Nedlac & Productivity SA 2023/24 Annual Performance Plans; with Deputy Minister
Employment and Labour
22 March 2023
Chairperson: Ms M Dunjwa (ANC)
Meeting Summary
The Portfolio Committee on Employment and Labour held a virtual meeting to consider the Strategic Plans and 2023/24 Annual Performance Plans of Nedlac and Productivity SA. Following the briefings, Members engaged the entities on various issues related to their plans for the year. Regarding Nedlac, Members were interested in the Presidential Climate Commission (PCC) which would be housed in Nedlac for some time, and its funding.
Some Members expressed frustration with South Africa’s notable lack of productivity, despite spending large amounts of money on the entity, and found that there was too much “business as usual” in the presentations. Members expressed that there was much emphasis on plans and policies while there was little implementation or impact tangibly seen. Members called for better coordination between the Department of Labour and its entities.
The Committee was concerned by the large scale retrenchment faced by the SA Post Office.
Meeting report
Opening remarks
The Chairperson opened the meeting and welcomed all those in attendance. She acknowledged the presence of the Deputy Minister.
Deputy Minister’s overview
Ms Boitumelo Moloi, Deputy Minister of Employment and Labour, remarked that 2023/24 was the final year of the sixth administration. Nedlac would present its revised Annual Performance Plan and explain how it managed to stay afloat. These revisions were necessitated by policy decisions and announcements such as the Presidential Climate Commission and budget shifts.
Productivity SA operates in a very challenging and complex socioeconomic and labour market landscape. It acknowledged the principle that SMMEs are the cornerstone of this landscape. Policy was key for a successful economy. A stronger and adequately resourced Productivity SA will have a positive shift on current enterprise development levels and have an impact on sustainable jobs and economic growth.
The entities would report to the Committee on the key achievements and highlights from the previous financial year.
[Some of the Deputy Minister’s comments were inaudible due to poor network]
Briefing by Nedlac
Ms Lisa Seftel, Executive Director, Nedlac, delivered a comprehensive presentation on behalf of the entity focusing on its Revised Strategic Plan for the period 2020 to 2025 and the Revised Annual Performance Plan for 2022/ 2023. Nedlac has been through a number of changes since the Strategic Plan 2020/25 was initially drafted, leading to two revisions:
- In 2020 with a new theory of change focusing on an effective and efficient secretariat, introducing new processes and emphasising capacity building
- In 2022 primarily to incorporate the Presidential Climate Commission as a fourth programme from 1 October 2022
Presidential Climate Commission (PCC)
The PCC is an independent, multi-stakeholder body established by President Cyril Ramaphosa. It comprises the President, nine Ministers and 23 commissioners from government, business, labour, civil society and research and academic institutions, appointed in Dec 2020. It aims to oversee and facilitate a just and equitable transition towards a low-emissions and climate-resilient economy. The PCC Secretariat supports the Commission and undertakes research and policy work relating to a just transition, climate mitigation, adaptation, and finance.
Since it is a social partner body, Cabinet agreed that Nedlac should house the PCC for a period of two years until the Climate Change Bill is passed, promulgated and the PCC is set up as a Schedule 3A public entity
Ms Seftel took the Committee through the key performance indicators for the programmes of the entity, emphasising the importance of these indicators in measuring the success of the entity’s initiatives, and financial information.
(See the presentation for further details)
Briefing by Productivity South Africa
Mr Mothunye Mothiba, CEO, Productivity SA, led a comprehensive presentation that covered the entity’s Strategic Plan for the period between 2020/21 and 2024/25, as well as its Annual Performance Plan for the fiscal year 2023/24.
Highlights for the 2022/23 financial year
- As of mid March 2023, Competitiveness Improvement Services (CIS) programme achieved 96% on the training of entrepreneurs, workers and managers (both in the formal and informal SMMEs) 2116 have been capacitated. Furthermore, 129% achieved in capacitating 416 Productivity Champions on productivity tools and 108% achieved in supporting 1356 SMMEs through training and competitiveness improvement initiatives.
- The Business Turnaround and Recovery (BT&R) programme has already exceeded all its 2022/23 targets. Since the lifting of the suspension of the programme in July 2020, cumulatively supported 171 companies, saved about 14799 jobs across all sectors, and capacitated over 1537 employees and managers who are members of the Future Forums. This culminated in the creation of 983 jobs and 99% of the companies that joined the programme was sustained and are up and running.
