National Department of Tourism on its 2015/16 2nd & 3rd Quarterly performance, with Minister present

Meeting report

Opening Remarks
The Chairperson expressed concern that the Expanded Public Works Programme was still on its back foot. The National Department of Tourism (NDT) had also had a downward appropriation, which meant that the budget had not been spent. First it was R8m that had not been spent and later R10m. The NDT did not provide a complete picture of why certain targets were not met. The information provided was scant. The Committee needed to know what challenges the NDT faced. The implementation of NDT’s Programmes was also a problem. For example on Programme 3: International Tourism Management 81% of its budget was spent but yet three targets were not met. On what was the funds spent? She noted that the Chief Financial Officer did report on the financials of the NDT but the Committee was interested to know what the original appropriation was.

Remarks by Minister of Tourism
Mr Derek Hanekom, Minister of Tourism, felt that 2016 was going to be a good year for tourism. He informed the Committee that after Parliament had closed for 2015, the Chief Executive Officer (CEO) of SA Tourism, Mr Thulani Nzima, by agreement with the SA Tourism Board, had decided to depart early before the expiration of his contract. The post of CEO would be advertised soon. The post of Chief Operating Officer (COO) at the NDT was also vacant but there was someone acting. The Deputy Director General: Policy and Knowledge Systems post was also vacant. Both the COO and the Deputy Director General posts were being advertised. He assured members that both posts would be filled within the next few weeks. 2015 was not an easy year but it ended on a positive note. The NDT only commented on figures released by Stats SA. Figures for Robben Island, Table Mountain, Maropeng, Cradle of Humankind and Walter Sisulu National Botanical Gardens were good. Figures were up 40% compared to last year. The good news was that figures were now coming through quicker to the NDT, within 7 weeks.  November 2015 figures showed an increase in overseas tourist arrivals year on year. Figures however decreased in the Southern African Development Community (SADC) and the rest of Africa. Overall there was a slight decrease. 2015 saw a significant drop in tourist arrivals from China but during September, October and November of 2015, there was an increase in numbers. On visa regulations, the decisions of cabinet would be implemented. The issue of visa regulations was being addressed. Commodity prices like gold, platinum etc affected SA’s economy heavily. There was also a downward turn in the world economy. The recent drought in SA also affected the economy as certain goods like maize needed to be imported to make up for shortages. Consequently there was a reduction in revenue in SA. The exchange rate was however in favour of increasing tourism numbers. SA at present was an extremely value for money destination. Tourism was unaffected by commodity prices. Hence tourism could assist in boosting the South African economy. It could create jobs and lead to economic growth.

Remarks by NDT
Mr Victor Tharage, Director General, NDT, emphasised that the NDT was committed to provide support to the Committee in order for it to do its work. The NDT pledged to be transparent in its efforts. If something was not clear or not forthcoming it was not done intentionally. Perhaps where more information was required the framework in place did not allow it. The framework of Annual Performance Plans (APPs) had to meet certain criteria. Criteria had to be measurable and time bound. There were limitations on what could be included in an APP. It might not be obvious but a great deal of work was being done in Programme 3: International Tourism Management on regional cooperation. Much of the work was not reflected in the APP. There were bilaterals and work involving the United Nations World Tourism Organisation (UNWTO) was done. Programme 3 dealt with accessing certain markets. The NDT believed that all market related issues should be handled by SA Tourism. The National Tourism Sector Strategy (NTSS) was being reviewed in order to identify what had worked and what needed to be relooked at. There would be a 10-12 page document covering the review. The review would not be rushed. All departments need to come on board regarding the review. Inputs from director generals would be obtained.  On the implementation of the visa regulations, the NDT was working with the Department of Home Affairs (DHA). On the matter of the unabridged birth certificate issue there was a draft in place and the DHA would make an announcement soon. There was agreement on a China dispensation. India and Russia however had dispensations that were different to China and SA. SA and India did have a database of businesses which operated and did business in SA. Processes were gone through properly. The announcement on China would be made in the near future. He referred to the Chairperson’s earlier comment about the R10m that National Treasury had taken back. He wished to clarify that the NDT did not declare it as a saving. National Treasury had classified it as a saving. It was basically a cut and not a saving that the NDT had made.

