Strategic Plans of the Media Development and Diversity Agency and International Marketing Council of South Africa

Meeting report

Briefing by the Media Development and Diversity Agency (MDDA)
Ms Phumelele Nzimande, Acting Chairperson of the MDDA Board introduced the delegation from the Agency to the Committee.  She presented the background, context and legislative framework, the vision, mission and mandate, the four major objectives in terms of the MDDA Act and the approach followed by the Agency to meet its mandate (see attached document).

Mr Lumko Mtimde, Chief Executive Officer, MDDA presented an overview of the achievements during 2010/11 and the projects funded by the Agency.  Certain regulatory and funding requirements had resulted in challenges, in particular the reduction in the contribution made by the print media to the MDDA.  An analysis of the external and internal challenges was provided.  The MDDA classified stakeholders as either sources of funding, partners or beneficiaries.

The Agency’s response to the issues that arose during previous engagements with the Committee was summarised.  These issues concerned the transformation of the media, increased Government advertising through community media, increasing the funding of the MDDA and the sustainability of projects.

The rationale behind the strategic focus for the period 2011 to 2014 was summarised.  Five key result areas had been identified, i.e. grant and seed funding; fundraising and resource mobilisation; research, knowledge management, monitoring and evaluation; advocacy for media development and diversity; and quality and diversity of content.

Mr Nkopane Maphiri, Programme Director, MDDA took the Committee through the specific objectives set for each key result area (KRA).  The amount of funding allocated to the projects under each KRA was indicated.  The total available budget was R28.5 million.

The sustainability of projects funded by the MDDA and the inadequacy of funds to meet the Agency’s print media mandate were identified as the major risk areas.

Mr Mshiyeni Gungqisa, Chief Financial Officer, MDDA presented a summary of the budget for the medium term expenditure framework (MTEF) period 2011/12 to 2013/14.  Total revenue for the fiscal year 2011/12 was R43.9 million, increasing to R46.3 million for 2013/14.  A breakdown of the budgeted programme costs, operational expenditure and capital expenditure was included.

Ms Nzimande concluded the presentation by pointing out that the strategic plan was guided by the MDDA Act and incorporated input from Parliament, projects and research recommendations.  The ongoing support from the Committee, the Department Government Communications and Information System (GCIS), the funding partners, projects, beneficiaries and other partners was acknowledged.

Discussion
Mr K Zondi (IFP) acknowledged the achievements of the MDDA regardless of the budgetary constraints, particularly in supporting local community media and providing opportunities for the youth.  The National Treasury did not have limitless funds available but he would like to know what prevented the fiscus from providing adequate funding to the Agency.  He asked what prevented the private sector from supporting the MDDA.  He was of the opinion that the print media in particular had vast resources, made substantial profits and was able to make a larger contribution to the MDDA.

Ms T Ndabeni (ANC) noted that the MDDA planned to increase the revenue received from international donors and asked what the challenges were in balancing the interests of foreign donors with the local objectives.  She asked what progress had been made in the transformation of the media.  She asked how the MDDA planned to sustain the funding provided to the four community radio stations mentioned in the briefing.  She agreed that the MDDA needed increased funding from the State in order to meet its mandate.

Ms W Newhoudt-Druchen (ANC) noted that the MDDA aimed to establish at least one community radio station per municipality and one per province.  She asked where provision was made in the budget to achieve these targets.  She noted that certain publications and projects were not sustainable and wanted to know what assistance was provided by the Agency, particularly to the projects serving the rural communities.  Certain community radio stations were being shut down as these were unable to afford the high license fees imposed by the Independent Communications Authority of South Africa (ICASA).

Mr N Van den Berg (DA) said that it would be beneficial if the Members of the Committee were provided with copies of the publications supported by the MDDA.  Members could then get a better sense of the content and layout of the publications.  Members also need to know what the program content of the community radio stations was, who the listeners were, the extent of the coverage, how the station progressed and how the careers of its staff had developed.  He suggested that Members were provided with a sample of the broadcasts on a compact disc.

The Chairperson remarked that Mr Van den Berg had outlined the Committee’s oversight programme.  He recalled that the budget of the MDDA had not been approved by the National Treasury in 2009 and asked if the situation had been resolved.  He asked if there was a comparable international experience and trend that could be drawn on.  He asked how similar organisations were funded in other countries and if there were alternative sources of funding available.

Ms Nzimande welcomed the comments and sentiments expressed by the Members.  She advised that the MDDA was exploring ways to ensure that community media were awarded a larger proportion of Government advertising.  The Agency was engaging with the Independent Electoral Commission (IEC) on utilising MDDA-supported media for voter education.

