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In 2020, 1,666 new projects implemented under Economy of Simple Things program — Ablay Myrzakhmetov

Tuesday, 15 December 2020, 18:58:30

At the government session chaired by Prime Minister Askar Mamin, issues of implementation of the Economy of Simple Things program and development of local content were considered. Chair of the Board of the Atameken National Chamber of Entrepreneurs Ablay Myrzakhmetov made a report on the topic of concessional lending within the framework of the Economy of Simple Things and the development of local content.

According to Myrzakhmetov, despite the difficulties associated with the coronavirus pandemic, 1,666 new projects were implemented during 11 months of 2020.

So, at the moment, the amount of approved projects is 696 billion tenge or 69%, the amount of subsidized projects is 444 billion tenge (44%). The difference between approved and subsidized projects is 253 billion. On the Damu line — 208 billion tenge, on the Koldau line — 45 billion tenge.

“In general, 85% of projects are functioning, but they require expansion and modernization. The remaining 15% are new projects. The leaders in new projects are Turkistan, Kostanay, East Kazakhstan regions. The modernized projects were implemented notably in the cities of Almaty, Shymkent, as well as the Zhambyl region. In Kyzylorda, Atyrau regions, indicators remain low. Therefore, despite the positive results, we still have certain tasks,” Ablay Myrzakhmetov noted.

According to forecasts, the expected effect from the implementation of 2,586 approved projects can provide 19,214 jobs.

He added that in order to effectively disburse funds, the regions need to actively work to support projects to the status of subsidized ones.

One trillion tenge was mastered under the Economy of Simple Things in 4 main areas: manufacturing industry and services (400 billion tenge), processing in the agro-industrial complex (300 billion tenge), production in the agro-industrial complex (270 billion tenge), spring field and harvesting works (30 billion tenge).

The next question raised by the head of the National Chamber of Entrepreneurs concerns the seventh package of amendments to the Economy of Simple Things program. Thus, it is planned to improve the guarantee mechanism under the program. The amount of the guarantee and the amount of the loan to be guaranteed will look as follows:

  • Damu — 50% of the loan amount up to 1 billion tenge inclusive;
  • FFPSH: - up to 50% of the loan amount up to 3 billion tenge;

- up to 85% in priority areas before commissioning the project up to 3 billion tenge;

  • DBK: - 50% of the loan amount from 1 to 3 billion tenge inclusive;

- 30% on loans over 3 to 5 billion tenge inclusive;

- 50% of the loan amount from 3 to 10 billion tenge inclusive.

In addition, it is proposed to conclude guarantee agreements not only on paper, but also in electronic form.

Ablay Myrzakhmetov explained that according to the expected effect of these decisions, the need to create provisions in the amount of 2.5-5 billion tenge will be eliminated, and equity capital and international credit rating will be preserved.

In addition, it was proposed to include leasing companies as an operator of the program in order to increase the coverage of entrepreneurs producing socially significant food products and developing import substitution, as well as to include OKED in the list of goods for lending.

In general, according to Myrzakhmetov, the changes made will create all conditions for the positive development of the Economy of Simple Things.

“We said that there was a problem with issuing guarantees. The guarantees will be given by the Damu Fund. That is, under the agreement, a loan of up to 1 billion tenge will be guaranteed by the Damu Fund. The fund will also provide guarantees in the amount of up to 50% of the amount for projects over 1 billion tenge,” he said.

The NCE supposes that these measures will eliminate the need to create provisions in the amount of 2.5-5 billion tenge, preserve their own capital and international credit rating.

Myrzakhmetov made a proposal to the Ministry of National Economy, together with interested state bodies, to develop a unified position on the proposals and submit a corresponding draft government resolution.

As for the issue of local content, according to the speaker, NPP conducts continuous monitoring of the processing industries. As shown by the analysis of the share of local content in public procurement by branches of the Economy of Simple Things for 11 months of this year, the plan and the fact of procurement by local authorities and the data of the public procurement portal differ by 2 times. Local executive bodies confirmed the share of local content only at 96 billion tenge (58% of the actual amount on the procurement portal). The largest voluntary health insurance is in the Karaganda, Almaty, Kostanay, Turkistan, East Kazakhstan regions, Shymkent, the smallest voluntary health insurance in the Mangystau, Atyrau, Zhambyl, West Kazakhstan regions, Nur-Sultan.

“At present, the indicators for the state order are 10%, and compared to 11 months of last year, it has almost doubled,” he said.

Myrzakhmetov suggested that the regions continue to actively work in the development of light industry and furniture industry. To ensure local control in the regions, special commissions have been created to systematize, cover and monitor the work of industries. He also noted the positive dynamics in the work of the commission in the cities of Nur-Sultan, Almaty, North Kazakhstan and Karaganda regions.

Among other things, on Dec. 11, 2020, Kazakhstan launched the Register of Domestic Producers www.otp.kz. Thus, the Register of Domestic Producers was created on the basis of Industrial certificates and CT-KZ certificates. Its main purpose is to provide a convenient search for the producers (by region, company, industry), feedback (website and current price list) for customers, contractors, domestic producers and government agencies.

In 2021, it is additionally planned to implement the identification of the best product by price and location (by analogy with marketplaces), and also to include the possibility of notifying the manufacturer about the expiration of the validity period of certificates. Further, Akim Zhenis Kassymbek reported on local content in the Karaganda region. So, according to him, work to support domestic producers is carried out within the framework of the Project Office for the Development of Entrepreneurship in conjunction with the regional chamber of entrepreneurs.

