Department of Tourism 2020/21 Quarter 4 performance


17 August 2021
Chairperson: Ms M Gomba (Acting)
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Meeting Summary

The National Department of Tourism (NDOT) presented on their Quarter 4 performance. At the end Quarter 4, NDOT achieved 64 of its 56 targets for an 87.5% overall achievement. Of the eight targets unachieved, three targets had significant work done, whilst five posed a serious challenge and needed intervention. The recurrent reasons for this non-achievement were: appointment of service providers; procurement challenges; poor planning.

Members asked about the progress made in the Tourism Sector Recovery Plan considering the KZN and Gauteng unrest as well as the negative effects of Covid-19. They asked about the slowness in NDOT providing the Auditor General with supporting documents for the approved applications for the Tourism Relief Fund. They asked why there was R12 million underspending in the Tourism Incentive Programme for the tourist guide relief fund and about the Expanded Public Works Programme (EPWP) variance. Members requested an update on vaccine passports; rail tourism; South African National Parks infrastructure; bilateral relations workshops, how communities are selected for community museums; elevating women in tourism; and increasing tourist attractions in rural areas, townships and villages.

Meeting report

In a virtual meeting NDOT presented its Quarter 4 Performance for 2020/21. Achieved and unachieved targets for performance indicators for its programmes were provided (see document) :
Programme 1: Corporate Management (CM)
Programme 2: Tourism Research, Policy and International Relations (TRP&IR)
Programme 3: Destination Development (DD)
Programme 4: Tourism Sector Support Services (TSSS).

Reasons for underspending
Programme 2: Under expenditure of R2,6 million (1% of allocated budget) was incurred. The bulk of this is for Compensation of Employees due to strict policies adhered to by NDOT to reduce expenditure on salaries.

Programme 3: Under expenditure of R15.2 million (3% of allocated budget) was incurred. The bulk of unspent funds is due to funds allocated to the Expanded Public Works Programme Incentive which was not approved by Department of Public Works (DPW) for spending. These funds must therefore be given back to National Treasury as unspent funds.

Programme 4: Under expenditure of R16.8 million (8% of allocated budget) was incurred.  The bulk of this is for the Tourism Incentive Programme as funds were set aside to provide financial relief to freelance tourist guides due to COVID-19 impact on the tourism industry. Since the total allocation was not fully taken up by the tourist guiding sector, this must be given back to National Treasury.

Implications of underspending
The underspending incurred by NDOT has implications on transformation, service delivery and its future appropriation to the Tourism Budget Vote 38.

A total of R34.6 million had to be returned to National Treasury. This means that NDOT was unable to maximise expenditure of the allocated budget, despite the R1 billion budget reduction for the Special Adjustment Budget.

The Portfolio Committee has raised a concern about the reduction in the Compensation of Employees (COE) budget for NDOT and the Department has made recommendations to National Treasury to appropriate more budget for this in the 2021/22 Budget Adjustment. However, NDOT would need to clarify the status of COE expenditure given that R2.6 million was not utilised in 2020/21.

The Committee should note with concern that the Expanded Public Works Programme Incentive Scheme was not approved by DPW for spending and that budget had to be returned to Treasury. This has implications for transformation as the incentive scheme is used mainly to assist Tourism SMMEs which are predominantly Black owned. This has implications for transformation in the sector and the competitiveness of Black owned tourism enterprises.

ChalIenges in performance and the operating environment:
- Governance
- Urgent issues for consideration by the new Minister
- Policy and legislative review
- Recovery of the sector
- Exploring the Health/Vaccine Passport
- e-Visas
- Dealing with the Red List status of South Africa in core markets
- Intergovernmental relations
- Expenditure
- Underspending.

Performance against predetermined objectives:
At the end Quarter 4, NDOT achieved 64 of its 56 predetermined objectives for an 87.5% overall achievement. A total of 8 targets were not achieved, accounting for 12.5% under achievement. For three of these targets significant work had been done, whilst five of the targets posed a serious challenge and needed intervention. The recurrent reasons for this non-achievement in the Quarter 4 were: Appointment of service providers; Procurement challenges; Poor planning.

