Annual Reports 2017/18
The National Department of Tourism (NDT) briefed the Committee on its 2017/18 Annual Report.
The NDT had managed to obtain an unqualified audit report with no matters of emphasis but there was however findings by the Auditor General of SA. On the financials of the NDT, total expenditure sat at 99.7%. Overall performance on targets was 90.9% with 60 out of 66 targets having been achieved. Members were provided with insight into performance as per each of the NDT’s Programmes:
Programme 1: Corporate Management
Corporate Management performance sat at 88% with fifteen out of seventeen targets having been achieved. Expenditure for the Programme was 100%.
Programme 2: Tourism Policy and Planning
For Tourism Policy and Planning all sixteen targets set were achieved and 100% of the Programme’s budget had been spent.
Programme 3: Destination Development
On Destination Development six out of seven targets had been achieved which translated into performance of 85.7%. 98.7% of the Programme’s budget was spent.
Programme 4: Enterprise & Visitor Support Services
On Enterprise & Visitor Support Services 23 out of 26 targets had been achieved. Performance thus sat at 88.4%. 98.2% of the Programme’s budget had been spent.
The Committee appreciated the efforts of the NDT in obtaining an unqualified audit report for 2017/18. The NDT however on its irregular expenditure of R271 000 was asked whether it was incurred in one single transaction or broken down amongst many. Members asked the NDT what its efforts on Working for Tourism projects in the Eastern Cape Province were. The NDT was asked how it spent its funds on destination development. Members were concerned that only 20% of the NDT’s resources were used for destination development when over 50% of it was used for policy and planning. Members felt that more needed to be spent on destination development. Destination development was vital as it could lead to the creation of jobs. When funds were spent tangible results had to be seen. How else would the quality of people’s lives be improved? Members also felt that the NDT needed to intensify efforts on township tourism. Members asked to see the matrix that the NDT was using when it’s spent funds. Resources should be used where it was needed. The NDT was asked how many enterprises it had supported in the Northern Cape Province and what the progress to date was. The NDT was further asked what type of support was given to enterprises and whether the support given was sustainable. The NDT was also asked to provide the Committee with a list of municipalities that it had trained in its Induction Programme. Members were concerned that there were many areas in the North West Province that had no tourism activity. What was planned in the North West Province? Members were surprised that 62% of the NDT’s budget was transferred to its entity SA Tourism. The NDT was asked whether work on Blue Flag beaches covered all four coastal provinces in SA. Which beaches was work being done on? Members asked in which municipalities the NDT had initiated programmes. The Chairperson asked the NDT to speak to trans-frontier activities. The NDT was also asked to provide the Committee with information around tourism plans for the Southern African Development Community (SADC) region given that SA had signed an agreement in this regard. Members highlighted concerns abroad around tourist safety. It was a matter that needed prompt action. The NDT was given the option of providing the Committee with detail/information at a later time if the detail/information was not at hand.
The Committee’s Fourth Term Programme 2018 and First Term Programme for 2019 were presented to Members.
Mr Victor Tharage, Director General, of the National Department of Tourism sent his apologies to the Committee for not being able to attend the meeting as he was on leave. Ms Shamilla Chettiar, Deputy Director General: Destination Development, NDT, stood in as Acting Director General.
Ms Chettiar said that the Department had started with its new structure on 1 April 2018. With the exception of the Director General and the Chief Financial Officer (CFO) the jobs of most of the staff had changed. Even with all the changes the NDT still managed to achieve over 90% of its targets in 2017/18. 99.7% of the NDT’s budget had also been spent. The NDT had managed to obtain an unqualified audit report with no matters of emphasis but there was however findings by the Auditor General of SA.
Briefing by the National Department of Tourism (NDT) on its Annual Report 2017/18
Mr Ralph Ackerman, CFO, NDT, kicked off the briefing by reiterating that the NDT had received an unqualified audit report and that there had been two misstatements in the NDT’s disclosure notes. The misstatements had subsequently been corrected. Total expenditure as previously stated, sat at 99.7%. The Committee was provided with a breakdown of expenditures for the four Programmes of the NDT ie Corporate Management, Tourism Policy and Planning, Destination Development and Enterprise & Visitor Support Services.
Ms Nomzamo Bhengu Chief Director: Strategy and Systems, NDT, provided the Committee with an overview of the performance of the NDT for 2017/18. Total performance sat at 90.91% with 60 of the 66 total targets set having been achieved. Members were provided with insight into performance as per each of the Programmes.
Programme 1: Corporate Management
Ms Lulama Duma, Deputy Director General: Corporate Management, NDT, stated that performance for the Programme sat at 88% with 15 out of 17 targets having been achieved. Two targets were not achieved. Expenditure for the Programme was 100%. On the vacancy rate of the NDT the annual target was set at 8%. As at 31 March 2018 the vacancy rate was 6.2%.The annual target for the employment of persons with disabilities was set at a minimum of 3%. As at 31 March 2018 actual performance sat at 4.7%. There was also 100% implementation of the annual internal audit plan.
