National Youth Development Agency on its functional programmes & alignment to government policy objectives to create work for young people

NCOP Economic and Business Development

09 June 2015
Chairperson: Mr E Makue (ANC; Gauteng) (Acting)
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Meeting Summary

The Select Committee on Economic and Business Development was told that the National Youth Development Agency (NYDA) had been established in 2009 following a merger between the Umsobomvu Youth Fund (UYF) and the National Youth Commission (NYC). Its role was to facilitate the development of South African youths in all facets. The Agency derived its mandate from legislative frameworks and ever since its inception had assumed and improved the operational platform that had been developed by its predecessors. The new NYDA delegates had spent roughly a year in office, and the presentation was an official response to a request by the Committee for a briefing. The presentation basically outlined the background of the Agency, its products and services and key achievements of the NYDA.

The NYDA said its objectives were the development of an integrated youth plan for South Africa. Its target market included all South African youths aged between 14 and 35 years irrespective of race, gender, colour, creed, geographical location or political affiliations. The report reflected the agency’s strong bias towards youths out of school, those with disabilities, the unemployed, young women, those who were in conflict with the law, and those who resided in rural, semi-rural and peri-urban areas.

The challenges faced by the NYDA were poor capitalisation of the merger with the UYF and the NYC, limited budget allocations or investments in youth development, poor co-ordination and cooperation with government departments, securing private sector partnerships and support for youth development in rural areas, government investments in rural development and poor understanding of the NYDA’s mandate.  Despite the odds, the mandate of the NYDA had taken on those of the UYF and NYC and further extensions had been made with the inclusion of education and skills development, National Youth Service, social wellbeing, sports and recreation, as well as arts and culture.

During discussion, a Member claimed that from the official statistics of the Agency, only one-third of the budget had been spent on its core focus, only 19% of the targeted matric re-writes had been enrolled in the previous year, only 42% of the total target had been achieved in the previous year and the largest portion of funds had been spent on salaries. The NYDA was clearly not achieving its role and objectives, and he wondered why its existence should continue. Other Members criticised the fact that the Agency’s financial and performance reports had not been presented, and the fact that there appeared to be little engagement with other relevant government departments.

The NYDA responded that to resolve its organisational and financial constraints, Price Waterhouse Coopers (PWC) had been consulted, and their report had stated that the Agency could do much better with even fewer resources. PWC had suggested a reorganisation, which the NYDA was planning to implement. The reorganisation would result in a reduction of senior managers from 38 to seven, a reduction of middle managers from 66 to 29, and a reduction in the number of divisions of the Agency from nine to five. The annual report would be presented once the audited report was available, and the relevant statistics would be shared in the next engagement with the Committee. 

Meeting report

National Youth Development Agency (NYDA) presentation

Mr Kathu Ramukumba, Chief Executive Officer, NYDA, said the presentation was prompted by the Committee’s request for a briefing on the plans of the agency, and how they were aligned to the government’s policy objectives. He highlighted the objectives of the NYDA, mentioning that the beneficiaries and target audiences were youths aged between 14 and 35 years, regardless of race, gender, colour, creed, geographical location or political affiliations. The agency had a very strong bias towards youth in rural, semi-rural and peri-urban areas, those out of school, young with disabilities, unemployed, young women and youth in conflict with the law.

Mr Ramukumba said the challenges posed to the NYDA were poor capitalization of the merger with the Umsobomvu Youth Fund (UYF) and the National Youth Commission (NYC), limited budget allocations or investments in youth development, poor co-ordination and cooperation with government departments, securing private sector partnerships and support for youth development in rural areas, government investments in rural development and poor understanding of the NYDA’s mandate.  He claimed that Umsobomvu -- which only offered very low interest financing – had been capitalised at approximately R1 billion, and its mandate was limited to economic development, compared to the NYDA which had never been capitalized but rather given a year-on-year grant. Despite the odds, the mandate of the NYDA had taken on those of the UYF and NYC and further extensions had been made with the inclusion of education and skills development, National Youth Service, social wellbeing, sports and recreation, as well as arts and culture.

Given the stated facts, the NYDA’s national footprint was limited, and could not be expanded. Due to the broad mandate, the high needs of young persons and budgetary constraints, the Agency had decided to target low numbers and high impact rates.  An assessment carried out over two years ago concerning the underlying causes of unemployment and poverty among youth had revealed that lack of skills, lack of education and wrong fields of study were responsible. Small Medium and Micro Enterprises (SMMEs) were the largest creators of employment, with about 60-70% of the total jobs created.