“Since the beginning of the year, we have already held 22 meetings and today we have certain results. Thus, for 11 months, the annual target indicators for local content in the procurement of goods from the Economy of Simple Things have been fulfilled,” the head of the region assured.

According to his data, compared to the same period last year, the share of local content has doubled. In the context of industries in the Karaganda region:

  • furniture industry — 87% (KPI - 46.3%);
  • light industry — 83.5% (KPI - 45.5%);
  • building materials — 91.3% (KPI - 47.1%);
  • food industry — 81.3% (KPI - not set);
  • mechanical engineering — 60.6% (KPI - 15.3%);
  • chemical industry — 53.6% (KPI - 12%).

The employment roadmap is 91% covered. For example, 80% in construction, last year the figure was 40-50%. This indicator, according to the akim, was achieved by conducting point meetings with domestic producers on the subject of the use of their products and loading of production capacities.

“Also, to ensure the growth of the share of local content in the procurement of non-primary goods, we manually work with large companies, including Arcelor Mittal Temirtau and the Kazakhmys Corporation. In February 2020, we signed a Memorandum with AMT to increase the share of non-primary goods produced in Karaganda from 5 billion to 10 billion tenge. To date, this plan has been exceeded,” he added.

At the same time, the share of non-primary goods increased 5 times and amounted to 24.5 billion tenge, and the number of manufacturers who signed contracts increased by 20 companies (from 29 to 49 enterprises). Similar work was carried out with the Kazakhmys Corporation. It is planned that by the end of this year, the share of goods purchased by Kazakhmys from Karaganda producers will increase from 10 to 15 billion tenge.

In general, work to support domestic producers is under constant control. As reported by the Akim of Mangystau region Serikbay Trumov, according to the Economy of Simple Things Program in the region there are 107 projects worth 86,911.5 million tenge. Of these, 101 projects were approved for the amount of 70,451.5 million tenge, 2 projects for the amount of 410 million tenge are under consideration and 4 projects are at the initiation stage for a total amount of 16,050 million tenge. Projects are presented in four sectors:

  • processing in the agro-industrial complex (10 projects) — among the approved are the projects for milk production (5 projects for the amount of 299.5 million tenge), water production (1 project for the amount of 61.7 million tenge) and fish processing (1 project worth 30 million tenge);
  • production in the agro-industrial complex —all 68 projects in the field of animal husbandry and crop production were approved;
  • manufacturing industry — projects for the chemical industry, light industry and the production of building materials were approved;
  • services — projects in tourism, healthcare, education and warehousing were approved.

According to the information provided by Trumov, the share of local content by industry is presented in:

  • furniture industry — by 1.12 this year 53% (KPI - 41.5%);
  • construction materials — by 1.12 for this year 44% (KPI - 40.8%);
  • mechanical engineering - by 1.12 this year 32% (KPI - 11.7%)
  • light industry — by 1.12 this year 43% (KPI - 42.2%);
  • food industry — by 1.12 this year 41% (KPI - not provided);
  • chemical industry — by 1.12 this year 56% (KPI - not provided).

The share of local content in construction and installation projects for 11 months of this year:

  • construction and installation works: a total of 69 projects, for which 67.8 billion tenge were allocated, of which 41.8 billion tenge was spent;
  • Employment Roadmap 2020: a total of 172 projects, for which 31.9 billion tenge were allocated, 28.9 billion tenge were spent.

A commission to support domestic producers is working in the region, 9 meetings were held, issues on the sale of products of local producers were considered. KPIs for 6 industries were completed.

Akim of Atyrau region Makhambet Dosmukhambetov reported on a similar situation in the region. So, according to him, 105 projects worth 33.4 billion tenge are being implemented in the region under the Economy of Simple Things. Second-tier banks and the Agrocredit Corporation have approved 41 projects worth 8.5 billion tenge.

At the moment, second-tier banks and an agro-credit corporation are considering 7 projects worth 6.5 billion tenge. At the stage of preparation of documents now — 57 projects totaling 18.4 billion tenge.

Local content in public procurement in 6 sectors for 11 months of 2020:

  • furniture industry — by 1.12 this year 64.4% (KPI - 48.3%);
  • construction materials — by 1.12 this year 74.2% (KPI - 67.5%);
  • mechanical engineering — by 1.12 this year 36.1% (KPI - 13.6%);
  • light industry — by 1.12 this year 67% (KPI - 42.8%);
  • food industry — by 1.12 this year 39.3% (KPI - not provided);
  • chemical industry — by 1.12 t. 66% (KPI - not provided).

In total, local content in public procurement in 6 industries was planned for 2,346.4 million tenge.

The share of local content in construction and installation projects is over 100 million tenge and the Employment Roadmap for 11 months of this year in the region is presented as follows:

  • construction and installation work: a total of 68 projects worth 72 billion tenge, purchased goods for 16.1 billion tenge;
  • Employment Roadmap 2020: a total of 63 projects worth 29 billion tenge, purchased goods for 9.5 billion tenge.

Together with representatives of state bodies and financial institutions in the region, 7 meetings were held with the participation of about 300 entrepreneurs. 66 meetings were held on the ZOOM platform, covering 2,610 entrepreneurs.


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