Programme 2: Tourism Policy and Planning
Ms Aneme Malan, Deputy Director General: Tourism Research, Policy and International Relations, NDT, stated that all 16 targets set were achieved and that 100% of the budget had been spent. On the number of monitoring and evaluation reports on tourism projects and initiatives to be developed the 2016 State of Tourism Report (STR) had been developed and had since been published on the NDT’s website. On the number of initiatives facilitated for regional integration a Ministerial Session was hosted at the 2017 Tourism Indaba on the 15 May at the Inkosi Albert Luthuli International Convention Centre.
Programme 3: Destination Development
Ms Chettiar said that six out of seven targets had been achieved and that 98.7% of the budget was spent. On the number of destination enhancement initiatives implemented a destination planning manual had been developed and a methodology for the development of tourism precincts had also been developed. On the number of Full Time Equivalent (FTE) jobs created through Working for Tourism Programme the target of 3 085 jobs was surpassed with 3 457 jobs having been created.
Programme 4: Enterprise & Visitor Support Services
Ms Morongo Ramphele, Deputy Director General: Tourism Sector Support Services, NDT, noted that 23 out of 26 targets had been achieved. Performance thus sat at 88.4%. 98.2% of the Programme’s budget had been spent. On the number of initiatives supported to promote Broad-Based Black Economic Empowerment (B-BBEE) implementation, the target was met of having a Tourism Transformation Indaba. It was held on 30-31 October 2017 at the Kopanong Conference Centre in Benoni. Furthermore, the target of having guidelines for the commercialisation of state owned attractions developed was also met.
Mr L Magwebu (DA, EC) congratulated the NDT on obtaining an unqualified audit report. On the matters which the Auditor General of SA had raised around compliance with laws and regulations where there was R271 000 spent on six items, he asked whether there were six different transactions or one transaction that totalled R271 000. On Working for Tourism projects funded through the Expanded Public Works Programme (EPWP), he had observed that there were seven projects but none seemed to be in the Eastern Cape. Had the NDT done any work in the Eastern Cape? The NDT was asked how it spent its resources on destination development. He was surprised that only 20% of its resources were spent on destination marketing when 56% of it was spent on policy and planning. He was concerned about why so much was spent on policy and planning and so little on destination marketing. The figures should be the other way around. When funds were spent it had to translate into concrete results. Destination development was important as it could create jobs. If six out of seven projects had been funded by the NDT, Members wished to see how much resources had been spent and what difference to the lives of people had been made. He noted that Mdantsane was the boxing capital of East London in the Eastern Cape. Many famous boxers had hailed from the area. Was anything planned for Mdantsane? There was also little being done on tourism in townships like Soweto. More needed to be done on township tourism. He pointed out that the township of Ginsberg in the Eastern Cape had turned itself into a booming tourist attraction as it was where the freedom stalwart Mr Steve Bhiko had been born. He wished to see the matrix that the NDT was using when it spent funds. Resources should be spent where it was needed.
Ms Chettiar responded that a very small portion of the NDT’s budget was for policy and planning. The lion’s share of the budget went towards destination development. There were several initiatives of destination development. Master Plans were done for regions. Destination development was talking place at Cradock and at Port St John in the Eastern Cape Province. A Master Plan was also being developed in this regard.
Mr Ackerman stated that the budget was R67m for policy and planning. It was only 6.7% of the total budget of the NDT. He explained that the irregular expenditure of R271 000 was for six different transactions.
Ms Ramphele added that the NDT had supported the Steve Bhiko Foundation for a period of three years on operational funding.
Mr W Faber (DA, Northern Cape) too felt that it was wrong for the NDT to spend over 50% on policy and planning but only 20% on destination development. Why was so much spent on policy and planning? He asked how much money had been spent at Phalaborwa and Mier. If 400 enterprises had been supported for development how many were from the Northern Cape Province. Were the enterprises supported being established as Small, Medium and Micro Enterprises (SMMEs)? He asked what progress had been made to date.
Ms Ramphele said that incubators had been established at Phalaborwa and Mier. Each incubator had 50 enterprises. After three years the enterprises went on their own. They were given business-wise support. Lack of funding was identified as the main problem. The NDT assisted them with having their documentation in order so that funding could be obtained from Developmental Finance Institutions (DFIs). Of the 400 enterprises supported there were twenty one in the Northern Cape Province. The rest of the spread was Eastern Cape Province – 65, Free State Province – 39, North West Province – 22, Mpumalanga Province – 28, KwaZulu-Natal Province – 31, Gauteng Province – 30 and Limpopo Province – 25. The assistance was further broken down in terms of women, youth and persons with disabilities.
Ms Chettiar noted that R20m had been spent on development in the Phalaborwa area.
The Chairperson said that if the NDT did not have certain information at hand it could be forwarded to the Committee at a later stage.
