Department of Communication and Digital Technologies 2021/22 Annual Performance Plan

Meeting report

The Committee Secretary said that apologies had been received from Minister Stella Ndabeni-Abrahams, and Deputy Minister Pinky Kekana ,who had to attend Cabinet meetings.

The Chairperson noted that an apology was received from Mr C Smit (DA, Limpopo). He said this virtual meeting had had to be shifted to an earlier time because of the plenaries which were scheduled for later during the same day.

Acting Director General’s introductory remarks

Ms Nonkqubela Jordan-Dyani, Acting Director-General, Department of Communications and Digital Technologies (DCDT), said the DCDT did not have a provincial presence and relied heavily on stakeholders to assist them in ensuring service delivery was enhanced and that there was no particular part of South Africa which was left out. The focus was on connectivity, and transforming communities in the industrial revolution (IR) space, and building on the digital economy.

There had been some adjustments to the DCDT’s presentation on its annual performance plan (APP), because President Ramaphosa had endorsed the Fourth Industrial Revolution (4IR) report, and the Department had been tasked to co-ordinate the implementation of the 4IR plan for South Africa.

Because of the Covid-19 pandemic, the DCDT had to come up with programmes that were responsive to the country's economic recovery. The digital economy master plan seeks to reposition the country to attract investment and partnership in order to build on digital infrastructure, development technologies, and advancing digital skills. The South African Post Office (SAPO) dispersed social grants and special grants due to Covid-19, while working with the Department of Social Development (DSD) and the South African Social Security Agency (SASSA). It had been tasked by the Sector Education and Training Authority (SETA) to fast-track e-government and digitise all government platforms to enhance service delivery and be responsive to citizen’s needs. The DCDT’s entities and the ones dealing with infrastructure were being urged to improve the digital infrastructure, mindful of the current issues involving virtual learning and digital classrooms.

The biggest constraint in all these programmes were the budget limitations which would be elaborated upon. The DCDT relied heavily on the private-public partnership to enhance the delivery of connectivity. Operators had been keen to expand on their network connectivity, as mentioned by the Minister in the budget vote speech on 18 May. The Department was currently working on other programmes and submitting proposals with regard to the expansion of broadband.

The interdict being faced regarding the auctioning of spectrum was a hindrance, as the DCDT had relied heavily on the auction so that the funding from this would go back to the fiscus and ensure South Africa’s digital connectivity expansion, and also address issues of data costs for citizens of the country. Minister Stella Ndabeni-Abrahams was negotiating with mobile operators and the regulator to find an out of court settlement in order to move forward on the issue. The DCDT was hopeful that the auction would proceed in this calendar year, and the DCDT would keep Parliament updated on this matter.

DCDT's Annual Performance Plan and Budget

Mr Farhad Osman, Chief Director: Strategic Planning and Monitoring, said the DCDT’s mandate was to lead South Africa’s digital transformation and achieve digital inclusion that would result in economic growth through creating an enabling policy and regulatory environment. Its impact statement was to enable citizens digitally with secure and affordable universal access.

There were four outcomes that the DCDT wanted to achieve.

Outcome 1: Enabling digital transformation policies and strategies

• Development of two country positions to support national information communication technology (ICT) priorities, focused on BRICS (Brazil-Russia-India-China-SA) and the World Telecommunication Development Conference (WTDC)-2.
  • Implementation of the International Relations and Engagement Strategy coordinate.
  • Submission of the South African Post Office (SAPO) Amendment Bill to Cabinet for approval and introduction to Parliament.
  • Monitoring the implementation of the approved data and cloud policy.
  • Development of the business case for the Regulatory Reform Bill.
  • Coordination of the implementation of the Digital Economy Masterplan.
  • Submission of the revised ICT small, medium and micro enterprise (SMME) development strategy to Cabinet for approval.
  • Conducting of a study on cost-to-communicate, to inform the revision of the Cost-to-Communicate Programme.
• Submission of the White Paper on the Audio and Audio-visual Content Services policy to Cabinet for approval.
• Submission of the Electronic Communications Amendment Bill to the cluster and Cabinet for public consultation and approval.
• Submission of the Portfolio Committee's 4IR strategic implementation plan to Cabinet for approval.
• Approval of the business case for the State Digital Services Company Bill.
• Approval of the business case for the State Digital Infrastructure Company Bill.
• Introduction of the Postbank Amendment Bill to Parliament.
• Submission of the framework on digital transformation and digital inclusion for approval and development of the implementation plan.

