Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698139682482.pdf (South Africa)
Tuesday, 22 March 2022] No 42—2022] FOURTH SESSION, SIXTH PARLIAMENT PARLIAMENT OF THE REPUBLIC OF SOUTH AFRICA _____________________ ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS _____________________ TUESDAY, 22 MARCH 2022 _____________________ TABLE OF CONTENTS ANNOUNCEMENTS National Assembly 1.

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Part 3 of Report of Judicial Commission of Inquiry into Allegations of State Capture, Corruption, and Fraud in Public Sector, including Organs of State ................................. 2 Referral to Committees of papers tabled .......................................................................... 2 TABLINGS National Assembly 1.

Minister of Finance ........................................................................................................... 3 2.
Minister of Higher Education, Science and Innovation ................................................... 3 Speaker and Chairperson .................................................................................................. 4 3.

COMMITTEE REPORTS 1 National Assembly 1.

Appropriations ................................................................................................................ 34 2.
Communications ............................................................................................................. 58 3.

Trade and Industry .......................................................................................................... 74 4.

Trade and Industry .......................................................................................................... 77 National Council of Provinces 1.
Health and Social Services ............................................................................................. 98 ANNOUNCEMENTS National Assembly The Speaker 1.
Part 3 of Report of Judicial Commission of Inquiry into Allegations of State Capture, Corruption, and Fraud in the Public Sector, including Organs of State (1) A letter, dated 16 March 2022, was received from the President of the Republic, informing the National Assembly that the Secretary of the Judicial Commission of Inquiry into Allegations of State Capture, Corruption, and Fraud in the Public Sector, including Organs of State, presented Part 3 of the Commission’s report to the Presidency.
He is available online at the https://www.thepresidency.gov.za.

report states that The President further states that government will have four months from receipt of the final Report to submit to Parliament an implementation plan in response to the Commission’s Report.
In addition to submitting the plan, the President expresses his appreciation that Parliament will need to engage in its own process on the recommendations that affect it directly, and shares this portion of the Report, and any other portions thereof with similar contents, to assist in this work.

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Referral to Committees of papers tabled (1) The following paper is referred to the Portfolio Committee on Agriculture, Land Reform and Rural Development for consideration and report: (a) Annual Performance Plan of the Office of the Valuer-General for 2022 – 23.

(2) The following paper is referred to the Portfolio Committee on Defence and Military Veterans for consideration and report: (a) Annual Performance Plan of the Department of Defence for 2022-23.
2 (3) The following papers are referred to the Portfolio Committee on Employment and Labour for consideration and report: (a) Annual Performance Plan of the Commission for Conciliation, Mediation and Arbitration for 2022-23.

(b) Annual Performance Plan of Productivity SA for 2022 – 23.

(c) Strategic Plan of Productivity SA for 2020-21 – 2024-25.

(d) Annual Performance Plan of the Compensation Fund for 2022-23.

(e) Revised Strategic Plan of the Unemployment Insurance Fund (UIF) for 2020- 21 – 2024-25.
(f) Annual Performance Plan of the Unemployment Insurance Fund (UIF) for 2022-23.

(4) The following papers are referred to the Standing Committee on Finance: (a) Protocol Amending the Agreement between the Republic of South Africa and the Republic of Mozambique regarding Mutual Assistance between their Customs Administrations, signed at Maputo on 18 March 2002, tabled in terms of section 231(3) of the Constitution, 1996.
(b) Explanatory Memorandum to the Protocol Amending the Agreement between the Republic of South Africa and the Government of the Republic of Mozambique regarding Mutual Assistance between their Customs Administrations, signed at Maputo on 18 March 2002.

(5) The following paper is referred to the Portfolio Committee on Tourism for consideration and report: (a) Annual Performance Plan of South African Tourism for 2022-23.

TABLINGS National Assembly and National Council of Provinces 1.
The Minister of Finance (a) Annual Performance Plan of National Treasury for 2022/23.

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The Minister of Higher Education, Science and Innovation (a) Revised Strategic Plan of the Department of Science and Innovation for 2020 – 2025.

3 (b) Annual Performance Plan of the Department of Science and Innovation for 2022/23.

(c) Annual Performance Plan of the Academy of Science of South Africa for 2022/23.

(d) Shareholder’s Compact of the Council for Scientific and Industrial Research for 2022/23.
(e) Annual Performance Plan of the Human Science Research Council for 2022/23.

(f) Annual Performance Plan of the South African National Space Agency for 2022/23.

(g) Annual Performance Plan of the National Advisory Council on Innovation for 2022/23.

(h) Annual Performance Plan of the National Research Foundation for 2022/23 – 2024/25.

(i) Annual Performance Plan of the South African Council for National Scientific Professions for 2022/23.
(j) Revised Strategic Plan of the South African National Space Agency for 2020 – 2025.

(k) Annual Performance Plan of the South African National Space Agency for 2022/23.

(l) Annual Performance Plan of the Technology Innovation Agency for 2022/23.

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The Speaker and the Chairperson DELEGATION REPORTS ADOPTED BY THE PARLIAMENTARY GROUP ON INTERNATIONAL RELATIONS (PGIR) ON 04 MARCH 2022.
(Continuing from 15 March 2022) (a) Report of the virtual SADC GBV Model Law Consultative Meeting with legal drafters from Ministries of Justice and Parliaments of Member States, 13 September 2021.

4 REPORT OF THE VIRTUAL SADC GBV MODEL LAW CONSULTATIVE MEETING WITH LEGAL DRAFTERS FROM MINISTRIES OF JUSTICE AND PARLIAMENTS OF MEMBER STATES 13 September 2021 1 5 1.
INTRODUCTION Purpose of the meeting: To deliberate and consult with legal drafters from Ministries of Justice and parliaments of member states on the draft SADC Gender-based Violence (GBV) Model Law Delegation: • Legal drafters from the South African Parliament were not able to attend.

Secretariat: • Dr N. Leibrandt-Loxton: Researcher – International Relations and Protocol Division (IRPD) 2.
MEETING OUTCOMES The meeting commenced with opening remarks from Ms Boemo Sekgoma, Secretary-General of the SADC-PF.

She explained the important role that legal drafters play in the development of legislative frameworks and encouraged them to share their insights during this consultative process.

The SADC-PF legal drafter, Ms Eva Jhala, proceeded to present the Model Law, after which the legal drafters were requested to make inputs section by section.
The legal drafters requested to make written submissions instead.

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CONCLUSION Legal drafters were requested to make written submissions to the Forum by 24 September 2021.

ENDS 2 6 (b) Report of the SADC GBV Model Law Validation Session of the SADC-PF Joint Sitting of the RWPC and Standing Committees, 16 September 2021.

7 REPORT OF THE VIRTUAL SADC GBV MODEL LAW VALIDATION SESSION OF THE SADC-PF JOINT SITTING OF THE RWPC AND STANDING COMMITTEES 16 September 2021 1 8 1.
INTRODUCTION Purpose of the meeting: For the Joint Sitting of Southern African Development Community- Parliamentary Forum the Regional Womens (SADC-PF) Standing Committees and Parliamentary Caucus (RWPC) to validate the draft SADC Gender-based Violence (GBV) Model Law.

Delegation Members registered: • Hon.

N. Bilankulu, MP • Hon.

D. Moela, MP Delegation Secretariat: • Dr N. Leibrandt-Loxton: Researcher – International Relations and Protocol Division (IRPD) 2.
MEETING OUTCOMES 2.1 Opening Remarks The meeting commenced with opening remarks from Mr Sheuneni Kurasha, from the SADC-PF Secretariat, who presented delegates with an overview of all the consultations held concerning the Model Law, as well as the expected programme of the day.

2.2 Welcome Address The SADC-PF Secretary General, Ms Boemo Sekgoma reflected on the diverse consultations held, as well as the speed at which all inputs into the draft Model Law have been incorporated.
She thanked the legal drafter, Ms Eval Jhala and SADC-PF staff for their hard work.

Following the validation meeting, the draft Model Law will be tabled before the 50th Plenary Assembly for adoption.

Ms Sekgoma further thanked all the various stakeholders that have been involved in the development of the Model Law, explaining that this will not be the end of the process.

A scorecard will be developed as a tool for member parliaments to review their respective countries’ progress of domestication.
Member parliaments will also be able to report on their progress to the SADC-PF Regional Model Laws Oversight Committee (RMLOC).

2.3 Presentation by the Legal Drafter, Ms Eva Jhala Ms Jhala presented the draft Model Law, explaining the approaches undertaken to develop it, its underlying principles, as well as its respective sections.

In essence, she explained that the Model Law was based on regional, continental, and international commitments that countries have already agreed to.
In this light, the Model Law is intended to be used by SADC countries as a legislative blueprint to assist them in complying with international best practices.

She observed that SADC countries’ domestic GBV laws are plagued with inadequacies, including having many loopholes, being inconsistent and/or contradictory, being vague, and lacking provisions concerning access to justice.
2 9 2.4 Input by participants Participants appreciated the detailed presentation by Ms Jhala, and highlighted the following key issues: • The importance of the Model Law providing for victims of GBV; • The need for policing in areas known for lack of policing, especially rural areas; • The need to recognize the link between GBV and unemployment; participants heard that the Model Law provides for sexual harassment at places of work; • The need for the Model Law to provide for victims who become disabled due to GBV; participants heard that the Model Law provides for compensation and restitution by the perpetrator or the state; • The need for the Model Law providing for interpretation and translation services, especially in rural areas; and • The importance of human rights and the difficulty this creates when considering cultural and religious contexts.
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CONCLUSION Members were also invited to submit any written inputs to the Forum by 24 September 2021 at gbv@sadc-pf.org.