Ms B Mathevula (EFF, Limpopo) asked if the Induction Programme had trained eight municipalities and if so which ones. She asked what the progress at Shangoni Gate was.
Ms Chettia explained that an Environmental Impact Assessment (EIA) at Shangoni Gate had been approved. Construction would happen shortly.
Mr B Nthebe (ANC, North West) noted that there were many areas in the North West Province that had no tourism activity. He highlighted the Lotlamoreng Dam area. Activities undertaken by the NDT in the Province should be highlighted. If anything could be done to unlock tourism potential it should be done. Not much progress was made at Rampampastad.
Ms Chettiar stated that the Lotlamoreng Dam area was important.
Ms Ramphele said that the NDT did see tourism potential at Rampampa village. The problem was that people did not have information.
Mr M Khawula (IFP, KwaZulu-Natal) observed that 62% of the NDT’s budget was for transfers to its entity SA Tourism. He remarked that government departments tend to transfer a great deal of their allocated funds to entities. He asked whether work on Blue Flag beaches covered all four coastal provinces. Which beaches were covered? Blue Flag status for beaches was a major issue in KwaZulu-Natal. If the NDT supported 400 enterprises for development he asked what type of support was given. Was the support given sustainable? If programmes were initiated in ten municipalities he asked which the municipalities were.
Ms Chettiar said that the only transfer that the NDT made was to SA Tourism - its only entity. She said that the NDT could provide the list of Blue Flag beaches to the Committee. At present three out of the four coastal provinces were covered. Work was not yet taking place in the Northern Cape Province. The Eastern Cape, KwaZulu-Natal and the Western Cape Provinces had Blue Flag Beaches. There were 25 additional beaches that work was being done on regarding Blue Flag statuses.
Mr Ackerman stated that the transfer payment to SA Tourism amounted to R1.6bn.
Ms Ramphele, on support to municipalities, explained that the NDT had to prioritise which to support. In total there were 265 municipalities in SA. Those who had potential for tourism were prioritised. The NDT did have a report on municipalities that it had supported on capacity building. The report could be provided to the Committee. There had been twenty in total. Traditional leaders, councillors, officials and businesses in municipalities all had key roles to play. The help of experts were called in to identify where capacity help was needed in each municipality. The NDT focussed mainly on supporting municipalities in rural areas. The list of municipalities included Beitbridge (Mpumalanga Province), Zululand (KwaZulu-Natal Province), Chris Hani and Alfred Nzo (Eastern Cape Province) and Vembe (Limpopo Province).
The Chairperson pointed out that the briefing had been silent on trans-frontier tourism activities. If the information was not at hand it could be provided to the Committee later. The NDT was asked whether it had documentation on the Southern African Development Community (SADC) Agreement that SA had signed covering tourism plans for the SADC region. The Department of Trade and Industry (DTI) was the department that was involved. He asked that when the NDT engaged with municipalities at municipal level that members be informed so that members could assist with maximising the engagement. He noted that safety of tourists was a huge concern. Ambassadors had stated that tourists were not willing to come to SA due to reports of SA being an unsafe destination. He was pleased that the NDT had safety monitors.
Ms Malan, on trans-frontier activities, wished to provide some context. The Regional Tourism Organisation of Southern Africa (RETOSA) was responsible for marketing in the SADC region. The SADC Ministers of Tourism had met to restructure the RETOSA. At the last SADC meeting a decision was taken to shut down RETOSA. Even though this was done, all countries agreed that marketing the SADC region was important. The vehicle to do it was the only thing that had to be decided upon. The SADC Secretariat was requested to look at a plan for policy with which to promote the region. The RETOSA was being wound down. The NDT was looking at coming up with a framework on marketing
tourism in the region. There was a great deal of work being done. The framework would be complete in the near future.
Ms Ramphele, on safety, said that work was being done. There was a forum established which had the South African Police Services (SAPS), provinces, the Tourism Business Council of SA (TBCSA), the Southern Africa Tourism Services Association (SATSA), Business Against Crime and SA Tourism on board. The intention was to come up with a strategy to identify crime hotspots. She noted that the Western Cape and Mpumalanga Provinces did have good communication when tourists were in distress. Tourism monitors would be placed at areas which were prone to incidents of crime.
The Chairperson asked the NDT to provide the Committee with detail on Blue Flag beaches etc. The information provided should speak to plans of those beaches not covered yet.
Minutes dated 10 October 2018 was adopted unamended.
Committee Programme for Fourth Term [9 October – 30 November 2018] and for First Term [7 January – 6 February 2019]
The Chairperson presented the Programme to the Committee. He said that the Programme was only a guide and that the Committee could note it. Members were informed that the possibility existed that the Committee would stand down in having meetings on some Wednesdays in favour of the slot being utilised by the Select Committee on Economic and Business Development. The Select Committee on Economic and Business Development had a great deal of legislation that it needed to deal with.
The meeting was adjourned.
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