Economic & Investment Cluster Progress Report
03 Dec 2008
Presenters: Mr Tshediso Matona, Director-General: Department of Trade and Industry, Ms Lyndall Shope-Mafole, Director-General: Department of Communications and Mr Les Kettledas Acting Director-General: Department of Labour
Mr Tshediso Matona, Director-General: Department of Trade and Industry, commented briefly that the documents distributed were self-explanatory. He reported that they were there to comment on the progress of the programmes of action in the Cluster. They had achieved quite a number of their goals and the Directors-General were there to speak to these issues. In order to make the briefing more interactive, he immediately opened the floor to questions from the media.
Q: A journalist asked Ms Shope-Mafole if she had suffered any ill-effects from her open support of the Congress of the People (COPE).
A: Ms Shope-Mafole responded that, as a government official, she was there to serve the people of South Africa and the government elected by the people of South Africa. Government officials were accountable to the people of South Africa, irrespective of the government of the day. She reiterated that they were dealing here with matters pertaining to her as a government official.
Q: Mr Matona was asked for an update on the clothing and textiles quotas. The journalist asked what effect had the quotas had had, if there was any reconsideration of the quotas at this time and what the way forward would be after the quotas expired.
A: Mr Matona responded that they had conducted a study on the impact of the quotas. The quota would be in place until the end of December 2008. Once the quotas had served their purpose, the Department would determine the impact. The anecdotal evidence at this time was that there was a marked reduction in imports from China. There was also a switch of supply from other countries in the Asian region. The switch had, however, not affected the aforementioned reduction. There had been relief for the clothing and textiles sector. There were other challenges faced by the sector such as inter-firm sector competitiveness and the production programme of support from which the Department would soon release results. The Department of Trade and Industry (DTI) had not received a petition to extend the quotas but would consider such an application if one was received.
Q: A journalist asked if such a petition was expected to come from labour such as the South African Clothing and Textiles Workers Union (SACTWU)
A: Mr Matona responded that if such a petition was received it would be processed. He did not want to speculate as an application had not been received. There has been no application yet, therefore the expectation was that the quota would expire.
Q: A journalist queried the impact of the sudden disappearance of the quota and what the view of business and the unions was on the impact of the quota.
A: Mr Matona responded that the anecdotal evidence had come from unions monitoring and researching this as well as business. They had shared their information with the Department and the upshot was that the quotas had been effective. There was all round appreciation as the sector had been in distress and there had been a need to do something. The effect of the recent depreciation of the exchange rate was to provide the sector with some level of protection. The Department was working on another set of interventions. It was an evolving situation that they would have to monitor closely and do what was in their competence to support the industry.
Q: A journalist referred to an official complaint of the DTI about the projects in the Industrial Policy framework that the National Treasury was reluctant to fund. Mr Matona was asked if there was since an agreement on which sectors to prioritise for the incentives.
A: Mr Matona responded that there was no difference between the DTI and the National Treasury on the Industrial Policy interventions. These were policies that were adopted by Cabinet. Two very important incentive programmes that they had launched were support for the film industry and interventions aimed at SMMEs, especially those in tourism. The incentives for the clothing sector was one intervention to consider in addition to the incentives provided to the sector in the previous year. Automotive industry support was also an area where there was an expectation that in the current budget the National Treasury would provide the resource for the investment incentive here. He reiterated that the National Treasury supported Industrial Policy, however, it was important to note that the projects had to satisfy certain criteria and that the DTI had had to make a case for the resources deployed in the past. There were no principle policy differences between them and Treasury.
Q: A journalist queried the Black Economic Empowerment (BEE) sector charters on the Trade and Industry Minister’s desk and asked what the hold-up was in having the charters signed and gazetted.
A: Mr Matona responded that the sectors had finalised the charters and had submitted them to the Minister for gazetting. Once a sector submitted a charter, the Department then checked the charter for alignment with the Codes of Good Practice. They could then send the charter back to the sector to address issues of clarity and deviations from the scorecard. That process was underway now. Many charters were close to finalisation and would be gazetted on time.
