Minister's & National Youth Development Agency reports on progress; Challenges facing children: Children's Institute briefing

Meeting report

National Youth Development Agency (NYDA): Progress report
Mr Steven Ngubeni, Chief Executive Officer, National Youth Development Agency, reported back to the Committee on some outstanding issues. He noted that the Committee had wished to receive some clarification on the accountability of the NYDA to Parliament. The Committee had also wished to have an indication of how the NYDA, given its mandate and functions, coordinated its activities with those of the Department of Performance Monitoring and Evaluation and the National Planning Commission, with specific reference to mainstreaming youth development. The Committee had also wanted a progress report on programmes offered by the NYDA, along with the intended outcomes and outputs. It also had asked how the NYDA intended to mainstream youth development within Government’s existing programmes, given the Committee’s prior reservations on this matter. Members had also asked for a progress report on the loan recovery plan, the number of intended beneficiaries who had received loans and the money recovered to date. They had further asked for an update on all vacancies and the situation at provincial offices. Members also required an indication of the finalisation of legal matters related to the winding up of the National Youth Commission (NYC) and the outcome of the Auditor-General’s (AG) forensic reports.

Mr Ngubeni tabled the programmes offered during the current financial year. He also indicated the targets for each. In respect of Economic Participation, he noted that the targets for the number of new young entrepreneur businesses created had not been met, as the annual target was 500, but only 15 had been created. The Business Consultancy Vouchers were placed on hold due to certain limitations. The target for the Value of Loans Issued was set at R11 million, but was currently nil, due to limitation on Small and Medium Enterprise (SME) loans.

In respect of Information Provision and Communication, the number of NYDA information dissemination and access points for the youth in all municipalities (Full Service YACs and YAC points) was currently at 91, as compared to the target of 134.

Mr Ngubeni said that the NYDA Progress Report for the financial year 2009/10 was still subject to audit, but the NYDA was satisfied with the progress made thus far. It had not yet been signed off as the NYDA was waiting on the Auditor-General.

Mr Ngubeni noted that key performance indicators for Economic for the previous financial year had indicated that the NYDA had hoped to create 78 625 jobs, yet only 33 008 were created. The reasons for this were well known to the Committee. R28.8 million in loans was provided through group and individual micro-finance lending. R24.6 million in loans was provided in loans to Small and Medium Enterprises. This was compared to the target of R54 million.

Under the KPA Information Provision and Communication, the total number of Youth Advisory Centres (YACs) that were set up in this financial year was 134 and the total number of clients reached was 495 012.

The NYDA intended to mainstream youth development within Government’s existing programmes. The fact that the NYDA had an interdepartmental committee serves as the biggest leverage. NYDA had undertaken a process to lobby all government departments to ensure that youth development issues were taken into account during planning and implementation of activities. The process of drafting the integrated Youth Development Planning Tool would serve as a guideline. The guidelines had been submitted to the Minister for the Public Service and Administration, Hon Richard Baloyi and Minister in the Presidency, Hon Collins Chabane. The NYDA was still awaiting feedback from Minister Baloyi’s office; although it had acknowledged receipt this office had not yet had a chance to look at the guidelines. The development of the Integrated Youth Development Strategy would further support and provide more guidance to government departments and other role-players in the youth development sector, as to priority areas and sectors for effective youth development in the country.

Another representative of the NYDA then highlighted the progress of the loan recovery plan, giving the number of beneficiaries and money recuperated to date. He highlighted the key contributing factors as to why the loan book had been deteriorating, and the measures that had been implemented to address these challenges. A series of slides showed a high level financial analysis for the past three to five years (see attached presentation for details). He indicated that there had been an increase of 71%, year-on-year, up to end of March 2010, on reversals and write-offs of loans. There had been a 84% year-on-year increase on impairment expenses, net of reversals. There had been a decrease of 14% on the number of loan write-offs, as at the end of March 2010. A loan recovery plan for micro finance had been put in place to address the current challenges that the NYDA faced. The measures undertaken included the drafting and implementation of a Credit Policy, engagement of an attorney and debt collectors, and new tools to emphasise closer monitoring.