Outcome 2: Increased access to secure digital infrastructure’

• Facilitation of the operations of the BRICS Institute for Future Networks.
• Conducting preliminary technical and regulatory studies to inform SA’s draft  position for World Radio Conference (WRC)-23.
• Sustaining of the provision of broadband services to 970 connected sites.
• Sourcing of Phase 2 funding.
• Sourcing of funding for the household connectivity programme.
• Establishment of the project management office for SA Connect Phase 2.
• Facilitation of the operations of the Digital Transformation Centre.
• Coordination and monitoring of 840 000 subsidised digital television installations in four provinces (Free State, Northern Cape, North West and Limpopo).
• Coordinating and monitoring the distribution of 3.2 million vouchers.

Outcome three: Transformed digital society

• Coordination of partnership programmes to support the digital economy initiatives.
• Hosting of the ICT investment conference.
• Facilitation of the implementation of the national e-Government strategy and roadmap towards digitalisation of government services.
• Facilitation and monitoring of the digital and future skills programme.

Outcome 4: High performing portfolio to enable achievement of their respective mandates

• Coordination of the implementation of recommendations from the analysis of state-owned entity (SOE) performance reports.
• Facilitation of the tabling of submitted APPs of SOEs in line with the medium term strategic framework (MTSF).
• Facilitation of the development of shareholder compacts of Schedule 2 and 3B entities.
• Tabling of the performance management system for the Independent Communications Authority of South Africa (ICASA) councillors in Parliament.
• Implementation and monitoring of the Workplace Skills Plan (WSP).
• Implementation of one digital transformation priority intervention (collaboration platform).
• Payment of 100% of valid invoices within 30 days from date of receipt.
• Coordination of the implementation of the annual 2021/22 communications plan.
• Monitoring of departmental and state-owned companies' (SOCs') gender, disability, youth and children (GDYC) responsiveness programmes, in line with national targets.
• Development of the DCDT integrated plan of action in support of the implementation of the national strategic plan (NSP) on gender-based violence (GBV).
• Coordinating the implementation of the Stakeholder Relations Strategy.
• Development of the implementation plan for the District Development Model (DDM).

Dr Fhatuwani Mutuvhi, Chief Director: Digital Migration Programme, DCDT, said that following the President’s announcement during the 2021 State of the Nation Address (SONA) in February, they had progressed with the analogue switch off process in the Free State, the Northern Cape and North West provinces. The following analogue transmitter sites had been switched off to date in the three provinces:

Free State:

Senekal, Ladybrand, Bethlehem, Petrus Steyn, Wisieshoek, Boesmanskop, Theunissen, Kroonstad, Suidrand LP, Springfontein, Paul Roux, Bethulie, Ficksburg, Dewetsdorp, Hobhouse, Jagersfontein, Vrede LP, Merrel LP, and Villiers LP

Northern Cape:

Springbok, Garies, Pofadder, Calvinia, Augrabies, Victoria West, Petrusville, Richmond, Williston and Prieska

North West:

Groot Marico, Ganyesa and Taung.

Mr Osman said that to monitor implementation, the Department had developed implementation plans for all its APP targets through its of operational plans, which unpack each quarterly target in the APP into monthly activities aligned to allocated budgets. The Department then undertakes monthly reporting against the operational plans. as well as quarterly monitoring. against the quarterly targets in the APP.