ENDS 3 10 (c) Report of the Seventh Parliamentary Speakers Summit (P20, Parliaments for the People, Planet and Prosperity, 7-8 October 2021, Rome, Italy.

11 anf REPORT OF THE SEVENTH PARLIAMENTARY SPEAKERS SUMMIT (P20, PARLIAMENTS FOR THE PEOPLE, PLANET AND PROSPERITY, 7-8 OCTOBER 2021, ROME, ITALY 1 12 1.
Background and Overview The purpose of this report is to give an account of the outcomes of the Seventh G20 Parliamentary Summit organised in Italy, Rome from the 7- 8 October 2021.
The South African Deligation consisted on the following; • Speaker of the National Assembly: Hon N Mapisa-Nqakula: Head of Deligation • Mr C Nqakula: Spouse to the Honourable Speaker • Hon G Boroto: House Chairperson • Ms N Nojozi: Executive Director in the Office of the Speaker • Ms Z Kula: Executive Assistant to the Speaker • Mr S Makhabela: Executive Secretary to House Chairperson • Mr M Ngese: Researcher International Relation and Protocol The Parliament of South Africa together with Speakers and other Presiding Officers participated in proceedings of the Seventh G20 parliamentary Summit.
Nineteen countries make up the G20 countries and the European Union.

The 19 countries are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, the Republic of Korea, South Africa, Russia, Saudi Arabia, Turkey, the United Kingdom and the United States of America.

The overriding theme related to “Parliament for People, Planet and Prosperity”.
The Summit further developed for sub-themes based on the following; 2 13 • Response to the Social and Employment Crisis caused by the Pandemic • Rebooting Economic Growth in terms of social and environmental sustainability The Speaker of the National Assembly, Hon Nosiviwe Mapisa Nqakula participated in debate relating to “Responses to the Social and Employment Crisis caused by the Pandemic”.
On sidelines of the Summit, Speaker also attended Bilateral Meetings between the Speaker of the Parliament of South Korea as well as the Speaker of the Parliament of India.

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Messages of Solidarity During the opening session of the summit, the keynote speakers acknowledged that the G20, which gathers the leaders of the World largest economies, is a key platform for building International consensus on all major global economic and social issues and that it ways strives to find coordinated, fair and effective solutions that can lay the foundations of a strong, sustainable, balanced and inclusive growth.
The priorities of the G20 agenda, focusing on three interconnected scopes of action: People, Planet, Prosperity is the most effective approach of countering the COVID 19 pandemic that has deeply upset our societies and seriously disrupted our economies, employment, health systems, social relations and education, while also jeopardising the future world population, especially of the younger generations.
Such 3 14 emergency has compounded the other great challenges of our time, such as climate change and the fight against inequalities.

To this end, the international community remain convinced that only by adopting a sense of common responsibility and promoting international cooperation will be able to effectively tackle the pandemic and stimulate global recovery.
As consequence, multilateralism is the most effective tool to address common threats to the international community, such as the spread of COVID 19, bearing in mind the G20 consensus on the role of extensive immunization as a global public good.

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Discussions and Analysis: Response to Social and Employment Crisis caused by the Pandemic National Assembly Speaker Ms Nosiviwe Mapisa Nqakula pointed out that the devastating effects of the Covid 19 pandemic have disrupted the socio-economic conditions of many societies and have exacerbated the already existing challenges of poverty, inequality and unemployment.
This necessitated many governments to be engaged in a task of developing economic and reconstructive recovery plans as a decisive response atrocities brought the pandemic.

This should further encourage Parliaments to vigorously perform their oversight functions that agreements adopted at different multilateral platforms are implemented.

These agreements should positively impact 4 15 by saving people’s lives, reconstructing and transforming economies to bring about a new global reality post-Covid 19.
Speaker Mapisa-Nqakula, made the clarion call this afternoon as the South African leader of delegation at the seventh Summit of the Heads of Parliaments of G20 countries, called the G20 Parliamentary Speakers’ Summit.

Parliaments of G20 countries have a crucial role, as oversight authorities, in ensuring governments are held accountable for implementing decisions.

The two-day meeting held in Rome, Italy, aims to strengthen the role of legislatures in global affairs.
Speaker further gave a South African socio-economic perspective regarding the Covid-19 pandemic.

She argued that South Africa, as elsewhere in the world, has also been severely impacted by the Covid- 19 pandemic.

She said March 2020’s hard lockdown in South Africa caused devastating effects both economically and socially.

The devastating circumstance of the pandemic claimed many lives, destroyed economies and left many jobless.
Socially it has resulted in another pandemic of gender-based violence that has left women and children vulnerable.

Compared to other G20 countries, Speaker Mapisa- Nqakula said South Africa’s GDP impact lies in the middle range.
She commended the “sterling efforts” taken by South Africa and India at both the World Trade Organisation (WTO) and United Nations (UN) level in calling for a temporary waive in intellectual property rules relating to 5 16 Covid-19 vaccines medicines, diagnostics and other technologies.
She said that by waiving the parts of the Agreement on Trade Intellectual Property Rights (TRIPS Agreement), drug makers in developing countries could produce effective vaccines without worrying about being sued for patent infringements, ultimately speeding up the end of the pandemic.
Speaker further reiterated that it is possible through the Government’s Economic Reconstruction and Recovery plan to build a new economy and unleash South Africa’s true potential, and create a sustainable, resilient and inclusive economy.

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Rebooting Economic Growth in Terms of Social and Environmental Sustainability The global onslaught of COVID-19 pandemic continues as uncertainty swirls around the global economy signalling a slowdown.
It is still uncertain how long it will take to arrest the spread of the pandemic and normalcy to be restored.

Under the prevailing situation, many country`s economies has been severely impacted by the COVID-19 pandemic.

• According to the United Nations report on World Economic Situation and Prospects as of mid-2020, the global economy contracted sharply by 3.20 per cent in 2020, with not much hope for strong rebound in the next year.
The projection for cumulative output losses during the next two years is US $ 8.5 trillion, which is equivalent to all output gains of the 6 17 previous four years.

World trade could drop as much as 15 per cent in 2020 due to sharp fall in global demand and disruptions in the established global supply chains.

Depending on the duration of the worldwide lockdown and restrictions on economic activities, output loss could further exacerbate.
• A World Bank analysis has argued that depending on the scale of the economic shock, COVID-19 had pushed about 40–60 million people into extreme poverty, with the best estimate being 49 million.

In the worst case scenario, global poverty in 2020 slided back to the level of 2017, eliminating last three years’ progress in fighting extreme poverty.
The International Monetary Fund (IMF) noted that already 170 countries have been facing shrinking GDP per capita and even a short-lived outbreak would cause a 3.0 per cent Gross Domestic Product (GDP) contraction globally.

While the devastation of the pandemic was expected to calm down however, a reappearance of COVID-19 in 2021 had further deteriorating impact on the world economy.
The G20 parliamentary Summit convinced that economic growth and increased human activities must always go hand in hand with the balance of nature, ensuring a sustainable future for the planet, consistently with the goals set by Agenda 2030.

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Side-lines Bilateral Meeting with the Speaker of South Korea In the bilateral meetings, Speaker Mapisa-Nqakula met with the Speaker of Korea to strengthen relations between the two Parliaments.
Political relations between the two countries dated back before the democratic 7 18 dispensation in South Africa and were formalised in 1994 when South Africa became a democratic government.

The meeting acknowledged that Korea and South Africa are far apart but agreed on similarities in the population and challenges and historical relations built before South Africa’s democratic dispensation.

The two Speakers agreed on cooperation and encouraged business people in both countries to invest in each other.
Despite their national interests, the two countries agreed to closely work together in monitoring the implementation of commitments and ensure policy convergence on critical interventions at the multilateral level.
Today’s meeting decided that the two Parliaments will: • always bring about a people’s representation aspect and be the voice of the voiceless • Support the call for an increase of financial aid to vulnerable countries that are still recovering and were left vulnerable by Covid 19 circumstances and other disasters such as climate change • Call for equity in the redistribution of vaccines and discourage vaccine nationalism.

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Side-lines Bilateral Meeting with the Speaker of India The Bilateral Meeting between the Speaker of the National Assembly Hon Nosiviwe Mapisa-Nqakula and the Speaker of the Parliament of India was convened to drive amongst the following issues; 8 19 • South Africa and India are currently Members of the BRICS and IBSA Parliamentary Forum • The India-South Africa relationship is characterised by shared political, economic, and strategic interests in which both countries seek win-win engagements.
• BRICS serve as a multiplier in positively influencing the global economic and governance structures.

It places people`s agenda at the centre of global development agenda and focus on addressing the triple challenges of poverty, inequality and unemployment.
• South African Parliament formally cooperates with India and other individual parliaments with the purpose of reinforcing democratic values and ideals; promoting and protecting human rights; promoting women’s emancipation; and upholding international law • India and South Africa have been able to contain the scourge of COVID 19 and India have vaccinated 25 million people in one day.
• India will be celebrating the 75 years of Mahatma Ghandi who shared strong bonds with South Africa in the struggle against apartheid.
• India being the largest democracy can cooperate on issues of human resources and training thereof; • Strong cultural ties with 1,6million South African who contribute to the economy of the country • South African and India can joint hands cooperate on efforts to strengthen health sector • India also extended an invitation to the Parliament of RSA in celebrating the Committees of Public Accounts 9 20 • India requested the support of the Parliament of South Africa for the candidate of the CPA International Chairperson they are intending to contest for in the CPC, Canada 2022.
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Way Foward • The Speaker of the Republic of South Africa Hon Nosiviwe Mapisa- Nqakula emulate the example of India to propose the issue of waiver to eliminate vaccine nationalism.
• Speaker committed to send a delegation to India • Caucus on positions in the International Forum • Discuss with the leadership of Africa Region to support India on the candidate for the position of CPA International Chairperson in the CPC in Canada, 2022 10 21 (d) Report of the Virtual Standing Committees and RWPC Session ahead of the 50th SADC Plenary Assembly, 8 – 19 October 2021.
22 REPORT OF THE VIRTUAL STANDING COMMITTEES AND RWPC SESSION AHEAD OF THE 50TH SADC PLENARY ASSEMBLY 8 – 19 October 2021 1 23 EXECUTIVE SUMMARY The Standing Committee and RWPC Session was focused on the Committees engaging with experts on various issues falling under their respective mandates.

