The National Youth Development Agency reported that since the merger between Umsobomvu Youth Fund and the National Youth Commission the Agency was accordingly formed and given a bigger mandate than the two erstwhile predecessors. Since then the Agency had made tremendous inroads in tackling youth unemployment, but had also met with a myriad of challenges including limited financial resources to meet its
mandate. Whilst the Agency welcomed constructive criticism meant to help it build a better organisation, it also appealed for guidance and innovative ideas towards addressing its broad mandate of youth development. The challenges facing youth today had an impact on South Africa’s prosperity tomorrow. It therefore pleaded for the subject of youth development to be divorced from political squabbles and invited all youth formations and parties to engage with the Agency directly. The Agency remained convinced that it was on course in carrying out its mandate. It would be, however, through collective efforts, including Government, the private sector and civil society that it would be able to make a meaningful and lasting impact to take South Africa forward. The Agency's programmes managed to create 18 038 jobs for young people in the 2010/11 financial year. These jobs were created through job placements, and self-employment through funding youth businesses to start or expand their businesses. Jobs created through self-employment initiatives, such as the micro-financing programme, accounted for a total of 14 227 jobs, which exceeded the target of 11 438 set for the year under review. The Agency received an unqualified audit opinion with emphasis of matters - significant uncertainties, restatement of corresponding figures, irregular expenditure, fruitless and wasteful expenditure, and material impairments. It was important to note that some had since been resolved, whilst the Agency was working tirelessly to improve on others. Its delivery record improved significantly in 2010/11. It achieved 42 out of the 49 key performance indicators thus scoring 85% of total targets achieved. Of the 42 targets met, some were greatly exceeded and the seven that were not met were behind with only a few points. This indeed was a significant improvement. The Agency received a Government grant (from the Office of the Presidency) of R370 million for the 2010/11 financial year.
The National Youth Development Agency reported that during 2010/11 it met a new challenge - an avalanche of negative reviews stemming mainly from media reports and statements by political parties regarding the World Festival of Youth and Students hosted by the Agency and World Federation of Democratic Youth in December 2010. In March 2010, the Agency delegation had presented a bid to the Federation to host the Festival in South Africa . The Federation indicated that only members of the body could bid to host the Federation (in South Africa the African National Congress Youth League was the only member) thus the partnership. Complaints in relation to the Festival were lodged with the Public Protector by the AfriForum. The main complaint and the initial inquiry sought to answer two questions: Was the festival within the Agency mandate? Was there any misappropriation of funds? Further enquiry related to the role of the ANC Youth League. The Agency had already proved that the festival was within its mandate and that all funds were used for its intended purposes and could be accounted for. However, it was still awaiting the outcome of the investigation by the Public Protector.
Members wanted more clarity on the partnerships between the Agency and other entities as indicated in the Strategic Plan especially the role the Agency played in the Sanitary Dignity Campaign. The relationship between the Agency and the Youth League had to be clarified and whether the Agency was affiliated to any other political party. The Agency made mistakes that could have been made by any other Department and the Agency did an excellent job. Members commended the entity for coming thus far, excepting its mistakes and shortfalls, and for being open. The challenges were not only unique to the Agency but were shared by many other departments. It was good to see that the Agency had already come up with strategies to address its challenges and Members saw it as a good sign. Members noted that most plans were achieved, more jobs had been created, more loans were given to the youth, and more young people received training. It was a good sign that the Agency could account for money spent as indicated by the Auditor-General. Members encouraged the Agency to keep up the good work. The Chairperson thanked the Agency for the report and the manner in which it handled the questions. Parliament could not set the Agency up for failure but wanted to see the entity growing from strength to strength. Young people were the future of the country.
National Youth Development Agency (NYDA) Annual Report 2010/11: briefing
The annual report of the NYDA was presented by Mr Steven Ngubeni, the Chief Executive Officer (CEO) and Mr Ramkunra Katru, the Chief Financial Officer (CFO). The CEO indicated that the NYDA had been invited by the Committee to make a presentation on its 2010/11 Annual Report and on the 17th World Festival of Youth and Students held in Tshwane, 13-21 December 2010. The NYDA came into existence as a result of the merger of Umsobomvu Youth Fund (UYF) and National Youth Commission (NYC). The entity was was formally launched by the President of the Republic on 16 June 2009. Its main objective was to establish the mainstreaming of youth development across all spheres of Government and all sectors of society.