Ms L Makhubela-Mashele (ANC) asked about the Tourism Sector Recovery Plan. She asked for details on where the plan is considering the July riots, violent looting and unrest which disrupted the tourism sector. What does NDOT have in place to assist the tourism space, in line with the holistic tourism recovery plan? Seeing as it was the hardest hit sector due to lockdown restrictions and negative effects of Covid-19, could the Director General give a brief account of where NDOT is so that the Committee can understand. Members need to be able to give feedback to tourism stakeholders they meet in their constituencies and provide the blueprint of the NDOT plan and where it currently is in implementing this recovery plan, and what they are embarking on as a recovery strategy.

She noted that the Auditor General had found that the Tourism Relief Fund had shortcomings. NDOT had failed to provide the Auditor General with supporting documents for the approved applications. She asked what NDOT is doing to rectify this weakness and to provide the missing supporting documents. If supporting documents cannot be provided, then there are loopholes in the reporting system. Can NDOT allay the Committee's fears? What are the plans for future funding programmes implemented by NDOT? How will they ensure that the watchdogs tasked with watching that the systems are in place and processes followed as prescribed by the Public Financial Management Act (PFMA)? She emphasized that NDOT must ensure there are systems put in place to ensure this does not reoccur in future.

Ms H Winkler (DA) asked about the Tourism Incentive Programme underspending being returned to Treasury. How many tourist guides were paid out in total? Considering that the entire tourism sector is in disarray and small businesses are struggling, will there be a second round for tourist guides to apply? Will they get the money back from Treasury and reopen that process? She asked for the latest with vaccine passport as it seems that South Africa is lagging behind in international trends on this. If South Africa really wants to open the borders, processes need to be in place to make it easier for international and domestic travel to take place.

On the Rail Tourism Survey, it was noted that infrastructure is not up to par so that they can proceed with rail tourism. Has there been collaboration with the Department of Transport on what infrastructure projects they have underway? Is a timeline available for that?

She asked for NDOT's scope and timeline for the South African National Parks Infrastructure Maintenance Programme.

With community museums, how are these communities selected? She knows it is on a needs basis, but how will communities go about applying for this assistance from NDOT?

With the Tourism Sector Recovery Plan, will there be collaboration across departments such as with Police, Cooperative Governance and Traditional Affairs (COGTA) and Water and Sanitation? We cannot assist the sector to bounce back without complementary measures in place such as proper security, policing, and water without contamination.

She asked why only R18 million of the R30 million set aside for the Tourist guide Relief Fund was used. Why was so little used considering there are so many individuals in dire need who would have availed themselves of this relief fund?

The EPWP programme has a huge variance. What happened here? How will we resolve this?

Mr H Gumbi (DA) asked what are the key outcomes for the Programme 2 bilateral relations workshops which are going to be implemented, considering the space the tourism sector is in? How will they be implemented into the future? How will they differ from previous workshops?

The KZN unrest probably impacts on the Programme 3 development plan. He, Mr De Freitas and Ms Winkler did an oversight visit in KZN. In the Umhlanga area there was a massive toxic chemical spill which contaminated the air and the ocean. Beaches were closed and many tourism areas were affected. This was specifically in areas considered “a big draw card” due to having hotels, malls and many recreational spaces. What extraordinary measures have been taken to assist those businesses? What kind of action will be taken. There must have been a response to those KZN businesses and tourism spaces.

Mr P Moteka (EFF) noted that the report dealt with Quarter 4. The committee is expecting NDOT to account for what happened during 2020/21. Transformation has been the core focus of this Portfolio Committee and NDOT. His first question is what were the transformational targets for 2020/21 for the four programmes and did the four deputy directors general manage to achieve these? They need valid reasons for lack of achievement.

They need to see the tangible destination infrastructure in rural areas villages and townships, where they never previously existed so the Committee knows that NDOT achieved what it set out to do in 2020/21. This way they can evaluate NDOT performance against the Portfolio Committee's expectations.

On the discrepancies revealed by the Auditor General, who are the culprits responsible for the missing information and what actions are you taking against them? NDOT cannot claim that they are helping businesses negatively affected by Covid-19, if there is missing information. If we let this go it will be the same as the PPE scandal. Room is opening for thieves to steal while government is helping people out of a disaster. How is the Department dealing with the culprits?

