Brand South Africa 2012 performance and 2013 strategic plan

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Communications and Digital Technologies

05 June 2013
Chairperson: Mr S Kholwane (ANC)
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Meeting Summary

Brand SA presented its fourth quarter report 2012/13, in which highlights were given on how South Africa’s brand was performing in different countries in terms of international reputation, media coverage and reputation management. Brand SA received an approved grant of R154.7 million however it spent R163 million, leaving a deficit of R2.1 million.

The budget for the period 2013/14 increased by 6% with an allocation of R155 million. The market split would be a 60% spend on the international market and 40% on the domestic market.

Questions raised by the Committee included the Brand SA vacancy rate, the board structure, the message used to attract investors to South Africa, unauthorised expenditure, measures in place to deal with unexpected externalities and the number of approved posts.
 

Meeting report

Brand South Africa 4th quarter report and strategic plan 2013
Mr Happy Ntshingila, Brand South Africa deputy chairperson, tendered the apology of the chairperson of Brand South Africa, Ms Chichi Maponya, who was on an official visit with the President.  In giving the context within which the Brand SA was functioning in the 4th quarter,  he said that a lot of things had happened and noted the following highlights of the Quarter and Financial Year 2013/14 so far:
▪ AFCON 2013 communications programme
▪ WEF Davos communication and engagement programme
▪ Mining Indaba Media programme
▪ BRICS Media programme and partnership with SA Tourism, BUSA, Standard Bank, JSE, PWC, CNBC
▪ BRICS Dialogues
▪ New communications campaign to seed the new positioning [CNN, eNews, Summit TV]
▪ Conclusion of CI manual in consultation with all stakeholders
▪ Launch of Brand SA application
▪ Thought Leader & Research workshops in partnership with Wits University and SAII
▪ Media partnerships with CNN, CNBC, Time Magazine, Community Radio SAC TV and Radio
▪ Inbound Media Tours focused on science and technology, Sport and BRICS
▪ Dti Investment campaign
▪ Expansion of Global South Africans Programme to UAE
▪ Talent management strategy development
▪ Procurement module implementation.

There had been a new communications campaign to seed the new positioning of South Africa that featured on CNN, eNews and Summit TV; and the launch of the Brand SA application together with other initiatives. Brand SA was working in an environment where other forces such as recent labour unrest and unprotected strikes were working against the good that had been done by affecting the business confidence of the country.

Mr Miller Matola, Chief Executive Officer: Brand SA, said that Brand SA’s work was impacted upon by external factors but there were impact measures in the entity’s business plans that measured the outcomes. Some of the aspects considered in the impact measures were the international reputation of the country, its competitiveness and the reputation in terms of media reporting globally.

International reputation
A perception survey conducted in 50 countries that included South Africa showed an improvement in international reputation (South Africa’s global reputation remained stable). An indication was given of how South Africa had been rated in other countries. In terms of increased competitiveness, South Africa was sitting at 52 (the target range set for 2012/13 was 48 - 58). In terms of brand improvement, South Africa remained at 36 as in the financial year 2011/12. Significant improvement was made in countries like Germany, India, Japan and Russia.  South Africa was also doing well in the area of increased brand equity that was measured by Brand Finance which valued the brand of different countries from a finance valuation model.

Media reputation and media coverage
This related to media reporting in different countries and Brand SA sought to achieve a target of 50 and above. The index showed that the brand did not perform well in some of the countries like Zambia, France, Kenya and United Kingdom. This was due to the fact that Brand SA did not have programs in some of these countries – Brand SA was only active in 13 countries. There was more work to be done in countries like Egypt in communicating the achievements innovations.  In terms of the number of pieces of coverage placed by Brand SA in various countries in quarter 4, Germany had over 77 pieces (34%) while coverage in countries like Nigeria had been low at 3 pieces (0.2%). The advertising value equivalent in US dollars for the pieces of coverage put out in Quarter 4 came to almost R16 million.

Summary of programme performance – domestic and international
The CEO went through Brand SA's activities for Quarter 4 and indicated which targets had been achieved and provided explanation when these had not been achieved or only partially completed (see document). He covered the following Brand SA's programmes:

Programme 1: Finance and administration
Programme 2: Brand strategy development and management
Programme 3: Reputation management

Expenditure and human resources report 
Ms Alice Puoane, Brand SA Chief Financial Officer, said that at 31 March 2013, Brand SA had cash and cash equivalents of R30.5 million mainly due to the fact that Brand SA had received its quarterly funds on 28 February 2013 meaning that the monies could only be expended in April and May 2013. She provided a statement of financial position, statement of financial performance, cash flow statement, statement of comparison between budget and actual for 2013 and commitments for 2012/13 (see document). Brand SA had committed the accumulated surplus of R6 million to the following activities: Brand SA Academy (R2.1 million); operating expenses (R363 779); Brand SA Forum (R1.2 million); SA Competitiveness Forum (R1.4 million); and Brand Ambassadors (R1 million).

