National Department of Tourism on its 2016 Strategic & Annual Performance Plan

Meeting report

Briefing by the National Department of Tourism on its Annual Performance Plan 2016/17-2018/19 Quarterly Targets
The delegation from the National Department of Tourism (NDT) comprised of Mr Victor Tharage, Director General; Ms Morongoe Ramphele, Deputy Director General: Domestic Tourism Management; Ms Aneme Malan, Deputy Director General: International Tourism Management; Ms Shamilla Chettiar, Deputy Director General: Policy and Knowledge Services; Ms Nomzamo Bhengu, Acting Chief Operating Officer/ Chief Director: Governance Support; Ms Nonkqubela Silulwane, Chief Director: Research, Information and Knowledge Management; Mr Ralph Ackerman, Chief Financial Officer; and Ms Petra van Niekerk, Parliamentary Liaison Officer: Office of the Director General.

The NDT had gone through a process of change on its Strategic Plans. The Department had done an in depth review which resulted in a new strategy. The Committee would notice that there was a shift in the manner in which the Department did things. There was greater harmonisation between the work of the NDT and SA Tourism. There was also a rationalisation of resources. The changes were of a continuous nature. A check would be kept on whether the organisation was keeping in line with the new strategy. The NDT however had to comply with administrative processes prescribed by the Department of Public Service and Administration (DPSA) and National Treasury. The NDT was still guided in its pursuit of implementing the National Development Plan (NDP). There was thus alignment with national prerogatives. The aim was to bring about inclusive economic growth. There were projects in previous APPs that were not seen in the current APP. This was due to the fact that these projects were completed. Some of the things done already were the review of the National Tourism Sector Strategy (NTSS) and completion of tourist guide regulations.

Mr Tharage said that that each of the NDT’s Programmes’ performance would be elaborated upon by the officials responsible for them. Detail was provided on annual targets and quarterly targets that were set.
 
Programme 1: Administration
The purpose of the Programme was to provide strategic governance and risk management, legal, corporate affairs, information technology, internal audit, financial management and strategic communication support services to the NDT. One of the performance indicators set for the programme was its vacancy rate. The annual target for 2016/17 was to maintain a vacancy rate not exceeding 8%. Targets for each of the quarters for the financial year were to maintain a vacancy rate not exceeding 8%.

Programme 2: Policy and Knowledge Services
The purpose of the programme was to support the tourism sector through policy development and evaluation, research and knowledge management, and the promotion of transformation and responsible tourism. A performance indicator was to have a number of initiatives supported to promote Broad Based Black Economic Empowerment (B-BBEE) implementation. The annual target set for 2016/17 was to provide secretarial support to the Tourism B-BBEE Charter Council. The target for Quarter 1 was to have the Council constitution and meetings plan developed. For Quarters 2 and 3, quarterly reports on the work of the Tourism B-BBEE Charter Council had to be developed. In Quarter 4 quarterly as well as an annual report on the work of the Tourism B-BBEE Charter Council had to be developed

Programme 3: International Tourism Management
The purpose of the programme was to provide strategic policy direction for the development of SA’s tourism potential across various regions of the world. A performance indicator identified was to have a number of programmes implemented to enhance tourism offerings. The annual target for 2016/17 was to have a Draft Tourism Investment Master Plan developed. The Quarter 1 target was to have a framework for the Tourism Investment Master Plan developed. The targets set for Quarters 2 and 3 were to have consultation with stakeholders. By Quarter 4 a target was set to have the Draft Investment Master Plan developed.
 
Programme 4: Domestic Tourism Management
The purpose of the programme was to provide strategic policy direction for the development and growth of sustainable domestic tourism throughout SA.  A performance indicator was to have the Domestic Tourism Growth Strategy revised. The annual target set for 2016/17 was to have the Domestic Tourism Growth Strategy reviewed. For Quarter 1 an audit of the 2010/11 Domestic Tourism Growth Strategy had to be conducted. During Quarter 2 the outcome of the audit review of the 2010/11 Domestic Tourism Growth Strategy had to be presented to stakeholders. In Quarter 3 action plans had to be developed based on the outcomes of the audit. By Quarter 4 the review of the Domestic Tourism Growth Strategy had to be finalised.

