National Lottery Board on funding for sports development and facilities, SAFA development programmes for 2014 World Cup

Sports, Arts and Culture

19 July 2010
Chairperson: Mr B Komphela (ANC)
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Meeting Summary

The National Lottery Board explained how the funding for sports was allocated. The bulk of the money went towards building of sporting facilities, training of personnel, administrators and coaches. A significant share was channelled towards purchasing sporting equipment and kit. On a few occasions, the National Lottery sponsored the hosting of major events. One of the challenges facing the National Lottery was the accountability of distributing agencies. Over two billion rand was distributed annually to distributing agencies. At present, they were not accountable to the Board but to the Minister. The funding choice by distributing agencies were also criticised.

Members were concerned that the 22% allocated to sport was low compared to what education institutions and charities received. The distributing agencies were urged to be poor-biased in terms of allocating the funding. The practice of granting more funding to minor sporting codes and wealthy institutions was criticised. Members were not happy that the publicity granted to National Lottery by certain sporting codes they funded, was adequate.

The South African Football Association spoke about its plans for the future and 2014 World Cup preparations. The governing body presented an extensive grassroots football development initiative. The aim was to identify talent at an early age and ensure that there were enough support services to nuture that talent to sporting excellence. For that to happen, massive investment in infrastructure and human resources needed to be realised. Schools were identified as a major breeding ground for talent, hence the need for various governmental departments to work together in ensuring that everyone pulled in same direction.

The issue of avoiding the legacy of “white elephants” due to stadiums not being fully utilised was discussed, with suggestions being made to engage in discussions with other sporting codes such as cricket and rugby to use the stadiums. Low soccer ticket prices was raised as another impediment towards raising money to maintain the stadiums.  Members questioned how much FIFA was going to give to SAFA for its football development programmes and whether that money would not be misused through giving bonuses to top SAFA leadership. SAFA explained that they had not yet been told by FIFA how much would be given to SAFA but whatever the amount, a trust account would be set up to ensure that SAFA development programmes benefited. The controversial appointment of the South African soccer team coach was raised as some members needed clarity as to whether proper procedures were followed.

Meeting report

National Lotteries Board (NLB) briefing
The meeting was an opportunity for the National Lottery to explain its funding for sports development and facilities, and the formula it used to allocate funds for such purposes. Professor Alfred Nevhutanda, Chairperson of the National Lotteries Board, spoke about the composition of the Board, its governance structure, the framework of the National Lottery and various other role players such as the distributing agencies. The NLB distributed over two billion rand annually to various distributing agencies. He assured members that drastic changes had taken place since the new Board had taken over. The amount of money available for distribution was too much - yet if properly distributed, many lives could change forever.

Mr Jeffery Du Preez, Chief Operations Officer: National Lottery, highlighted the challenges. Some emanated from the fact that the distributing agencies were not accountable to the Board. In terms of the National Lotteries Act, the distributing agencies were only accountable to the Minister of Trade and Industry. The distributing agencies were appointed by the Minister, on a five year term, and it was they that had the responsibility of developing criteria and guidelines for allocation of funding - as directed by the Minister. It remained important for the distributing agencies to have the ability to target those communities which were most in need. The situation at present was that the applicants that received most of the funding were the historically privileged institutions.

The funding allocation for sporting activities mainly addressed issues of capacity building, such as the training of managers, administrators and coaches. A significant portion of funding went to purchasing of sporting equipment and kit for teams and clubs. The building and upgrading of sporting facilities remained on the key areas which the bulk of funding was channelled to address. A fair share of funding was reserved to sponsor major events in the form of enabling smooth participation or hosting of such events. The South African National Soccer Team received massive allocation when it went to camp in Brazil and Germany ahead of the 2010 FIFA World Cup. The World Cup Local Organising Committee also received a sizeable allowance for the staging of the opening and closing ceremony of the World Cup.

Other challenges which were identified included the reported high “decline” rate. A total of 514 applications for sporting related activities were declined in the 2007/08 financial year and 455 in the 2008/09 financial year due to failure to comply with procedures meant to be followed before an application could be considered. Capacity constraints also meant that the processing of applications moved at a painfully slow pace. There were a total of 3 691 applications for funding in the 2007/08 financial year and only 1154 were adjudicated. In 2008/09, a total of 867 applications were received but only 594 were adjudicated, leaving a total of 273 applications outstanding. 