- Productivity SA contributed to the drafting of the Concept Note for the First BRICS Employment Working Group (EWP) Meeting on Priority 1: Building sustainable enterprises through productivity ecosystems for Decent Work in the BRICS countries
Mr Mothiba took Members through the priorities for Productivity SA for the 2019/2024 Medium Term Strategic Framework and the detailed targets per outcome.
Key projects for 2023/24
- Productivity SA is strategically positioned to play a critical role in the envisaged Employment Creation Coordination Committee to be chaired by the Deputy President, which will be tasked with ensuring an Ecosystem that Promotes Sustainable Enterprise Development.
- This is in line with the ILO’S Productivity Ecosystem for Decent Works Programme which is implemented by the ILO’s Enterprises and Employment Departments in collaboration with the Swiss State Secretariat for Economic Affairs (SECO) and the Norwegian Agency for Development Cooperation (NORAD) and being piloted in South Africa, Ghana and Vietnam from 2022 to 2025.
- Productivity SA will scale and accelerate its Enterprise Development and Support Programmes, focusing on company turnarounds and Value Chain Competitiveness of Industrial SMMEs (both formal and informal) to support localisation, emboldened by empirical evidence that they are the backbone and productive drivers of economic growth and development.
- Productivity SA was approached by the Department/UIF to (in collaboration with the Labour Activation Programme) fund the Competitiveness Improvement Services Programme, including short-term interventions (kaizen programme) and long-term interventions (Workplace Challenge Programme) to support over 5000 SMEs and cooperatives in the productive sectors to improve their competitiveness and sustainability to preserve and create decent jobs.
- As part of positioning Productivity SA, we will continue forging meaningful strategic partnerships with numerous entities across Organised Business, Government Departments and Provincial Departments of Economic Developments and Development Agencies.
Members were taken through the budget per programme and strategic risks.
(See the presentation for further details)
Discussion
Ms C Mkhonto (EFF) inquired about how the PCC was constituted. She also inquired about the cost of office space and remunerations annually for the PCC. She further requested information on the number of distressed companies owned by youth or women. She expressed support for the idea of awareness campaigns and hoped they would result in improved productivity as she was concerned by the culture of non-performance in Productivity SA.
Mr M Bagraim (DA) expressed frustration with the lack of results despite spending R100 million annually on productivity. South Africa had the second-worst productivity rate in the world, which continued to worsen yearly. He acknowledged the need for an entity focused on productivity but criticised the report presented as being entirely focused on business as usual – this would not result in increased productivity. He argued that if they continued with business as usual, productivity would only continue to decline. He suggested that more training and advertising may be necessary to assist businesses in being more productive but expressed scepticism about the impact of such efforts. He was concerned the money spent on Productivity SA was being badly wasted – this money could be better spent assisting private companies with [productivity] workshops. He concluded that despite having wonderful plans and advice, productivity remained stagnant.
Ms S Zuma (ANC) inquired about the effectiveness and efficiency of the impact that the Presidential Climate Commission has had on Nedlac. She expressed scepticism about the use of buzzwords that have no tangible results. While she acknowledged the importance of the Presidential Climate Commission, she asked for clarification on why it was emphasised in the presentation and what progress Nedlac had made in this area.
Mr S Mdabe (ANC) had two questions. Firstly, he asked about the financial sustainability of the PCC as it is proposed to be set up as a stand-alone institution, given the financial struggles of other schedule three institutions. Secondly, he asked about the targets of developing more policies, as he observed that there seemed to be more policy development than actual implementation. He emphasised that the Department was a service delivery one with a focus on job creation but there was a lack of coordinated efforts to implement job creation amongst the entities. Mr Mdabe also asked if there had been any coordination between the Department and its entities to address companies that are facing distress, due to Covid and the unrest, and if there is a strategy in place to reskill or bring these former employees into a programme of entrepreneurship to drive them back into economic activity.
The Chairperson asked about the role of Productivity SA in creating a job-creating environment, as was the focus of the Department. She asked if the 17 companies listed as assisted in the slides were in the public or private sector.
She also inquired about any engagement between the Department and the Post Office to assist in reducing the high retrenchment. The Chairperson clarified that they were seeking a productive engagement with the Post Office leadership to address the challenge of retrenching 6 000 workers.