Briefing by NDT on Quarter 2 and Quarter 3 Performance Reports for 2015/16
The Department briefed the Committee on its 2015/16 Quarter 2 and Quarter 3 Performance Reports. The delegation comprised of Mr Tharage, Ms Nomzamo Bhengu, Acting Chief Operating Officer, Ms Ramphele Morongoe, Deputy Director General: Domestic Tourism Management, Ms Nonqubela Silulwane Acting Deputy Director General: Policy and Knowledge Systems, Mr Ralph Ackerman, Chief Financial Officer and Ms Petra van Niekerk Parliamentary Liaison Officer: Office of the Director General . Also in attendance was Ms Nurunessa Moolla, Chief of Staff: Office of the Minister, Ms Shama Nathoo Parliamentary Liaison Officer: Office of the Minister and Ms Natasha Rockman Parliamentary Liaison Officer: Office of the Deputy Minister. Apologies were tendered for Ms Aneme Malan Deputy Director General: International Tourism Management for not being able to attend proceedings due to illness. On both Quarter 2 and Quarter 3 performance reports presented on Ms Bhengu was tasked with speaking to the Administration Programme, Ms Silulwane the Policy and Knowledge Services Programme, Mr Tharage the International Tourism Management Programme and Ms Ramphele the Domestic Tourism Management Programme. Mr Ackerman covered budgets and financial issues of the NDT. The briefings on Quarter 2’s and Quarter 3’s performance targets overlapped with one another as they were interrelated. The provided figures for Quarter 2 were actual figures whereas those for Quarter 3 were only preliminary figures.

The Chairperson in the interest of time asked for the briefing to be as concise as possible.

2015/16 Quarter 2 and 2015/16 Quarter 3 Performance Reports
The NDT, in Quarter 2 as at the end of September 2015, had spent 51.79% of its budget. It had achieved 82.54% of its targets. 11.11% of targets had not been achieved but significant work had been done. 6.35% of targets had not been achieved and intervention was required. At the end of Quarter 3 expenditure had increased to 74% and the NDT had achieved 70.37% of its targets.
Programme 1- Administration: The Programme had for the most part met its Quarter 2 performance targets with the exception of a few. A target had been set to maintain a vacancy rate of 10% for Quarter 2 but only 6.6% had been achieved. On women representation in Senior Management Service (SMS) and representation for people with disabilities in Quarter 2 a target was set at 50% women representation in SMS and 5% representation for people with disabilities. The actual performance for Quarter 2 was 49.2% at SMS and 5.2% for people with disabilities.
Programme 2-Policy and Knowledge Services:  A general target was set for the review of the NTSS. On the NTSS the Quarter 2 target of developing a draft NTSS had not been achieved nor had stakeholder consultation on the draft NTSS taken place. On universal access actual performance was that stakeholder awareness workshops were held. On the National Tourism Information Gateway (NTIG) a quarterly operational report for OR Tambo International Airport (ORTIA) and a resource plan for King Shaka International Airport (KSIA) implementation had been developed. On initiatives to support Broad Based Black Economic Empowerment (BBBEE) for Quarter 2 a report on the development of a final scoping, functional and technical specifications document for the database was developed and approved.
Programme 3-International Tourism Management: With the aim of supporting South African missions on developing tourism a target was to have capacity building for South African missions abroad implemented as per an agreed schedule however it did not materialise.  On skills development opportunities by way of bilateral, the target was set to liaise to finalise details of FET chef trainers’ skilling workshop by French counterparts. Liaising with South African parties to schedule a meeting had taken place and a letter had been forwarded to the Head of Department North West. Terms of reference had also been forwarded to the North West Province. 
Programme 4-Domestic Tourism Management:  On programmes to inculcate a culture of travel amongst South Africans provincial coordination of the countrywide Tourism Month Programme had been done. The Minister’s stakeholder event was also hosted during Tourism Month. The intention was to support 100 rural enterprises for development and the target for Quarter 2 was for implementation of the intervention plan for the 100 rural enterprises. The intervention plan for only 92 rural enterprises was implemented.  On the Tourism Human Resource Development Strategy review the Quarter 2 target was to do an analysis of data from the environmental scan and to have stakeholder engagements. The analysis of data from the environmental scan could not be done but stakeholder engagements were conducted.