He reported that the NYDA currently had 2 146 active clients, of which 1 760 were delinquent in respect of payments. Additional measures to be implemented included an appropriate staffing structure, linking of clients within the same value chain, linking Micro finance clients to potential opportunities through the internal BOSS programme, which linked procurement opportunities to young people. Furthermore, there would be on-the-job training for field staff, an improved loan analysis process with a quick turnaround time, and arrangements would be made with the relevant government departments for the cession of payments for contact loans.

A loan recovery plan for SME finance had also been put in place to address the issue of delinquent loans. Young people preferred to make settlement agreements for recovery of their loans. Recovery measures for SME loans included taking legal action through attorneys, the implementation of interventions through other products including BOSS, mentorship and vouchers, rescheduling of some loans to cater for smaller instalments, close monitoring through frequent site visits, and close monitoring of the collections agents. Those clients whose businesses had failed completely would have their loans written off. There would be linking of clients to opportunities within the NYDA.

Mr Ngubeni then dealt with the issues around staffing. He said that the NYDA had put recruitment of full-time employees on hold, due to the restructuring of the organisation. Only the executive structure has been finalised and approved by the Board. The establishment of the NYDA provincial structures was under way. Correspondence had been forwarded to the Premiers of all Provinces, but thus far only two provinces, Limpopo and Northern Cape, had responded, and interviews had been held. The NYDA was awaiting ratification of the  suggested employment by the Board. Further interviews would be conducted in KwaZulu Natal, Mpumalanga, Free State and the North West during the coming weeks. From the inherited structure, there were 18 vacancies within the NYDA Full Services Offices, based at provincial level.

Mr Ngubeni dealt with the position of the former National Youth Commission (NYC). With the repeal of the National Youth Commission (NYC) Act No 19 of 1996, all the assets, rights, obligations and liabilities of the NYC were transferred to the NYDA, with effect from 1 October 2009. The statutory audit on NYC was conducted up to 31 March 2010. The audited accounts would be included in the Annual Report of the NYDA. There had been no forensic audit performed on the former NYC by the Auditor-General. The NYDA had commenced a process of conducting a forensic audit on NYC former activities, especially issues raised in the Financial Statements. This process would be completed by 30 September and would be reported to the Committee.

Minister Collins Chabane confirmed that the NYDA reported to and was accountable directly to the Minister in the Presidency for all matters, with the exception of financial reporting. The Public Finance Management Act (PFMA) required that financial reporting was channelled via the Accounting Officer in the Presidency. The Minister has been delegated the function of the Executive and the responsibility for the administration of the NYDA Act. He was ultimately accountable to Parliament via the Portfolio Committee. The Presidency was charged with the responsibility of providing advice on strategy, legislation and policy alignment to the NYDA. The Minister played an oversight role by monitoring the operation of the NYDA and monitoring, evaluation and advising on departmental programme performance.

Discussion
Ms D Ramodibe (ANC) asked that the outcomes be clearly identified. She enquired how the NYDA would implement recommendations from workshops and the summit, and how the NYDA intended to change the way in which matters were done in the future.

Ms D Robinson (DA) questioned what the outcomes of the summits were and whether they had achieved anything. She also questioned what the case studies revealed, who conducted them and what they were achieving.

Mr Ngubeni responded that the tangible outcomes of meetings and summits were to discuss the challenges that young people were facing. Through participating in these discussions, the NYDA could then design solutions that were responsive to the challenges. In turn, the youth  would get to know who the NYDA were and what their expectations were. One very prominent issue was that of accessibility. The NYDA hoped that in the future, there would be specific consultations on various issues, and it would be able to create a platform to speak about other issues and thus engage broadly with young people. The NYDA felt that these meetings are important.

Mr D Kekana (ANC) asked why there were still so many vacancies within the NYDA, despite the fact that it had already been in existence for a year. He commented that since jobs were not being created, no skills were being transferred. He wondered whether this presentation was in line with the National Economic Policy. Training for artisans should be pushed and taken seriously, as these were the vital skills that the country needed.

Mr Ngubeni said that the restructuring of the NYDA had been discussed. This had proven to be quite a challenge as the NYDA needed to start from scratch in response to the NYDA Act. 27 vacancies would be advertised within the next two weeks. This would also serve as an opportunity to do evaluations of existing staff. The transfer of skills was important to the NYDA, and it was leading by example, for instance, by making use of and taking advantage of skills from neighbouring countries like Swaziland.