The NYDA had to guide efforts and facilitate economic participation and empowerment and achievement of education and training. It had to partner and assist organs of state, the private sector and non-governmental organisations and community based organisations on initiatives directed at attainment of employment and skills development. The entity had the objective to initiate programmes directed at poverty alleviation, urban and rural development and the combating of crime, substance abuse and social decay amongst youth. It had to promote a uniformed approach to youth development by all stakeholders. The National Youth Convention (NYC) of 2006 highlighted the need for a unitary structured youth agency. The agency had to be robust and agile enough to deal with the manifold challenges of the youth in
The NYDA submitted a funding request through the Medium Term Expenditure Framework (MTEF) processes of R930 million for its first year of operations in order to respond to those challenges. The submission was informed by a plan to increase direct service delivery by 20% and it was further informed by the National Treasury Due Diligence report prior to the merger of the former UYF and NYC which proposed funding levels of approximately R600 million per annum. The request was based on an increase of product delivery targets by 20 %. A further 100 local youth offices had to be added to the already existing 121, making it a total of 221 and an additional 39 full service offices to add to the already 13 existing offices to bring a total of 52 full service offices. The entity had established increased visibility in all 283 municipalities and was allocated R370 million for the financial year 2010-2011through the MTEF process. Government funding through National Treasury was a combination of the funding already allocated to the former institutions through the MTEF. The allocated funding was approximately 40% of required funding to meet youth expectations and address the challenges faced by youth. The allocated funding was not nearly adequate to address the youth challenges and expectations.
Given the limited funding, the NYDA had to reduce some of its targets and maintain the 10% delivery. This immensely affected the increased accessibility to the entities products and services by the youth. The NYDA strategy was developed in line with available resources and was submitted, presented and approved by the NYDA Executive Authority, National Treasury and presented to the Portfolio Committee on Women, Children and Persons with Disability in March 2010. The Strategy was endorsed as what would be implemented by the NYDA due to limited resources. The Agency was targeted at youth aged between 14 and 35 years, and the emphasis was given to young persons with disabilities.
Its main focus areas were towards peri-urban, semi-rural and rural areas; where community projects were prioritised. Its key performance areas were regarding economic participation; education and skills development; effective and efficient management of resources; information and communication; policy, lobby and advocacy; research, monitoring and evaluation; and social cohesion.
The NYDA programmes managed to create 18 038 jobs for young people in the 2010/11 financial year. These jobs were created through job placements, and self-employment through funding youth businesses to start or expand their businesses. Jobs created through self-employment initiatives such as the micro-financing programme accounted for a total of 14 227 jobs, which exceeded the target of 11 438 set for the year under review. The NYDA received an unqualified audit opinion (with matters of emphasis) from the Auditor General (AG) and its delivery record improved significantly in the financial year 2010 to 2011.It achieved 42 out of the 49 key performance indicators thus scoring an 85% of total targets achieved. Of the 42 targets met, some were greatly exceeded and the seven that were not met were behind with only a few points. This indeed was a significant improvement.
The CFO provided an overview of the entities financial status and expenditure. The NYDA received a Government grant (from the Office of the Presidency) of R369 million for the 2010/11 financial year which generated R10 million interest. The loan capital repayments were R39 million and the total revenue for 2010/11 was R418 million. The Enterprise Financing disbursed more on micro finance as it benefited more young people rather than the disbursement on small and medium enterprises (SMEs) which benefited a few individuals.
(See Annual Report, pages 109- 158)
Audit outcome 2010/11
The NYDA had an unqualified audit opinion with five matters of emphasis. These were regarding significant uncertainties, restatement of corresponding figures, irregular expenditure, fruitless and wasteful expenditure, and material impairments. It is important to note that some had since been resolved, whilst the entity were working tirelessly to improve on others. Irregular expenditure included R26 million related to expenditure incurred for the World Festival of Youth. Fruitless and wasteful expenditure arose from interest paid by the NYDA to Old Mutual. The NYDA was liable for this interest as a result of late payment of management fees to Old Mutual in relation to a Joint Venture that was entered into during the “Umsobomvu” Youth Fund days.
(See Annual Report, pages 103-105)
Highlights of the 2010/11 financial year
Mr Ngubeni indicated that Agency accelerated its Artisan Training Programme and introduced lending policy reforms in the area of collateral and loan interest rates now at 6% and no longer prime plus 5. The Matric Rewrite Programme, the Ithuba Lentsha Programme, and the Intensified National Youth Service Programme (NYS), were among the highlights.
A zero tolerance approach had been adopted where all defaulting clients from both Microfinance and SME were immediately handed over for legal collection by the NYDA attorneys. The general practice for written off loans was that they were removed from the books but collection on some still continued and where there had been successful collection, this portion was accounted for as bad debts recovered which accounted for the entities profits. Since the implementation of these measures, there had been an increase in payments by defaulting clients while others had made payment arrangements. In addition, a decision had been taken to restructure the loan repayments based on affordability. There had been an increase of 6% in loan repayments during the second quarter for SME Loans, and this increase was as a result of the measures taken.