Mr T Khalipha (ANC) stated that when the Sixth Term Committee started in 2019; their interest was in rural areas and townships. The Committee would like an update on this.

He asked how far NDOT in vaccinating officials who need to do work? What has been done to support small businesses in tourism negatively affected by the riots in KZN and Gauteng?

He concluded by praising the “good work” done by NDOT and the former Minister, in achieving some of the targets. However, he requested reasons for why the other targets were not met.

Mr S Mahumapelo (ANC) stated that even though we are dealing with Quarter 4 2020/21, he would like to appeal to the Department about dealing with the injustices of the past. To do so, it requires dealing with the oppression of women. They must liberate them as women, as workers and as Africans [inaudible 1:08:01-1:09:03]. For this transformation there needs to be collaboration with CoGTA. In the next financial year, when dealing with economic transformation, we should look at numbers and quantify this so that we can have tangibles. This will ensure that report-backs are specific and comprehensive responses are given. For example, KZN has 1 200 villages.Tourism activities are only in 15, so the backlog to cover will be the balance. The same will apply to townships. This way, the discussions on transformation will move from general terms to specifics.

All Departments including Treasury are unable to comprehend the extent to which it is difficult to build the economy around tourism in townships, villages and small towns. We must go through the exercise by going village by village, township by township, and small town by small town so people can understand what we are trying to say and do.

On the riots, he does not support focusing resources only on Johannesburg and Durban businesses solely affected by riots. In all of South Africa, In Limpopo for example, there are people running small businesses affected by the economic situation even before the pandemic. Covid-19 worsened the situation and they have not gone directly to help them. He is not saying that DOT should not help those affected by riots, but there are people who have been in worse situations than those whose profit margins have only been affected by riots so we are strengthening the status quo. This is not sustainable. He is not saying those affected by the riots should not be helped, but people in rural areas who are in a worse economic situation should be included. DOT has done well, but there is room to do this more aggressively so that we turn the situation around.

Mr M De Freitas (DA) expressed interest in the comments made by the Rail Tourism Study. The study had been abandoned because South Africa is not in a position to develop rail tourism infrastructure at the moment. He asked NDOT to share if it had approached other relevant departments about this so that they can start developing rail tourism infrastructure.

Ms M Gomba (ANC) congratulated NDOT for where they did well and for enrolling women with the University of South Africa for tourist-related programmes. She asked which are the six districts which were given training for excellence standards so that there is clarity and transparency. In those districts, what percentage were townships, villages and dorpies?

In Destination Development, what percentage of townships, villages and dorpies destinations were developed or assisted in those numbers? This has been discussed before. Townships are where the most unemployment is concentrated. NDOT must put a lot of effort in those areas to ensure tourism establishments are supported and tourism is made possible.

Department response 
Mr Ralph Ackermann, Chief Financial Officer: Tourism, replied about the Tourism Incentive Programme specifically for tourist guides where it spent only R18 million, with R12 million unspent at the end of the year. They paid each beneficiary  R1 500 for three months which totalled R 4500. Some of the money was not redeemed and was returned to NDOT. They will not get the money back from Treasury. Once it is returned, it goes back into the National Revenue Fund. If another round of relief is needed, it will have to come from its current budget.

Ms Ameme Malan, Deputy Director General: Tourism Research, Policy, and International Relations, covered the questions on Programme 2 on the Tourism Sector Recovery Plan. It was approved by Cabinet in April 2021 which is just outside the quarter being reported on. It was launched by the former Minister of Tourism. They have agreed on a structure to monitor the implementation of the actions for the Tourism Sector Recovery Plan. They will also be compiling quarterly reports following from Quarters 2 to 4 of 2021/22.

On the bilateral best practices workshop, this is a plan they rolled out a couple of years ago especially to honour the bilateral agreements they signed with other African countries. This has expanded to cover others as well due to interest. The reason they began with this mechanism was because their objectives in their memorandums of understanding are fairly the same as other countries in Africa. These cover aspects such as sharing of best practices and statistics. Holding these workshops once a year assists them to do it with other countries instead of one-by-one. They agree on a focus each year, noting the Covid-19 pandemic. The focus for this current year has been country responses to the pandemic by the different countries in attendance. The purpose of the workshop is to share the work of each country.