Q: Mr Matona was asked to comment on the recent complaints in the African region about South Africa taking a big brother stance on the European Union (EU) agreements was queried.
A: Mr Matona responded that South Africa’s relationship with the Southern African Customs Union (SACU) was governed by the SACU agreements. There was a trade policy clause that stipulated that members had to consult and negotiate jointly. No member could contract with a third party without the agreement of the Union. Ideally, there should be a consensus on stances regarding the European Union, World Trade Organisation (WTO) and the like. There were differences at the moment such as the draft agreement on tax. This did not meet the mutual benefit principle and was at odds with other policies of the South African government. Other members of SACU had different viewpoint, but South Africa was bigger and had a more complex and diverse economy than other SACU members, giving rise to these differences. It was not for South Africa to dictate the positions of the other members. The accusations of bullying were baseless. South Africa would negotiate and hoped to find each other over the EU agreements in upcoming SACU talks. They should respect the integration agenda and not fragment the region. The SACU agreement remained in place. Nothing regarding the EU was finalised yet and the Department was committed to the development of the African region.
Q: The media asked what the deadline was by which the agreements with the EU had to be reached.
A: Mr Matona responded that the EU wanted to sign to an agreement as soon as possible – in January. They would have to resolve the issues between now and then.
Q: A journalist queried the introduction of the set-top boxes and the funding of the project.
A: Ms Shope-Mafole responded that the set-top boxes were for the broadcasting digital migration and the work they had done had been approved by Cabinet. As ministers were part of Cabinet, there was no difference in the decision-making. There were strict criteria that departments had to follow when requesting funds. Funding was limited, as South Africa is a developing country. They still had to prioritise projects, even when criteria are met. Cabinet had proposed the migration from analog to digital signal. South Africa furthermore did not have the option not to do this, as it was an international requirement that it be done by 2015 - in order to be able to better use frequencies. It was generally seen as a good technological development globally and for South Africa, it was one more development tool. One could then use the additional broadcasting frequency spectrum freed up to provide for other channels. South Africa was going to have mobile broadcasting and other wireless technologies. The set-top boxes were aimed at bridging the digital divide and would give Internet access to millions of South Africans. They were like mini-computers and could do much more than the ones found abroad. They could assist children receiving computer literacy in schools but who had no computer in the home to practice on. In this way it served the developmental angle of Cabinet. Fifteen million homes will be subsidised with the set-top boxes. They could also use this to make South Africa more competitive. To this end the Department of Communications was working with the Department of Trade and Industry, the National Treasury and the Department of Science and Technology to support the growth of the electronics sector. This was an issue of software development and gaming support as well as of ordinary television content. The developmental priorities were clear and the Department was fairly confident of funding as they had targeted the Universal Service Fund for their funding.
Q: A journalist asked how realistic proposed changes to BEE legislation were and if such a change was definitely on the table.
A: Mr Matona responded that the news reports about a BEE scorecard change [removing employment equity and skills development from the empowerment scorecard] was incorrect and misleading. They were only now starting to implement the BEE legislation. They were still in the construction phase of the regime and this phase would focus on the codes, alignment of the legislation, charters and the verification that would be necessary. This was not the time to stop and review the regime. The real issue was market practice as some players attempting to avoid the full commitment to BEE policy. The Minister reflected a view that they should consider whether they should have skills development in the BEE policy as this was already covered by other departments. They would continue to implement BEE policy. The BEE legislation was now built into policy and codes of good practice. Review of this was not foreseen in the immediate term.
Q: A journalist asked Mr Matona to respond to accusations that the programme of support for the textiles sector had delays in implementation.