Discussion
Ms P Adams (ANC) referred to the NDT’s workforce representativity and asked how many employees were youth. She pointed out that in some instances actual performance was greater than the targets set. Was it a case that correct targets had not been set? She noted that capacity building programmes for district municipalities were good but that monitoring and evaluation was important. She asked whether implementation had taken place. On support to rural enterprises she asked why had only 92 been supported when the target was 100. Was development actually taking place and what were the challenges encountered? She also asked how the three priority areas had been chosen under the Tourism Incentive Programme. Had market research been done to identify the three priority areas? On initiatives supported to promote Broad Based Black Economic Empowerment (BBBEE) she asked how successful it was. In Quarter 3 she asked why the programme for Indaba 2016 ministerial session had been developed but not approved.

Mr Tharage. on the programme for the Indaba 2016 ministerial session. said that it had not yet been submitted to Minister Hanekom. The process entailed liaising with missions of different countries. There was thus far a reasonable degree of agreement.  He said that the NDT in the near future would provide a detailed presentation on BBBEE. Every sector had its own codes. The codes of the tourism sector were in place.

Ms Ramphele said that it was not about under targeting. The NDT created awareness in all nine provinces. Actual performance was more than the targeted amount due to provinces requesting that efforts be increased. On educator exposure, normally the NDT did all nine provinces but the decision was taken to focus on provinces where there was National Tourism Careers Expo (NTCE) in order to popularise it. There was also a partnership with the Federated Hospitality Association of SA (FEDHASA) to provide accommodation to students. On capacity building for district municipalities the annual target had been set at 6. In Mpumalanga Province 5 district municipalities had been targeted. District municipalities in other provinces would also be targeted. The capacity building was aimed at local government officials and councillors etc. The University of SA (UNISA) had also come on board. The idea was to have organised bodies. On enterprise development 100 rural enterprises was targeted. The Tourism Enterprise Partnership (TEP) would deal with 150 urban enterprises. The type of support given to enterprises was on business training, market access etc.
 
Ms Bhengu responded that the NDT had eight interns. On the lodging of complaints, she stated that provincial offices did have mechanisms in place.

The Chairperson responded that the Committee should be provided with the details on where complaints could be lodged in the provinces.

Mr Tharage said that the provincial contact details for complaints would be forwarded to the Committee.  

Minister Hanekom agreed that exceeding targets did not mean that the NDT was under-targeting. Sometimes there were opportunities that came up. Targets were estimated and on occasion things were beyond ones control. He explained that priorities did change in the course of the Strategic Plan which could be affected by the economy, the State of the Nation Address etc. Important priorities were small business support, skills development, incentive programmes, destination enhancement, world heritage sites and the EPWP. The EPWP needed to grow in order to contribute to destination SA. The current exchange rate not only made it attractive for foreigners to come to SA but also made South Africans think twice about travelling abroad. All the priorities had to contribute towards the transformation of the tourism sector.

Ms L Makhubele-Mashele (ANC) asked what the criteria for capacity building initiatives to support the implementation of responsible tourism Universal Accessibility were. She informed the NDT that she had at provincial level struggled to get hold of someone with whom complaints could be lodged with. She pointed out that there was EPWP in her area but persons were only employed on a six-monthly basis. Every six months there were new persons employed. Could the benefit of EPWP projects be measured? Did the EPWP change peoples’ lives? She asked whether the placement rate of the EPWP could be quantified.

Ms Ramphele, on the EPWP, said that an annual target had been set at 308. Targets for Quarter 1 and 2 had been exceeded. She believed that the targets set would be met. EPWP principles called for the skilling of persons in order for them to be employable. 