In respect of the comment on artisans, Mr Ngubeni added that the NYDA have adopted a model used in United States of America (USA) for skilling artisans, which, in that country, had a 100% success rate. The NYDA was also engaging with the Sector Education and Training Authorities (SETAs) to try to get them on board. This would lighten the NYDA’s financial burden as it would then not be funding the programmes exclusively.

Ms P Petersen-Maduna (ANC) queried whether the presentation was correct when it stated that the NYDA conducted three public hearings for the year, and whether this should not read that it “attended” three public hearings”.

Ms P Duncan (DA) questioned how the NYDA could justify an 84% increase on expenses and what it would need to change to ensure that this amount should decrease.

Ms Duncan asked what the cost was of the NYDA using debt collectors and whether the interest rates for the loans were the same as those charged by the banks. She queried why the NYDA seemed to be concentrating on granting loans instead of concentrating on whether the youth were employed.

Mr Ngubeni responded that the NYDA Act included certain clauses on debt collections and set out the objects of the NYDA. The agency’s responsibility lay with management and administration. The NYDA was required by its Act to continue with the business that the Umsombomvu Youth Fund had administered.

Ms S Rwexana (COPE) questioned the Committee’s relationship with the NYDA, as it was directly accountable to the Presidency, and asked the Minister to clarify this point.

Ms D Robinson (DA) also asked that the mandate of the Committee and the mandate of the Ministry be clarified. She believed that there needed to be clearer communication.

Minister Chabane noted that there were a number of agencies that reported to the Minister and the Director-General, at an administrative level. The Minister, on behalf of the President, monitored the NYDA, as a responsibility delegated to him by the President. His task was to develop outcomes in line with Cabinet outcomes. Cabinet monitored the contributions of each and every stakeholder and set up bodies, like this Committee, to think about how they would like to deal with the NYDA. One member from the NYDA would be at each Committee meeting. Parliament was to make a decision about the monitoring and evaluation.

The Chairperson agreed that this gave the Minister a chance to be accountable.

Ms I Ditshetelo (UCDP) questioned what criteria were being used for funding, and what criteria were being used for writing off loans.

A representative from NYDA said that the write-off of loans followed an internal process and was based on an assessment that the loans were irrecoverable, and the clients could not be reached. If the client could be reached, steps were taken to recover loans. The write-offs of SME loans also needed approval from Management. NYDA was also thinking about implementing a process whereby bridging funding would be granted to SMEs for a tender. The NYDA will introduce a cession, so that the Government department would pay the money to NYDA, who would in turn pay the young person after first recovering the NYDA share. He said that the numbers reflected in the presentation did not necessarily mean that the NYDA was writing off the loans, as these reports showed the information that was required, according to Accounting Standards presentation. The NYDA was still coming up with different interventions to assist with the recovery of loans.

Ms Ditshetelo asked whether all nine provinces were included in the figures of the presentation, and why there was a disparity in the number of offices in the various provinces.

Mr Ngubeni said that the NYDA was trying to establish fully functional offices in each Province. The current structure was still based on the old structure. NYDA was hoping to establish at least one YAC point in each Province. It would also evaluate how vast the area was, so that the decisions would be based on objective reasons, and it was hoped not to create a bias in favour of any one province. He asked that the Committee should remember that the current presentation was reporting on what had happened, and not what is going to happen in the future. .

Ms Rwexana wanted an explanation of what criteria were used for granting loans to the youth. She also asked about the number of young women that were being reached and how young people were being integrated into the programmes of the NYDA.

Mr Ngubeni said that the mandate of the NYDA must be understood properly. It did not simply provide loans, in the same way that the banks did, but it needed to look at all eight Key Performance Areas and emphasise these.

Ms Ditshetelo asked what was causing the delay in filling the 18 vacancies.

Ms Ditshetelo asked that the number of women and disabled youth be included in the reports..

Ms Petersen-Maduna queried the exclusion of persons with disabilities.