A: Mr Matona responded that, in the textiles sector, he did not think the programme had been slow. They had negotiated with the retailers, manufacturers and unions. However, in these negotiations, consensus had eluded them. The retailers walked out of the process. The impact of that had been to slow things down as they had spent time persuading retailers to come on board. They had now succeeded in getting some retailers on board. The delay was not occasioned by the sloppiness of the Department. They were back on track now and were ready to implement early in 2009.
Q: The media asked if steps were being taken to support marginal BEE firms, given the global climate.
A: Mr Matona responded that no new instrument was being considered to support marginal BEE firms. They had always had an instrument for supporting BEE – the National Empowerment Fund considered applications for support. One of the services offered was the warehousing of shares until they were ready to be offered on the market. The Department would encourage firms to avail themselves of that agency. They could, however, not predict funding as every case was judged on its merits.
Q: A journalist referred to the mention of the set-top boxes subsidisation. Had the prices been determined and by how much would it be subsidised.
A: Ms Shope-Mafole responded that the boxes would cost R 700 but they would be subsidised by 70%. She asked the press not to compare the price with that of an M-Net decoder which was meant for broadcasting only, whereas the set-top box was a tool for providing electronic access to the people of South Africa.
Q: A journalist referred to the recent G20 meeting in Washington DC where the Doha round of the World Trade Organisation (WTO) talks were prioritised and a speedy resolution to the round was supported. Was South Africa of the view that the Doha round would be completed in 2009?
A: Mr Matona responded that they were encouraged by the call for the Doha round resolution. There was a meeting planned for the following week where there would be some effort to conclude the round. It was important that effort was made and they had a high level of confidence for success. They would also have to determine the room for flexibility and the appetite for compromise. They had seen that, in the course of the process, South Africa had been able to secure appreciation of the unique situation in our economy. South Africa had complied with the tariff reductions since the Uruguay round. It was now difficult to undertake the cuts suggested and south Africa could not do that at the expense of domestic industries. They also, could not prejudge the outcome and would be there to work towards a good outcome.
Q: A journalist asked what form the support for the film industry would take and how would it work with the big studio project in Cape Town.
A: Mr Matona responded that the current scheme was a modification of the old incentive scheme which targeted big budget movies made in South Africa. It depended on local contracts and local spending to determine the level of support. They had lowered the thresholds for eligibility for big budget movies to respond to small budget local products that fell outside the existing scheme. They had a separate scheme to target that sector due to the realisation of the potential and subsequent lobbying by the local industry. The scheme was aimed at deepening the local film industry and to make South Africa attractive to the foreign film industry.
Q: A journalist referred to the possibility that the USA President-elect, Barack Obama, would reconsider trading with South Africa due to high tariffs. The media asked if the DTI was aware of this and what the response would be.
A: Mr Matona responded that he was not aware of that. He added that it was not necessarily a bad thing and could be good for the domestic economy.
Q: The journalist specified that this referred specifically to South Africa’s export market and the possible cut of US consumption of South African goods.
A: Mr Matona responded that in accordance with the working of the floating exchange rate, this affected the competitiveness of goods. South Africa also had certain duty-free agreements with the US that made SA’s goods relatively cheaper to the US. He added that they could have another conversation on that particular issue.
Q: A journalist queried service delivery for 2010, in relation to the Department of Environmental Affairs and Tourism, and how far along progress was on this.
A: Mr Matona responded that the best barometer of that was the opinion of FIFA and FIFA was happy with the progress. The statement was a bit generalised and they would follow up with the Department of Environmental Affairs and Tourism on that.
Q: The DG of Labour was asked what the expectations were for jobs created by the Extended Public Works Programme (EPWP), what the top three priorities were for the Department of Labour and what the Department’s response was to recent developments regarding retrenchments in the mining sector.
