness sessions for SMMEs in Manufacturing. The events took place in Port Elizabeth and Durban. These results are now being utilized by Seda to fine tune the industry 4. 0 readiness assessment tool. • R 1. 418 Milion was leveraged from the DTI Sector Specific Assistance Scheme for 16 SMMEs from Digital Technology based incubators to participate in the GITEX Future Stars International Showcase in Dubai, UAE. 24

VALUE ADDING PARTNERSHIPS - HIGHLIGHTS Digital Hubs The digital hub concept has been developed and roll-out has commenced: • Two digital hubs have been approved one in Capricon district (Mankweng) in partnership with University of Limpopo and Mangaung District (Botshabelo) in partnership with Softstart. BTI. remain locations for the 2019 fy targets is North West (Bojanala district) and • The Mpumalanga (Ehlanzeni district) 25

VALUE ADDING PARTNERSHIPS - HIGHLIGHTS Seda Market Facilitator/ lead incubator milestones achieved • Incubation ecosystem mapping In line with the new recommendation for Seda to be the Ecosystem Facilitator and Incubator of Incubators, an incubation ecosystem mapping was conducted during the period under review and established that South Africa has a network of 244 Incubators, accelerators and technology hubs. The objectives of the ecosystem mapping is: o Create a comprehensive multi-dimensional database of all incubators in South Africa, whether funded by Seda or not; o Provide geographic, quantitative and qualitative dimensions to the data collection, analysis and interpretation of the data collected; o Form a basis for more informed and appropriate policy, standards and programme development with regard to all aspects of incubator operations; o Better understanding of the number and type of incubators by Province and Municipal area, ie geographic distribution; o Better understanding of the number and type of incubators by sector, entity type, funding and governance models and various other metrics; 26

VALUE ADDING PARTNERSHIPS - HIGHLIGHTS Seda Market Facilitator/ lead incubator continues • Roundtable with Incubators and Accelerators On the 25 th September a dedicated Seda CEO, roundtable dialogue session in three Cities (Gauteng, Cape Town and KZN), via live link interacting with just over 100 privately funded Incubators, Accelerators and Tech Hub Managers and CEO’s. The interactive session was used to explain Seda’s new mandate and to listen and solicit ideas on how Seda can better facilitate and coordinate its work and support to all ecosystem builders. This role of Seda was well received by partners. The next phase is on agreeing on common reporting metrics. 27

VALUE ADDING PARTNERSHIPS - HIGHLIGHTS Seda Market Facilitator/ lead incubator continues • South African Business Incubation centre standard Seda has embarked on the development of the South African Business incubator standard with following objectives in mind: o To develop a South African National standard for certification by South African Bureau of Standards (SABS) and this in turn will be a certification standard for all South African incubators and accelerators. All will be measured and evaluated against this standard in terms of promoting entrepreneurship and developing small enterprises in such a way that will improve the economic growth rate and create further sustainable jobs. o To leverage the Standard as part of Seda’s role as a leader in the South African entrepreneurship ecosystem and a national facilitator of incubation to create a framework to expand the incubation network with private sector incubators, higher education incubators, new incubators in townships and rural villages, and digital hubs. o Draft standard proposal developed and submission to SABS due in October. 28

3. HUMAN RESOURCE REPORT 29

Key Human Resources Figures Q 2 VACANCY RATE Western Cape 3% North-West 2% Eastern Cape 2% Gauteng 3% Kwa. Zulu Natal 1% Northern Cape 6% Mpumalanga 6% National Office 2% • Total number of staff as at end September 2019 was 696 • Of this number, 189 currently are Business Advisors (173 as per approved structure +16 MOUs) • Staff vacancy rate at 2. 4 %, for Business Advisors is 4% • Significant part of National Office are in the Enterprise Development Division and Seda Technology programme, which are part of the core services. 30

4. FINANCIAL REPORT 31

FINANCIAL REPORT- Quarter 2 32

EXPENDITURE PERFORMANCE – Quarter 2 Expenditure comparison previous periods to the period under review 33

PORTFOLIO SPEND PER PROGRAMME – Quarter 2 Budget spent per programme year-to-date 2 nd Quarter (2018/19 vs 2019/20)

FINANCIAL REPORT Plan to address Underspending Ø Under spending is mainly due to the process adopted to accommodate the priorities of the sixth Administration. Reallocation of this budget to priority areas will be concluded in October. Ø National Gazelles project: A total amount of R 11 million is due to be paid out to the Gazelles in grants. Ø ICT project plan to replace the ageing ICT infrastructure and increase processing performance has been approved. The ICT team have started with procurement. Ø Project status and deliverables are monitored and reported on a weekly basis. 35

5. CONCLUSION 36

CONCLUSION REMARKS Seda has performed adequately on the approved performance plan and is further delivering new initiatives for DSBD’s new priority areas: • Seda has started a process of piloting District facilitation model with the OR Tambo District Municipality, with the launch expected in the 3 rd quarter. • Common business plan template was developed by DSDB, Seda, Sefa, IDC and NEF with an intention to reduce the turn around times of accessing finance. • We making progress with the establishment of digital hubs proposals, we are positioned to meet the annual target of 4 digital hubs. The following Districts; hubs in Mangaung, Greater Capricorn, Ethekwini Metro are already been approved.

CONCLUSION REMARKS. • Process for the establishment of Product Markets has commenced and proposals will the adjudicated in quarter 3. • Seda has finalised the partnership with the retail motor industries for accreditation of at least 200 informal mechanics from the townships. The work will commence in quarter 3. • Seda is constantly identifying sector-specific initiatives that have a potential for job creation in rural areas, like the cotton partnership. • Business plan to review the role of the Learning Academy to support Seda’s role as the ecosystem facilitator was commissioned. • National incubation and Acceleration standard development processes has commenced.