The outcomes of the meetings will be reformulated into resolutions to be adopted by the Plenary Assembly in due course.
Parliament is advised to note the following key issue: • The RPMLOC approved the Scorecard for the SADC Model Law on Eradicating Child Marriage and Protecting Children Already in Marriage for tabling before the 50th Plenary Assembly for adoption.

Parliament is advised to note that, once adopted by the Plenary Assembly, the Scorecard will need to be referred to the relevant portfolio and select committees for action to assess South Africa’s progress in eradicating child marriage.
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INTRODUCTION Purpose of the meetings: For the Standing Committees and Regional Women’s Parliamentary Caucus (RWPC) to deliberate on thematic issues of regional interest that fall under their respective mandates to build capacity of Members and enhance the role of parliaments in SADC regional integration.

Delegation Members were designated as follows: • Hon.
D. Bergman, MP – Vice-Chairperson of the Standing Committee on Democratisation, Governance and Human Rights (DGHR) and, by extension, member of the Regional Parliamentary Model Laws Oversight Committee (RPMLOC) • Hon.

N. Bilankulu, MP – Standing Committee on Gender Equality, Womens Advancement and Youth Development (GEWAYD), and the Regional Women’s Parliamentary Caucus (RWPC) • Hon.

T. Matibe, MP – Standing Committee on Food, Agriculture, and Natural Resources (FANR) • Hon.
H. Mkhaliphi, MP – Standing Committee on Trade, Industry, Finance and Investment (TIFI), and the RWPC • Hon.

D. Moela, MP – Standing Committee on Human and Social Development and Special Programmes (HSDSP) Delegation Secretariat: • Dr N. Leibrandt-Loxton: Researcher – International Relations and Protocol Division 2.
MEETING OUTCOMES 2.1 Meeting of the RPMLOC The Committee met on 8 October to consider and adopt its previous minutes and the following substantive business under its mandate: 2 24 • Presentation on the Scorecard for the SADC Model Law on Eradicating Child Marriage and Protecting Children Already in Marriage, by the Secretary-General, Ms Boemo Sekgoma: Ms Sekgoma briefed the Committee on the Scorecard, explaining that the RPMLOC was to approve the Scorecard before its tabling before the upcoming 50th Plenary Assembly for adoption.
The Scorecard was developed to assess the impact of the Model Law, notably how it has been domesticated in the respective SADC parliaments.

She emphasised that the purpose is not to rank countries or compare performance, but to accurately identify bottlenecks that hamper domestication.

The Committee approved the Scorecard, as well as the need for similar Scorecards to be developed for other Model Laws.
2.2 Standing Committee meetings 2.2.1 Standing Committee on TIFI The Committee met on 11 October to consider and adopt its previous minutes and deliberate on the theme, “Enhancing the Role of Parliament in Promoting Domestic and Foreign Direct Investment”.
The Committee received presentations from experts as follows: • Investment framework in SADC – opportunities and weakness in the current framework (SADC Secretariat): The Committee received an overview of SADC’s existing policy and legislative framework concerning investments, including the overarching Regional Indicative Strategic Development Plan (RISDP) 2020 – 2030, the RISDP Investment Implementation Plan, and the SADC Protocol on Finance and Investment.
The Committee also heard about key SADC programmes, such as the SADC Regional Action Programme on Investment (RAPI) which aims to develop the region into a SADC investment zone by promoting intra-regional investment and FDI in the SADC region, in particular for SMEs.
The Committee heard that parliaments can contribute to the improvement of the business and investment climate in SADC through, amongst others: o Supporting investment policy and legislative reforms; o Proposing relevant Bills for investments; o Monitoring the implementation of investment policies and reforms by their governments to ensure alignment with regional frameworks; and o Participating in global networks to brand and promote the SADC region as the preferred investment destination.
• The role of Parliament in facilitating and promoting domestic investment and FDI and how it can be enhanced (Dr Gorden Moyo): Based on this topic, Dr Moyo suggested the following: o Parliaments must monitor Special Drawing Rights, pressurise governments to donate Special Drawing Rights to economically disadvantaged countries; o Parliaments must address corruption, especially elite corruption, that is hampering domestic investment and leads funds to be invested elsewhere; o Parliaments must request information on foreign investments through their oversight role; and o Parliaments must ratify regional and international protocols that promote investment and scrutinise them vigorously.
3 25 • Country Specific Interventions on Special Economic Zones (Botswana, Mauritius, Zambia): Representatives from the three countries’ investment agencies presented on their countries experiences and interventions to promote investments.

Core recommendations made included parliaments promoting the image of SADC as an investment destination and dealing with non-tariff barriers to investments.
2.2.2 Standing Committee on FANR The Committee met on 12 October to consider and adopt its previous minutes and deliberate on the theme, “Water Resource Management in the SADC Region: What is the Role of Parliaments?”.
The Committee received presentations from experts as follows: • World Wide Fund (WWF) for Nature: The Committee heard that: o Water resources in SADC are unevenly distributed when compared to population and settlement patterns, and that water availability and water quality are critical concerns o Population growth in the region is leading to the expansion of towns and other o settlements, threatening eco-sensitive areas; Industrialisation is also leading to deforestation and pollution, so exacerbating climate change; and o Regional cooperation is very important as water sources is often shared across borders, and that there are various policies, regional strategies, and protocols to facilitate this.
• SADC Secretariat and Global Water Partnership Southern Africa: The presentations highlighted that: o SADC has a dedicated Water Section Programme, as well as key policies, strategies and implementation frameworks for the management of water resources o Each of these interventions was elaborated upon in detail.
• The Committee agreed with the expert recommendations that: o More research is needed on transboundary groundwater aquifers; o Political ownership and leadership in water resources management is needed; o Parliaments must raise awareness of the region’s water challenges in their communities; and o Stronger legislation needs to be developed to safeguard nature, and their implementation must be improved.
2.2.3 Standing Committee on DGHR The Committee met on 13 October to consider and adopt its previous minutes and deliberate on the theme, “Peace, Security and Conflict Trends in the SADC Region: Strengthening Parliament’s Role in Conflict Prevention and Management’’.
The Committee received presentations from experts as follows: • Reflections on the Role of Parliaments in Promoting and Protecting Constitutionalism and the Rule of Law in the SADC region and Recommendations on priority interventions based on the deliberations by the 49th Plenary Assembly (Justice Oagile Key Dingake): The 49th Plenary Assembly, held from 25 to 27 June 2021 deliberated on the prospect of going ahead with a SADC Model Law on the Role of Parliaments in Promoting and Protecting Constitutionalism 4 26 and the Rule of Law in the SADC region.
The Plenary Assembly recommended for the Committee to reflect and analyse the implications of conceiving and formulating the said Model Law in the broader context of the promotion of constitutionalism and the rule of law in the SADC region given the diverse domestic legal and government systems that prevail in member states.

The presentation sought to discuss the pros and cons, and other implications of the SADC region adopting through the Forum a SADC Model Law on constitutionalism and the rule of law.
The presentation highlighted the following: o Many countries with constitutions do not subscribe to constitutionalism; o The rule of law is fundamental to any functioning of democracy, and parliaments have oversight powers to oversee this; o MPs can set the normative framework on constitutionality through such a Model Law – the Model Law’s non-binding nature allows countries to choose which aspects (norms) they wish to domesticate; o The Model Law would not be reinventing the wheel, or in conflict other governance frameworks that countries already ascribe to; In light of the above, the Model Law would not interfere with states’ sovereignty; and o o Model Laws set standards that member states can aspire to.
• Peace, Security and Conflict Trends in the SADC Region: Strengthening Parliament’s Role in Conflict Prevention and Management (Mr Jorge C. Cardoso, Director, SADC Organ of Politics, Defence and Security Affairs).
The presentation highlighted the following: o An overview of all the SADC structures that assist in maintaining peace and deal with conflict - peace organisations and/or agencies exist in most SADC countries; o MPs can play role in conflict prevention and resolutions, and the SADC-PF can serve as o a key platform to facilitate this and the overall regional infrastructure for peace; In 2020, SADC launched a mapping exercise for peace to, amongst others, identify the nature of the regional and national infrastructure for peace, as well as their strengths and weaknesses; o The mapping exercise took place in 8 states, including South Africa, and is still in progress; o The SADC-PF can assist in enhancing the legislative and oversight capacity of countries to prevent conflicts and electoral violence.
• Peace, Security and Conflict Trends in the SADC Region: Strengthening Parliament’s Role in Conflict Prevention and Management (H.E.

