Department of Tourism 2018/19 Quarter 4 performance


10 September 2019
Chairperson: Mr S Mahumapelo (ANC)
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Meeting Summary

The National Department of Tourism (NDT) briefed the Committee on its Fourth Quarter Performance Report 2018/19. An overview of performance for Quarter 4 was that the NDT had 83 targets of which 75 had been achieved. The briefing included an overview of Quarter 4 performance across the NDT’s Programmes ie Corporate Management; Tourism Research, Policy and International Relations; Destination Development and lastly Tourism Sector Support Services. Workforce representativity of the NDT at 31 March 2019 was 83.6% - African, 5.4% - Coloureds, 4% - Indians and 4.5% - Whites.  Persons with disabilities made up 4.5% of the organisation. On the financial performance of the NDT the expenditure as a percentage of budget was 99%. For Quarter 4 however, there had been an under spending of R27m.  In respect of Programme 1, the bulk of this underspending lies within Compensation of Employees due to strict policies adhered to by the Department to reduce expenditure on salaries and wages. On Programme 3, the underspending is primarily related to project payments to consultants for research and advisory services which could not be processed as milestones where not reached as per contractual agreements. On Programme 4, the underspending is primarily due to the delays experienced in the finalisation of contracts with project implementers of the Tourism Incentive Programme.

Members observed that across the Programmes there were targets that had not been met. They were concerned about the procurement processes of the NDT, the unfilled vacancies, the outsourcing of functions and the lack of activities in rural and township areas. In addition, they asked about airlift strategies, training programmes, maintenance of tourist sites, challenges that affected tourist numbers, the support given to Small, Medium and Micro Enterprises, the Tourism Transformation Fund and the Department’s communication strategy.

Meeting report

The Chairperson informed the Committee that the Minister and Deputy Minister had both tendered apologies for not being able to attend the meeting. He pointed out that there had been reports of South African National Parks (SANParks) employees having salary disputes. There were also the recent acts of criminality that had played out under the guise of xenophobia. These types of issues impacted upon tourism and needed to be addressed.

Ms Morongoe Ramphele, Acting Director General, NDT, tendered apologies for Mr Victor Tharage, the Director General and Ms Aneme Malan, the Deputy Director General: Tourism Research, Policy and International Relations, for not being able to attend the meeting.
Briefing by Department of Tourism (NDT) on its Fourth Quarter Performance Report 2018/19
Ms Nomzamo Bhengu, Chief Director: Strategy and Systems, NDT, provided some background on Quarter 3 actual performance. The October 2018 report presented to the Committee had been unaudited figures. Quarter 3 actual performance sat at 69.88%. 

She continued with an overview of performance for Quarter 4. 75 of 83 targets (90.36%) had been achieved.

The presentation highlighted Quarter 4 performance across the NDT’s Programmes:

Programme 1: Corporate Management
Ms Lulama Duma, Deputy Director General: Corporate Management, NDT, noted that the Programme had 16 targets in total. 14 of the 16 targets had been achieved with two not being fully achieved. On the number of strategic documents developed the annual target was to have the Annual Performance Plan (APP) 2019/20 developed. This was achieved as the report was submitted for approval and tabled in Parliament.

Programme 2: Tourism Research, Policy and International Relations
Ms Nonqubela Silulwane Chief Director: Research and Knowledge Management, NDT, stated that the Programme had set 20 targets with 19 being achieved. One target remained unachieved but significant work on it had been done. On the number of policy development initiatives undertaken, the annual target was to have quarterly analysis reports on airlift developed to inform stakeholder engagements. The Quarter 4 target of having an analysis report on airlift developed to inform stakeholder engagements had been met.