South Africa is focused on the Tourism Sector Recovery Plan , implementing norms and standards for safe tourism. The key outcome is that the country should continue to share what it is doing with other countries with the main focus being on tourism. It should not be a once off event. It must be continually done, and learn from each other’s response to the pandemic.

Ms Shamilla Chettiar, DDG: Destination Development, responded about the Rail Tourism Survey. The survey’s specific target audience were tourism stakeholders. The key focus was understanding what appetite there might be for rail tourism in the country and what kind of markets there might be? When they looked at the outcomes from that survey; it was clear that there is a great appetite from tourism stakeholders to implement rail tourism offerings. They indicated that one of the key inhibitors is the rail infrastructure and that the cost associated with having to fix the rail infrastructure is prohibitive in making rail tourism occur.

At this point there have not been further discussions with the Minister of Transport. Members are familiar with public reports on the state of rail tourism in South Africa. However, NDOT is aware that the Department of Transport is addressing those challenges with the broader rail infrastructure in the country. Once that is addressed the appetite for rail tourism can be built on that backbone.

There is good collaboration and advanced work by colleagues in Mpumalanga on rail tourism in that province. However, collaboration with the Department of Transport has not extended beyond that work. 

On national parks infrastructure, the Department is rolling out a maintenance programme to all 19 national parks across the country. The timeline and funding provided for the work is a three-year budget which came out the budget summit hosted by the President. The scope is to ensure all tourism facilities in the national parks are to a standard worthy of both our domestic and international visitors.

On the variance of Expanded Public Works Programme budget, a department is responsible for EPWP programmes in two ways. The Department gets a baseline budget which it is allowed to spend on the programmes it has. There is an incentive portion for which it has to get permission from DPWI to spend. That incentive portion is based on meeting the EPWP targets. In that financial year, NDOT did meet its EPWP targets and in fact exceeded its targets. However, by the end of Quarter 4, it did not get permission to utilise that allotted incentive portion of R15 million and it had to be returned to Treasury.

With Destination Development initiatives, particularly those they are implementing in rural areas and townships, she wanted to talk broadly about destination development. The approach starts with broad master plans. In the previous year of 2019/20 NDOT completed a series of master plans in different regions in the country. The Wild Coast being one of those regions.  

NDOT has taken that work into the District Development Model to ensure the work is integrated into it. They also took some of the concepts and developed precise plans for them. (1:30:35-40). Those will be in areas like Galeshewe and Khayelitsha. But in Coffee Bay which is a rural area they have been working in, it typically takes 12-18 months to plan an infrastructure project.  When looking at the last Annual Performance Plan (APP) it can be seen that the Dinosaur Interpretation Centre in Clarens, Free State, is a value product which did not exist before. It is a significant contribution to that area. The Destination Development approach tries to develop areas where we have no development, before it tries to develop supporting structures. The key work they are trying to do does focus on rural areas, such as the work in community-based projects and community museums. The work being done in the current APP is implementing 30 community-based tourism projects across the country, as well as looking at key initiatives in the Destination Development planning element and does begin to implement the initiative in townships. It is a continuous pipeline of initiatives. They started broad and are now detailed initiatives. So, you will see infrastructure in areas that did not exist before when you look at this sector.

It is also important to emphasize that it is not possible given the limited budget to work in every area in the country. Where there is existing infrastructure to support the development of infrastructure supporting tourism development in areas like Clarens, this will be done to create  new major attractions as with the Dinosaur Interpretation Centre. 

Ms Mmaditonki Setwaba, DDG: Tourism Sector Support Services, replied that the information on quantifying tourism transformation in villages and townships, will be shared in the next session.

In 2020/21 they were able to hold Service Excellence sessions in Limpopo, KZN and Northern Cape. The desegregated information requested on where exactly in Limpopo, KZN and Northern Cape will be provided.