Ambassador Said Djinnit, Special Advisor, African Centre for the Constructive Resolution of Disputes (ACCORD).
The presentation highlighted the following: o Africa has made progress in moving from authoritarian regimes to multiparty democracies, although in the SADC region, not all such transitions have gone smoothly o SADC’s progress in particular of holding free and fair elections during the pandemic in Namibia, Zambia, and Malawi should be commended; o The presenter highlighted the following factors that parliaments should be mindful of when considering conflicts in the region: § vulnerable communities with low prospects for economic empowerment are extremely vulnerable and susceptible to conflicts, such as Cabo del Gado; 5 27 § Governments utilising private military companies (PMCs) should be transparent, notably when considering rumours of them harming civilians – stronger regional protocols should be developed and adopted to monitori them in the SADC region; § Gender-based violence (GBV) increased significantly during lockdowns as governments failed to anticipate it - Covid-19 has shown that GBV must be part of all crisis management planning; and § The SADC-PF can play a role in conflict prevention and management through goodwill missions conducted under parliamentary diplomacy.
• Insights by Dr Adane Ghbremeskel: This presenter advised SADC parliaments to hold regular parliamentary hearings with vulnerable constituencies to improve early warning systems.

Members engaged with the presenters on the need for youth and governments to work together to prevent conflict, as well as the need for SADC states to not hide behind sovereignty to avoid regional or continental interventions in conflict situations.
2.2.4 Standing Committee on GEWAYD Gender Equality The Committee met on 14 October to consider and adopt its previous minutes and deliberate on the theme, “Enhancing Parliaments’ Response in the Prevention and Elimination of Violence against Women and Girls during Pandemics’’.
The Committee received presentations from experts from UN Women and the National Legal Aid Clinic for Women and heard that: • Current challenges for states to address GBV include: the need for more awareness-raising of GBV and the rights associated with it; o o more resources are required for gender-machineries; o Not all countries have national action plans; o States have limited tracking of gender budgeting; and o Monitoring and enforcement of commitments remain inadequate.
• Key elements to prevent GBV are: o Strengthening relationship skills through couples' programmes; o Empowering women economically; o Providing essential support services for survivors; o Creating safe environments for those at risk; o Transforming education for girls; and o Transforming cultural and religious attitudes, beliefs, and norms.

Subsequent discussions focused on the impact of child marriages.
The Committee discussed practical initiatives run by UN Women and the National Legal Aid Clinic for Women, as well as the importance of education for girls, communities, as well as victim support that does not intimidate victims of GBV.
• Presentation on GBV status and response in the SADC region: Status and availability of regional data and information on GBV: Reviewing the current regional GBV indicators (Ms Kealeboga Kelly Dambudzani, Programme Officer, Gender Unit, SADC): This presentation 6 28 was aimed at highlighting SADC's commitment, instruments and interventions to deal with GBV, especially in the context of Covid-19.
The Committee heard that: o SADC has a new instrument to address GBV in the region, namely the SADC Strategy and Framework for Action to Address GBV; o More action is needed in GBV prevention and providing services to victims, including special dedicated services; o GBV keeps evolving, and new forms are emerging; o Member states continue to report inadequate knowledge of GBV, hence more education is needed, especially at community level; o There is also limited knowledge of GBV legislation in communities – people are not aware of their rights; o There is a high reliance on development partners to respond to GBV, which creates challenges in the sustainability and political ownership of programmes; o Accurate data remains lacking, despite being necessary to inform effective anti-GBV strategies; and o The region still struggles with offering low protections for victims.
Members appreciated the presentation and emphasised the importance of the SADC Protocol on Gender and Development, as well as gender-sensitive budgeting.

Members also agreed that GBV-education should be incorporated into school curricula from Grade 1.
2.2.5 Standing Committee on HSDSP The Committee met on 15 October to consider and adopt its previous minutes and deliberate on the theme, “The Role of Parliaments in Advancing Accountability on the Consistency, Budgeting, and Implementation of Comprehensive Sexuality Education (CSE) Programs in SADC Member States”.

The Committee received a presentation by Dr Remmy Shawa from UNESCO on the proposed draft of the ESA Ministerial Commitment.
The presentation highlighted the following: • • • In line with SADC regional protocols and commitments, the SADC-PF in conjunction with national parliaments in the region is implementing a project on SRHR, and one of the thematic areas of the project is Comprehensive Sexuality Education (CSE); In December 2 013, Ministers of Education and Health from twenty countries in Eastern and Southern Africa (ESA) committed to scaling up CSE and youth friendly Sexual Reproductive Health (SRH) services for adolescents and young people; In this Commitment, governments under the leadership of EAC and SADC committed to improving sexual and reproductive health outcomes and strengthening HIV prevention through access to CSE, as well as integrated sexual and reproductive health services for young people; • By the end of 2020, the ESA Commitment had put the spotlight on young people, promoted inter sectoral collaboration while rallying partners around four key results for adolescents and young people: reducing HIV infection; reducing early and unintended pregnancy; reducing GBV and eliminating child marriage.
The presentation suggested that the Committee urged Ministerial buy-in into the ESA Commitment.

The Committee agreed accordingly.

7 29 2.2.6 Meeting of the RWPC The Committee met on 19 October to consider and adopt its previous minutes and deliberate on the theme, “Empowering women in a sustainable industry-focused workforce in SADC: A focus on social protection”.
The Committee received the following presentations: • The International Labour Standards as enablers to eliminate gender inequalities and discrimination, with a focus on social protection in the workplace (Kroum Markov, Social Protection Specialist, ILO-Geneva): The presentation highlighted the following: o An overview of international labour standards, with a focus on gender equality; these include international conventions on labour as adopted by international conferences at the International Labour Organisation (ILO), international labour recommendations, as well as other soft law instruments such as guidelines; o An overview of the various mechanisms in place to monitor these labour standards, including regular reporting, special procedures such as representations and complaints, and the Committee on Freedom of Association (Governing Body); o Data on prevailing gender inequality in society, including in the house responsibilities between men and women and available jobs in the labour market available to women; and o Data on most countries have basic non-discrimination and equality pay provisions, but national laws have shortcomings including not protecting certain groups, not covering certain forms of discrimination, and allowing for exceptions contrary to international standards.
• The International Labour Standards as enablers to eliminate gender inequalities and discrimination, with a focus on social protection in the workplace (Maya Stern Plaza, Social Protection Specialist, ILO-Geneva): The presentation highlighted the following: o Covid-19 revealed gaps in social protection coverage for women; women globally had already been experiencing lower access to decent work and lower social protection coverage than men due to lower labour participation rates, higher levels of part-time and temporary work, and higher levels of informal employment; o There are 3 types of social protection mechanisms: pensions, maternity benefits, and medical care § Pensions: There has been an expansion of tax-financed pensions, including in South Africa, although they generally provide low benefit levels and women may not always benefit due to narrow eligibility criteria or stigmatization; § Maternity benefits and childcare: Many women don't have access, especially those who are self-employed or in vulnerable employment.
This also does not allow for men to transfer unused paternity leave to women; § Social health protection: Some barriers to this include employment status, contributory capacity, and coverage gaps that disadvantage women through them not taking into account women’s longevity, women’s additional unpaid care work, and their lesser participation in paid employment.
o With Covid-19 8 30 § Sectors where women are employed were hardest hit, like textile, agriculture, frontline health care; § Domestic violence increased; § Pregnant women were also adversely affected in terms of risk to employment and livelihood loss, barriers to pre- and postnatal care and skilled delivery; and § Country responses to Covid and the impact on women have been largely gender-blind.

o The committee heard that the ILO can support SADC states improving their social protection intiatives.
• Informality and Social Protection in African Countries: A Forward-looking Assessment of Contributory Schemes (Joint presentation from Denise Monteiro, Technical Officer, Social Protection, ILO CO-Kinshasa, based in Luanda and Lorenzo Mancini, Economist, UNDP Luanda, Angola): This presentation focused on some African countries’ experiences in social protection initiatives in the informal sector, notably Rwanda and Kenya.
The presentation showed that: o o In Rwanda: The “Ejo Heza” Pension Plan was established as a highly flexible contribution-based plan.

The benefits received are linked to the amount contributed.

The Rwandan Government developed incentives to encourage more people to join, like contributions from the state, subsidies, and tax relief.

In Kenya: The “Mbao” Pension Plan emerged as a saving scheme among informal workers.

It has now evolved into a formal scheme that enjoys tax exemptions status.
The scheme is also not taxable at point of exit, unless it exceeds the maximum exception taxable limit of KES 20 000 ($196) o Based on these countries’ experiences, the presentation made the following recommendations concerning the role of the state in extending social protection to informal workers: § Developing special strategies for them, based on sufficient data and information; § Establish an enabling environment for coverage, including laws and policies; § Adapting the financing of social protection schemes to the unique situation of informal workers; § Matching co-contributions; § Promoting gender equality through financing; § Actively facilitating access to social protection schemes; § Ensuring compliance and incentives, monitoring and evaluation; § Building trust; § Adopting simplified social protection regimes for self-employed workers; and § Ensuring social dialogue with informal works to ensure that social protection schemes address these groups' needs.
o The Committee also head that: § It is very relevant to promote financial and digital literacy so that women and girls in the informal economy may benefit from the use of digital financial services.

For example, by promoting the use of mobile money or the use of simple applications for mobile phones, women will be able to take advantage of digital business.

With these simple technologies and digital literacy, they may have more opportunities to sell their products.
The use of applications may also 9 31 be very useful to pay the contributions for social security and access business and financial services.

3.

CONCLUSION The outcomes of each meeting will be captured as draft resolutions due for adoption by the Plenary Assembly in due course.