All reporting was supported by a portfolio of evidence on the reported progress, which was also audited by internal audit. Challenges and corrective measures were identified in monthly and quarterly reports. Performance reports were tabled at management forums for inputs and interventions, and were submitted to the Minister and to the Department of Performance Monitoring and Evaluation (DPME). Extensive oversight and engagements were undertaken on all SOEs delivering on key priorities.

Ms Joy Masemola, Chief Financial Officer, DCDT, said the Department had been allocated R8.5 billion. This was a decrease of about 8% from the baseline allocation. The bulk of the budget went to Programme 4 (SOE oversight), and to ICT infrastructure support for the branches.

The compensation of employees (CoE) was allocated R304 million, while goods and services were allocated R420 million. The allocation for broadband was R611.2 million, spread over three years -- R194.5 million in 2021/22, R203.8 million in 2022/23, and R 212.8 million in 2023 /24.

R95 million had been allocated in the Department's baseline for SAPO distribution costs in terms of Broadcasting Digital Migration (BDM), while the Universal Service and Access Fund (USAF) allocation amounted to R1 billion. The international membership fees for organisations to which the DCDT was affiliated, amounted to R39 million. For Sentech (dual illumination), R100 million had been allocated. In total, transfers and subsidies amounted to R2. 9 billion.

Discussion

Mr A Nyambi (ANC, Mpumalanga) commented that there was room for improvement, but he would like to give credit where it was due. He said the DCDT had previously been in his municipality in Mpumalanga with regard to a digital outreach programme, and two schools in his municipality had received 60 laptops with internet connectivity. Additionally, 34 young people had completed cellphone repair programmes. Could the DCDT elaborate on any serious critical challenges, except for the budgetary constraints? The Committee had to play a role in oversight and assist when it must. What was the timeframe for bills so that Department attended to their progress? What was the current situation when it came to 30-day payment to people submitting invoices that were 100% valid -- did this mean they were destroying small and upcoming businesspeople who were trying to comply? What was the situation regarding the other five provinces regarding digital migration, since the DCDT had focused on four provinces so far? When were the other five provinces benefiting from such a programme? The transition to a digital economy was key to what South Africa was trying to achieve to help economic recovery. Looking at the four outcomes that the DCDT was attempting to achieve, could they achieve them without the issue of the spectrum being concluded?

Ms L Bebee (ANC, KwaZulu-Natal) said she shared the same sentiment as Mr Nyambi. The DCDT had identified key priorities, including the digital migration project, SA Connect and legislation, but were these key projects fully funded or budgeted for, and did they have any timeframes for completion? The DCDT had indicated, under their medium term expenditure, that they would be spending about R119 million in 2021/22 on consultants for goods and services, and she wanted an explanation for why this huge amount would be spent on consultants.

Mr A Arnolds (EFF, Western Cape) advised the DCDT to move with speed towards their vision of a digitally connected South Africa. The impact of Covid-19, particularly with regard to challenges with virtual learning, had exposed South Africa’s inability to deliver in this space. The last time the Committee met with the DCDT, a conclusion date of 2023 had been set for the merger of the two departments -- was the Department still on track with this process?

He urged the DCDT to speed up connectivity for the rural areas. Would the licensing of the wireless open access network (WOAN) be concluded this financial year? Confirmation was needed on this matter. When would the workplace skills plan to address skills gaps in the Department be implemented -- was the DCDT on track with this matter? Could the Department give the Committee an update on the 5G policy?

Mr M Nhanha (DA, Eastern Cape) said that Mr Nyambi had correctly referred to the court action related to the auction of the spectrum, and he asked what the DCDT had done within their means and powers to prevent this court action. The Committee had stressed the importance of opening the spectrum and getting the auction going as soon as possible. Had the court action been preventable?

With regards to SA Connect, he agreed with Mr Arnolds' view. He wanted to propose that a session be set aside with the DCDT so that it could elaborate more to the Committee regarding the pilot sites announced by the Minister a few years ago. He raised this because he had been keeping a close eye on OR Tambo district municipality in the Eastern Cape, where not much progress had been made. He advocated that the Chairperson call the DCDT back to give a presentation on clear timelines with regards to SA Connect, and a diagnosis on where things had gone wrong, how the DCDT planned on rectifying issues, and what contingency plans they had in place.