Brand SA’s employment equity statistics at 4 June 2013 indicated that out of the 43 approved positions, 33 vacancies had been filled and of these one person was disabled and in terms of racial equity, 76% were black, 6% coloured, 3% Indian and 15% white. 20 were female and 13 were male.
           
Discussion
Mr A Steyn (DA) asked for clarity on how to interpret the international reputation target. For example, Germany had given South Africa 34 out of 50. He asked why there was a discrepancy in figures in the financials. For example, total income was R161 million and total receipts was R160 million. It appeared in the employment equity statistics, there was a 20% vacancy rate – what the reason for this?

The CEO replied that international reputation related to the German public's perception opinions around South Africa’s brand and the other related to media reporting on South Africa in other countries. On the vacancy rate, there was an issue of skills in terms of the language required. There was an undertaking to expand to other markets in BRICS but there was need to get the balance right - some positions at the time of writing the report were at the point of being filled.

The Chief Financial Officer said that the cash flow statement spoke to the actual cash flow from the bank. Balancing between the statement of performance (income and expenditure statement) and the cash flow statement (this included balances from the previous year) was the reason for the variance in the figures.  
 
Ms F Muthambi (ANC) asked for more clarity on the IT Master Systems Plan and the withdrawn tender. What was the turnaround time for recruitment under corporate communications and the Brand Ambassadors programme? What was the update on the South African Competitiveness Forum? What was the research manager doing during the third and fourth quarter? How was Brand SA dealing with unauthorised expenditure?

The Chief Financial Officer, responding about the withdrawal of the tender, said that the quotations sent to Brand SA went way beyond what had been budgeted.  Alternatives were currently being considered in ensuring that Brand SA did not spend more than the allocated amount.

The CEO commented about the Brand Ambassadors programme, saying implementation would be done following the Board approval of the individuals on the list. The submission to the Board had been tabled and it was only a question of approving. The Brand Ambassadors would be announced at the implementation of the Competitiveness Forum in October 2013.

The CEO, speaking on the research manager who was appointed in June 2012, said that under the research reference groups, he had done all the eight groups that were required between then and now. However, in terms of giving feedback, he could not give feedback on all the eight engagements because of the timing of having joined in June 2012. He added that Brand Ambassadors and the Patrons of SA Brand were one and the same.  

The CFO addressed the unauthorised expenditure, saying the reason for this was because at the time of the audit, there had been no authorisation letter from National Treasury to retain the surplus of R6 million. However the accumulation thereof and the payments this year had regularised everything because Brand SA had received the approval from National Treasury to retain and use the surplus funds.

Ms S Tsebe (ANC) asked for the way forward in achieving the sourcing of the eight remaining vision partners? In terms of engagement with government, emphasis was on provinces, was there any engagement with departments such as Tourism and International Affairs?   

The CEO replied that the Brand SA had since revised its strategic plan on the number of vision partners required. Brand SA had adopted a new approach of segmenting them into: programme partners (who want to get directly involved) and funding partners (prepared to put in some funding such as Old Mutual). The number of vision partners had been lessened and segmented into civil society and business partners.

The CEO said that they could not manage to reach out to all departments. Of these,  23 departments identified as being critical to the mandate of Brand SA. The initial training would cover the 23 departments and these would be used to partner and cover the training of provincial and local government. other departments. The assistance of South African Local Government Association had also been enlisted in covering municipalities. There was also collaboration with other entities such as SA Tourism and Proudly South African – a framework has been developed for collaboration and cooperation between the three agencies in marketing South Africa.    

Mr A Steyn (DA) noted that Brand SA had disposed of assets last year, indicating a loss of R123 000. What was this about?

The CFO explained that the assets were old IT hardware that Brand SA had had for more than three years. IT items bought by Brand SA were depreciated over a period of three years.

Ms F Muthambi (ANC) asked for more clarity on the Brand SA Academy and the Brand SA Forum.

The CEO said that Brand SA Academy between Quarter 3 and 4 would have engaged in training the provincial and the local departments. The primary targets identified were: tourism and trade investment promotion agencies for purposes of extending training to them (including the communicators in each of these agencies). With regards to the Brand SA Forum, this was to be combined with the SA Competitiveness Forum because the two fora were going to be speaking to the same issues in October 2013 and the relevant stakeholders had been contacted.

The Chairperson asked for clarity on the total number of posts in Brand SA.