On the matter of corporate governance, the accountability of the distributing agencies needed to be re-looked at. At present, it was not enough that the distributing agencies were only accountable to the Minister. There was an issue of many members who were part of distributing agencies having an interest in organisations that applied for funding. The solutions and interventions proposed were that the organizational structure of the National Lottery should be reviewed, even if that meant amending the Lotteries Act. Funding regulations needed to be revised and published by the Minister of Trade and Industry. There was a need for the establishment of provincial offices which would educate potential beneficiaries on how to apply for funding in accordance with the rules and regulations and lastly the Ministry of Sport was urged to produce a blue print for sport development which would serve as a guide to be used by the Lottery in allocating funding.

From the estimated more than two billion rand available for allocation annually, sports related activities received 22% of the revenue from the National Lottery to be distributed via the distributing agency responsible for sport. The bulk of the funding (39%) was allocated to schools. The challenges identified were diverse. They ranged from the distribution of funds to simple corporate governance issues. On the distribution of funds, it was reported that there was a lack of strategic focus when allocating and approving funding. Certain well-off institutions continued to receive massive funding to upgrade their facilities while those that were completely deprived received little or none at all. The high “decline” rate in the processing of funding was raised as an issue that needed to be addressed, and there was a need to have a set turnaround time which was based on a practical operational model.

Discussion
Mr D Lee (DA) asked for more clarity as to why Sports received only 22% “of the pie” when other distributing agencies such as Arts and Culture and Charities received 28% and 45% respectively. He commended the passion for sport which had been displayed by Mr Du Preez and hoped the Board would do something to increase the allocation for sport related activities from 22%.

Mr L Suka (ANC) praised the presentation. The challenges and opportunities were clearly outlined. The Board was assured that it would get all the support it needed from the Committee. A suggestion was made to the Board to have a way which would show its achievements since it took over in order to avoid a situation where the failures of the previous boards would be attributed to them.

Ms G Tseke (ANC) said her major problem was in the allocation of funds. There seemed to be a very biased formula and that could have partly been exacerbated by the alleged conflict of interests from members who formed part of distributing agencies. It was difficult to explain why small organisations such as those running table tennis received large sums of money compared to bigger federations which were allocated very little to achieve anything significant. The point raised about the Department of Sports producing a blueprint for sports development in the country had shown that Parliament had been lied to. The department had earlier said such a blueprint existed.

Mr Nevhutanda agreed with Ms Tseke, stressing that he too, found it mind boggling that institutions such as the University of Pretoria continued to receive millions for upgrading world class facilities which they already had when just across the street there were schools that could only imagine having fields and grounds which University of Pretoria had. If the issue of accountability of the distributing agencies was sorted out, perhaps it would have been easier for the Board to probe why such was the case. However, at present, the decisions on whom to fund did not lie with the Board.

Ms Tseke encouraged the National Lottery to insist on having publicity especially when they sponsored major events. It was disappointing to hear that the South African soccer team received large sums of money from the Lottery but there was nothing to show in either news conferences or the kit used by the team. The Lottery marketing team should refuse to budge when told that they could not be given publicity for having sponsored an event or a team.

The Chairperson asked how much had been allocated to the national Soccer Team for their preparations ahead of the soccer World Cup.

Professor Nevhutanda replied that the Soccer Team was given over R20 million for its preparations in Brazil and Germany. The Local Organising Committee also received R20 million for the hosting of the opening and closing ceremony of the World Cup. The Lottery had attempted to have its name published as one of the sponsors but had been given the run-around by the relevant authorities.

The Chairperson insisted that from now on, the Lottery should stop funding any team or event unless publicity was given. It was depressing to notice that minor sponsors who contributed far less that the Lottery to the national team had bigger muscle and their logos were displayed everywhere the team went.

Mr C Frolick (ANC) asked if it was possible for the Board to send the Committee a full list of all clubs and organisations that had received Lottery funding for sporting purposes so that the Committee would do oversight into what had been done with that funding.

Mr Du Preez promised to compile a list of all the beneficiaries, how much they had received and what they intended to do with the funding. It was important for the Committee to keep track and to do oversight.

The Chairperson said he was worried that the Lottery was giving too much of its funds to other ministries. It would not be desirable for the Lottery to take over the responsibilities of the Departments of Education or Social Development because those departments were allocated massive budgets to carry out their programmes. Some departments had huge budgets compared to what the Sports Ministry was allocated by the Minister of Finance. The Committee was impressed by the work done by the National Lottery thus far. It promised its unequivocal support to the Board and hoped to interact again in the near future.