Mr Ngubeni said that comprehensive reports would contain the information about how many young women and people with disabilities have been reached through the programmes.

Ms P Lebenya (IFP) questioned what kinds of jobs were being created, whether they were permanent and which sectors they covered.

Ms Lebenya asked the NYDA to elaborate on what challenges it was facing and what it was  doing to address these.

Ms Lebenya asked how the NYDA could grant loans of up to R100 000 without applicants submitting business plans. She recommended that the NYDA should focus on those business ventures that were still running and hook them up with other Departments, in this way focusing on sustainability.

Mr Ngubeni confirmed that youth applying for SME loans needed to submit a business plan. The NYDA needed to be convinced that the project was sustainable, both financially and in terms of jobs. Youth applying for micro loans of less than R100 000, would submit business plans, in the form of ready-made forms prepared by NYDA, which the youth just needed to complete, and gave assistance in completing the forms to those who needed it. There were also specific requirements for these loans.

Mr Ngubeni then made some general comments, covering a number of the points raised. He said that the NYDA was looking at various policies before deciding what the youth programmes would finally be, in order to conform to the requirements. The purpose of NYDA was to create jobs through the programmes that were funded. There were a myriad of possible jobs and everything depended on what kinds of businesses should be created. There hade been various challenges in creating young entrepreneurs. For instance, NYDA had requested a certain allocation in order to do everything that it had intended, but the final allocation was only one third of what was requested. However, NYDA was engaging with the private sector, including First National Bank (FNB) and Ithalabank in KwaZulu Natal, in order to establish partnerships in securing funding. The NYDA would also lobby members of Parliament for extra funding. Comprehensive reports would be submitted on all business ventures created. Although there were evaluation and monitoring tools, these were too cumbersome to report on during this session. NYDA would be producing comprehensive reports and would submit them to the Committee.

Mr Ngubeni’s colleague added to this response. He noted that the partnerships with FNB and SMEs would shortly be finalised, with an emphasis on group lending and co-operatives.

The Chairperson raised a concern that Ithalabank only existed in KwaZulu Natal, and that it was the only bank that offered that specific services. There were no banks in the other provinces that offered the same services. She also questioned the fact that the presentation mentioned that no private companies were lobbied.

Mr Kekana questioned whether the NYDA would be interacting with other Ministries, saying that there seemed to be money available in other Ministries.

A representative of NYDA noted that the NYDA had a unit that would ensure the monitoring of Parliamentary activities. The unit would try to be invited to any relevant meeting, to take back any concerns or areas of concern, and to monitor these activities.

Mr Ngubeni added that the NYDA would be reporting more on lobbying partnerships with the private sector in the future.

Minister Chabane commented that the impact of investment spend was currently under consideration, and he said that this was part of the NYDA mandate. The Presidency was also busy collating information about its impact on youth, women and people with disabilities and once it is finalised, it would be given to the NYDA. He also pointed out that the Department of Higher Education dealt with skills levels quite intensively. Most artisans were trained in State-owned enterprises. The Department of Monitoring and Evaluation would evaluate the NYDA and the impact that was made, although the numbers may not necessarily be the best indicator as yet. This report would be verified.

Challenges facing children in South Africa: Strategic Plans and Budget of the Department of Women, Children and Persons with Disabilities and provincial departments of Social Development: Children’s Institute comment
Ms Paula Proudlock, Programme Manager, Children’s Institute, University of Cape Town, presented evidence on the challenges facing children in South Africa. She felt that there was a lack of clarity, firstly, on the Committee’s mandate, and secondly on the general government mandate in regard to children. The Children’s Institute (CI or the Institute) had reviewed all budgets and the trends towards services available to children. These always seemed to be based on inflation. She questioned what would happen to money for services.

South Africa had ratified the United Nations Convention on the Rights of the Child (UNCRC) in 1996 and the African Convention on the Rights of Women and Children and had the obligation to submit country reports regularly to the United Nations (UN), showing South Africa’s progress, highlight any challenges and plan for improvements. Thus far only one report had been submitted to the UN, and two were outstanding. No report was ever submitted to the African Union (AU). There had been some movement over the past year as the second report was sent to Cabinet for approval, but no approval had been granted there despite six months having elapsed.