The Committee was also given insight into the budget of the NDT. A breakdown of allocations per Programme for the medium term was also provided. For 2016/17 the budget of the NDT was just over R2bn. There were slight increases in the budget allocations for 2017/18 and 2018/19. Members were also provided with a breakdown of figures as per economic classification.

Discussion
The Chairperson asked the NDT to speak to its budget specifically about the R14.1m, its implementation of the Specific, Measurable, Accurate, Reliable and Time-bound (SMART) Principle, projects that it was unable to implement in 2015/16, detail on its Tourism Incentive Programme (TIP), the Expanded Public Works Programme (EPWP), its Social Responsibility Infrastructure (SRI) Programme, its relationship with the Tourism Enterprise Partnership (TEP) and the support that it was giving to rural enterprises.

Mr Tharage said the TIP would deal with issues of unemployment. On the issue of adherence to the SMART Principle it had to be remembered that the NDT operated in a fluid environment. The NDT had ended its relationship with the TEP on the 31 March 2016. The NDT however was still working on enterprise development but was utilising a panel of partnerships where each member of the panel had specific expertise.  On immigration regulations the Department of Home Affairs had agreed on the accreditation of companies to do visa applications on behalf of Chinese persons who wished to come to SA. Supposedly next in line would have been India and thereafter Russia. The DHA however had waivered visa requirements for Russians coming to SA.

The NDT had to review its environment on a regular basis and things changed quickly. The EPWP was a Programme of the Department of Public Works and the relevance to tourism was the jobs that it created. The NDT considered its relationship with its internal auditors, the Auditor General of SA and the Accountant General of National Treasury as important. On the matter of the R14.1m he noted that the NDT had put cost cutting measures in place and had streamlined its business. The TIP was still in its infancy stage. The TIP was not an initiative from the Department of Trade and Industry (DTI). The DTI had decided to stop providing incentives for tourism. The NDT thus had to start from scratch. The first year of the TIP was aimed at domestic tourism. The NDT had encountered problems with its SRI projects. On the TIP good results were being seen. Businesses in the Limpopo, Kwa-Zulu Natal, Gauteng and the Western Cape Provinces were doing well.  Applications for assistance were coming from all over SA. In 2015 more than 60 businesses were assisted by the NDT. Preliminary results on return on investment were way above what was expected. The review of the NDT would speak to where it was best to house the TIP and enterprise development.

On working relationships the NDT was doing work that the Committee did not necessarily see. For example much of the work done by the International Tourism Management Programme was not reflected in the APP. Work which the NDT did with the Regional Tourism Organisation of Southern Africa (RETOSA) was also not reflected in the APP. Work was also being done with the Organisation for Economic Cooperation and Development (OECD), the United Nations World Tourism Organisation (UNWTO) and the World Trade Organisation (WTO). A great deal of work was being done on regional integration, multilateral cooperation and bilateral implementation. For the NDT it was about outcomes. The NDT furthermore had good working relationships with provinces. The intergovernmental relations system was working.  

Mr Ackerman said the 14.1m was in relation to the Administration Programme. A reclassification had taken place according to the Standing Committee on Appropriations (SCOA). The amount formed part of the travel and subsistence budget of the NDT and was not new money that had been received.

Ms Bhengu informed the Committee that the presentation did not contain all information. There were still the actual Strategic Plan and Annual Performance Plan documents that Members could peruse. There was a requirement that targets that was set needed to adhere to the SMART Principle. The NDT took the SMART Principle seriously and tried to meet basic requirements of prescripts.

Discussion
Ms P Adams (ANC) asked what was considered capital assets for domestic tourism on the Medium Term Expenditure Framework (MTEF) baseline. She noted that the Expanded Public Works Programme (EPWP) caused the Department of Public Works to get a qualified audit report. She asked the NDT whether it was on the ball on the EPWP. She considered the EPWP to be very important. Given that National Treasury limited the compensation of employees of the NDT, she asked from what budget the NDT paid for increases in wages for its employees. She also pointed out that the Policy and Knowledge Services Programme received 63.3% of the NDT’s budget, much of which went towards SA Tourism. Were there proper checks and balances that funds were properly spent? It was all good and well that signage was to be done at various sites, Members however needed to know what the timeframes for various sites were. How did the NDT ensure that signage at various sites would be put up by the end of the financial year. The Committee had on its oversight visits encountered that signage was lacking. She wished to have greater information on marine and coastal tourism besides the work done on blue flag beaches. What were the NDT and SA Tourism hoping to gain from marine and coastal tourism? The NDT needed to name the municipalities where it had done capacity building and other work. She suggested that the NDT do impact studies of its training after the fact. She asked how successful the training in French had been in 2015/16. Russian and Chinese were difficult languages to learn. She asked where the imbizos that the NDT had referred to were taking place. What was the message communicated to communities?   