A: Mr Kettledas responded that the EPWP was run by the Department of Public Works and the skills training component fell to the Department of Labour. Increasing the number of people in the EPWP was joint work between the Departments. The strength of the programme was in providing for when people exited the EPWP. They should then be able to be self-employed or obtain employment. A top priority was the amendments to the Skills Development legislation to be signed and gazetted as an Act on 1 December 2008. A key component was to the strengthening of artisanal development with four planned training routes for artisans. Collective bargaining was established in the mining industry and the Department had encouraged the parties to look at alternatives to retrenchments. He referred to the extended leave and short-time arrangements used by General Motors in the USA in an effort to reduce job losses. The retention of jobs was necessary in this phase. As the economy moved through this phase, they would focus on being sensitive to the loss of jobs and the hardships inherent in retrenchments.
Q: A journalist queried the developments in communications for 2010.
A: Ms Shope-Mafole responded that, in terms of capacity, 2010 had been quite a blessing for investment in Information and Communication Technology (ICT) infrastructure. The World Cup was mainly focused on ICT and broadcasting was critical. South Africa had invested massively in ICT. The key providers were Telkom, Sentech and the SABC. Telkom was advanced in its infrastructure and had made progress on Next Generation Networks. In terms of backup systems, Sentech was a guarantor of signal and in this way complied with redundancy requirements. Cost to communicate had been one of the key issues that had been pushed on the part of the Department of Communications.
They had implemented work on submarine cables and the West Coast leg of this would be complete by 2010 - she noted the main one to Nigeria as a part of the programme of action. South Africa had also signed a Memorandum of Understanding (MOU) with Kenya regarding these submarine cables. The cables meant bigger capacity on the continent. The issue now was the construction phase from Nairobi to South Africa and from Nigeria to South Africa, which they hoped would be done before 2010.
They had accelerated work on skills and prioritising quality education to allow citizens to function in the information society and getting citizens ready for the job market. One of the key aims was empowering people in what was currently called “industrial jobs” to get e-skills to enable them to function and be employed as they got replaced by computers in the process of modernization. This was important, as they did not want workers to be against modernization.
The media briefing was concluded.
DEPARTMENT OF AGRICULTURE
STATEMENT BY DIRECTOR GENERAL OF DEPARTMENT OF AGRICULTURE: MS NJABULO NDULI
03 December 2008
The Land and Agrarian Reform Programme (LARP), which is a collaboration project between the Department of Agriculture, the Department of Land Affairs and Provincial Departments of Agriculture and appearing as Apex Priority 7, has been our primary focus towards interventions in the second economy.
LARP’s five key objectives are; distribution of 5 million hectares of land to 10 000 beneficiaries; increasing the number of new agriculture entrepreneurs by 10 – 15%, providing universal support; increasing agricultural production by 10 – 15%;; and increasing market access by 10 – 15%.
In August this year, the Department commenced with the first phase of increasing production by 10 – 15% though the Ilima / Letsema campaign in Jacobsdal, Free State. This campaign revives the traditional community building, self-help synergies where citizens take the responsibility of contributing towards finding and implementing sustainable solutions to issues of concern faced by the community.
In this case, the issue of high food prices was addressed through Ilima / Letsema in order to increase production by making use of all available land, especially land lying fallow in the rural and peri-urban areas. Furthermore, the Ilima / Letsema encourage household gardens and stimulated ploughing and planting through the distribution of starter packs.
The Ilima / Letsema campaign rolled-out in the Eastern Cape, Mpumalanga, Northern Cape, Free State, Limpopo, Western Cape, KwaZulu-Natal and Gauteng. Through the campaign, over 14 000 varying agricultural interventions in the form of seedlings, veggie tunnels and other needs deemed necessary by provinces and custom made to suit the needs of provinces were distributed. This is outside the additional commitments made by our sister Department of Land Affairs. Building on this campaign, provinces will monitor progress in relation to hectorage covered, scale of production, and implement produce marketing and distribution solutions.