The introduction of Microfinance Product Specialists (MFPS) within the new structure would ensure that for Microfinance each of the four MFPS had been allocated to at least three provinces. Their roles included, but were not limited to the following:
a) Compliance Issues as identified in the Risk Register.
b) Product Roll out support – to ensure that the right methodology was used for the writing of the loans which would result to quality loans.
c) Collections Support – to ensure that they assisted branches with their respective collection strategies and collection drives.
A Microfinance Task Team had been constituted to include Finance and Risk. The role of this committee was to ensure that the whole cycle of the microfinance product roll out was revisited and restructured in order to eliminate the writing of bad loans. More and regular aftercare had been planned to SMEs. This would enable identification of problems that the businesses were facing at a very early stage. This would also allow the NYDA to verify the pledged collateral from time to time.
(See Annual Report for further details.)
World Festival for Youth and Students: briefing
Mr Ngubeni said that the Festival was organised by the World Federation of Democratic Youth (WFDY) which was founded in
The objectives of the WFDY was the promotion of youth participation in a democratic process, in civic decision making, community and all development levels, and the responsiveness to the needs and aspirations of the youth in a participative manner. The WFDY promoted the value of sustainability without compromising the needs of current and future generations. The Festival aimed at uniting the youth for the world of peace, solidarity and social transformation. The NYDA was charged with raising critical policy issues aimed at impacting governments of the world and had to mainstream the African Youth Agenda. The entity had an obligation to forge social cohesion amongst the SA’s youth and the Youth in the Region, Continent and the World. The Festival discussed amongst others xenophobia and the NYDA had to promote education and training. The Festival discussed issues on education, including the issue of free education up to the first tertiary level qualification for all.
The declaration by the Festival delegates outlined the critical policy interventions anticipated by the youth of the world from world organisation of states and the governments. The most concrete proposal by the festival was that the United Nations (UN) should be lobbied to adopt the declaration as its own and ensure its realization. The Festival outcome raised critical current issues in order to impact the shaping of policies of governments of the world. The WFDY wanted the mainstreaming of the African youth agenda and place youth from Africa, Latin America and the
The WFDY paid tribute to the first South African to be elected as President of entity, Mr Andile Yawa, from
Complaints in relation to the Festival were lodged with the Public Protector by the AfriForum. The main complaint and the initial inquiry sought to answer two questions: Was the festival within the NYDA mandate? Was there any misappropriation of funds? Further enquiry related to the role of the ANC Youth League. The NYDA had already proved that the festival was within its mandate and that all funds were used for its intended purposes and could be accounted for. However, it was still awaiting the outcome of the investigation by the Public Protector.
The Chairperson thanked the NYDA for an extensive report and asked the Co-Chairperson to comment and lead the meeting.
The Co-Chairperson asked the NYDA to explain the discrepancies between the Strategic plan and the Annual report. The Committees wanted to have more clarity on the partnerships between the NYDA and other entities as indicated in the Strategic Plan. The Committees was especially interested in the role the Agency played in the Sanitary Dignity Campaign.
Ms P Maduna (ANC) thanked the Agency for its presentation and good work. She asked why the entity had not sufficient monitoring control systems and why it had no daily and monthly control.
Ms M Nxumalo (ANC) asked about the nature on the 49 partnerships signed and how many were still operational.
Ms D Robinson (DA) thought that the CFO highlighted the shortcomings of the financial management very well and hoped that it would be better in the future. Her heart was with people on the ground and that is why she was so concerned. She asked for an explanation for the term “imperialism.” She acknowledged that she was on the side of the young people but highlighted that things had to be done in a positive way. She asked how careful the entity was in checking the credibility of people to whom loans were given. She failed to understand how so much money could be spent on a festival and wanted to know on what basis were the service provider selected who pulled out at the last hour.
Mr G Mokgoro (ANC,
Mr D Worth (DA,
Ms G Tseke (ANC) thanked the Agency for the report and an unqualified audit opinion. She asked for more clarity on the targets presented in the annual performance plan that were not in line with the annual report.
Ms P Lebenya (IFP) said it was disturbing to her when she saw a big banner of the ANCYL on the march to take place on the website of the NYDA, because the Agency was a government institution and a political organisation. She asked for a few examples on the internal and external projects as presented in the presentation. She wanted to know how the entity would justify using public funds for the Youth Festival if the ANCYL entered into partnership with the WFYS and she did not see how ordinary young people benefited from the Youth Festival.
Ms M Tlake (ANC) asked what criterion was used to select youth for programmes on social cohesion and wanted to know how many youth from the rural areas were included. She asked if there were statistics available to see how many youth from rural areas were present and wanted to know if follow up had been done.