South African Football Association (SAFA) briefing 
Mr Lesley Sedibe, SAFA CEO, emphasised the need to set up sound grassroots football structures that would provide a breeding ground for senior teams. The ultimate goal of the federation was to command respect both within the continent and in the world. The medium-long term dream was to play in the FIFA World Cup finals in the year 2022! The CEO was adamant that if work begun now, that dream was realistic and achievable, but it depended on the setting up of a powerful youth development programme. He referred to the example of those countries participating in the recent FIFA World Cup final that had been successful in setting up youth structures many years ago and were reaping the rewards of their commendable initiatives. The federation also called on government to be a key partner in complementing its efforts to revolutionise football in the country. One area identified as suitable for the government to intervene in was with the provision of land. A lot of the development programmes would require massive spaces of land, which SAFA would not be able to afford. It was common knowledge that land was very expensive in South Africa and if the government was to make land available for football academies and grounds, this would be effective.

SAFA was to embark on a vigorous ‘back to basics’ strategy, which would involve, among other things, implementing a robust football development programme to focus on grooming talent from an early age. The strategy would also involve a process of securing and developing highly competent coaching and technical support staff to mentor the young stars, to be guided all the way to becoming national heroes. The approach would also seek to involve all stakeholders, including Ministry of Education which would ensure that all schools, including former Model C and traditionally white schools were involved in producing talent. It was critical in ensuring success, to realise that football development was not a one man show. Key stakeholders were the Departments of Health, Education, Social Development, Public Works and Sports and Recreation. The Department of Education, together with Sports and Recreation were urged to do everything possible to ensure that certain schools did not deny children from all race groups from participating in football. Initiatives such as schools football tournaments were cited as one of the best opportunities to scout talent.

The world soccer governing body, FIFA, had pledged its commitment to assisting SAFA in ensuring that its football development programme was a success. The bulk of the money which FIFA was set to reward SAFA for the successful hosting of the World Cup was going to be channelled into development. In addition, FIFA had committed to sponsoring schools and amateur clubs with balls, bibs, cones, whistles and t-shirts. SAFA said it would hold discussions with the Premier Soccer League to ensure that it sold its vision to the PSL. That would involve persuading the league to initiate a new policy which would seek to curb the number of foreign coaches and players. Such initiative would ensure that more and more South Africans were given the opportunity to shine in the domestic league. FIFA would also help in the building of artificial football turfs, sponsor education programmes, leadership training initiatives and support HIV and anti-crime initiatives. The theme of the legacy project from FIFA was to leave a lasting and sustainable social, economic and football legacy which will be manifested through the creation of world class infrastructure, environmental preservation initiatives such as Green Goal and human legacy such as the Football for Hope.

The football artificial turf programme was singled as one major project that had already started and was being rolled out at a satisfactory pace throughout the country. SAFA had committed to building 52 football turfs distributed across all SAFA regions, and there would be football development programmes introduced in all the regions where those football turfs were built. The mentors in those football development programmes would include former football legends. The federation had entered into agreement with the Dutch Football Association, inviting them to provide training for local coaches who would be spearheading many of the development programmes. The Green Goal environmental awareness campaign would ensure that solar panels and rain water tanks would be installed in all development infrastructure venues. For such initiatives to succeed, it was paramount that government departments such as Tourism and Environmental Affairs seize the opportunity and be a part of the driving force. So far, it was reported that SAFA had secured funding from the National Lottery to build 27 of the 52 facilities set to be provided. The manner in which many of the football development initiatives would be set up was to target the previously disadvantaged communities and schools. SAFA urged government and the Basic Education Ministry in particular to re-introduce the physical education programme in primary schools.

The issue of World Cup stadiums was briefly canvassed by Mr Sedibe, where he said a plan needed to be devised to ensure that the stadiums continued being used for major sporting events. He warned that it would be very costly to break even on the costs of building the stadiums considering that ticket sales for football matches were sold at very low prices, coupled with low match attendance rates and yet it would cost over half a million rand to hire the stadiums for a single soccer match. Perhaps it was now time to start engaging on whether the R40 price for a ticket was appropriate, taking into account that it was from where most of the money for running stadiums would come. The corporate world was encouraged to come on board and support football in the country. Bafana Bafana was the only sponsored soccer team and the rest of the teams from juniors to women teams were solely dependent on SAFA.

Discussion
The Chairperson asked SAFA officials to clear the air for once and for all and confirm or deny the rumour that FIFA had given the country’s football governing body over one billion rand for hosting the World Cup. Would any of that money be used to pay top SAFA officials fat bonuses as has been the practice in the past? How much of what FIFA has bequeathed would go towards development of football at grassroots level?

Mr Mandla Mazibuko, SAFA Vice President, said the rumour was not correct. The FIFA officials met with SAFA shortly after the World Cup and announced that they would first go and consult their records and make a decision as to how much SAFA would be given.