Programme 3: Destination Development
Ms Shamilla Chettiar, Deputy Director General: Destination Development, NDT, said that the Programme had 14 targets in total. 12 targets had been achieved whilst 2 targets were not achieved but significant work had been done on one of the unachieved targets. On the number of destination planning initiatives undertaken, the annual target was to develop an ownership and operational model for budget resorts. The Quarter 4 target of having an ownership and operational model for accommodation and related tourism products (budget resorts) developed was achieved.

Programme 4: Tourism Sector Support Services
Ms Ramphele, as the full time Deputy Director General of Tourism Sector Support Services, stated that the Programme had 33 targets in total. 1 target had not been fully achieved and two targets had not been totally achieved. On the number of enterprises supported for development, the annual target was to have non-financial business development support provided to 400 Small, Medium and Micro Enterprises (SMMEs). The Quarter 4 target of having an annual progress report and programme review on implementation of enterprise support programmes to 400 SMMEs developed was achieved. Even though the number of SMMEs to be supported was set at 400 the actual number was 487.

The Department’s end of March 2019 figures on workforce representativity were 83.6% - African, 5.4% - Coloureds, 4% - Indians and 4.5% - Whites.  Persons with disabilities made up 4.5% of the organisation.

Mr Ralph Ackerman, CFO, NDT, spoke to the financial performance of the NDT for Quarter 4. The expenditure of the NDT as a percentage of budget was 99%. For Quarter 4 however, there had been an under spending of R27m.  

In respect of Programme 1, the bulk of this underspending lies within Compensation of Employees due to strict policies adhered to by the Department to reduce expenditure on salaries and wages. On Programme 3, the underspending is primarily related to project payments to consultants for research and advisory services which could not be processed as milestones where not reached as per contractual agreements. On Programme 4, the underspending is primarily due to the delays experienced in the finalisation of contracts with project implementers of the Tourism Incentive Programme.

Mr H April (ANC) observed that the NDT saw the development of reports by itself as a target that had been met. How does the development of a report become a target that had been met? He noted that the implementation of targets would be more important in respect of the report that was developed. He asked who had attended the research seminar that had been held. He was concerned that procurement processes had taken three months and after three attempts had taken nine months. Why had it taken so long? He further noted that an empowerment conference had been held in the North West. Who had been empowered? In his view, the 1000 days support initiative was a good thing.

Mr April asked how many illegal tour guides there were in SA. He felt that the training and empowerment initiative was a positive step and should be continuous and be increased. He did not agree with the NDT not filling vacant posts all be it that there were reasons for doing so. The unemployment rate in SA was already far too high.
Ms Bhengu, on the NDT having a strategic document set as a target, said that beyond this National Treasury and the Department of Planning, Monitoring and Evaluation (DPME) required certain things from the NDT. The DPME may require an output. The output was the report. The NDT had an obligation to develop documents which was part of compliance with its mandate. In order for the NDT to do oversight over SA Tourim (SAT) it needed information/reports.

Ms Ramphele, on illegal tour guides, responded that there were 11 000 registered tour guides. There were illegal tour guides who were chance takers. Illegal tour guides were given spot fines.

Ms Silulwane added that reports in the final quarter were the product of data collection from previous quarters. Executives from the tourism industry had attended the research seminar. In 2018 a total of 131 delegates had attended the research seminar.

She admitted that there were practical challenges present when it came to procurement. The NDT tried to sensitise service providers on the do’s and don’ts. Unfortunately, the service providers had not grasped the process. Service providers were mostly in training but not in data collection. Other challenges were that some service providers were simply far too expensive.

Ms Chettiar pointed out that the principle behind procurement process was transparency and fairness. The procurement process took about three months to complete.

The Chairperson asked whether there were other mechanisms within the law that the NDT could have used.

Ms Chettiar replied that the Auditor General of SA would not say that the NDT had problems with procurement processes.