Mr Mtimde replied that inadequate State funding was a major impediment to the MDDA.  The Agency had requested additional funding from the National Treasury and hoped that its request would be supported by the Standing Committee on Appropriations.  The Electronic Communications Act (ECA) made provision for an annual contribution to the MDDA of 2% of the turnover of media companies.  Print media companies had cited financial challenges and reduced profitability as the reason for reducing the contribution to the MDDA but the Agency had requested these companies to review their decision.  The current agreement with the commercial print media allowed for the annual contribution to be reduced from R1.2 million to R1 million in the last two years.  The MDDA was exploring the introduction of legislative provisions to enforce contributions from the print media.  It was more likely that the Money Bills would be amended rather than the MDDA Act.

Mr Mtimde advised that similar organisations existed in Canada, Australia and the United States of America.  In these countries the entity was funded by the fiscus, through a Department of Arts and Culture.  The MDDA model was however uniquely South African and was based on a public/private partnership (PPP).  The MDDA had presented its model to UNESCO in 2010, where it was positively received.  UNESCO had a similar entity, which was funded by contributions from member states.  The MDDA had applied for funding from UNESCO as well.  The MDDA had a better chance to receive international donor funding than other non-Governmental organisations (NGO’s).  The Agency submitted a presentation rather than begged for donations and had received support for certain projects from the Netherlands in the past.  The MDDA did not accept donations if the financial support provided was subject to actions that would contravene the MDDA Act.

Mr Mtimde acknowledged that little progress had been made on transforming the print media.  A report on the subject was submitted in 2009.  Business Unity South Africa (BUSA) had reported on the progress made in promoting black ownership of media companies as well.  There was disparity between the cost of printing and distribution between the established media companies and the smaller organisations.  The Agency was engaging with the larger entities in an attempt to gain access to their printing and distribution facilities.  He was of the opinion that the best solution would be to diversify printing and distribution activities in South Africa.

Mr Mtimde reported that more progress had been made in transforming broadcasting.  New radio stations had been established and most municipalities had a community radio station.  The provision of financial support to these stations remained a challenge.  The assistance provided by the MDDA included financial support, training, skilled personnel and a toolkit.  Trained staff was in demand in the private sector and there was a need for MDDA intervention on an ongoing basis to ensure the survival of these stations.  He undertook to provide the Members with examples of the publications and broadcasts supported by the MDDA as suggested by Mr Van den Berg.  The MDDA provided details of and showcased the projects on its website as well.

Mr Mtimde explained that community radio stations were exempted from the ICASA license fees and were only required to pay a minimal R500 application fee.  However, ICASA had interpreted the provision in the ECA requiring broadcast media to contribute 2% of turnover as being applicable to community radio stations as well.  This was a major financial challenge to the community radio stations and had resulted in widespread panic in the sector.  Despite the financial challenges, few community radio stations had actually closed down.  Most of the challenges experienced by the community radio stations were in the areas of governance, skills, management and continuity and the MDDA provided mitigation assistance where necessary.  Another major challenge was the substantial fees charged by Sentech for utilising its network.  The fee charged by Sentech to community radio and television stations was the same as the fee charged to the commercial stations and constituted the major threat to the financial viability of the community stations.  The MDDA was currently discussing the issue with the Department of Communications (DOC) and ICASA.

Mr Mtimde confirmed that the National Treasury had approved the allocation to the MDDA for the following three years.

Mr Zondi observed that the current funding agreements specified that no more than 10% of funds could be spent on administration and research costs.  He asked if this limitation unnecessarily restricted the projects supported by the MDDA.

Mr Mtimde replied that the restriction applied to the administration of the MDDA but was not applicable to the projects.

Ms Nzimande thanked the Committee, the GCIS, the new MDDA Board members and the Ministry of Communications for the support received.

Mr Van den Berg congratulated the MDDA on its achievements and was encouraged by the progress made by the Agency in meeting its mandate.  He observed that the strategic plans included detailed targets rather than theoretical objectives.

Briefing by the International Marketing Council of South Africa (IMC)
Ms Anitha Soni, Chairperson of the IMC Board presented the strategic plan for the period 2011/12 to 2013/14 to the Committee (see attached document).

The briefing included a strategic overview of the IMC’s activities during 2010/11 to promote the sustainability of the organisation, the alignment of the South African Nation Brand and the key platforms utilised to change international perceptions of South Africa.  The IMC had a staff complement of 30 and had entered the Deloittes ‘Best Company to Work For’ competition.

The presentation included an overview of the IMC mandate; an explanation of a Nation Brand and the approach followed in promoting Brand SA.