The NYDA had considered entrepreneurship and skills development as a possible substitute for employment. The methodology for the inclusion of entrepreneurs into the mainstream of the economy had been the development of grant funding, targeted at new entrants. The grants ranged from R1 000 to R100 000, and the plan afterwards was to hand over the entrepreneurs to financial institutions that would further assist them in becoming industrialists. The criteria for the grant funding programme included compulsory participation in entrepreneurship training.

Young persons had a wrong perception about the agency’s mandate, as it was seen as able to provide a solution to all problems, and this had pressurised the NYDA in the past. It had implemented three different approaches to reach out to the targeted youth -- full service branches, local youth offices and mobile youth advisory centres (outreach vehicles). The operations of some offices were not optimal, due to shortage of competent hands, but the agency was doing its best to fill the vacancies through its graduate programmes.

Mr Sanjay Hargovan, Acting Executive Manager (Economic Development): NYDA, described the products and services of the agency. He said that products and services were integrated and aimed at providing holistic services for the youth. Youths were required to demonstrate competence or proof of academic excellence prior to further support in the form of grants, and the agency intended to source more funds to meet its mandate. Business consulting services had been provided, and links to existing businesses had been sourced to furnish young entrepreneurs with business mentorship programmes to enable them build sustainable businesses. The NYDA had structures in place to assist young entrepreneurs with Black Economic Empowerment (BEE) accreditation and to facilitate obtaining registration from the Companies and Intellectual Properties Commission (CIPC). Entrepreneurship courses had been designed to train the youth, ranging from one-day awareness courses to more structured three to five-day courses. The Agency had partnered with the Small Enterprise Finance Agency (SEFA) and Industrial Development Corporation (IDC) to assess where necessary and hand over qualifying enterprises for funding, inclusive of those who would have participated in its grant funding programme. R2.7billion had been set aside for the purpose, and the essence of the partnership was also to assist in creating sustainable jobs.

Mr Ramukumba added that the partnership with SEFA and the IDC was aimed at making funding more friendly towards young people. He claimed many small businesses had closed down in the past due to short loan payment terms. The friendly funding terms included a 12-month loan repayment holiday to enable small businesses build a clientele and break-even, an approval of funding regardless of the risk profile, and also an interest rate of prime rate minus 3% for the youths.

Mr Hargovan said that to assist with education and skills development, programmes had been designed to assist learners re-writing matric to excel. The programmes involved academic support in up to four subjects, with simulated exams as well as part-time and weekend classes. The Solomon Mahlangu Scholarship fund sought to respond to scarce skills shortages in the economy, and it had partnered with the Department of Higher Education and Training (DHET), 23 universities and 20 Further Education and Training (FET) colleges. The NYDA Career Guidance programme had been designed to assist young South Africans to make informed career decisions, as many learners were educated in areas that contributed very little to the economy.

The National Youth Service (NYS) programmes were focused on enabling skills development in productive areas and making youths serve their communities with acquired skills. There were three programmes. The YouthBuild programme was a six to 12-month comprehensive skills development programme designed to integrate academic achievement, work experience, community service, leadership development and personal transformation. The second programme encourage university and FET students to service their communities with the skills they were learning, while the Youth Volunteering programme engaged young people in community service activities to strengthen service delivery, promote nation building, foster social cohesion and assist them to gain occupational skills necessary for access to sustainable livelihood opportunities.

Health and wellbeing programmes were targeted at increasing awareness of the healthy lifestyles that promoted good health practices, such as the dangers of substance abuse, unprotected sex, nutrition, sexually transmitted diseases, teenage pregnancy and the impact of HIV and Aids among young people in the country. One of the key achievements of the Agency over the last three years had been a total of 7 952 youths placed in jobs.

The Chairperson said it was imperative that Members should look into the programmes of the Agency for the year in order to facilitate a thorough engagement with the NYDA.

Discussion

Mr S Mthimunye (ANC, Mpumalanga), said although the presentation was the first engagement with the new NYDA delegates, he would have preferred a report that was broader in scope. He asked why the financial reports for 2013/2014, 2014/2015 and 2015/2016 had been omitted from the presentation, and if the act was deliberate. He further asked about the official statistics of unemployed youths in the country and the agency’s role in its mitigation.

Ms M Dikgale (ANC, Limpopo), suggested locating NYDA branch offices in remote rural areas to assist extremely poor youths could not afford transport to cities. She asked if mentors were receiving salaries, and suggested a reflection of provincial statistics in future presentations to the Committee.

Mr J Londt (DA, Western Cape), claimed that from the official statistics of the agency, only one-third of the budget had been spent on the core focus of the agency, only 19% of the targeted matric re-writes had been enrolled in the previous year, only 42% of the total target had been achieved in the previous year and the largest portion of funds had been spent on salaries. The agency was clearly not achieving its role and objectives, and he wondered why its existence should continue. The misrepresentation and falsification of documents reflected the internal issues the agency was battling with, and he asked how the NYDA could resolve external issues when there seemed to be serious internal issues.