ENDS 10 32 COMMITTEE REPORTS National Assembly 33 1.
REPORT OF THE STANDING COMMITTEE ON APPROPRIATIONS ON THE DIVISION OF REVENUE BILL [B6– 2022] (NATIONAL ASSEMBLY – SECTION 76), DATED 22 MARCH 2022 The Standing Committee on Appropriations (the Committee), having considered the Division of Revenue Bill [B6-2022] (National Assembly), referred to it on 9 March 2022 and tagged as a section 76 Bill, reports as follows: 1.
Introduction Section 214(1) of the Constitution of 1996 (the Constitution) requires that a Division of Revenue Act (DoRA) determines the equitable division of nationally raised revenue among the three spheres of government (National, Provincial and Local).

This is intended to foster transparency in the sharing of nationally raised revenue and ensure smooth intergovernmental relations.

The Intergovernmental Fiscal Relations Act, No.


97 of 1997 prescribes the process for the determination of an equitable sharing and allocation of revenue raised nationally.

Sections 9 and 10 (4) of this Act set out the consultation process to be followed with the Financial and Fiscal Commission, including the process of considering recommendations made with regard to the equitable division of nationally raised revenue.
In giving effect to section 73 of the Constitution, the Money Bills Amendment Procedure and Related Matters Act, No.

9 of 2009 (the Money Bills Act) as amended by the Money Bills Amendment Procedure and Related Matters Amendment Act No.13 of 2018 was enacted.

In line with Section 7(1 and 3) of the Money Bills Act and section 27 of the Public Finance Management Act No.
1 of 1999 (PFMA), the Minister of Finance tabled the 2022 National Budget including the 2022 Division of the Revenue Bill (the Bill) on 23 February 2022.

The Bill was then referred to the Committee on 9 March 2022 in line with Section 9 (1) of the Money Bills Act.

Subsequent to the Bill being referred to the Committee, the Committee received a briefing from National Treasury and the Parliamentary Budget Office.
The Committee also had engagements with the Financial and Fiscal Commission as required by Section 1 34 9 (7) (a) of the Money Bills Act.

Furthermore, a briefing was received from the South African Local Government Association as required by Section 214 (2) of the Constitution of the Republic.

In line with section 9 (5) (b) of the Money Bills Act, the Committee is required to hold public hearings on the Division of Revenue Bill.
To this end, adverts calling for public submissions on the Bill were published in regional radio stations as well as in both national and local print media from 25 February to 4 March 2022.

Public hearings on the Bill were held on 16 March 2022 with the following parties who had made submissions: • Women on Farms Project; and • Amandla.mobi.

2.

Division of Revenue Bill 2022 The medium term fiscal policy focuses on reducing the budget deficit and stabilising the debt-to-GDP ratio.
Over the medium term, government commits to restoring fiscal sustainability through continued restraint in expenditure growth and other reforms to raise economic growth.

The 2022 budget proposes: • Additional allocation to address immediate spending pressures, including extending the special Covid-19 social relief of distress grant for 12 months until March 2023, and bolstering provincial transfers for health and education.
• Setting aside a portion of higher than expected revenue to narrow the budget deficit.

This in turn mitigates the impact of higher interest rates on debt-service costs and improves the long-term debt outlook.

• Supporting growth through a range of reforms, including the infrastructure- build programme financed through innovative funding mechanisms and supported by improved technical capacities.
The 2022 budget continues to consolidate public finances while providing immediate support for the response to the Covid-19 pandemic, job creation and social protection, as set out in the 2021 Medium Term Budget Policy Statement (MTBPS).

Table 1 below indicates overall share of nationally raised revenue between national, provincial and local spheres of government for 2022/23, 2023/24 and 2024/25 financial years respectively.
2 35 Table 1: Equitable Division of Revenue Raised Nationally Spheres of Government Column A Column B 2022/23 R’000 Forward Estimates 2023/24 R’000 2024/25 R’000 National allocations1,2 1 327 188 238 1 354 771 376 1 433 054 261 Provincial allocations 560 756 789 543 149 099 562 018 365 Local government allocations 87 311 493 94 086 549 101 486 470 Total allocations 1 975 256 520 1 992 007 024 2 096 559 096 1.
National share includes conditional allocations to provincial and local spheres, general fuel levy sharing with metropolitan municipalities, debt-service costs, the contingency reserve and provisional allocation 2.

The direct charges for the provincial equitable share are netted out Source: National Treasury (Division of Revenue Bill: 2022) 2.1.
Main Budget Allocation Over the 2022 medium-term expenditure framework (MTEF) period, after budgeting for debt service costs, the contingency reserve and provisional allocations, 48.8 per cent of nationally raised funds are allocated to national government, 41.4 per cent to provinces and 9.8 per cent to local government.
Excluding the debt-service costs, and the contingency reserve, allocated expenditure shared across government amounts to R1.66 trillion in 2022/23, R1.60 trillion in 2023/24 and R1.67 trillion in 2024/25.

The division of these funds between the three spheres of government takes into account government’s spending priorities, each sphere’s revenue-raising capacity and responsibilities, and inputs from various intergovernmental forums and the FFC.
Government continues exercise restraint and is working on reducing the pressure exerted on the budget by the public service compensation costs.

The 2022 budget increases the allocations for both provincial and local government to assist with urgent spending pressures.

Relative to the 2021 budget, direct provincial allocations will 3 36 increase by R74.1 billion over the medium term.
The majority of this amount consist of R53 billion that is added to the provincial equitable share and R5.4 billion added to direct conditional grants following the 2021 MTBPS.

Local government allocation is increased by a total of R30.7 billion over the medium term: R28.9 billion is added to the local government equitable share and R1.8 billion is added to direct conditional grants.
The provincial share of nationally raised revenue grows by an annual average of 1.4 per cent over the medium term, including a growth in the equitable share by an annual average of 1 per cent and conditional grants growing by an annual average of 3.3 per cent over the same period.
Local government share of nationally raised revenue grows by an annual average of 7.9 per cent over the medium term, including a growth in the equitable share by an annual average of 10.3 percent and conditional grants grow by an annual average of 5.3 per cent over the same period.

In contrast, the national government share of nationally raised revenue declines by an annual average of 1 per cent over the medium term.
The Division of Revenue Bill is redistributive as funds allocation are based on the demand for public service in each province and municipality, and even though urban provinces receive the higher proportion of funding, rural provinces receive more funding per capita as rural provinces and municipalities have higher per capita cost of delivering most services due to lower population density.
Table 2 below indicates the overview of the division of nationally raised revenue between the period 2018/19 and 2024/25.
4 37 Table 2: Division of nationally raised revenue R billion Division of available funds 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 Outcome Revised estimate Medium-term estimates Average annual MTEF growth National departments 634.3 749.8 790.5 831.1 824.7 770.9 805.7 -1.0% of which: Indirect transfers to provinces Indirect transfers to local government Provinces Equitable share Conditional grants Local government Equitable share Conditional grants General fuel levy sharing with metros Provisional allocation not assigned to votes1 Non-interest allocations – – – – 5.6 28.3 32.1 1,324.8 1,486.2 1,556.4 1,627.6 1,663.5 1,627.0 1,698.0 4.4% 2.2% -2.2% 4.6% Percentage increase 6.6% 12.2% 4.7% Debt-service costs Contingency reserve Unallocated reserve 181.8 – – 204.8 – – 232.6 – – 268.3 301.8 335.0 363.5 10.7% – – 10.0 – 5.0 25.0 5.0 30.0 Main budget expenditure Percentage increase 1,506.6 7.2% 1,691.0 12.2% 1,789.0 5.8% 1,896.0 6.0% 1,975.3 4.2% 1,992.0 0.8% 2,096.6 5.2% 3.4% Percentage shares National departments Provinces Local government 47.9% 43.2% 8.9% 50.4% 41.3% 8.3% 50.8% 40.4% 8.8% 51.1% 40.6% 8.3% 49.7% 41.2% 9.1% 48.2% 41.7% 10.0% 48.4% 41.4% 10.2% 1.
Includes support to Eskom, amounts for Budget Facility for Infrastructure projects and other provisional allocations Source: National Treasury (Budget Review: 2022) 3.

Provincial allocations Provincial government receive two forms of allocations from nationally raised revenue, the equitable share and conditional grants.
Having taken the revisions to the provincial fiscal framework into account, national transfers to provinces increases from R661 billion in 2021/22 to R682.5 billion in 2022/23, growing at an annual average of 1.4 5 38 per cent over the MTEF to R690.2 billion in 2024/25.
A total of R560.8 billion is allocated to the provincial equitable share and R121.8 billion to conditional grants, which includes an unallocated amount of R471 million for the provincial disaster response grant and the provincial emergency housing grant.

Due to their limited revenue raising abilities, provinces receives 41.4 per cent of nationally raised revenue over the medium term.
In addition, provinces receive conditional grants to help them fulfil their mandates, and transfers to provinces accounts for over 95 per cent of their provincial revenue.

3.1.

Changes to provincial equitable share allocations • The 2021 public sector wage agreement included a once off non-pensionable cash gratuity payment to all public servants in government.

A proposed total of R14.7 billion is set aside for provinces to fund the preliminary carry through costs of the cash gratuity.
Out of the proposed R14.7 billion, a total of R13.9 billion is added to the provincial equitable share and R809 million is added to several provincial grants that cover compensation of employees.

• As part of the Presidential Employment Initiative, a proposed total of R12.7 billion (R6.2 billion in 2022/23 and R6.5 billion in 2023/24) is added for the provincial education departments to continue hiring assistants in schools as part of the Presidential Employment Initiative.
• A proposed total of R24.6 billion (R9 billion in 2022/23, R7.6 billion in 2023/24 and R8 billion in 2024/25) is added to the provincial equitable share to support provincial education departments in addressing educator numbers and other shortfalls within the sector.
• A proposed total of R15.6 billion (R7.4 billion in 2022/23, R3.4 billion in 2023/23 and R4.7 billion in 2024/25) is added to the provincial equitable share to support the provincial departments of health to continue responding to the Covid-19 pandemic and to reduce the impact of budget reductions on essential medical goods services.
• A proposed total of R988 million (R204 million in 2022/23, R358 million in 2023/24 and R426 million in 2024/25) is added to the provincial equitable share to fund non-profit organisations that are already contracted by the provincial 6 39 departments of social development to ensure that the social welfare budget grows in line with inflation.

