Umsobomvu Youth Fund & Productivity SA Annual Reports 2006/7: briefings

LABOUR PORTFOLIO COMMITTEE
21 November 2007
UMSOBOMVU YOUTH FUND & PRODUCTIVITY SA ANNUAL REPORTS 2006/7: BRIEFINGS

Chairperson: Ms O Kasienyane (ANC)

Documents handed out
Umsobomvu Youth Fund Annual Report [Part 1][Part 2]
Umsobomvu Youth Fund Annual Report
Productivity SA: Annual Report 2006/07 presentation [Part 1][Part 2]
Productivity SA Annual Report 2006/07
NPI brochure: Inspiring a Competitive South Africa
Productivity Statistics 2006 [available shortly at www.npi.co.za]
Draft Report on Annual Report of Department of Labour (not adopted)
Draft Minutes of Proceedings on 9 October 2007 and 6 November 2007 (not adopted)

Audio recording of meeting

SUMMARY
The committee received a briefing on Productivity SA Annual Report 2006/07 and the Umsobomvu Youth Fund Annual Report 2006/07. Each organization set out the vision, mission, key focus areas, challenges and the plans.

Members questioned Productivity SA on the formal of the presentation, pointing out that there were no financial statements, list of members nor information about the audit committee. Questions related to the funding, the need to expand the programmes countrywide, the possibility of duplication with the work of the Department of Trade and Industry, how the rural areas were reached, whether increased productivity included the public service, and what specific challenges were faced. Further enquiries related to the training, how local government could be included, the composition of the Board, the track record with the second economy, and any working relationships with the Umsobomvu Youth Fund.

The Umsobomvu Youth Fund focused in its briefing on the approach to youth development, highlights and achievements, and identified its major challenges as the accessibility of UYF to youth with disabilities and the manageability of growth. Members asked about the methods used to encourage the youth to start small businesses, whether there was any overlap with the Small Enterprise Development Agency, the need to be proactive in setting up offices in municipalities, the outreach to the disabled, what was being done to address structural barriers, the policy in place for performance appraisals, and the plans for 2010. Further questions addressed the age group of “youth” up to 35, why no white youth were represented on the Board, and whether graduates should not be hired by government departments.

MINUTES
Productivity SA Annual Report 2006/07
Dr Yvonne Dladla, Executive Director, Productivity SA, gave the members a brief summary of Annual Report. She covered the vision and mission, and indicated that the key focus areas for 2006/07 were to improve productivity knowledge and awareness, to develop skills, second economy productivity interventions, industry sector collaborations, turnaround solutions for companies and labour management collaboration. She described the achievements under each of those focus areas. She noted that Productivity SA had a number of implementation partnerships with international organizations. IN the field of knowledge management, several research reports had been produced, covering the performance, productivity and service delivery in the public sector, the impact of government interventions on Small Medium and Micro Enterprise (SMME) competitiveness, productivity statistics and analysis and a social plan distressed sectors report. It aimed to incorporate productivity concepts into the National Curriculum and had implemented a pilot project from grade R to 3, and had trained 160 foundation phase teachers. In the public sector it had implemented projects in 5 organisations.

Second economy productivity interventions included building SMMEs to transform from second to first economy, turnaround solutions for companies to prevent job losses and ensure survival of businesses, and facilitate government and industry partnerships.

Mr Bogani Coka, Corporate Services Executive Manager, Productivity SA, outlined the achievements in training of staff. There had been IT upgrades, and 22 new innovations were implemented to improve productive performance. No matters of emphasis were raised by the Auditors and there had not been a qualified audit report for the past seven years. He set out the government grant. He noted that the main challenges arose from Productivity SA’s inability to reach the mass of people due to limited regional presence, and insufficient financial resources available to Productivity SA.

A video clip was played to the committee members about Productivity SA

Discussion
Ms A Dreyer (DA) commented that the presentation was not really in the format of an Annual Report. She said that the booklets looked more like an advisement for Productivity SA. She added that this was not enough information for the Committee to do their oversight work. There was a lot of information missing from the presentation. She wanted to know where the financial statements were for Productivity SA, who the other managers in Productivity SA were, and whether there was an audit committee in place

Dr Dladla replied that the presenters had not brought the Annual Report with them, as this had been distributed earlier in the year to Members of parliament. The other documents that have been issued to the committee were just supporting documents.