The Institute had produced the South African Gauge for the past five years, to present a summary of the main challenges facing children in South Africa. Ms Proudlock highlighted some of the statistics which were contained in the 2009/10 Gauge. She noted that South Africa was not doing very well as resources were not being distributed to where they were needed.

She also noted the problems with data collection. The last time a reliable survey was conducted was in 1998. The 2003 survey was reliable for a number of areas, but not for the under-5 child mortality rates. The 2007 statistics had not yet been released. She felt that the Minister of Monitoring and Evaluation needed to be called in to assist in this regard.

The main causes of death, contributory factors and preventative measures needed to save more babies were highlighted. The presentation highlighted interventions to address the main causes of under-five child deaths, which were mostly accounted for by HIV/Aids, neonatal complications/infections and diarrhea. Most of these deaths were preventable. Other contributory factors for the high under 5 mortality rate were poverty, under-nutrition, low immunity, lack of access to services (a key concern), inequality and shortages of staff in the public health sector. The statistics for each province differed in regard to service delivery and needs. There were many indicators of inequality as well.

Ms Proudlock said that the budgets for service areas also needed to be closely examined. The Provincial Departments needed to have the powers to adjust budgets.

Ms Proudlock said that the new child legislation, of the Children’s Act and the Child Justice Act, could, if effectively implemented, reduce child abuse, neglect and exploitation and give effect to a number of Constitutional rights. They served as an umbrella for all services for vulnerable children. However, these Acts were not adequately funded.

Ms Proudlock added that there were other concerns around the provincial Departments of Social Development, who relied heavily on Non-Profit Organisations (NPOs) to provide around 50% of services under these two Acts. NPOs in turn relied heavily on government funding, with the rest of their budgets being raised through private funding. In Government-run centres there was a budget of R6 000 per child per month, whilst the NPOs only had a budget of R2 000 per child per month, or R11,84 per child per day for food. The NPOs received no subsidies for staff salaries. The Free State High Court recently ruled that this funding policy was unconstitutional and unreasonable and must be reviewed by the end of 2010.

Discussion
Ms G Tseke (ANC) queried why South Africa had not submitted its reports on time. She recommended that this Committee should call on the Minister to present the report to the Committee before Cabinet approved it. She also questioned what the responsibilities of the NPOs were.

Ms Proudlock said that South Africa seemed to have lost political momentum as high level decisions were not being implemented. An assessment needed to be done on the state of the nation’s children. The CI used a Rights-based Framework.

Ms P Duncan (DA) suggested that the Committee should look at reviewing the policy for NPOs and Non Government Organisations (NGOs) and specifically look at the mushrooming of NGOs. She also felt that the Minister needed to give some mandate in regard to budgets.

Ms Proudlock said that there were many different types of organisations, and they did operate according to strict rules. However, there was an unequal level of negotiation, as they were told what to do. They were unable to plan services, in terms of staffing and the programmes that they implement, or to make longer-term plans.

Mr D Kekana (ANC) was worried that Ms Proudlock was focusing too much on the mortality rates and felt that instead there was a need to look at those who survived. He was worried that this society was breeding children who were exposed to bad influences, and who could no longer differentiate between fact and fiction. He said that the goal should be to stabilise the current society.

Ms Proudlock said that the CI did not only concentrate on the mortality rate. She asked Members to refer to the 2009/10 Gauge for further information and statistics.

Ms D Ramodibe (ANC) felt that it was very worrying that the correct data were not available.

Ms Proudlock agreed, and suggested that the Department of Health should be asked what it relied upon when recording data.

The Chairperson felt that some things were lacking, due to lack of funds. She was worried about the issue of the missing reports, as these reports were an indicator of the countries progress. She wondered what was guiding the Ministers. She also felt that this presentation would guide Members when asking questions in the House. She suggested that this Committee should try to access the first Country Report, and then ask the Minister to indicate what the delay had been with the second report.

Ms Kashiefa Abrahams, Parliamentary Researcher, thought that it would be helpful to indicate who did the previous shadow reports.

Ms Proudlock indicated that a group of NGOs did the second report, but, because it had taken so long to be approved, they did not do the third report.

The meeting was adjourned.