Their programmes are designed for transformation. When looking at the most recent State Of Tourism Report of 2018, the findings there were exactly that what was needed was to increase participation of women in the sector to ensure that women participate at high levels within the tourism space. Programmes were needed to ensure that women sit in decision-making structures such as on the board of enterprises. This is why the Department came up with the executive development programmes – to ensure women in the tourism space are climbing up the ladder in the corporate world. This initiative has been successful. They have been able to track the progress of women taken through the programme and will show the Committee at some stage the successes of women developed through UNISA.

Looking at the implementation of the Domestic Tourism scheme, it is mainly aimed at increasing or reigniting tourism in less visited areas, by people who travel less. They are encouraging South Africans citizens who would not normally travel due to financial barriers, to travel and visit attractions.

The incubators will ensure that women in numbers dominate the incubation programmes in rural areas. They are looking at (1:38:02-04) Manyeleti Game Reserve, Palabora. One of the main findings in State Of Tourism Report was regression of black people ownership and control in the corporate world. Which is why they formed the Tourism Equity Fund. Unfortunately, everyone knows what the status is but it was meant to transform equity patterns in the tourism space.

The women participation study by the United Nations World Tourism Organization (UNWTO) Pilot Programme is important in finding out what are the barriers for women to participate willingly in the tourism space. The results and recommendations for removing the barriers women are facing, have been meaningful. The Department is in the conceptual stage where it is taking the findings, prioritizing them with its available resources and coming up with interventions and quick solutions to assist women in removing barriers they are faced with. This study was done in Mopane and Mbembe in Limpopo looking at specific challenges faced by rural women.

On the Tourist Guide Relief, they simplified the process. It was not based on application. NDOT went through the provinces and approached people who had information on tourist guides registered at provincial level and then they came up with that number. The uptake made us where we are in terms of expenditure.

Director General response
Mr Victor Tharage, NDOT Director General, stated that there were 4 650 tourist guides who redeemed the payment of R1500 per month. The total was R60.8 million. The number of tourist guides who did not redeem the payment was 4 435 tourist guides.

[Via the chatbox, Ms H Winkler (DA) asked why the 4435 guides did not redeem the R1 500?]

On the direction they is taking since the riots, NDOT has not created a new mechanism or specific dispensation for the riots. They are mindful that the businesses they interact with regularly have gone through a difficult time. Their approach is to ensure bringing back not only the confidence of the consumers/their customers but also the confidence of trade. This is why they can report that they have achieved one of the targets in recovery plan for the Norms and Standards for the safe operations of the Tourism Sector. Importantly, they see holistic recovery, be it Covid or unrest related. They believe that all these businesses must be able to recover.

From a budget point of view there are serious limitations with the Tourism Sector Recovery Plan. There are areas that are being recovered apart from the limitations mentioned. There was a four-month extension of COVID-19 TERS relief payments in July for which the Minster of Employment and Labour specifically noted tourism would be one of the sectors prioritized for this support. This has a direct link to the Tourism Sector Recovery Plan for protection of vulnerable workers in this period.

The work being done on SANParks maintenance is part of the recovery. When they concluded the recovery plan, they stated that they did not want to find themselves in a situation where the key attractions are not ready to host when the system opens up fully and more people come in. This is something that is an absolute necessity to continue to do to so it is ready. To ensure that training is ready (1:47:30-39) they have done some work on regional integration. The Southern African Development Community (SADC) Council of Ministers will be receiving this plan (1:4815-21) and South African tourism will speak to the fact that they will be rolling out the international campaign. This will deal with brand repositioning, recent events and where the sector finds itself due to Covid.

Specific to the vaccine passport, NDOT would love to have it immediately but there are some issues that need to be resolved broadly. For example, even in some jurisdictions that have opted to apply it, there is not yet a sense of uniformity. There is no single standardized specimen of a vaccine passport, so it is difficult to say which one is valid and how one will share the data. One needs a global consensus on how countries verify the vaccination information. The biggest principles is when they reopen and people travel, it should not be discriminatory and that has been emphasized by UNWTO – there should be some aspect of solidarity.

However, there will also be other aspects they need to manage such as events. Broader discussions on this are needed. That can be done in a reasonable period of time. They need confidence from consumers and trade. Otherwise, it will have a negative impact on the country’s recovery.