Mr Coka replied that Productivity SA did have an audit committee in place. He added that there was no matter of emphasis raised and that they had received an unqualified report.

Ms Dreyer commented that the income from the private sector was decreasing and the grant from government seemed to be increasing.

Mr Coka replied that the funding had increased overall over the years. He added that Productivity SA had looked at other sources of funding.

Dr Dladla added that the funding was fairly limited. The programmes needed to be expanded so that the entire country could be reached

The Chairperson stated that Productivity SA should have reminded Members to bring the annual report along. The Chairperson added that Dr Roopnarain and Mrs. Dreyer were new to the committee, which is why they may not have received the Annual Report.

Mr M Nene (ANC) wanted to know if Productivity SA reached the schools in the rural areas with the debates that had taken place. He added that there tended to be more focus on the urban areas than the rural areas.

Dr Roopnarain (IFP) wanted to know how different Productivity SA’s work was to that of the Department of Trade and Industry. She enquired if this was not duplication. She asked how people were informed about business ethics and if they knew how to market their products. She also asked how the rural areas were reached, seeing that there were only two regional offices. She added that the rural areas may not have access to the internet.

Dr Dladla replied that there was no duplication of work between the Department of Trade and Industry and Productivity SA.

Mr Sello Mosai, Executive Manager: Knowledge Management and Research, Productivity SA, replied that Productivity SA had finalised the Small, Medium and Micro Enterprises (SMME) report. There was a lack of contact between government and SMMEs. He added that it was very difficult for a SMME in a rural area to register itself as a business as there was only one Companies and Intellectual Property Registration Office to register a business, which was located in Pretoria.

The Chairperson also asked about the marginalised people, such as those living in rural areas, women and the disabled. According to the report there had been general productivity improvement in different sectors, and she wanted to know if this included the public service. She also wanted to know more about the challenges that Productivity SA faced.

Mr Iggy Sathekge, Executive Manager: Productivity Strategic Leadership, Productivity SA, replied that one of the challenges was general productivity. There were limited financial resources so research could not be done into every sector. He added that previously Productivity SA had partnered with SABC Education, which had reached a total of 20 million people.

Mr Mosai added that Productivity SA did look into the Public Sector. He added that they did also look at what the challenges were in the public sector. It would try to assist managers to increase productivity. Statistics were one of the ways by which the productivity of different businesses were measured.

Ms L Moss (ANC) commented that there ere partnerships with the Chambers of the different provinces. She added that fishing was no longer a livelihood for the fishing community. She wanted to know if Productivity SA could link up with the Department of Environmental Affairs and Tourism to see what could be done about the problems in the fishing industry.

Ms N Twala (ANC) wanted to know in which seven provinces the 3000 people were trained. She also wanted to know why the training did not take place in all nine provinces.

Mr Neville Goba, Public Sector Executive Manager, Productivity SA replied that the organization was currently working with 8 out of the 9 provinces. He added that it had an agreement with schools to participate in the debate. He added that they did reach schools in the rural areas, although not as much as they would like to. People were trained in North West, Northern Cape, Kwazulu-Natal, Eastern Cape, Free State and Limpopo.

The Chairperson wanted to know what could be done to include local government in the work of Productivity SA so that service delivery could be improved in the country.

Mr Goba replied that the organisation had been in discussion with the Department of Local Government to see how they could work with them.

Mr T Anthony (ANC) enquired as to the composition of the board of directors.

Dr Dladla replied that there was a board of directors, but that it had changed since last year. Government was represented on the board of directors by the Departments of Labour, Trade and Industry, Education, and Science and Technology.

Mr S Siboza (ANC) wanted to know if Productivity SA worked with any South African institutions to provide training. He added that it might be very difficult to check if the training was given by an institution out of the borders of South Africa.

Mr Mosai replied that the report looking at skills development and productivity had not yet been released.

Mr Nene wanted to know if it would be possible to get rid of the second economy.

Mr Goba replied that there was a good track record with the second economy, although he believed that at present it would be impossible to get rid of the second economy.

Mr Anthony wanted to know if Productivity SA was working with Umsobomvu Youth Fund.

Dr Dladla replied that it was in discussion with the Umsobomvu Youth Fund to see how they could work together.