In a previous meeting, he had raised the issue of inhumane treatment of people standing in long queues for the R350 grant at post offices across the country. The grant was coming to an end, so the congestion would be eased. Going to a post office involved queues of around an hour. South Africa’s post offices were still too manual, where things moved at a snail’s space. Could the DCDT please investigate this matter? He commented that the SABC would not be broadcasting the Kaizer Chiefs' game, but it was said that if one had Open Time, then one could watch the game. Was the DCDT aware of this? If people who were paying for TV licences were not able to watch their football teams play, and only those with Open Time decoders were given this opportunity to watch their teams play --was the DCDT aware of this?

 Ms T Modise (ANC, North West) noticed that the DCDT was making a concerted effort to ensure that ICT services were accessible and available to all South Africans, especially now during the ‘new-normal’. She gave credit where it was due, and acknowledged the effort of the DCDT. What was the Department doing to ensure that these services were affordable? In rural areas, people could not afford these services. Could the DCDT ensure that the cost of communication was affordable for all?

DCDT's response

Ms Jordan-Dyani thanked the Committee for the questions posed, and the encouraging and constructive feedback.

Answering Mr Nyambi’s question on the matter of cellphone repairs, he said the DCDT would like to conduct more programmes such as the one held in Mpumalanga across South Africa.

Regarding the Post Office Amendment Bill, the DCDT wanted to finalise public comments in June, and submit it back to the Cabinet in July. She hoped that it could be presented to Parliament in the third quarter of this year. Owing to its urgency, the DCDT would like to fast track this process. Regarding corporatisation and amending the Post Office Act, the DCDT had engaged with the Reserve Bank regarding its licence, and were working hard to position the PostBank, which already had 8.1m customers -- the largest footprint in the country.

The Department was targeting those provinces that were characterised as rural provinces, and had high unemployment rates. The intention was to give society and the youth the necessary digital skills for the 4IR, to contribute to their families. One of the outcomes was linked to the digital migration. The DCDT were training potential installers to give them the necessary skills to become installers. It currently had 187 installers that have been trained by Sentec. The same installers had been used to assist South Africa with digital migration. The programme ensured that some installers were assisted with entrepreneurial skills to open installation or resource centres. 72 installers had been trained in the North-West Province, 75 installers in the Free State, and 36 in the Northern Cape. Currently, the DCDT were taking on installers in Mpumalanga and Limpopo as a new group. This was being done across the country.

Regarding Ms L Bebee’s question, the DCDT's key priority was digital migration, where it had made significant progress. Currently, the intent was to switch over the country by March 2022, which was the date set by President Ramaphosa. The DCDT was trying to move this timeframe forward, so the last few months could be used to focus on re-stacking to free up the spectrum. If this occurred, the DCDT could release the 4G and 5G programmes, which was linked to the broadband and SA Connect project. The Department wanted to bring in the 4IR capabilities for other sectors as well, as it could be used with smart metering in the provinces, which would benefit municipalities. This was heavily reliant on freeing up the spectrum.

SA Connect remained a priority for the DCDT this year. A target of 80% had been set for broadband access by 2024. Currently, it had done 970 sites. The biggest challenge for the DCDT was funding, as it had not received any additional funding. It was looking at a public-private partnership (PPP) consortium to expand to those areas. It had submitted claims for additional funding. For now, the focus was on household connectivity. If the outcome of the pilot was successful, this would be used in other areas too.

Ms Masemola confirmed that what Ms Jordan-Dyani had said was correct -- the deals that were planned for the financial year were fully budgeted for. Budgetary constraints remained an issue regarding the BDM projects, and the DCDT was working with National Treasury to address those challenges.

She answered the question regarding the cost of consultants. She said the total for goods and services amounted to R119 million, because under administration there were audit costs, security services, cleaning contracts etc. However, she clarified the consultancy costs under administration (on page 16 of the presentation) were R7.3 million. The DCDT had been trying to reduce expenditure on consultants. However, a team of experts had to assist with the drafting of legislation, as the DCDT did not have this expertise within the Department.