Mr Z Peter (ANC) pointed out that across all the programmes there were targets that had not been met. Was there perhaps a weakness within the NDT? If there was then it ought to be addressed. He too disagreed with the NDT holding back on the filling of certain vacant posts. Could the posts not be filled because of poor planning? On 1500 unemployed youth being enrolled on the Food Safety Programme he asked whether the NDT had aftercare for the youth. He asked what the target was for the Township Master Plan. Was the target linked to the budget? On challenges around visas, he asked what progress had been made. What would the situation be three months from now?

Ms Chettiar, on master plans, said that there were budgets. However not all projects in master plans would have budgets.

Mr M Galo (AIC) appreciated the briefing but felt that the NDT needed to focus its efforts more in rural areas. More jobs needed to be created in rural areas. On the 577 unemployed youth that had been enrolled in the National Youth Chef Training Programme, he asked that the Committee be given a breakdown of the figure in terms of how many per municipality.

Ms M Gomba (ANC) was concerned that procurement processes for the same thing had to be repeated thrice without results. What method of procurement had been used? Would the Auditor General of SA not query the irregular expenditure? Would the NDT not get an audit query? What functions did the Department outsource? Why had certain functions not been performed in-house? Was a budget provided for the functions to be outsourced?

Look at the expenditure, she asked how it was possible that there was a 2.1% variance whilst there were SMMEs that were struggling on tourism destination development. She was disappointed that only one place in a township – Vilakazi Street in Soweto - was recognised by the NDT as a tourist attraction in the entire Gauteng. After 25 years of democracy how was this possible? There were so many SMMEs in townships that needed assistance. Members needed to know what the hotspots were. Was the Department consulting with provinces to identify places? She was pleased with the training and development efforts of the NDT but felt that SMMEs should also be developed.

Ms Chettiar responded that the reality was that the state had not invested in Vilakazi Street for the past 25 years. Business and the community had invested in it. The NDT’s work in Vilakazi Street was new and was not for 25 years. Vilakazi Street was a successful model of township tourism. The NDT had done mapping. She explained that it took 20 years to develop a brand and a product like the sorts of Vilakazi Street. This was the very reason why there were master plans.

Mr Ackerman, on the 2.1% variance, said that the NDT would have loved to have spent 100% of its budget. He noted that over expenditure was a bigger problem than under expenditure. He explained that the NDT followed the modified cash basis of accounting. The challenge came in when the NDT received invoices after 31 March. These service providers were paid in April. This meant that when one added in the accruals the expenditure would be higher than the current 98% expenditure. 

Mr M de Freitas (DA) got the impression that some provinces seemed to be more cooperative than others. He asked whether it was in fact so. What could the Department do to get the other provinces on board when it came to tourism? On capacity building programmes, he asked what happened to the youth once they received their qualifications. Did they have to go out and look for jobs or did the NDT ensure that these trained youths were placed?

Ms Ramphele replied that the skills development that was done was for experiential training. The efforts of the NDT were to enhance the employability of youth. 70% of the training was practical and 30% was theoretical. She pointed out that the chefs programme was doing well with the absorption rate being 60% upwards. On the food safety programme participants were also being absorbed. They could be absorbed by hospitals, schools etc where food safety was important. Collaboration was needed amongst departments to get people placed.

Mr H Gumbi (DA) asked how domestic tourism was monitored. He further asked whether the Department monitored what the is cost of getting to SA. Airline ticket costs, airport taxes and visa application costs etc ought to be taken into consideration. At present, Ethiopian Airlines seemed to be the gateway to the African continent. He asked whether there was value for money on funds that were spent on tourism.  He added that the Committee or individual members needed to be invited to tourism conferences, workshops etc.

Ms Silulwane stated that domestic tourism was monitored by way of two surveys. One survey was done by SAT and the other by Stats SA. The NDT intended for there to be an integrated domestic tourism survey. There would be one methodology and one target group. On the cost of coming to SA, such as flights etc, it was something that the NDT had to consider. Stakeholders would have to be engaged on the matter.