Minister Hanekom conceded that the EPWP was imperfect. There were challenges associated with it. However it must be borne in mind that most of tourism’s EPWP projects were time bound. For example when something was constructed the project had to come to an end. He believed EPWP projects to change peoples’ lives. The projects could unfortunately not benefit everyone as unemployment was high. There was a new programme with a different type of EPWP which would have more permanent workers. The type of work entailed keeping beaches clean to make destinations more attractive. The NDT worked with the Wildlife and Environment Society of SA (WESSA) to help beaches maintain their blue flag status. During this financial year 200 persons were employed.

Ms A Matshobeni (EFF) appreciated that capacity building for tourism practitioners at local government level had been done at 39 municipalities across all nine provinces but said that the Committee needed to be provided with more detail. She referred to capacity building initiatives like the Executive Development Programme for transformation still being at a concept document stage and asked when actual capacity building was to take place. On destination development why was Robben Island and the Kruger National Park targeted. Why were funds not being spent on lesser known destinations? On programmes to inculcate a culture of travel in South Africans and supporting rural enterprises she asked whether interventions were actually working.

Mr Tharage, on destination development, explained that there were reasons why places like Robben Island were chosen. The NDT believed that in order to create scale, to expand opportunities on photography, food and beverages, arts and crafts etc mass needed to be created. For example a place like the Kruger National Park wished to create a wild activity hub. The idea was for it to create jobs and for new skills development to take place.  

Ms E Masehela (ANC) asked whether there was only a single target set for a skills development opportunity for the entire year. On tourism source market development plans implemented she said that no target number had been set. If 92 rural enterprises were supported for development what type of support was provided to them? She asked with which universities the NDT had collaborated with.

Ms Ramphele said that there were chefs training and tourism buddies programmes. Graduations had taken place at the end of 2015. The idea was for graduates to obtain employment and the current absorption rate was 50%.

Ms Silulwane responded that the universities collaborated with were the University of Pretoria, the University of Johannesburg, the University of Venda and the University of KwaZulu-Natal. Persons undergoing training were chosen after a needs assessment was done. The impact of the training was also measured. Evaluations were done on a mid-term basis. There was also a monitoring and evaluation team in place.  

Mr Tharage, on the Chefs Programme, explained that the level of negotiations was quite intense. What was to be done next year was being discussed at present. He said that small businesses needed assistance on grading. Market access for Small, Medium and Micro Enterprises (SMMEs) also needed work. On rural enterprise development in provinces the numbers were; Western Cape – 11, Eastern Cape – 19, Northern Cape – 3, Gauteng – 1, North West – 2, KwaZulu-Natal – 12, Limpopo – 12, and Mpumalanga – 41. There was harmonisation with the Department of Small Business Development. 

The Chairperson noted that when the NDT presented its Annual Report to the Committee it needed to account for its budget for service delivery. On EPWP projects she asked whether persons were given skills that could be used in the future. She asked how frequently the NDT serviced its tourism knowledge portal.

Ms Silulwane stated that there were structured quarterly updates made to the tourism knowledge portal.

The Chairperson asked if the NDT could give a guarantee that the EPWP Account would be completed by the end of the financial year.

Mr Ackerman responded that he would do his best to do so.

Mr Tharage explained that the NDT reported according to a framework prescribed by National Treasury. The Auditor General’s Office of SA (AGSA) had to decide. Discussions with AGSA had taken place to identify how best the NDT could meet its modified cash standards. The reality was that there was no framework in place. The NDT had engaged with National Treasury and there was agreement to treat infrastructure as capital and the rest of things as goods and services. Once the NDT received confirmation then the NDT would be in a clear position. He noted that members asked about whether the NDT was bringing about change at grassroots level. There was visible movement towards something that was sustainable. Social Responsibility Implementation (SRI) projects were closing some of the poverty gaps. A tangible difference was seen on the ground. Some of the chefs that had been trained had become restaurateurs. 

The Chairperson asked that the list of SMMEs supported by the NDT be forwarded to the Committee

Mr Tharage agreed to forward the list to the Committee.

The meeting was adjourned.