She answered the 30-day period situation, and confirmed that the DCDT did pay its invoices within 30 days. The average turnaround time was seven days. This had been included in the APP, as it was a compliance matter.

Ms Nomvuyiso Batyi, Head: PC4IR, DCDT, said that in terms of 4IR activities, they were conducting consultative activities with everyone in South Africa. These sessions were virtual, but could be made face-to-face. They take people through the Fourth Industrial Revolution report itself and how these recommendations could be implemented by various clusters of government and sectors of industry and academia. This had been done with eight provinces, and with all government departments except for four. The DCDT was developing a monitoring and evaluation theory of change framework.  

Ms Thulisile Manzini, Deputy Director-General: Administration, confirmed the seven-day turnaround period for the invoices. The DCDT had made significant progress with its structure, and was currently operating on an interim structure, subject to a final structure. It had developed a service-delivery model, and had consulted unions where input had been given. The current DCDT structure had levels, which was an issue. Job evaluations had to be instituted if one was talking about levels, such as levels 13 and 14. Currently, only the Department of Public Service and Administration (DPSA) was able to give the DCDT those tools. There was no structure currently, and the DCDT had been engaging with the DPSA on a way forward. It was hoping to finalise this process by the end of May.

Ms Jordan-Dyani indicated that a draft had been made available regarding the status of the 5G policy. The Department hoped to have this finalised this year.

Regarding the spectrum auction, the DCDT had made interventions and engaged with each of the parties that were in court, to try to avert the current situation. This had included three engagements with the regulator. It had tried to speak to other industry groups as well to find a solution. Currently, ICASA was involved in mediation with the parties in court, to try and find a solution with the settlement. There seemed to be a compromise, from what the DCDT had observed. However, more issues needed to be resolved.

The DCDT faced a few challenges regarding the pilot project at OR Tambo. If the Universal Service and Access Agency of South Africa (USAASA) could to be given an opportunity to present to the Committee, along with the SA Connect team, clear timeframes for the SA Connect project could be given to it. According to the announcement made by the Minister, USAASA would focus on the OR Tambo region regarding broadband connectivity sites. Every effort was being made to move this project forward.

Regarding the Post Office queues, the Post Office had been focusing on trying to migrate people from getting their social grants physically, to a card system. There was fear of bank charges among people who were yet to migrate. The Post Office had indicated that there had been increases in the queues from April to May for these special grants. The DCDT was still trying to manage the queues.

Regarding the SABC broadcasts, she said it was misinformation that there was no obligation to have a TV licence to get an set-top box (STB) decoder. The DCDT had noted this message being flighted, and had had discussions with the SABC and the media to address this misinformation. She urges the public to pay their TV licences, as the public broadcaster depended on those licence fees.

Ms Manzini said that the WSP had been developed in consultation with all the branches. The core capacity needs had been identified, aligned to the mandate, with a focus on the 4IR related skills. The WSP was monitored on a quarterly basis through training reports. Media evaluation was done to see if the DCDT was on the right track, and to measure the impact.

Ms Batyi said the DCDT, was planning on working with ICASA on the cost to communicate programme. ICASA had received a policy directive to deal with data costing. Since the report of the Competition Commission in 2019, a policy roadmap had been developed on how data costs to communicate should be reduced, and ICASA had been engaging with this matter, guided by the roadmap internally.

The Chairperson thanked the DCDT for their responses. He commented that the DCDT had covered the questions, although there were still some areas which had been raised by the Committee that had to be looked into, particularly regarding the Post Office Amendment Bill. This would assist the Committee greatly. This was a critical bill. He referred to SA Connect and the challenges raised. Those were the key areas which had to be investigated.

He acknowledged the good work that the DCDT had done, and urged them to keep up the good work.

The minutes of 12 May 2021 were presented for consideration and adopted.

The meeting was adjourned.