SAFA President, Kirsten Nematandani, assured the Committee that whatever FIFA would decide to give SAFA, the Committee, and soccer loving South Africans in general could rest assured that the money was “in safe hands”. What SAFA had decided was that a trust account would be formed which would be administered by people with impeccable credentials. It would ensure that the money was invested where it was needed the most.

The Chairperson said the issue of white schools refusing to participate in inter-schools football tournament was a big challenge which needed to be tackled vigorously. The governing bodies of such schools had no right to take such decisions which prevented children from participating in football.

Ms Tseke (ANC) asked why women football development did not feature prominently as something that would be aggressively pursued. Even the national broadcaster did not adequately market women football and that could be seen by the lack of publicity given to the ongoing FIFA Under 20 Women World Cup taking place in Germany.

Mr L Suka asked whether SAFA’s take on limiting the number of foreign players would not contribute to the already out-of-hand hatred of foreigners emerging in the form of xenophobic attacks.

Mr Sedibe said SAFA condemned xenophobia with the absolute contempt that it deserved. In the upcoming friendly match between South Africa and Ghana, South Africa would publicly take a stand to show its disgust at xenophobic violence. Xenophobia, just like racism, had no place in a sport loving nation and in football in particular.

Mr M Dikgacwi said he was also concerned about the issue of splashing out ‘golden handshakes’ as that would take away from what was seemingly not enough to fund footballing initiatives.

Mr G Mackenzie (COPE) said it was important for SAFA to start discussions with other sporting bodies such as cricket and rugby to ensure that the stadiums were fully utilised and the legacy of white elephants was avoided. The issue of paying bonuses was also of concern to him.

Mr Suka gave SAFA thumbs up for hosting a good show. The pundits were left eating a humble pie after they gave South Africa no chance of successfully hosting the World Cup. It was important that SAFA should set out which targets were long term and which were short to medium. Equally important was the need to fix time frames as to when those projects would be completed.

Mr Suka wanted clarity as to the circumstances surrounding the recent appointment of Bafana Bafana soccer team coach, Mr Pitso Mosimane. Certain members in the SAFA Technical Committee were not happy with the manner in which the coach was appointed, particularly due to the fact that the post was not advertised to allow any coach who felt he could do the job to come forward and share his vision. The issue of payment of performance bonuses was not a problem as long as the employment contracts made provision for such. What was wrong was for the SAFA top brass to take a decision to award themselves bonuses.

Mr Sedibe assured the Committee that all due process had been followed in the appointment of Coach Pitso Mosimane. More than four years ago when Pitso was appointed as assistant to the former coach, Carlos Pereira, the vision of SAFA was to enable Pitso to have an opportunity “to learn from the best” and thereafter be able to fly on his own.

The Chairperson said it was important for people to know that no corners were cut in the appointment because the issue was bound to crop up again if - for instance - the team performed poorly in the long run. There was nothing wrong with the appointment of a South African coach to carry the vision of the nation forward.

Mr J McGluwa (ID) asked SAFA to spread friendly games fairly to all cities. There was a tendency developing that only the people of Gauteng had the privilege of watching Bafana games. Cape Town had a world class stadium and it had proved during the World Cup that it can host big matches.

The Chairperson asked SAFA to explain what had happened to the dispute between SAFA and gentlemen who owned all the rights associated with the marketing of the brand name, Bafana Bafana, a name popularly used to refer to the South African senior national team. It was unfair that a certain somebody could claim the proceeds of what should go to the team itself. Time had come for SAFA to resolve the issue once and for all, even if that meant bidding goodbye to the name Bafana Bafana.

Mr D Lee (DA) started by congratulating the wins registered by golfer Louis Oosthuizen and runner Caster Semenya. He expressed hope that the Soccer teams would one day do South Africa proud just as the two sportspersons had done. He had reservations about the approach suggested by the Chairperson which seemed to suggest that no school would be allowed to boycott soccer tournaments. If people did not feel like participating in sport, forcing them would only harden their resistance, even if there was a chance that they could change their views when gently persuaded.

The Chairperson said he did not suggest forcing any school but said no school should prevent children from playing in tournaments and that could be better described as an intervention measure rather than interfering.

Mr B Kora (ANC) thanked the SAFA CEO for a good presentation and said his eloquence in outlining the programme of SAFA had proved that indeed South Africans could produce competent managers. The regulation of foreign players and coaches was long overdue in South Africa.

The Chairperson thanked SAFA for their effort in sharing their vision. The Committee would closely watch the activities of SAFA with keen interest and interactions such as this one should continue to be held from time to time. There was a massive load of work ahead but the Committee had confidence that SAFA was in the capable hands to deliver on the goals set.

The meeting was adjourned.

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