Mr Ackerman said capital assets on domestic tourism had increased from 0.2% in 2015/16 to 23.8% in 2016/17.  EPWP infrastructure projects were classified as capital assets. It was work in progress. On compensation of employees he explained that National Treasury always included a percentage for increases. He stated that on salary increases National Treasury provided the difference in the adjustment budget. On the 2017/18 budget there was already a cut in the compensation of employees. The NDT was only allowed to have 530 employees. The staff complement at present was beyond 530. He conceded that the transfer of funds to SA Tourism sitting at 63% was huge but controls were in place for monitoring expenditure.

Mr Tharage, on oversight over SA Tourism, said the new Board of SA Tourism was doing a good job. The NDT was satisfied with the work of SA Tourism. The NDT did make quite a sizeable transfer to SA Tourism i.e. approximately 50%. National Treasury did not have an issue with the huge transfer to SA Tourism, as there was a constant struggle with exchange rates. The NDT did not have an issue with accountability on SA Tourism as they managed to get a clean audit year after year from the Auditor General of SA (AGSA). On the EPWP there had been criminal cases and investigations that had been done.

Ms Malan explained that there had not been training on the French language. There was the training of Further Education and Training (FET) Chefs Educators by French Chefs in Mafokeng. The language training on Russian was a pilot project and lessons would be learnt from it. The trainees would also spend a month in Russia to get a feel of Russian culture.

Ms Ramphele, on interpretive signage plans at world heritage sites, responded that there were Memorandums of Understanding (MOUs) which set out what needed to be done and by what time. So yes there were timeframes. Processes had to be followed for the making of signs etc. Delays were sometimes experienced during procurement. Transfers could only be done once work was completed. Vredefort Dome traversed the North West and the Free State Provinces. There were contracts and plans in place. 

Mr S Bekwa (ANC) asked whether the recruitment of tourist guides and the language training would be multi-year. On the implementation of blue flag statuses at 50 beaches he asked whether the NDT intended to develop a comprehensive marine strategy. He asked when the draft amendment act to the Tourism Act would be submitted to parliament.

Mr Tharage, on marine and coastal tourism, stated that there was an in depth planning process underway. Operation Phakisa did speak to issues around minerals, gas and small harbours etc. The NDT worked hand in hand with the Department of Environmental Affairs. Five to six mega projects would be identified that were planned by the private sector. Transnet was also involved in putting up infrastructure. The Department of Transport was also working with the private sector. Scientific studies were being done to earmark certain areas. Even developers who owned coastal land were on board with the process. The NDT would provide the Committee with further detail at a later stage. Legislation would be brought to Parliament in 2017. Policy issues needed to be sorted out first. The legislation would proceed through the cluster, Cabinet and go out for public consultation.

Ms Malan, on whether the training offered was multi-year, said that targets would be relooked at as the NDT moved forward.

Ms E Masehela (ANC) asked for greater clarity on the cost of the under spending on the incentive programme during 2014/15 and 2015/16. What was being done to prevent it from recurring in 2016/17? She appreciated the fact that the NDT was passionate about ethics but asked whether there were instances where ethical principles had been compromised. Transformation in the tourism industry was at a slow pace. What turnaround strategy had the NDT put in place to fast track transformation? On enterprise development she asked how many enterprises or individuals were assisted annually and how good the success rate was.  How many complaints did the Tourism Complaints Officer deal with per month? She suggested that the NDT provide the Committee with greater detail on its international activities as not much was contained in the APP. She commended the NDT for maintaining a vacancy rate of 8% and having a disabled persons’ employment rate of 3%.

