Arts and Culture Venture Capital Fund; PANSALB public hearing report on multilingualism & official languages

Meeting report

National Empowerment Fund on its work and impact on Arts and Culture Sector
Ms Philisiwe Mthethwa, NEF CEO, explained the NEF strategy included empowerment in various sectors such as tourism, biofuels, construction, agro-processing and mining services. This was in line with the government priorities which involved acceleration of economic growth and transformation; infrastructure development to achieve social and economic goals; skills and human development. NEF offered non-financial support in pre-investment advisory services, socio-economic development, post-investment support and turnarounds, workout and restructuring.

Some of NEF’s life to date performance milestones were approval of 919 transactions worth R9.2 billion across the country; disbursement of about R6.2 billion since inception; secured clean external audit opinions for 12 years; reaching approximately 400 million people in villages and township on its investor education.

NEF's role in the Arts and Culture sector included its funding of the following projects/companies: Long Walk to Freedom (PTY) Ltd, Sky Rink Film Studios Pty Ltd, Accident Films Pty Ltd, Bonngoe Productions Pty Ltd, Ma-Afrika Films Pty Ltd and Cloverleaf Films Pty Ltd.

She provided background to partnerships the NEF had in various sectors. The Department of Rural Development and Land Reform (DRDLR) and NEF signed an MOU in January 2016 to implement the SRR programme called the 50/50. This programme involved the government (through the DRDLR) purchasing land used for farming operations from a farmer. The farmer will own 50% of the new company and the farm workers will own the other 50%. The DRDLR has assigned about 36 SRR projects to the NEF since the commencement of the program, 10 of these projects were declined while 14 are earmarked for finalization by 31 March 2018.

The NEF also signed an MOU with the National Department of Tourism (NDT) and established a Tourism Transformation Fund (TTF). Under this MOU, the NDT committed to transfer R120 million to the NEF over a three year period to be applied as grant funding to qualified enterprises that meet the funding criteria as set out by the Project Steering Committee. This will be matched on a 2:1 basis by the NEF through both debt financing and equity contributions to the value of a further R80 million per annum. Under NEF’s partnership with the Western Cape Department of Economic Development and Tourism, the parties identified an opportunity to partner in order to identify private sector enterprises which are willing and able to deliver sustainable B-BBEE solutions to black enterprises at an accelerated pace in the Western Cape.

The Department of Arts and Culture (DAC) entrusted the NEF through a tender process to manage a Venture Capital Fund (VCF)for a period of three years with an allocated budget of R20 million (2016/17), R30 million (2017/18 and R50 million (2018/19). The VCF was designed to support black entrepreneurs wishing to start or expand existing businesses. The fund sought to redress past imbalances by addressing the lack of financing instruments for the creative industries, thereby contributing to economic growth and job creation. She said that the NEF has received R20 million from the Department of Arts and Culture but is waiting on the Department to approve the release of the funds to various beneficiaries.

On the importance of arts and culture to society, this sector contributed R90.5 billion (2.9%) towards South Africa’s GDP, created 562 726 job opportunities, contributed to social cohesion and sustenance of the country’s heritage among others. Some of the challenges faced by organizations within cultural industrials include lack of funds; inconsistent/unreliable business; high operational costs; lack of support from government.

Some of NEF’s strategic solutions to grow the Arts and Culture portfolio were to seek and secure services of heritage, arts and cultural experts who would assist with business development and opportunity scoping; engage with legends in music, arts and crafts, theatre, film production; engage with the State Theatre (and provincial equivalents) to identify young players in the sector; appoint a standing panel of service providers who would assist with fine-tuning the business proposition, financial viability and packaging of deals requiring non-financial support.

Venture Capital Fund overview report by Department of Arts and Culture (DAC)
Mr Vusi Mkhize, DAC Director General, said that there was need to address the problem of funding for entrepreneurs and the NEF was able to tackle by providing access to loans at very low interest rates. DAC has entrusted the NEF through a tender process to manage a venture capital fund (VCF) for a period of three years as a pilot project with the approval of Treasury on the condition that a DAC officer must work closely with the NEF to monitor the disbursement of the funds. Under the MOU executed by both parties, the Department will contribute 40% of the funds. DAC has disbursed the sum of R20 million to NEF with an outstanding balance of R30 million. A committee was set up to monitor the disbursement of the funds and there would be quarterly reports from the NEF on the progress of the project. An officer has been seconded to work closely with the NEF to ensure proper set up and running of the project.

He said that the major challenge faced by this project was dissemination of the information about the availability of this project to entrepreneurs. To address this, the parties agreed to advertise the project in newspapers and also organized workshops to attract entrepreneurs. It was also agreed by DAC and NEF that there would be no cap on the funding for each project but all projects would be assessed objectively.

Discussion
The Chairperson expressed her satisfaction with the presentation which she said it was very detailed. She spoke strongly against the Department of Arts and Culture’s failure to plan before implementing projects and made reference to the Committee’s last meeting in 2017 where one of the issues raised was the non-alignment between some of the entities’ operational budgets and the that of the Department. She asked the Department to confirm if they have an entity that oversees film production. She asked for clarification from the NEF on their marketing strategies, time line for each application and interest rates.