3.2.
3.2.

Additions to provincial grants allocation • A proposed total of R3.3 billion is added to the Human Resources and Training grant to address funding of the shortfall for medical interns and community services doctors.

• A proposed total of R1 billion is added in 2022/23 to the Covid-19 component of the District Health Programme grant to fund the continuation of the Covid- 19 vaccine rollout by provinces.
• A proposed total of R2.1 billion is added over the next two years for repairing of infrastructure damaged by storms and floods in KwaZulu-Natal in 2019 and 2020.
This disaster funding is added to the Human Settlement Development grant for repairs of houses, the Education Infrastructure grant for repairs of schools and Provincial Road Maintenance grant for the repairs of provincial roads, as follows: - Human Settlements Development Grant: R398 million in 2022/23 and R475 million in 2023/24; - Education Infrastructure Grant: R145 million in 2022/23 and R326 million in 2023/24; and - Provincial Roads Maintenance Grant: R490 million in 2022/23 and R294 million in 2023/24.
3.3.

Reprioritisation and reductions of provincial grants allocation • To address funding shortfalls for medical internship and community services posts in provinces over the 2022 MTEF period, a proposed total of R745 million is reprioritised to the human resources and training grant.

These proposed funding is made available through reprioritising R345 million from the Health Facility Revitalisation grant and R400 million from the national health insurance indirect grant over the 2022 MTEF period.
• A proposed total of R1.7 billion is reduced from the Provincial Roads Maintenance grant in 2022/23.

These funds were set aside in the baseline for the 7 40 conditional grant in the 2021 MTEF as an incentive portion allocated to provinces based on their performance within the grant.

For the 2022/23 financial year, the incentive portion will not be allocated to provinces as the sector is in the process of developing and finalising a clear and objective criterion for the incentive.
- A proposed R15 million in 2022/23, R20 million in 2023/24 and R30 million in 2024/25 will be reprioritised from the Provincial Roads Maintenance grant to the Department of Transport to fund a system that will be used to centralise collected road data.

3.4.

Correction to the District Health Programmes Grant framework The overarching framework for the District Health Programmes grant framework indicates the target for human papillomavirus vaccination programme to the grade seven school girls.
However, the grant funds a human papillomavirus vaccination programme that is targeted at grade five girls in public schools and special schools.

The grant framework for the District Health component shows the correct target for human papillomavirus vaccination programme.

The error does not affect allocations per province; however, it creates confusion on the targeted grade for human papillomavirus vaccination programme in schools.
National Treasury requests the Standing Committee on Appropriations to recommend that the conditional grant framework be corrected as part of the gazette that will be issued in terms of section 15 of the Act, once the Bill is enacted.

3.5.Changes and renaming of provincial grants • The HIV, TB, Malaria and Community Outreach grant is renamed to District Health programme grant.

Though it will still be used for the same purpose, the number of components within the grant will be reduced to two.
The mental health services component and the oncology service component of the previous grant is shifted to the National Health insurance grant.

• The early childhood development programme will be transferred from the Department of Social Development to the Department of Basic Education from 8 41 April 2022.

As a result, the Early Childhood Development grant will be moved from the Department of social Development to the Department of Basic Education.
• The name of the Provincial Disaster Relief grant is renamed to Provincial Disaster Response grant, to align the existing processes and actions that are followed by the National Disaster Management Centre in responding to disasters, including the provision of relief where it is needed.

4.

Local government fiscal framework and allocations Funds raised by national government are transferred to municipalities through conditional and unconditional grants.
Over the 2022 MTEF period, R481.3 billion will be directly transferred to local government, and a further R25.4 billion is allocated through indirect grants.

National transfers account for a relatively small portion of the local government fiscal framework, with the majority of local government revenues being raised by municipalities themselves through their substantial revenue-raising powers.
Direct transfers to local government over the medium term accounts for 9.8 per cent of national government’s non-interest expenditure.

When adding indirect transfers, total spending on local government increases to 10.3 per cent of national government’s non-interest expenditure.

However, due to the variations in municipalities, poor rural municipalities rely on receiving most of their revenue from transfers, while urban municipalities raise the majority of their own revenue.
Consequently, transfers per household to the most rural municipalities are more than twice as large as those in metropolitan municipalities.

Allocations to local government increase by R31.5 billion relative to the indicative allocations in the 2021 budget.

However, since the 2021 MTBPS, local government allocations have been increased by R30.7 billion, consisting of R28.9 billion to the local government equitable share and R1.8 billion in indirect conditional grants.

4.1.
4.1.

Changes to local government equitable share allocations Over the 2022 MTEF, the local government equitable share is increased by R28.9 billion (R4.2 billion in 2022/23, R10.5 billion in 2023/24 and R14.2 billion in 2024/25) to expand the provision of free basic services to poor households.

9 42 4.2.
9 42 4.2.

Additions to the local government conditional grants allocation • A proposed total of R1 billion is added to the direct Regional Bulk Infrastructure grant for George Local Municipality to implement the portable water security and remedial works project over the medium term.

This is funded from the Budget Facility for Infrastructure (BIF).
• A proposed total of R1.7 billion (R800 million in 2022/23 and R856 million in 2023/24) is added to the direct Neighbourhood Development Partnership grant to fund the continuation of government’s response to job losses due to the impact of Covid-19 through city led public employment programmes as part of the Presidential Employment Initiative over the next two years.
• A proposed reduction of R754 million in 2022/23 and R105 million in 2023/24 and an increase of R 621 million in 2024/25 in the Public Transport Network grant to align it to the revised implementation plan and cash flow projections for the City of Cape Town’s MyCiti public transport network.

• A proposed total of R347 million (R26 million in 2022/23 and R321 million in 2023/24) is allocated over the next two years to fund the introduction of the Municipal Disaster Recovery grant.
The grant is introduced to fund repairs of municipal infrastructure in KwaZulu-Natal that was damaged by natural disasters that took place between October 2019 and January 2020.

4.3.

Reprioritisation of local government conditional grants • A proposed total of R8 million in 2022/23 and 2023/24 respectively is reprioritised from the Energy Efficiency and Demand Side Management grant to finance the operational requirements within the vote of the Department of Mineral Resources and Energy.
• A proposed total of R50 million has been reprioritised from the Integrated National Electrification Programme (Eskom) Grant to finance the operational requirements of the Independent Power Producer Office in 2022/23 10 43 • A proposed R10 million is shifted from the sport component of the municipal infrastructure grant to the Integrated Urban Development grant in 2022/23 to fund a sport project in Polokwane Local Municipality.

4.4.
4.4.

Amendment to the Local Government Financial Management Grant (FMG) framework From 2022/23, the FMG will make provision for the preparation of asset registers.

The Municipal Infrastructure grant, administered by the Department of Cooperative Governance (DCoG), has a similar provision, but broader funding the development of Asset Management Plans.

The submission of audited asset registers is a pre-requisite for eligibility for this provision.
Where the asset registers need updating, DCoG can provide this support.

National Treasury added a requirement in the responsibilities of the administrators of the FMG, to ensure that there is no duplication of effort and funding for municipalities targeted for this support.

The phrasing of this requirement in the framework tabled on 23 February 2022, needs to be amended to highlight the need for alignment between the provisions in both grants.
This will be done through improved collaboration between the two grant administering departments when support is provided in the preparation of asset registers.

National Treasury requests the Standing Committee on Appropriations to recommend that the conditional grant framework be corrected as part of the gazette that will be issued in terms of section 15 of the Act, once the Bill is enacted.

5.
5.

Stakeholders and Public Inputs on the 2022 Division of Revenue Bill This section provides an overview of the comments on the Bill from the Parliamentary Budget Office, Financial and Fiscal Commission and the South African Local Government Association.

Furthermore, this section will also provide a summary of public submissions received on the Bill.
3.1 Parliamentary Budget Office The Parliamentary Budget Office (PBO) gave an overview of the Bill and provided a situational analysis at national, provincial and local government.

The PBO submitted that while the 2022 budget increased the local government equitable share by an 11 44 average annual rate of 10.3 per cent, it does not guarantee that the needs of indigent households would be sufficiently met.
The PBO stated that national transfers accounted for a relatively small proportion of the local government fiscal framework, with the majority of local government revenues being raised by municipalities.

However, poor rural municipalities, received most of their revenue from transfers, while urban municipalities raised the majority of their own revenues.
The PBO made reference to the research work undertaken by the Public Affairs Research Institute which found the following: • The challenges faced by local government were systemic and were the direct result of the unrealistic assumptions that were made in designing the funding model in the 1998 White Paper on Local Government.
• The White Paper assumed that local governments could raise over 70 per cent of their financing requirements through services charges and this also made them responsible for providing affordable services to households.

The PBO made reference to the capital and operating revenue trends at local government, and the PBO underscored that poor revenue management and an inability to efficiently raise own revenue was one of the biggest causes of financial distress in municipalities.
Furthermore, a number of municipalities failed to deliver services effectively due to poor governance, financial mismanagement and insufficient capacity.

The PBO also stated that the key issues in municipal budgets included growing grant dependence, inadequate maintenance expenditure, outstanding customer debt, and under-pricing of services.
The PBO, in summary recommended that national departments must monitor information on financial and non-financial performance of programmes partially or fully funded by an allocation made in the DoRA.

