ATC140711: Joint Report of the Portfolio Committees on Communications and on Telecommunications and Postal Services on their deliberations on Brand South Africa (Programme 4 in Budget Vote 1: The Presidency), dated 11 July 2014

Joint Report of the Portfolio Committees on Communications and on Telecommunications and Postal Services on their deliberations on Brand South Africa (Programme 4 in Budget Vote 1: The Presidency), dated 11 July 2014

The Portfolio Committees on Communications and on Telecommunications and Postal Services, having considered the strategic plan of Brand South Africa (BSA), report as follows:

1. Introduction

Section 55(2) of the Constitution of the Republic of South Africa, Act 108 of 1996, states that the National Assembly must provide for mechanisms (a) to ensure that all executive organs of state in the national sphere of government are accountable to it; and (b) to maintain oversight of (i) the exercise of national executive authority including the implementation of legislation; and (ii) any organ of state. In terms of the Public Finance Management Act, 1999, the Accounting Officers must provide Parliament or the relevant legislature with their respective institution’s medium-term strategic plan and where applicable with its annual performance.

The Money Bills Amendment Procedure and Related Matters Act was promulgated in 2009, by which it vests powers to Parliament to reject or recommend budgets of departments, it also makes provision for the implementation of recommendations emanating from the Committee’s oversight.

The aim of the report is to provide an overview of the 2014/15 Budget and Annual Performance Plan (APP) of BSA who appeared before the Committee on 8 July 2014.

Their strategic plan was referred to the Portfolio Committee on Communications for consideration and report in the Announcements, Tablings and Committee Reports (ATC) Parliamentary Paper on Friday, 27 June 2014.

2. State-of-the-Nation Address ( SoNA )

In his SoNA in February 2013, President Jacob Zuma stated: “Let me hasten to add that government departments at all levels must work closely with communities and ensure that all concerns are attended to before they escalate. That responsibility remains. We are a caring government.” Furthermore he said, “This programme of action will be implemented differently as the activities of departments must be aligned with the National Development Plan.”

Although some analysts may argue that the 2014 SoNA did not make any unswerving pronouncements on BSA, the articulation by the President can also be used to highlight BSA’s work (programmes and activities) through its direct communication with the citizenry whose resultant interaction acts as an enabling tool that promotes BSA locally and internationally, whether these are national communication strategy, online reputation management, socio-economic environment surveys, research and opinion polls, tracking indices reflecting competitiveness and reputation, stakeholder engagements, media briefings and press conferences.

3. Brand South Africa (BSA) – R 167 686 000

Brand South Africa (BSA) is a Schedule 3A Public Entity registered as a Trust. The Accounting Authority is the Board of Trustees contemplated in section 49 of the PFMA, and the Trustees are appointed by the President of the Republic through the Executive Authority. It is constituted as a Trust, and is therefore also subject to the Trust Property Control Act.

BSA, as an umbrella organisation is the custodian of the national brand and its work is derived from South Africa’s national objectives of Gross Domestic Product (GDP), job creation, poverty reduction and social cohesion as informed by the Constitution, the National Development Plan (NDP), and the country’s International Relations Strategy. In discharging its mandate, BSA operates as part of a networked of agencies and departments whose role is ultimately to market and promote various aspects of South Africa; either domestically or abroad.

Its purpose is to develop and implement a proactive and coordinated international marketing and communication strategy for South Africa to contribute to job creation and poverty reduction, and to attract inward investment, trade and tourism.

BSA was transferred to The Presidency during the 2011/12 financial year after it had applied and was granted permission to change its name from IMC to BSA. BSA now falls under Programme 4 of Budget Vote 1: The Presidency. When the then International Marketing Council changed its name to Brand South Africa, the shift in mandate moved the organisation’s focus from ‘only’ pursuing a positive and compelling brand image for the country to building South Africa’s nation brand reputation to improve the country’s global competitiveness.

Brand South Africa is 31 ^st in the world in terms of overall brand value, and has seen steady improvement in the quality of its air transport rankings in the Brand Strength Index, a key area for further development of its inbound tourism.

Programme 4 of Budget Vote 1 facilitates the transfer of funds to BSA (as a sub-programme) for the agency to develop and implement a proactive marketing and communication strategy for South Africa to contribute to job creation and poverty reduction aimed at promoting South Africa and increasing the familiarity and knowledge of South Africa as a visible, world class and profitable business destination in targeted international trade, investment and tourism markets.

The sub-programme’s total budget is transferred in full to Brand South Africa.

3.1 Objectives

• Oversee the implementation of a proactive branding, marketing and communication strategy for South Africa by transferring funds to Brand South Africa for the development of a branding framework and programme over the medium term; and
• Oversee the work of Brand South Africa by analysing its strategic and annual performance plans and quarterly reports on an ongoing basis.