Mr T Makondo (ANC) restated that it was obvious that the DAC has a major challenge in planning. He asked if there was need for the Department to transfer the R20 million to NEF when all the processes were not in place. Delay in getting approval from the department was a disservice to the entrepreneurs. He asked how the Department and the NEF intend to address some challenges faced by the entrepreneurs in accessing the funds from the project and the benefits of the partnership with the NEF. He also noted that there is a higher concentration of the NEF footprint in some provinces than others.

In response, Ms Zama Khanyile, NEF Mnotho Fund Manager, said that the tenor of each application is determined after review of the bankability of the project. The process for approval of each application involves review of the business plan and a screening process to determine if the project is economically viable. The screening process may take up to two weeks to be concluded.  The next process would be due diligence on the project application. And afterwards, a report on the findings is forwarded to the approval committee based on the amount applied for.

Ms Nokuthula Nkomo, NEF Asset Management Manager, said that the programmes under the project have included women in their projects such as building lodges for entrepreneurs with an opportunity for women to display their arts and crafts. NEF has always assisted entrepreneurs with their business plans and applied interventions to ensure that each applicant is given an opportunity to access the funds.

On the higher concentration of the NEF footprint in some provinces, Ms Khanyile replied that the NEF has a target and would cover all provinces.

The Chairperson noted that this provincial imbalance has been highlighted as a challenge since 2014. She advised that the DAC and NEF must consider this in their future planning.

Pan South African Language Board (PANSALB) Public Hearing Report
Mr Rakwena Monareng, PANSALB CEO, said PANSALB was established to promote and create conditions for the development and use of all official languages of the Republic of South Africa, the Khoisan languages and sign language; to promote and ensure respect for all languages commonly used by communities in South Africa including German, Greek, Gujarati, Hindi, Portuguese, Tamil, Telegu and Urdi and Arabic, Hebrew, Sanskrit and others used for religious purposes in South Africa.

The Constitution of the Republic of South Africa recognized the historically diminished use and status of the nine indigenous South African official languages and obligated the state to take measures to elevate the status and advance the use of these languages.

In fulfilling their mandate as outlined in the Constitution and the PANSALB Act (No. 59 of 1995), PANSALB conducted a public hearing to monitor and investigate the observance of the constitutional provisions set for the South African languages and the Official Languages Act No. 12 of 2012 by national government departments. Forty-two (42) national departments were invited to the public hearing panel, 31 attended while 11 did not attend. Each department was expected to present its language policy formulated in line with the prescripts of the Official Languages Act; outline its language policy implementation plan; and confirm the existence of the language policy implementation structur.

Each department had to submit its individual language policy before appearance at the Panel, make a PowerPoint presentation and respond to comments and questions posed by the hearing panel and members of the public. Although the panel’s approach was collegial and not adversarial, the recommendations made at the hearing would be binding upon departments. 

Their findings during the hearing showed that very little has been done by government to give effect to the constitutional multilingual requirement. Apart from the apparent lack of political will to promote the languages, there was also lack of understanding of the importance of promoting previously marginalized official languages. It was found that almost all the departments perceived the Official Language Act and the multilingual policy implementation as provision of translation and interpreting services rather than creating equitable space for official languages to grow and create value. There appeared to be no inclination to allocate sufficient human and financial resources towards multilingual language policy development and implementation.

Mr Monareng stated that it would have been easy to blame the Department of Arts and Culture for its formulaic, workshop-style introduction of a policy template to all departments as it did in 2016 but these departments were responsible for not complying.

He recommended that government departments should construct acceptable multilingual language policy with A time-framed implementation plan; both the language policy and its implementation should be strategically biased towards the development and creation of business space for the indigenous South African official languages; the departments should provide sufficient resources for language policy implementation and accord top priority to fully functioning language units with cogent executive standing within the departmental executive/management committee.

The Board would facilitate language policy workshops for departmental staff, management and executives. It will continually monitor and evaluate language policies development and implementation to provide necessary support and guidance.

Discussion
The Chairperson commended PANSALB on its hard work and resuscitation of PANSALB. She noted with dismay that the usual excuse by the Departments for not implementing the language policy has been lack of funds. The mindset of most of the departments has been that the implementation is unachievable. She said the defaulters may be sued as they are in effect breaking the law. Compliance with this policy by departments should be checked on the Committee oversight visits. All departments should be summoned before the portfolio committees to check their level of adherence.

Ms S Tsoleli (ANC) commended PANSALB for their hard work. It is disappointing that some departments did not prioritize the implementation of the language policy especially the Department of Education considering the pivotal role they play in dissemination of languages. She proposed that the Committee should engage other portfolio committees in assist in implementing the language policy of the departments they oversee.
           
Mr G Grootboom (DA) said that it is the responsibility of the parliament to ensure that the departments comply with the language policy as implementation must stay with government institutions.

Mr Mkhize said that the DAC will work together and support PANSALB. The Department will also get other departments to comply as it is the country’s collective responsibility to ensure that the language policy is implemented.

The meeting was adjourned.