Dr Y Vawda (EFF, Mpumalanga), said that without being over-critical, he wished to be informed of the areas in the economy that the young entrepreneurs and youth would be incorporated. He inquired about the agency’s criteria for the identification of mentors. He asked about the extent to which the NYDA was  engaging the Education Department in order to achieve better statistics, and mentioned that universities should not be seen as a quick fix to the problems of unemployment, and should rather have job-oriented faculties.

The Chairperson emphasized the gravity of the questions being asked by Committee Members, which were based on a common concern for the very young population – over 21 million -- in the country. The Committee had had previous engagements with other Departments, such as Labour and Public Works (DPW), and it was puzzling to realise that none of them seemed to mention any form of cooperation with the NYDA. He wondered why, because there seemed to be lots of job opportunities springing out from the Expanded Public Works Programme (EPWP) of the DPW. He asked how the NYDA aimed to strengthen cooperation with other departments to enable the agency achieve its goals. He also inquired about the amount being spent in each province.

Mr Ramukumba said more time was needed to unpack the work of the Agency. Good progress had been made in the last two years, especially in the area of irregular expenditure, where there had been a reduction from R133 million to R500 000, although the target was zero. There had been a 98% performance against key indicators, which was currently being audited. In future engagements, the commitments of the Agency would be clearly highlighted. Turn-around strategies had significantly improved the situation.

To resolve its organisational and financial constraints, Price Waterhouse Coopers (PWC) had been consulted, and their report had stated that the Agency could do much better with even fewer resources. PWC had suggested a reorganization, which the NYDA was planning to implement. The reorganisation would result in a reduction of senior managers from 38 to seven, a reduction of middle managers from 66 to 29, and a reduction in the number of divisions of the Agency from nine to five. The annual report would be presented once the audited report was available, and the relevant statistics would be shared in the next engagement with the Committee.

As regards infrastructural development, he said the agency was currently engaging with municipalities by training youths in the required skills for projects. Over 1 000 youths had been funded -- 200 from Gauteng and 500 from KwaZulu-Natal. Local media would be actively involved in publishing relevant information, such as job expos and the Agency’s events in an attempt to make the general public aware of its activities. In an attempt to reduce irregularities, the NYDA planned to reduce its current monthly office rental of R1.4 million by more than 50%.

Mr Ramukumba said that the misrepresentation of his qualifications by former NYDA senior manager, Mr Clayton Peters had been an honest one, and no documents had been falsified. Mr Peters had registered for a Masters degree and had passed all his first year modules, but had not completed the qualification. As it appeared that the same modules were valid for a Postgraduate Diploma (PGD) in Public Management, Mr Peters had claimed to have obtained a qualification equivalent to a PGD from Wits University. This was academically true, if one referred to the curriculum, although he was not actually issued with a PGD certificate. To avoid any suspicion of foul play, independent prosecutors and disciplinary bodies had been brought on board to investigate the matter.

He then referred to the agro-processing industry and the coastline of the country, which he said were untapped even though lots of opportunities were embedded there.

Addressing education-related issues, he said that a change in curriculum contributed to the challenges faced by young learners. The NYDA sought to introduce entrepreneurship modules in high schools in an attempt to change the mentality of the youth and prepare them for future challenges. The Agency’s Act stipulated that it had to oversee every cooperative or partnership process, but it did not give the Agency the teeth to bite when there were shortcomings. As a result, cooperation with other departments was not as easy as it might appear. Lastly, he added that many universities offered courses which were not needed, and this sometimes increased the unemployment rate because graduates found difficulty in integrating into the system.

The Chairperson commended the CEO for covering the broad spectrum of questions with so much maturity and calmness. The Committee now had confidence in the intellectual capacity of the Agency, but would like to see practical results. He said that at the next meeting with the NYDA, the Committee would expect to see the Annual Performance Plan for 2015/2016, the impacts achieved, the financial report and provincial details relating to office locations and statistics.

Mr Londt suggested that the PWC report should be presented at the next meeting, as well as how the Agency had met the recommendations. He also suggested oversight of the NYDA’s educational programmes.  

The Chairperson advised the Agency not to be conservative in terms of the information presented to the Committee, as over-information would not be frowned upon.

Ms Dikgale asked how the Agency planned to address the challenges highlighted in the presentation.

Mr Ramukumba said the activities of each province would be communicated to the Committee through the office of the Parliamentary Liaison Officer, and Committee Members could attend the Agency’s programmes if they wished to. 

The meeting was adjourned.                                                          

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