Mr T Khalipha (ANC) felt that the NDT needed to focus on domestic tourism. South Africans had to take tourism seriously. He was pleased that the NDT delegation was predominantly women. He said that outsourcing seemed to still be a problem by government departments. The resolution of the majority party is that outsourcing is not a priority. The NDT needed to limit its outsourcing.  The NDT’s focus should also be on rural areas and townships. He wished to see efforts in relation to this reflected in the next financial year. The focus should not only be on Vilakazi Street. 

Mr Khalpha asked what happened to persons that had been trained. Where were they at present? Did the NDT do a follow up? Were these persons still on the NDT’s system? He asked whether these persons had been integrated into the tourism and other sectors. He was also disappointed that the NDT had not filled vacant posts even though there had been a budget for it. The NDT was doing well but there was room for improvement.

Ms L Makhubele-Mashele (ANC) appreciated the efforts of the NDT given its overall performance of 90.36%. She said that the tourism sector relied heavily on external stakeholders. The NDT provided the regulatory environment. Stakeholders were required to do what needed to be done.

Ms Makhubele-Mashele advised the Department to consider the Yamoussoukro Decision when it is looking into airlift strategies. This was essentially an African airlift strategy. It was an open skies policy which encouraged Africa intra travel. The NDT needed to inform the Committee where the bottlenecks were on the Decision. If the Decision was dormant she asked how it could be resuscitated. She urged the NDT to look at intra African strategies rather than reliance on Asian or European airlift strategies. She felt that other African countries should also ratify the Decision.

Ms Makhubele-Mashele asked if the NDT had met its targets on data collection. When could the Committee expect to see results, analysis etc in order for the data to be used for planning? On the development of routes and physical spaces the NDT had said that it did not own the tourism products. The tourism products were given to stakeholders who had to manage it. The problem was that the tourism products ended up in a state of dilapidation. Stakeholders were unable to do maintenance on the products. The NDT had to put a plan in place so as to ensure that tourist had good experiences. An option was for the NDT to enter into Memorandums of Understanding (MOUs) with stakeholders. The MOU could make provision for consequence management where certain things were not done by stakeholders.

Ms Makhubele-Mashele referred to the various training initiatives and asked what the criteria was used to select people.
Ms Makhubele-Mashele pointed out that the Tourism Transformation Fund members felt that many SMMEs could not leverage on the NDT’s programmes because its criteria was too stringent. She concurred with this observation. What was the Department doing to get rid of the red tape? She was concerned about how many SMMEs there were that could not leverage on the Tourism Transformation Fund. The Fund was after all a legacy of the Committee. The briefing had spoken about female participants dropping out of programmes due to being pregnant. The Department should have a recovery strategy so that the affected females could complete the programme after all. She wished for the NDT to profile provinces on how many participants there were in each province. Having worked for Stats SA in a previous life, she believed it was possible to track people. 

Ms Silulwane, on the Yamoussoukro Decision, said that it was signed in 1999 but had not been implemented. She said that a starting point was less stringent visa regulations. Political will was needed.

Ms Chettiar, on the dilapidated state of tourism products, said that infrastructure maintenance was a challenge across SA. The NDT unfortunately had no recourse against owners of products. The NDT had agreements with owners of tourism products.

Ms Ramphele, on the Tourism Transformation Fund, said that the NDT had done an assessment on what worked and what did not work. The NDT had identified the criteria to access funding from the Fund as one of the issues. One of the challenges was the time taken to do assessments and to get projects ready. The NDT had enterprise development initiatives to develop SMMEs. On rural nodes, the NDT had a Rural Tourism Strategy and a Culture & Heritage Strategy. The NDT was cogniscent of nodes identified by the Department of Rural Development and Land Reform. On females dropping out of programmes because of pregnancies, she said that the Department of Social Development should come on board. For now the NDT could do profiling, whilst other relevant departments could do the recovery. The problem was that the duration of the programmes were twelve months so by the time the pregnant young lady returned the programme had ended. Participants in programmes had to show passion and commitment. When persons dropped out they had taken up the space of someone that could have completed the programme. 