We have concluded the Five-Year Review of the Strategic Plan for the Agriculture Sector (Sector Plan) which is a joint plan developed by the Department of Agriculture and agricultural unions in 2001. This five year review confirmed the importance of the three core strategies of enhancing equitable access and participation in the agricultural sector; improved global competitiveness and profitability; and ensuring sustainable resource management.
This is supported by the strategic plans of the Department of Agriculture and furthermore, by the developed commodity strategies. The review presented clear evidence that there is widespread buy-in into the philosophy of the Sector Plan, with generally good intentions amongst all key stakeholders and supporting government departments. The Review makes a number of recommendations to improve the implementation and scope of the Sector Plan.
The transformation of the Sector will be further boosted by the Khula-MAFISA Fund which was signed for inception last month. This will extend financial services to emerging farmers and agri-businesses; providing a portfolio indemnity to financial institutions that offer production loans to emerging black farmers within the Khula-MAFISA target market. through leveraging of additional financial resources from commercial financial institutions. Furthermore, the maximum loan ceiling is also higher and the banks will also provide packaged support to the clients.
With the AgriBEE Charter adopted in March this year, the Charter Council is established to further facilitate collaboration with sector stakeholders and manage all complexities associated with the Charter and its implementation in the sector.
Our focus has also been in furthering the growth of commercial agriculture. Mainstreaming of sector activities was boosted by the establishment of CEO’s Forum, a forum where all CEOs in the sector and government jointly deliberate on strategic issues that affect the performance of the sector. In addition, an Advisory Council was established to facilitate input into agricultural policy development.
The commodity strategies developed have created a framework for engagement with commodity groups in the country in identifying and advancing participation of emerging farmers in the value chain of commodities such as grain, livestock, cotton, sugar, and other. This has also provided the basis for engagement with other commodity groups internationally. In September 2009, South Africa will host the 68th International Cotton Advisory Committee (ICAC) Plenary meeting.
For us, cotton plays a critical role in the income of small scale farmers due to its drought tolerant characteristics, not being prone to theft or suitable for direct animal consumption and its labour intensity. Hosting the plenary will play a significant role in realising South Africa’s cotton strategy goals through utilising the networking opportunities, sharing experiences and benchmarking in the areas of global cotton trade and marketing.
As a signatory to the Agreement on Mutual Acceptance of Oenological Practices (MAA) and the Agreement on Requirements for Wine Labeling (Labeling Agreement), which forms part of the World Wine Trade Group, South African wines will easily be exported to among others, the USA market which is a lucrative wine consuming market. The agreements facilitate trade of wine amongst signatory parties by recognizing each other’s wine making and labeling practices as being in compliance with their own. Signatory countries are Argentina, Australia, Canada, Chile, New Zealand and the United States of America.
The recent workshop held by the EU on Bovine Spongiform Encaphalophathy (BSE) was an eye opener for our trading partner the EU. The workshop, among others, demonstrated our ability to control animal diseases, our freedom from BSE and that our feed ban to prevent this animal disease is working. We trust that going forth; the country will be given higher classification which will increase our ability to trade globally.
We have managed the outbreaks of diseases including Classical Swine Fever and Avian Influenza to help maintain the markets that we had. We have further managed African Horse Sickness and outbreaks of Rabies. The latter continued to be a serious threat to public health.
We are also preparing in anticipation of 2010. To that effect, we have started with increasing food production. To ensure control against unwanted, dangerous agents and alien species at our borders we have 5 sniffer dogs at work –at the OR Tambo International Airport through the Sedupe K9 Programme.
3 December 2008
Department of Communication
Economic Cluster media briefing input
Sentech switched-on the digital signal on 30 October 2008 marking the start of broadcasting digital migration in the country. The switch on of the digital signal is a milestone for South Africa as we move to meet the ITU deadline for the Africa and Europe Regions to fully migrated to digital broadcasting by June 2015
Broadcasters are currently undertaking a digital terrestrial television trial to test among others the operation of the set top box. ICASA has thus allocated 4 new digital channels, three (3) for SABC, one (1) for e-TV and two (2) for Mnet to enable them to participate in the digital broadcasting trial. It is envisaged that digital terrestrial television will be launched nationally in the second half of next year (2009).