Umsobomvu Youth Fund Annual Report 2006/07
Mr Mbongeni Mtshali, Director: Business Development, Umsobomvu Youth Fund (UYF) and the Acting Chief Financial Officer, Mr Sello Nkoane, took the members through the Annual Report. Mr Sello Nkoane told the committee that there were no major concerns raised about the financial statements. Members were briefed on the UYF approach to youth development, UYF contribution to the Accelerated Shared Growth Initiative of South Africa (ASGISA) and the National Skills Development Strategy (NSDS), and 2006/07 highlights and achievements.

Year on year, the UYF had reached considerably more beneficiaries. IN 2006/7 it had achieved 16% increase in beneficiaries in the National Youth Service, to 15 139. It had granted 21 383 loans, 9 470 business support vouchers and business opportunities worth R183,7 million. There was more than a 100% increase in the number of youth walk-ins to the offices. However, in two areas it had not reached its targets. More than 90% of beneficiaries in the micro businesses were women. The repayment rates on loans were high, at 85% for micro enterprises and 90% for small enterprises. the challenges faced by the UYF, 2006/07 financial statements and the 2007 Strategic Priorities. The two major challenges highlighted were the accessibility of UYF to youth with disabilities and the manageability of growth.

The financial statements were tabled. Mr Sello Nkoane, Acting Chief Financial Officer commented that there were no major concerns on these statements.

Finally the strategic priorities for 2007 were highlighted, including the roll out of a branch network, the launch of a Women’s Fund, the strengthening of existing partnerships, the finalisation of a new micro finance model, improving operational efficiency by putting in place effective management systems, enhancing the focus on staff training and development, and positioning the UYF to participated in supporting the volunteer programme for the 2010 World Cup.

Discussions
The Chairperson wanted to know how the youth was being encouraged to start their own small businesses. She added that many youth are not finding employment in malls because foreigners were mostly being employed. She wanted to know if the youth was just being selective.

Mr Malosi Kekane, CEO, UYF, replied that there were a number of ways to encourage self-employment. Many people lacked skills, so training was given to them.

Mr Mzondeki commented that he was impressed with the rate at which loans were repaid. He wanted to know what the UYF’s outreach was in the rural areas. He added that the UYF should not wait for the municipalities to contact them before setting up an office. He wanted to know if the 8 000 jobs that were created were sustained. He added that he was concerned about the 54% decline in skills development. He also wanted to know how the disabled were being reached by UYF.

Mr Kekane replied that UYF had entered into partnerships with various chambers of commerce. He said that there was a lack of awareness and a lack of skills. He added that an awareness campaign would be run in the townships, so that youth would get to know about the UYF. He said that there was a report on the website about the rural outreach. UYF had recently moved away from indirect service to direct service. He added that it was not the UYF that was waiting on municipalities to contact them; often it was the youth that push to have a UYF office at the municipalities. He said that UYF did interact with the disabled. The jobs that had been created had been sustained.

Ms Dreyer commented that in the Annual Report it was noted that that there were structural barriers that needed to be overcome. She wanted to know what was being done to address this. She also wanted to know if there was a policy in place for performance appraisals.

Mr Kekane replied that over the last five years the funding had been tapering. He added that there was an audit committee in place as well a remuneration committee in place

Mr Anthony wanted to know what projects were in place that would benefit from 2010. He also wanted to know how UYF was working with Productivity SA.

The CEO replied that the UYF would be having projects with the host cities for 2010. UYF would be looking at youth who were unemployed. He added that they were in discussions with Productivity SA on how they could help UYF with learnerships.

Mr L Labuschagne (DA) wanted to know why the cutoff age for youth was 35. He commented that it appeared as if there was a lot of duplication of the work that Small Enterprise Development Agency (SEDA) was doing. He added that he did not see any white youth on the board. He wanted to know if this was because white youth did not qualify. He wanted to know which 1 250 young graduates were trained, and where they were placed. He also wanted to know why graduates were not used to fill vacancies in government departments.

The CEO replied that if there had never been apartheid the UYF would not have had to push the age limit for youth to 35. He said that most of the people who were marginalised during apartheid would fall into that age group. He added that an agreement had been signed with SEDA so there was no duplication of work. He added that they had realized that there were indeed poor white youth. He said that research had been commissioned to see how this could be addressed. Follow ups were done with those who had been sent on training. He said that UYF had started to interact with government so that there could be a partnership between government and UYF.

The meeting was adjourned.