The Chairperson agreed with what was said regarding pregnant female participants. It was non-negotiable. The NDT had a target of having a database of black owned products and services. How representative was black owned products and services? The NDT was reminded that the Committee had asked that there be mini indabas at municipal level. On the annual target of having 600 trained youth placed for the National Tourism Information and Monitoring System (NTIMS) data collection, the Quarter 4 target only sat at 549. He asked whether the shortfall of 51 youth training would be provided in the Eastern Cape, Northern Cape and Free State Provinces.

The Chairperson asked if the report on the Tourism Broad-Based Black Economic Empowerment (B-BEEE) Sector Codes whether it could be re-availed. On incubators supported in Quarter 3 procurement was delayed by finalisation of expanded panel of service providers. He asked what the result was on the unexpanded panel of service providers.

The Chairperson asked the NDT to elaborate on the tourism monitors training that were undertaken. What were the names of the rural nodes? He noted that the NDT had met all its quarterly targets on presenting risk analysis reports to the Risk Management Committee. He felt that something was amiss on the NDT’s procurement and contract management. The conclusion could thus be that the risk strategy of the NDT had not anticipated what had gone wrong. On the NDT not filling vacant posts because of risks associated with the transition from the fifth administration to the sixth and whether it would be merged with another department after elections, he felt that there ought to be transitional arrangements in place by the NDT and by government as a whole when these situations arise and they will. The NDT was asked how it measured the impact of its communications strategy. On procurement from B-BBEE compliant businesses, he asked for a breakdown of the businesses. Other than meetings and reports, how did the NDT hold SA Tourism accountable? He asked what else could be done. He said that the Committee needed to have a database of issues raised by Members so that there was no repetition. 

Ms Bhengu explained that management ran the risk management function. Steps had to be taken to mitigate against risks materialising. Even if the risk materialised the impact of it should not be that great. She conceded that contract management and procurement in the NDT needed attention. There were issues around responsiveness. Responsiveness was not what it should be. From an enterprise risk management space, managers should look at things.

Ms Silulwane noted the comment on the need for municipal indabas. On the trained youth placed for the National Tourism Information and Monitoring System (NTIMS) data collection, there had been a shortage of 51 youth which were mostly from the Northern Cape and Western Cape. There had been many challenges. In the Northern Cape there had been a shortage of youth in participating. Criteria had to be met and a certain qualification was needed. Most of the 549 participants were young women. On data collection the intention was to spatially map. The data had to be shared with municipalities.

Ms Duma, on the filling of vacancies, said that the NDT had adopted a new structure in 2017. The NDT had posts which were critical but did not have internal candidates to fill it. Other reasons were that the NDT had reached its ceiling on salaries expenditure and there was also the uncertainty that went along with the last general elections. The NDT had decided, in the short term, to find panels to assist with the health practitioner function, the media, electronic & communication function and the graphic design function. It was a stopgap measure to use panels. There were also no people in the build environment and in spatial mapping within the NDT. The NDT would on an incremental basis fill posts. On NDT’s communication strategy, she said that the key deliverable was for stakeholders in townships, dorpies and rural areas to have information on projects and programmes. The NDT used various platforms. With youth the NDT revamped social media platforms. The number of imbizos had also been increased. The communications strategy was work in progress. There was a need to find creative ways. 

Ms Ramphele, on the Tourism B-BBEE Charter Council, said that the applicable Act stated that the Minister of Tourism had to appoint the Charter Council.

The Chairperson said that the NDT had to concretely work on outcomes with relevant departments.

The Committee in conclusion agreed to the tabling of the Draft Consultative Workshop Report, August 2019 as well as tabling of the Draft Concept Paper on Tourism Oversight Forum.

The meeting was adjourned.


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