The Co-Chairperson said the relationship between the NYDA and the ANCYL had to be clarified and whether the Agency was affiliated to any other political party.
Mr Andile Lungisa, Executive Chairperson, NYDA, said that the dictionary explained imperialism as an imperial rule or system or extending a country’s influence trade through, diplomacy, etc. The ANCYL could not be sidelined from the WFYS because it was the only member in
Mr Ngubeni said that the aim of the Agency was to build a stronger emphasis on youth and to mainstream youth agendas. The NYDA received bad media publicity regarding the WFYS and the Agency had to clarify what had not been made clear. The CFO had made note of the shortfalls with the financial management department and most of the challenges highlighted were due to the lack of capacity within the entity; it should be noted that the CFO was newly appointed. He did not have the figures on how many of the 144 access points were fully operational but stated that the number was increasing as they entered into new agreements with various municipalities and the South African Football Association (SAFA) . The accessibility could not be fully realised due to the lack of financing. The Agency went to various areas around the country to distribute sanitary towels but it should not be the task of one Department to distribute sanitary towels. Departments had to work in collaboration with other entities to effectively fulfill this task. The Agency worked with various Departments like Health and Education in addressing the needs of the youth.
The successes and failures of the NYS had not been realised yet as it was still in progress. The Youth Festival created about 1 200 temporary jobs for youth across the country and should not be set up for failure because it only received bad publicity. The good work done by the NYDA was not realised and the Agency was of the view that matters of the youth should be addressed with urgency. The conditions of loans were very simple and clearly defined in the loan agreement. The training for young entrepreneurs took place on the NYDA sites where they worked in partnership with various entities. The ANCYL was the only member of the WYDF in
The CFO noted that only some levels did not perform. The NYDA never entered into any joint ventures with entities. The existing ventures were entered into by the former organisation Umsombomvu. The majority of loans were inherited from the Umsobomvu Youth Fund and the Agency had to make sure that those who were not paying were not paying for genuine reasons. The conditions attached in granting the loans would be determined by the business plan and business viability. The shortcomings of the past model of granting loans were that young people received loans with no training and support in their businesses. The new model would ensure that training and support was provided. The absence of documents as highlighted by the Auditor-General was due to procurement services which had not been centralised. The procurement requirement needed three quotes and only one could be provided in some instances. The other quotes were kept by the divisions and could not be provided when requested. The NYDA continued to engage with sponsors for sponsorship and it had to use funds at its disposal to see that all service providers were paid for their services to the festival. The Umsobomvu Youth Fund entered into agreements with various investments companies and associates who benefited from the revenue. It should be noted that the NYDA did not benefit from anything as most of those companies had been liquidated. The amount of about R6 million was budgeted for the Matric Rewrite under the year of review.
Mr Ngubeni stated that the WFYS benefited youth from all spheres of the country as indicated by the key performance areas of the NYDA. The discussions highlighted areas of social cohesion and lots of policy formation took place at the event. Economic participation was high on the agenda and 1 200 jobs was created for young South Africans. Most companies which procured were owned by youth and employees of companies were youth. Among the other issues discussed were unemployment, free education, xenophobia, HIV/HAIDS and drug abuse. The NYDA strongly believed that that the Festival had enormous benefits for South Africans on all spheres and more detail about the event could be accessed on the NYDA website.
Mr Mcebo Khumalo, Non- Executive Director, NYDA, said that emphasis on young people’s ideas had been at the centre of the NYDA. The Agency had received bad publicity regarding the WFYS because of people who used information falsely. The Agency was very proud of staging a “world class festival” which was very successful. The issues which had been spoken about at the Festival were issues directly affecting the youth.
The Co-Chairperson asked Mr Khumalo to be early for meetings because he was repeating what had already been said. His comments might have spoiled the party and all the good things that were highlighted.
Ms Tlake said the NYDA made mistakes that could have been made by any other department. She was also part of the Appropriations Committee and thought the NYDA did an excellent job. She commended the entity for coming thus far, excepting its mistakes and shortfalls, and for being open. She listened on how the Agency unpacked its financial circumstances and said that many other Departments had similar challenges. The challenges were not only unique to the NYDA but were shared by many other departments. It was good to see that the Agency already came up with strategies to address its challenges and she saw it as a good sign.
The Co-Chairperson noted that most plans were achieved, more jobs had been created, more loans were given to the youth, and more young people received training. It was a good sign that the NYDA could account for moneys spent as indicated by the Auditor-General. She encouraged the Agency to keep up the good work.
The Chairperson thanked the Agency for the report and the manner in which it handled the questions posed to it. Parliament could not set the Agency up for failure but wanted to see the it growing from strength to strength. Young people were the future of the country.
The meeting was adjourned
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