The mandates of the different spheres of government are addressed by the division of revenue considering the demographic social and economic needs of the environment.
The PBO emphasised that relevant up- to-date official statistical data was, however, not always available to inform policy and funding decisions.

12 45 3.2 Financial and Fiscal Commission The Financial and Fiscal Commission (FFC) submitted that he 2022 budget proposed a total allocation of R682 billion over the 2022 MTEF to the provincial fiscal framework which represented a slight improvement to the 202l MTBPS estimate of R658 billion.
However, the FFC submitted that notwithstanding the upward adjustment, the 2022 MTEF allocations remained below pre-Covid-19 projections.

The FFC recommended that provinces identify selected service delivery indicators and provide assessments of service levels using 2020 financial year as a point of reference to determine the impact of stagnant allocations on service delivery.
These assessments must also incorporate provincial conditional grants delivery targets set out in the 2020 DoRA in comparison to the year of assessment.

The FFC noted that despite the R24.6 billion allocation over the 2022 MTEF for provincial education departments to address the shortage of teachers, it recommended that the government consider the carry through cost for teachers going forward.
Regarding local government, the FFC submitted that 2022 will be a challenging year for municipalities as the political landscape has changed drastically after the municipal elections with governance and fiscal challenges which have the potential to impact the delivery of basic services.

Furthermore, these changes were taking place against the backdrop of Covid-19, which amplified challenges related to access to basic services (i.e.
water, electricity, and sanitation) with wider fiscal gaps and municipalities (68 per cent of 278) which were in financial distress.

The FFC made the following recommendations with regard to local government: • The FFC welcomed government's efforts to keep the LES growth rates above inflation as this will go a long way in offsetting the ever-increasing costs of basic services and enable the delivery of basic services to poor households.
• The FFC welcomed the reviews of capacity-building systems and infrastructure grants.

The FFC is of the view that such initiatives will enhance municipal 13 46 performance, move the local government sector forward, and quicken the recovery process.

• The FFC further underscored that the aforementioned review initiatives should be synchronised with the District Development Model, which seeks to address critical issues of municipal finances and service delivery failures.
• Lastly, the FFC emphasised that municipalities must improve the efficiency of spending with cooperative support from the national and provincial spheres of government through monitoring, reporting and evaluation to fulfil their constitutional mandates.
3.3 South African Local Government Association The South African Local Government Association (SALGA) noted and supported the fiscal consolidation course plotted by government to narrow the budget deficit and submitted that this was promising to bear results, notwithstanding the risk factors cited.
SALGA welcomed the increased adjustment to the local government fiscal frameworks since this accorded with what the organisation has been lobbying and advocating for at the Budget Forum, Parliament and various other intergovernmental relations fora.

SALGA submitted that the proposed increase in the allocation to local government over the MTEF cycle will gradually bring to reality the promise contained in the White Paper on Local Government of an equitable share of nationally raised revenue.
With regard to the importance of effective municipal capacity building given the high number of municipalities currently under financial distress, SALGA submitted that it has introduced the following: • Development of a ‘Good Practice Guide on Municipal Financial Management’ with a view to improve the capacity of municipal officials and political leadership.
Furthermore, it is in the process of rolling-out capacity building initiatives via the Municipal Finance Integrated Councillor Induction Programme (ICIP) and capacity building workshops targeting municipal officials.
14 47 • In terms of coordination of capacity building initiatives targeted at municipalities, the ICIP is offered in collaboration with National Treasury as well as Provincial Treasuries; Department of Cooperative Governance, South African Revenue Services, and the Local Government Sector Education and Training Authority.
• Development of the accredited ‘Project Preparation and Financing’ capacity building initiative for major capital projects included piloted municipalities to ensure that the learning outcomes address the deficiencies agreed with municipalities.
In terms of municipal revenue, SALGA submitted that the National Conference resolved amongst others to encourage municipalities to strictly implement their credit control policies in an effort to manage escalating debt-owing to municipalities, particularly in collecting debt from customers who are able to pay but not willing as opposed to indigent customers.
SALGA made reference to the updated Municipal Borrowing Policy Framework, and stated that it is collaborating with the Development Bank of Southern Africa’s Infrastructure Fund in an effort to facilitate the uptake of long-term borrowing instruments for major capital projects.
SALGA welcomed the allocations of R800 million in 2022/23 and R856 million in 2023/24 in respect of the Neighbourhood Development Partnership grant to continue with city-led employment programmes forming part of the presidential employment initiative.

However, it submitted that these allocations must be aligned to the local government functions of the grant.

SALGA acknowledged the temporary nature of the initiative due to its response to the impact of the Covid-19 pandemic on the economy.
Furthermore, SALGA noted a risk of placing expectations on municipalities to provide this form of employment for medium to long-term period even after the funds were no longer available.

Regarding the Municipal Disaster Recovery grant, SALGA highlighted the need to factor-in rapid disbursements of the grant allocations to municipalities, in the case of a 15 48 disaster.
SALGA emphasised that the responsiveness in the disbursement of the said grant determined whether the grant would have the requisite impact in the event of disasters and it was therefore important to draw from lessons learnt during the Covid- 19 hard lock-down responsiveness for disbursement of funds.
In conclusion, SALGA submitted that it supported the Bill and recommended that the upward trajectory in local government allocations from nationally raised revenue be maintained in order to realise the aspirations contained on the White Paper on Local Government, 1998 in respect of subsidising the provision of basic services.

3.4 Women on Farms Project The Women on Farms Project (WFP) is a feminist non-governmental organisation that believes in feminist solutions for dignified lives for farm women.
WFP welcomed the redistributive approach to budgeting as shown in the Bill, as rural and farm communities were the most historically deprived during apartheid and therefore required more resources.

WFP contends that the current budgetary allocations to rural areas were still inadequate to address the structural inequalities inherited from centuries of commercial agriculture, apartheid and racialised capitalism.
To this end, the WFP recommended the following in the interests of women farm workers and dwellers, additional revenue be allocated to ensure the following public services: • Land Redistribution: A significantly increased budget allocation was needed for the redistribution of land for women farm workers and dwellers, including unused state land and state land currently leased to commercial farmers.

• Health: Rural clinics and hospitals must be adequately staffed and resourced.
Women’s specific health needs, such as sexual and reproductive healthcare services, need to be prioritised.

In addition, community-driven health services must be created to deal with a range of health problems, from pesticide exposure to addictions and conditions caused by foetal alcohol syndrome, a legacy of the ‘dop’ system.
WFP also advocated for the introduction of mobile clinics which provide psychosocial services for gender-based violence survivors, as well as government-financed shelters in all rural towns.
16 49 • Police: More funding for rural police stations is needed as this will result, inter alia, to the appointment of more police officers, gender-sensitivity training for police officers, police vans, and trauma rooms at police stations, from which farm women will benefit when reporting gender-based violence, including the enforcement of Protection Orders.
• Justice and Courts: Additional revenue should be allocated to strengthening and resourcing rural courts, including more Sexual Offences Courts, increasing staff numbers and training staff to expeditiously deal with gender-based violence cases.

• Education: Rural schools are overcrowded, under-staffed and under-resourced.

Farm children face additional constraints such as transport, discrimination, high dropout rates and aggravating factors such as evictions and seasonal household food insecurity.
Matriculants on farms often find themselves excluded from tertiary education opportunities due to geography and economic constraints.

• Basic Income Grant: Whilst WFP welcomed the extension of the Social Relief of Distress grant for a further 12 months, this was, however, significantly less than the Food Poverty Line of R624.

Given the low wages, seasonality and precarity of farm women’s labour, growing mechanization on farms, etc.
WFP called for a permanent Basic Income Grant which will ensure food security (especially during the off-season period) and cover other critical household expenses.

• WFP also called for the introduction of a wealth tax on the richest 1 per cent of South Africans.

In conclusion, WFP submitted that, based on the 2022 budget speech, it was evident that government was constrained by, inter alia, budgetary constraints and spending that worsened the fiscal deficit.
3.5 Amandla.mobi Amandla.mobi welcomed the year-long extension of the R350 Social Relief of Distressed grant, however it expressed disappointment that the grant was not increased and expanded to include more people.

It was disappointed by the 2022 national budget 17 50 tabled by the Minister of Finance since it did not mention anything about allocating funds towards the implementation of a Basic Income Support grant.

Amandla.mobi re-emphasised its previous recommendations to the Committee, i.e.
extension and increase of the SRD grant, immediate introduction of a Basic Income Support grant, expansion of the Child Support grant to include pregnant mothers, increase old-age pension to R2500 per month and giving them a 13th cheque.

Amandla.mobi further submitted that, as per its previous recommendations to the Committee, that the aforementioned should be funded through the introduction of a wealth tax on the richest 1 per cent of South Africans and the increase of the Sugary Drinks Tax to 20 percent.
It further submitted that Parliament and the Committee Members must hold National Treasury, the Minister of Finance, the President of the Republic of South Africa, and the rest of the Executive to account for approving a budget which failed the poor majority.

In conclusion, Amandla.mobi bemoaned that National Treasury’s current approach to public consultation and the creation of the budget appeared to be based on the principle of one rand, one vote.
Those with the least money struggle the most to engage with National Treasury and the budget process.

Many people still do not know about public hearings and participation and are thus left out of the budget process.

It further submitted that many failed requests have been made to the former Minister of Finance for a meeting with the pensioners (gogos).

To this end.
To this end.

Amandla.mobi requested that the Committee formally requests the current Minister of Finance to meet with the gogos and allow them to explain in detail why it is important that more funds be allocated towards the Old-Age grant.

6.