The CFO replied that there were 43 posts that had been approved and budgeted for and that 33 were currently filled so 10 posts were currently vacant   

 Ms S Tsebe (ANC) said that the total was 34. However the CFO clarified that disabled was not a post and so it could not be counted. Ms Tsebe said that this had to be corrected because it was misleading. The Chairperson added that this had to be deleted as there was no race called ‘disability’.

Strategic and Performance Plan 2013/14
The Chairperson, in guiding the discussion on the strategic plan, said that the Committee Members had had the presentation document for a while and so it was unnecessary to go into details.

The CEO in following the advice of the Chairperson highlighted the key issues and priorities for the Strategic and Performance Plan as including among others: marketing South Africa more aggressively as a business destination; promoting and ‘selling’ South Africa to South Africans; ensuring that nation branding became an integral part of national strategy and policy formulation; ensuring that building and promoting the nation brand translated into economic growth, job creation and support for efforts to attract investors from within the continent and further afield; the 20th Anniversary of Democracy; and ensuring that nation branding cascades to the provinces by devolving all programmes and projects to all provinces.

Marketing and communications approach and objectives; Target markets; Brand SA stakeholders and target audiences; Cooperation and collaboration with other agencies; Key focus areas and initiatives for 2013/14 were covered in the presentation document.

From a corporate services point of view for the period 2013/14, focus would be on talent management (attracting high quality staff), performance management, rewards and recognition, employee wellness, benefits management, employee relations, automation of human resources processes; and workforce planning. All vacant posts had been advertised and a recruitment programme was underway.

The budget for the period 2013/14 increased by 6% with an allocation of R155 million. The market split would be a 60% spend on the international market and 40% on the domestic market. This was because there was a focus to market South Africa as a business destination. 

Discussion
Ms M Shinn (DA) asked what message Brand SA was giving out to attract investors to South Africa. Where things like the high cost of communication, labour unrest and strikes deterring investment in South Africa? In terms of target markets, there was an improvement in media reputation with regards to China while there was a drop in Russia – clarity was requested on these scores.

The CEO replied that research was being done to test investor perception and this helped in fine tuning the message to be sent out in inviting investors. What was being emphasised was the fact that South Africa was the leading economy on the continent, in addition to pointing out what South Africa was doing to remain competitive. The National Treasury messages were also vital including those of South Africa’s International Relations and the cost of doing business in South Africa.

With regards to the scores, he said that media was volatile and that it was changing most of the time. The perceptions were low and that this was a mix of approaches. Russia had a low base but Brand SA was looking towards increasing the coverage. 

Mr A Steyn (DA) said that there were shortcomings in the Strategic Plan in terms of the risk profile in achieving the targets. One needed to be aware of these externalities in achieving the set targets and that measures had to be in place to help avert these. What measures were in place with regard to cooperating with government entities? In terms of promoting and selling South Africa to South Africans, this was the primary target for South Africa and that in improving it, public representatives such as Members of Parliament should be included.

The CEO replied that Brand SA’s strategy was risk based and that some of the externalities were being considered. Brand SA had no control over some of the externalities however the entity was engaging with other stakeholders.  The measures in place in promoting cooperation with government entities included business awards and sharing office space. A number of entities were involved in spreading the message of promoting and selling South Africa to South Africans.

Ms S Tsebe (ANC) asked how the Marikana incident and service delivery unrests had affected the way the international community was viewing South Africa.  

The CEO replied that there was a difficult communication environment with the build up to the Marikana incident. However it was the continued and sustained violence that affected the way the international community viewed South Africa. The government’s response in dealing with the incident helped the reputation of the country in that it dealt with it decisively.  

The Deputy Chairperson: Brand SA added that in terms of reputation management, because some incidents are unplanned, the challenge was who dealt with a particular incident and at what level. For instance during the Oscar Pistorius incident, the comments were coming from the policeman investigating the matter while CNN had turned the matter into a crime story as opposed to limiting the story to a domestic affair.

Ms M Shinn (DA) said that during the Annual Report presentation last year, the Committee had recommended that there was need to trim the size of the Board which had 28 people. What was the current structure?

The Deputy Chairperson: Brand SA replied that the structure was still the same size with 28 people. The decision to trim it rested with the executive authority. The recommendation that had been made was more than trimming the size as it also suggested appointing people based on expertise.

The Chairperson asked if there were programmes where Brand SA was teaching South Africans about the importance of the brand of South Africa – was this engrained into the school curriculum?

The Deputy Chairperson: Brand SA said that this indeed required taking the message to schools. There was a programme of promoting the brand in homes – every bit helped.

The meeting was adjourned.

[Apologies were received from: Mr Collins Chabane, Minister in the Presidency, Dr Cassius Reginald Lubisi, Director-General in the Presidency, Ms L Van der Merwe (COPE), Ms R Morutoa (ANC) and Ms M Lesoma (ANC)].

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