Nedlac response
Ms Seftel responded on how the PCC was constituted; she said there were nine Ministers and 23 other commissioners. Additionally, the new Minister of Electricity would be invited to be a commissioner from government's side. There were 12 current staff members paid for by Treasury, and another three that were funded by donors. The PCC was hoping to extend the staff complement to 20 staff members in the next few months. The funding for these staff members would be funded by the cost of expenditure line item to the tune of R18.5 million in this financial year, with a budget for the following financial years. The issue of financial sustainability of the PCC as a schedule three entity was raised, and she acknowledged its importance. She noted that if any new organisation is required to set up a new entity, National Treasury and the Department of Public Service and Administration (DPSA) require a business case and feasibility study, which is what will be done. If government believes it is a priority and the business case is supported, the funding for the entity would have to come from the fiscus. There would be further reports on the PCC and much of its form would be informed by the Climate Change Bill. Office accommodation and other such expenditure for the PCC is not yet coming from Nedlac. There is currently an integrated budget and arrangement, but the PCC's work is not draining the Nedlac budget. She emphasised the stability and continuity of Nedlac and its programmes but because the PCC was new, Nedlac felt it important to highlight to the Committee, bearing in mind the Committee’s oversight mandate.
Regarding the question on the relationship between policies and implementation, she noted this was the last year of the sixth administration and Nedlac will be reviewing the bills and policies it has processed, their impact etc. This will ensure they review that there is implementation of policies and legislation.
Mr Dumisani Nxumalo, Manager: Finance and Governance, PCC, added that they were closely working with Treasury, especially regarding the future institutional form of the PCC, to define how they should be resourced and what it should look like in the next three years for budget allocation. International and domestic donors were also engaged to support the work of the PCC. The aim was to provide scientifically based recommendations to government on transition as part of their climate transitions.
Productivity SA response
Mr Mothiba assured Members that the investment in Productivity SA for job preservation and creation was money well spent, and a return on investment could be seen. In the companies supported by Productivity SA in the 2023/24 financial year, one could see improved productivity in those companies, improved efficiency, improved profits and job creation. Training was provided to both management and workers. There was an improvement in the wages and income of workers in these companies when an analysis was done. The stories of these improvements were seen in the annual national productivity awards. Company visits are done to assess the long term sustainability of Productivity SA interventions. These companies were back in action and reemploying workers that were retrenched. Information on this can be resent to Members if needed.
He emphasised that it was not business as usual. Productivity SA worked closely with the International Labour Organisation (IOL) on the productivity ecosystem for decent work. This was the outcome of a 2020 paper Productivity SA and IOL produced. SA was one of three countries part of this IOL project which was recognition that it was not business as usual.
In the provinces, an increased uptake was seen of Productivity SA interventions such as the enterprises support. It was important to scale these interventions up in the 2023/24 financial year to increase the number of enterprises assisted. Once this was finalised, 500 additional enterprises would be added.
Interventions were being focused on women and youth-owned enterprises. Of the 2 000 jobs Productivity SA saved, this was the jobs of young people. Information on this would be provided to the Committee on the demographics and sectors of interventions. The interventions were linked to the Industrial Development Zones as it was believed this would have a multiplier effect.
Mr Mothiba said there was an increase in the campaigns to promote productivity and mobilising SA behind this movement.
Regarding policy, he said this was always on the agenda and planning framework and the entity was aligned with the Department’s National Employment Policy for coordinated efforts between the Department and the labour entities for employment creation. Despite the development of policy, the focus was on implementation.
He said support was provided to distressed companies in focused collaboration with the other labour entities.
Productivity SA was driven to create a conducive environment for entrepreneurship and sustainable enterprises with the objective of job preservation and job creation.
He also expressed his concern over the retrenchment of over 6 000 employees by the South African Post Office, which Productivity SA approached to offer its services, where they advised the Post Office on the temporary employee relief scheme, a turnaround strategy, and improving competitiveness and sustainability.
An MOU was also signed with the Department of Home Affairs and DPSA to provide advice on their operational and efficiency improvements to enhance capabilities to provide state services. Productivity SA hoped to collaborate with more government departments.
The Chairperson emphasised that it would no longer be business as usual and stated that from time to time, the Committee would request detailed information on areas of interest. They acknowledged the challenges faced by South Africans and those providing service to the sector, particularly regarding the post office network. The Committee would look into working with the Portfolio Committee on Communications.
The Chairperson thanked the Members for their questions, particularly on the issue of the PCC. She encouraged everyone to empower themselves with information to fight incorrect perceptions.
The Chairperson reminded Members travelling to Kenya to familiarise themselves with protocols and procedures.
The meeting was adjourned.
Present
-
Dunjwa, Ms ML Chairperson
ANC -
Bagraim, Mr M
DA -
Cardo, Dr MJ
DA -
Denner, Ms H
FF+ -
Makhubele-Marilele, Ms PP
ANC -
Mdabe, Mr SW
ANC -
Mkhonto, Ms C N
EFF -
Moloi, Ms BE
ANC -
Zuma, Ms AS
ANC
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