Mr Tharage, on expenditure, explained that in 2014/15 there had been cuts applied across the system. The NDT had a cut that amounted to R78m. There had been no under expenditure for 2015/16. The lessons that the NDT had learnt was that plans needed to be more detailed. The NDT was learning as it went along. Things could be done more smartly. It was all about commitment. On ethics he responded that when it came to working with people mistakes would be made. The NDT did have a situation where an official had been demoted from a director to a deputy director. The person had used his influence and office to get benefits from the industry.

Ms Bhengu stated that on tourism complaints at the end of February in 2015/16 there had been 34 complaints, 9 were in progress and 25 had been closed. Most of the complaints were around tourists’ expectations not being met.

Mr G Krumbock (DA) noted that his question was not on the briefing but more on cooperative governance or the lack thereof. It was very frustrating to assist the residents of his constituency due to the lack of cooperative governance. In the Umgeni Municipality the Department of Cooperative Governance and Traditional Affairs (COGTA) had spent huge sums of money on upgrading the Nelson Mandela Capture Site. The site had approximately 13 000 visitors each month. Three years ago he had asked the Minister of Tourism to put up signage at Howick Falls and other places. To date no signage was put up. One year after putting in the request he had a response saying that the matter was receiving attention. The people of Howick had even requested the municipality to put up signage. A Non Governmental Organisation (NGO) whose job it was to market Howick had their funding cut. The area had a great deal of unemployment and this made matters worse. There was an increase in hopelessness amongst residents. Cooperative governance simply was not happening on the ground even though the briefing was saying otherwise. No price could be placed on the dignity of people to be gainfully employed. It was unacceptable that it had taken five years to have signage put up at the Nelson Mandela Capture Site. The NDT was asked whether they as officials could perhaps get it right seeing that politicians could not. He asked whether Director Generals and officials of departments spoke to one another. He asked that the NDT’s response instil a sense of positivity in him.

Mr Tharage noted the observations made by Mr Krumbock. He was aware that there was a need for improvement. The issue was about whom the NDT needed to communicate to at grassroots level. The solution was communication. There needed to be an open door policy. There was a concurrent mandate on tourism. The NDT went to provinces and shared its plans with them. Provinces communicated their critical areas to the NDT. However there would be things that the NDT would not pick up. There was a need for a broader Product Development Master Plan. Inputs from various provinces were required. The Tourism Infrastructure Master Plan would identify the most important things to deal with. Benchmarking was needed to determine what made a working local government. The International Tourism Management Programme would be responsible for coming up with a model. The model could then be applied to all municipalities. He conceded that more needed to be done. Greater prioritisation was needed. The Nelson Mandela Capture Site was a mega site. 

Mr R Cebekhulu (IFP) emphasised that the need existed for tourism to be taken on as a subject in schools. Education on tourism had to start at a young age. Rural areas also needed attention. People in rural areas should be taught how to take advantage of tourism activities in their areas when tourists arrived. This could alleviate the financial hardships of people in those areas.

Ms Ramphele, on rural areas not benefiting, pointed out that the NDT had done a study tour to Malaysia. Malaysia was exceptional on how best to do home stays of tourists. A framework was needed. There should be opportunities for rural areas to give tourists an opportunity to stay in beehive huts. There was an incubator project in the Pilanesberg. In the KwaZulu-Natal, the Deputy Minister of Tourism had launched a home-stay initiative.

The Chairperson noted that the NDT worked collaboratively with other departments and in some instances depended upon them to do things. How could the NDT influence its counterparts? She pointed out that the Human Sciences Research Council (HSRC) had said that when Dutch tourists went to rural areas they preferred to stay at bed and breakfasts rather than hotels. Tourists’ accommodation needs differed. Was accommodation accessible? She stated that people living in areas surrounding the Nelson Mandela Capture Site were not being employed. People were being brought in from Cape Town and Johannesburg to work at the site.
           
Mr Tharage noted that people living around tourist attractions needed to be capacitated and empowered. Jobs should ideally not be given to outsiders. The NDT did work with provinces to identify sites and people. The implementation of the Broad Based Black Economic Empowerment (BBBEE) Codes would also assist in empowering suppliers. 

The meeting was adjourned.