The finalization of the STB specifications is at an advanced stage and the South African Bureau of Standards is on track to complete this critical task during the 1st quarter of 2009. The finalization of the STB Manufacturing Sector Development Strategy is also on track.
South Africans will be buying new television sets during this period, it must be emphasised that it is not necessary to buy a new TV to pick up the digital signal. The only way any TV can pick up the digital signal is with a set top box.
Undersea cable update
Significant strides have been made towards establishing partnerships for the construction of the UHURU and UMOJA networks
In November 2008, an agreement was reached between the NEPAD e-Africa Commission (on behalf of BAHARICOM DEV CO) and Nigeria’s Main One on joint collaboration and construction on the West Coast cable. A similar agreement was brokered with Kenya regarding the cable construction on the East Coast.
The IDC, Pan African Infrastructure Development Fund and Development Bank of Southern Africa have agreed to fund both West and East coast cable construction.The finalisation of common equity will be concluded soon and construction of both cables will commence in the first quarter of 2009. It is expected that the West Coast cable will be ready for service in the first quarter of 2010, and the East coast cable ready by the third quarter of 2010.
The full cable around Africa is on track to be ready for service Q4 2010
Department of Environmental Affairs and Tourism: Economic Cluster media briefing input
1. TOURISM DEVELOPMENT
Tourism plays a major role in the growing South Africa’s economy. Its contribution to the GDP is estimated to have increased from R137,6 billion in 2006 to R159,6 billion in 2007. The number of jobs created directly and indirectly through tourism has increased by 5% from 896 900 in 2006 to 941,000 in 2007.
Foreign arrival figures for the first five months of 2008 indicated strong growth in the face of challenging economic conditions. Overall foreign arrivals grew by 7.6% from January to May 2008 to reach a total of almost 4 million (3,983,061).
However, South Africa’s service delivery standards have been ranked as the lowest in the World. The Accenture report released in 2007, titled Leadership in Customer Service, has reflected South Africa’s ranking as 111 out of 124 countries. The challenge relates to soft skills such as business etiquette, customer care, and service attitude.
The following interventions have been put in place:
· Government has launched a multifaceted programme called the “South African Experiment”. It aims to position South Africa as a world class quality service destination to attract tourists while growing the economy through partnerships between the private and public sectors.
· A Service Excellence Strategy was launched at the National Tourism Conference, in November in Gauteng.
The strategy is based on the premise that South Africa needs to deliver an unforgettable experience to visitors during the Soccer World Cup and beyond. It will elevate service levels in South Africa to equal the best in the world and focuses on four areas:
· The up-skilling of those involved in service delivery, focusing on behavior and attitude alignment at all service touch points.
· Appropriate training programmes and other interventions will be used to achieve sustained changes in behaviour and attitude;
· Public awareness initiatives on service excellence, which will aim to educate consumers on what world class standards entail and motivate South Africa to be a hospitable and welcoming nation;
· A consumer feedback mechanism that will be well publicised and linked
to the grading and accreditation system.
SOUTH AFRICAN IVORY STOCKPILE AUCTION
South Africa auctioned 47 metric tons of stockpiled ivory to accredited buyers from China and Japan recently. The sale was approved by the Convention on International Trade in Endangered species (CITES). The ivory was verified by the CITES Secretariat as being of legal origin and was from the South African National Parks (SANParks), Mpumalanga Parks and Tourism Agency, North West Parks and Tourism Board and KZN Wildlife.
Approximately 6,7 million USD was raised from the sale of the ivory stockpile. South Africa will use the proceeds of the sale within the specific guidelines laid down by CITES and they include:
· Elephant related research, conservation, anti-poaching measures, monitoring of herds and land expansion.