Mr Miller Matola, Chief Executive Officer, IMC explained the Brand SA value chain, the competitive environment and the SWOT (strengths, weaknesses, opportunities and threats) analyses of Brand SA and the IMC.  The key issues identified included understanding of the IMC mandate, increased competition, adequate funding, brand alignment and compliance and international representation.

Three strategic objectives were identified, i.e. increased international competitiveness, improved international reputation and increased brand equity in order to achieve global recognition of South Africa as a top Nation Brand.  A summary of the desired outcomes and strategies and the detailed performance targets were provided.  An analysis of the target markets, audiences and partners for Brand SA was included.

The domestic and international programmes of action were outlined.  Six outcomes were identified for the domestic programme and the objectives, key outputs and target dates for each outcome were provided.  The outcomes included brand alignment by key stakeholders; increased pride and patriotism; a contextualised and articulated policy; positively changed perceptions; increased economies of scope and scale and the achievement of a sustainable organisation. 

The international programme focused on the activities to improve the perception of South Africa in Brazil, China, the United States of America, India, Russia, Kenya, Angola, Egypt, the United Kingdom, Germany, the Democratic Republic of Congo, the United Arab Emirates, Zambia, Japan, Zimbabwe and Nigeria.  A summary of the key programme initiatives for the period 2011/12 to 2013/14 was included.

A more detailed breakdown of the IMC budget was given on page 29 of the Approved Strategic Plan document.  The total budget amounted to R140 million for 2011/12, R148 million in 2012/13 and R157 million in 2013/14.

Discussion
Mr Zondi asked what feedback had been received from the international community on the effectiveness of Brand SA.  He wanted to know what progress had been made in promoting the concept of “South African-ness”.  He asked for clarity on the review of the Brand SA logo by the IDC.

Ms S Tsebe (ANC) asked what funding models were used by other countries for similar organisations.  She asked for details of the IMC’s organisational structure.  She asked if there had been extensive public participation in the development of the Brand SA logo.

Ms Newhoudt-Druchen was of the opinion that the domestic programme needed to include the children of South Africa.  She asked if the programme included activities aimed at promoting national pride in schools.

Ms Ndabeni asked if the IMC planned to use national icons to promote the concept of “South African-ness”.  She asked what progress had been made in achieving the country’s vision for 2020.

Ms Soni explained that the logo was not being re-designed.  The current logo had taken root during 2010.  It was necessary to review the accompanying slogan from time to time.  Extensive public participation was invited but it was not a simple process to achieve universal acceptance of the final design.  The IMC relied on international benchmarks and indicators to gauge the effectiveness of Brand SA.  Significant progress had been made since 2008 and the prolific display of the South African flag and colours at Davos in 2010 was particularly noticeable.

Mr Matola responded that the vision for 2020 was still under development by the Planning Commission.  The IMC had decided not to wait for the details to be finalised but had already introduced certain interim initiatives.  The IMC worked closely with the Departments of Arts and Culture, Basic Education and Justice and Constitutional Development to promote national pride.  The domestic programmes were of a long term nature and involved many stakeholders.  It took longer than a year to define the desired outcomes and the process of obtaining input was continuing.

Mr Matola explained that the process of reviewing Brand SA involved extensive consultation with stakeholders and focus groups.  More than 20,000 people were involved in the original design of the logo but fewer people would be involved in the review process.  The challenges included the negative perceptions of inequality and crime and the efforts of the IMC included providing factual information.

Mr Matola conceded that the IMC operated within a tight budget and the available funding was not adequate to properly promote the brand.  The IMC concentrated on developing strategic and PPP partnerships.  An example was the Old Mutual, which had a vested interest in a positive international perception of the country and which contributed to the cost of maintaining the IMC’s office in the UK.  The IMC was however wary of accepting external financial contributions that could compromise its independence and integrity.

Mr Matola explained that the IMC Board comprised 24 Trustees.  The operational structure was divided into two directorates, i.e. a section responsible for content, marketing and communication and a section responsible for stakeholder relations, delivery and the country offices.  He explained the organisational structure comprising officials, programme managers and directors who reported to the CEO.  The current staff complement was 33 and the vacant positions were in the process of being filled.

Mr Matola advised that the IMC was working closely with the Planning Commission on the vision for 2020.  Various national icons were included in the campaigns to promote national pride where appropriate.  The IMC conducted internal stakeholder audits and the results indicated the effectiveness of the national programmes to a certain extent.

Ms Soni thanked the Committee and GCIS for the support provided to the IMC and for the assistance in addressing the challenges faced by the organisation.  She hoped that the positive interaction with the Committee would continue and undertook to provide a list of forthcoming events to the Members.  She stressed the importance of the commitment of all the stakeholders to ensure the success of Brand SA.

The meeting was adjourned.