On the empowerment of women and how that manifests in Department practices. Previously the percentage of women in NDOT was 43%. Now it is 47%. Ms Rhulani Ngwenya is the new NDOT Deputy Director General for Corporate Management – he should have introduced her. This is her first meeting with the Committee. Prior to her appointment, they had just appointed Deputy Director General Ms Setwaba. This month they have a new Chief Director who has a disability, so NDOT is moving towards its targets. After 40 years of service, the Chief Financial Officer will retire.

On Tourism Relief Fund concerns, NDOT came and reported. Subsequently the former Auditor General, Mr Kimi Makwetu, came to Parliament and gave a report on the relief schemes the Office of the Auditor General had audited, tourism being one of them. Initially NDOT put in place an ICT system that was meant to serve the application processing system. The system was too slow and there was too much pressure coming from businesses which at the time were under a lot of financial pressure due to Covid. NDOT moved to a manual system. The documents that were in the original ICT system as per the requirements would be retrieved. Those documents would be packaged manually, and payments would be made. This allowed money to be sent to the beneficiaries in the shortest possible time. With the audit, the Office of the Auditor General needed the documents immediately, but it took time to get them due to the manual system. So, if they are meant to do something like that in future, they can upgrade the ICT system to do this although this year there is no money to do so. The manual system was able to provide the Auditor General with all the documents but challenges were experienced at the preliminary stage. The main recommendation the Auditor General made to NDOT was to ensure it has an ICT system in place and ensure it passes all the necessary tests before it is launched. Of course, NDOT did not anticipate that they would have to set up a mechanism to dispense so much money in such a short period of time.

Luckily, not a cent of that money went to the wrong cause. There was one over payment of R50 000. Processes to recover that money took place. A total of 4 000 businesses were paid R50 000 each and they were able to disburse the total R200 million. They have taken lessons from that and have specific recommendations to ensure the same digital results as that of the manual system. The pressure and costs meant they had to opt for a manual system.

They are dealing with a huge backlog of infrastructure projects. Almost all of them are in rural areas, specifically in villages. In dealing with the backlog, they were not able to take up new ones immediately. As they go forward they will look at how to deal with that. They work with the provinces which will help them to deal with identification, and the new processes will be able to achieve the results.

With museums, they have been focusing on cultural and largely liberation heritage museums. Most of those are not well developed so they are working with the Department of Arts and Culture (DAC), and the narrative is developed by DAC.

One of NDOT’s biggest challenges is the availability of data on villages and townships. This is system wide. It is a work in progress. We need this official data prioritized – possibly though a relationship with COGTA, the Statistician General and other Portfolio Committees – to make it easier to have characterization and move forward.

Transformation has been the thread overall in all that they do – incentives, product or development initiatives. Transformation cuts across, it is a thread throughout.

Vaccination as a driver for recovery, this has momentum. Encouraging people to be vaccinated is a collective responsibility, even in the industry vaccinations are taking place such as Sun City’s vaccination centre. Ages 35 and above can be vaccinated and the bulk of workers are in that group. The age group 18 and above is also open so that will assist too in moving forward. This will help the most in sustaining the sector’s recovery. The risks are fewer so people can enjoy tourism.

Mr P Moteka (EFF) emphasised that the Committee need a list of all the infrastructure erected from 2019 to date, of rural areas, villages, remote areas, and small towns. This will help them gauge if the Committee has been taken seriously. They need specifics not generalizations so they can see if the Sixth Administration is taking this further. He was concerned that the DDG for Destination   Development said that the development of new destinations where no infrastructure exists is not possible. What message is being sent to people in the villages and townships, where there was no development of tourism infrastructure? The new Minister needs to address this despite the budget constraints. Something must be done.

In closing remarks, Mr Mahumapelo thanked NDOT and hoped that one day there will be enough resources to develop townships, rural areas and small towns into tourism areas. Beyond the written statistics during the riots, real people are suffering. Due to the economic situation the country finds itself in; real people are suffering. He hopes we can have a society where something can be done so that people can self-sustain.

The Acting Chairperson handed over to original Chairperson and the meeting was adjourned.

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