· Conservation functions which will include employment of additional game rangers, obtaining more vehicles, erecting elephant proof fences where needed, purchasing of equipment and the like.
· Community development projects, specifically within communities affected by the presence of elephants.
CLIMATE CHANGE – LONG TERM MITIGATION STRATEGY, LTMS
The Climate Change Response Policy - Long-term Mitigation Scenarios (LTMS), findings, proposed policy direction and proposed way forward were presented to the 2008 July Cabinet Lekgotla. The Lekgotla approved the six broad policy direction themes to be addressed in a National Climate Change Response Policy. It also approved a National Climate Change Response Policy development process to culminate in a policy by 2010. The 6 policy direction themes are:
· Limitation and reduction of greenhouse gases
- Reduction of greenhouse gases by 2020 – 25.
· Build on or strengthen current initiatives
- Current energy efficiency and electricity demand management initiatives and interventions must be reinforced through available regulatory instruments and other appropriate mechanisms
· Prepare for the future
- Awareness campaigns to reach out to communities so as to encourage behavioural change which will support the effective and efficient implementation of the Climate Change Response Policy.
· Implement the Business Unusual Call for Action
- Government must promote a transition to a low carbon economy
· Vulnerability and Adaptation
- Government departments to ensure that climate change adaptation in their sectors are included as departmental key performance areas.
· Alignment, Coordination and Cooperation
- The roles and responsibilities of all stakeholders in the three spheres of government to be clearly defined and articulated
The first milestone in the approved National Climate Change Response Policy development process will result in the hosting of a Climate Change Policy Summit in March 2009.
The following DG bilaterals between DEAT and key sector departments on the climate change policy development process have taken place or have been scheduled: Department of Minerals and Energy – 17 November; Department of Transport - 25 November ; Department of Trade and Industry - 3 December ; Presidency - 4 December; Department of Public Enterprise - 4 December.
The National Climate Change Response Policy Development Summit is being arranged for 3-6 March 2009.
1. MLRF TURNAROUND ACHIEVED TWO YEARS AHEAD OF TIME
The Marine Living Resources Fund (MLRF) has for the first time ever received an unqualified audit report. The MLRF Annual Report for 2007/08 was tabled in Parliament in August and shows a turnaround in the management and administration of the MLRF. The MLRF finances operations which include research, resource and coastal management and monitoring, control and surveillance - of the Marine and Coastal Management (MCM) branch of the Department of Environmental Affairs and Tourism (DEAT).
The unqualified Audit Report is the culmination of work that was started in August 2006 in response to a number of concerns raised about the MLRF, including cash flow problems, a lack of skills and capacity and inadequate financial systems.
The corrective strategies focused on corporate governance, risk management and compliance with International Accounting Standards.
The MLRF Annual report reflects a healthier financial position. The MLRF now has a positive accumulated surplus of more than R29 million, compared to a deficit of more than R65 million in the 2005/06 financial year. The improved financial position means, amongst other things, that there are now more sea days available for compliance vessels and research.
The MCM branch is tasked with:
· Managing the development and sustainable use of South Africa’s marine and coastal resources;
· Protecting the integrity of our marine and coastal ecosystems; and
· Striving to achieve a healthy balance between the sustainable utilisation of marine and coastal resources and protecting and conserving these same resources.
The Annual Reports for 2002-05, identified the following concerns:
· A lack of internal controls;
· A lack of compliance with the Public Finance Management Act (PFMA);
· No proper accounting and fixed asset systems;
· A lack of historical data and supporting documentation; and
· Insufficient debtor and income controls.
In the Annual Report for 2005/06 there were 22 qualifications and an amount of R247 million was incorrectly presented in the financial statements. This resulted in the Auditor General not expressing an opinion on the financial statements. The report for 2006/07 had six qualifications with a misstated amount of R25.7 million. In contrast to this, the most recent report was released with an unqualified audit opinion and no emphasis of matter.
No related documents