The organisation’s strategic goals over the medium term are to:

• develop and articulate the value proposition and positioning that will drive the long term reputation of Brand South Africa
• develop and implement proactive and coordinated marketing communications and reputation management strategies for South Africa
• build awareness of South Africa and the image of the nation brand in other countries
• build patriotic pride, positive citizenship and unity among South African by encouraging citizens to live the values of the national brand and identify as South Africans
• increase South Africa’s global competitiveness by developing symbiotic partnerships with all stakeholders who can enhance the national brand and helping them to enhance the country’s reputation
• strengthen institutional capacity and systems to effectively ensure the long term sustainability of the organisation.

3.2 Programmes

BSA has the following programmes:

3.2.1 Programme 1: Administration – R63 817 000

The purpose of this programme is to achieve organisational sustainability as defined in the King III report. It is managed internally via two divisions. The Corporate Services division manages planning and reporting, board secretariat, human resources, information technology and the legal functions. The Finance division manages budgeting, financial management, payroll and supply chain management.

3.2.2 Programme 2: Brand Strategy Development and Management - R44 827 000

The purpose of this programme is to continue seeding the new positioning, “inspiring new ways,” to all South African (local markets) and in key global markets to drive the competitiveness of South Africa.

3.3.3 Reputation Management – R59 042 000

The purpose of this programme is to provide a positive disposition about South Africa amongst target audiences, domestically and internationally by implementing a domestic reputation management programme as well as an international reputation management programmes specific to targeted markets. It is also to leverage from strategic platforms while developing strategic partnerships with targeted diplomatic corporations.

4. Progress made on the recommendations of the Committee in its 2012/13 Budgetary Review and Recommendation Report (BRRR)

The Committee noted: (i) that BSA has made progress in appointing people with disabilities; and (ii) the improvement in the marketing of South Africa as a destination for investment in its 2013/14 Strategic Plan.

5. Expenditure Trends

Brand South Africa derives revenue mostly from transfers from The Presidency, investment income and a once-off grant of R6 million in 2012/13 for the Africa Cup of Nations tournament.

Funded mostly through a transfer from The Presidency, the spending focus over the medium term will be on aligning the organisation’s objectives, activities and interventions with the national development plan through four broad strategic objectives: reputation management, brand strategy and development, administrative support, and capital expenditure. To achieve these objectives, the organisation will focus on building awareness and promoting a positive image of the South African brand domestically and internationally through various activities, such as promoting active citizenship through a campaign called Play Your Part, training key stakeholders on branding, promoting the country’s long term policies, and accessing the media to communicate the country’s competitiveness and business opportunities. Through its reputation management programme, the organisation will increase the country’s international media reputation index to a range of between 50 and 55 over the medium term.

Expenditure over the medium term will increase due to the hosting of the inaugural South African competitiveness forum, the development of the brand ambassador programme, and the acquisition of additional office space. The brand ambassador programme is designed to market South Africa and communicate the country’s development strategies and programmes to the international community.

In 2013/14, BSA commissioned a study of perceptions held of the country by South Africans living abroad. The study was to inform the development of a brand monitoring and reputation management tool. The entity is currently conducting a review of the corporate identity manual and will provide stakeholder training on key aspects of the manual. The study and the review are expected to increase spending on consultants, travel and subsistence, communication, marketing, printing, stationery and training over the medium term. In addition, expenditure over the medium term will increase due to the hosting of the inaugural South African competitiveness forum, the development of the brand ambassador programme, and the acquisition of additional office space. The brand ambassador programme is designed to market South Africa and communication the country’s development strategies and programmes to the international community.

Lastly as at 30 November 2013, the entity had a funded establishment of 44 posts of which 7 were vacant due to resignations and delays in the recruitment process. Currently, the entity is evaluating its organisational structure to inform future appointments.

6. Observations

The Committee noted: (i) the number of Board members is determined by the President and therefore BSA management is not in a position to influence this decision of an inflated Board; (ii) the Board is however reviewing the number of Board members in consultation with the President as a means to find efficient ways of operating; (iii) it is BSA’s role to bridge the gap between perception and reality in relation to how people, locally and internationally perceive the performance of South Africa; (iv) compliance in content development and distribution is critical while branding is a complex issue that necessitates a broad consensus with various stakeholders, and therefore takes time to achieve a uniform brand for a country; (v) Programmes of the BSA are based on empirical research conducted by the Agency; and (vi) ‘Potential’ versus ‘capability’ is a process and that the ‘Alive with possibilities’ slogan demonstrates the potential while ‘Inspiring new ways’ is a slogan based on market research that reflects the progress path of South Africa.

7. Recommendations

The Committee recommends that:

a) there should be an equal focus, if not more, on promoting BSA to South Africans;

b) BSA should arrange a workshop with Members of the Parliament to engage on its programmes and activities to enable members to become brand ambassadors in their respective constituencies;

c) BSA must urgently fill all funded vacant posts; and

d) BSA must present data to the Committee that indicates how it has achieved a return on investment for the allocated R167 million.

The Committee supports the Strategic Plan and Budget for 2014-2019 of BSA and recommends that it be approved.

The Democratic Alliance and the Economic Freedom Fighters reserved their position on the report.

Report to be considered.