Findings and Observations Having deliberated and considered all the submissions made by the above stakeholders on Division of Revenue Bill (B6-2022), the Standing Committee on Appropriations makes the following findings and observations: 18 51 6.1.
The Committee notes and welcomes the proposed annual average of 10.3 per cent increase in the local government equitable share over the 2022 MTEF.

The Committee has always been emphasising on the need to increase the local government share of nationally raised revenue above inflation due to local government being in coalface of service delivery.

The Committee views this as an important step in ensuring that municipalities are able to provide free basic services to poor households.
However, the Committee would like to reiterate its concerns on the lack of consequence management and poor financial management within local government, an issue that it has raised on many occasions with SALGA.

6.2.

The Committee notes and welcomes the proposed additional R12.7 billion for the provincial education departments to continue hiring assistants in schools as part of the Presidential Employment Initiative for the first two years of the 2022 MTEF.
The negative impact caused by Covid-19 pandemic, particularly on job losses and the livelihoods of many South Africans cannot be overemphasised.

The Committee fully supports this government initiative to create jobs in response to the number of jobs losses caused by the Covid-19 pandemic.
However, the Committee would also like to re-emphasise on the need to use these resources in a manner that demonstrate the understanding of the scarcity of these resources and upholding the laws and regulations governing public finances in South Africa.

6.3.
6.3.

The Committee notes and welcomes the proposed additional R1.7 billion to the direct Neighbourhood Development Partnership grant to fund the continuation of government’s response to job losses due to the impact of Covid-19 through city led public employment programmes as part of the Presidential Employment Initiative over the next two years.

6.4.
6.4.

The Committee notes and welcomes the proposed additional R15.6 billion to the Provincial Equitable Share to support the provincial departments of health to continue responding to the Covid-19 pandemic and to reduce the impact of budget reductions on essential medical goods services.

19 52 6.5.
19 52 6.5.

The Committee notes and welcomes the proposed additional R1 billion in 2022/23 to the Covid-19 component of the District Health Programmes grant to fund the continuation of the Covid-19 vaccine rollout by provinces.

The Committee has always been supportive of government’s efforts to speedily rollout the Covid-19 vaccination programmes and encourages all citizens to use this opportunity and take up the vaccine if the country is to defeat this pandemic and all its associated challenges.

6.6.
6.6.

The Committee notes and welcomes the proposed additional R24.6 billion over the medium term to the Provincial Equitable Share to support provincial education departments in addressing educator numbers and other shortfalls within the sector.

The Committee supports this proposed allocation due to the public outcry on both the shortage of teachers in schools and learner teacher ratio that need to be addressed urgently if the quality of education and education outcomes are to be improved.

6.7.
6.7.

The Committee notes and welcomes the proposed allocation of R2.1 billion over the next two years for repairing of infrastructure damaged by storms and floods in KwaZulu-Natal in 2019 and 2020.

The Committee is of the view that the speedily disbursement of these funds is critical in ensuring that the victims of the natural disasters receive the required government assistance timeously and public infrastructure is repaired to its functional level.

6.8.
6.8.

The Committee notes with concern the proposed reduction of R1.7 billion from the Provincial Roads Maintenance grant in 2022/23 for the incentives portion allocated to provinces.

This was done based on the performance within the grant due to the sector being in the process of developing and finalising a clear and objective criterion for the incentive.
The Committee has always been against random allocation of scarce resources without first having proper plans on how these resources are to be utilised.

6.9.

The Committee notes and supports National Treasury’s request to correct the grant framework of the District Health Programmes grant to reflect the correct targets for the human papillomavirus vaccination programme.
These proposed 20 53 corrections are to be effected as part of the gazette that will be issued in terms of section 15 of the Act, once the Bill is enacted.

6.10.

The Committee notes and supports National Treasury’s request to amend the Local Government Financial Management grant to ensure that there is no double dipping on scarce public resources for the same activities that are provided for within the municipal infrastructure grant, administered by the Department of Cooperative Governance.
This proposed amendment is to be effected as part of the gazette that will be issued in terms of section 15 of the Act, once the Bill is enacted.

6.11.

The Committee notes and welcomes the transfer of function of the Early Childhood Development (ECD) programme from the Department of Social Development to the Department of Basic Education from April 2022, with the associated funding.
The Committee has always been of the view that ECD is critical if a child has to be better prepared and productive in later years of life.

6.12.

The Committee notes and welcomes SALGA’s initiatives in developing a Good Practice Guide on Municipal Financial Management with a view to improve the capacity of municipal officials, councillors and political leadership.
Given the current precarious financial position of most municipalities, the report on financial distressed municipalities by the National Treasury, and the report of the Auditor General of South Africa (AGSA) on the financial management in many municipalities; the Committee is encouraged by this support provided by SALGA in order to improve the overall capacity and financial management within the local sphere of government.
However, the Committee is of the view that in addition to training, suitably qualified individuals should be appointed in critical position within municipalities.

6.13.

The Committee notes with concerns the submission by Amandla.mobi that questions National Treasury’s budget consultation process, as well as the public consultation and participation processes in passing the budget.
The Committee 21 54 subscribes to the Constitutional requirements on public participation and involvement and will thus engage with National Treasury, to see to it that the budget consultation processes reach more South Africans as far as possible, the poor in particular.

6.14.

The Committee notes the call by both Amandla.mobi and the WFP for the introduction of basic income support grant.
However, note should be taken of government’s competing priorities and limited revenue, made worse by the Covid-19 pandemic and its associates slow economic activities.

The Committee however notes the current review process underway by government regarding the efficiency and effectiveness of the all grants.

7.
7.

Recommendations The Standing Committee on Appropriations, having considered submissions from various stakeholders on the Division of Bill (B6-2022), recommends as follows: 7.1 That the Minister of Finance and the Presidential Management Office ensure that the funds allocated towards the Presidential Youth Initiatives are spent within the required guidelines and frameworks in order to avoid potential abuse and corruption.
7.2 That the Minister of Finance ensures the following: 7.2.1 That National Treasury introduces mechanisms to ensure the equitable spread of government work to the service providers at the provincial and local spheres of government.

7.2.2 That National Treasury ensure that the processes of procurement are credible and transparent and to ensure that we receive value-for-money.

Furthermore, government should not overpay for goods and services.
7.2.3 That National Treasury provides, as part of in-year monitoring, comprehensive quarterly reports to the Committee on gross violations of 22 55 the MFMA and PFMA, including the names of repeat offenders in failing to implement programmes and projects.
7.3 That the Minister of Basic Education ensures the following: 7.3.1 That the Department of Basic Education provide the Committee with detailed plans on how the additional R24.6 billion to provincial equitable share to address the shortages of teachers and materials will be spent and monitored to attain value for money.
7.3.2 That Department of Basic Education provide the Committee with detailed plans on how the R12.7 billion added to the provincial equitable share to continue hiring assistants at schools as part of the Presidential Employment Initiatives will be spent and monitored to attain both value for money and ensure that there is standardisation across provinces on the criteria and remuneration of the assistants.
7.3.3 That the Minister of Basic Education provides a report on the progress regarding the removal of pit-latrines within the schools across South Africa.

7.4 That the Minister of Cooperative Governance and Traditional Affairs ensures that the Department of Cooperative Governance report to the Committee on the disbursement of the proposed R2.1 billion allocated towards repairing of infrastructure damaged by storms and floods in KwaZulu-Natal in 2019 and 2020.
7.5 That the Minister of Transport provides the Committee with a status report on the development and finalisation of the clear and objective criteria that will be used to assess performance and qualify provinces for the incentives within the Provincial Roads Maintenance grant.

7.6 That the Minister of Finance ensures that National Treasury corrects the grant framework of the District Health Programmes grant to reflect the correct targets for the human papillomavirus vaccination programme.
This correction should be effected as part of the gazette that will be issued in terms of section 15 of the Act, once the Bill is enacted.

23 56 7.7 That the Minister of Finance ensures that National Treasury amend the local government financial management grant to ensure that there is no double dipping on resources for the same activities that are provided for within the municipal infrastructure grant, administered by the Department of Cooperative Governance.
This amendment should be effected as part of the gazette that will be issued in terms of section 15 of the Act, once the Bill is enacted.

8.

Committee Recommendation on the Bill The Standing Committee on Appropriations, having considered the Division of Revenue Bill [B6-2022], (National Assembly) referred to it and classified by the Joint Tagging Mechanism (JTM) as a Section 76 Bill, recommends that the Bill be adopted, without amendments.

9.
9.

Conclusion The Committee would like to express its appreciation on the inputs, comments and proposals made by all the stakeholders who participated during the consultation processes of this Bill.

All the inputs, comments and proposals are valuable to the Committee.

Like all the stakeholders, the Committee is faced with very limited choices given the tight fiscal space that South Africa finds itself in.
The Committee would have loved to recommend to the Executive most of the proposals made, however, due to the scarcity of public resources, made worse by the Covid-19 pandemic, some of these proposals cannot be implemented immediately.

The Committee would like to encourage all stakeholders to continue to engage with the Committee on these important topics of public interest.
The responses by the relevant Executive Authorities, to the recommendations as set out in section 7 above, must be sent to Parliament within 60 days after the adoption of this report by the National Assembly.

Report to be considered.

24 57 2.
24 57 2.

Report of the Portfolio Committee on Communications on the 2021/22 First and Second Quarter Performance and Expenditure Report of the Department of Communications and Digital Technologies, dated 22 March 2022 The Portfolio Committee on Communications (the Committee), having considered the 2021/22 First and Second Quarter Performance and Expenditure Report of the Department of Communications and Digital Technologies (DCDT), here referred to as “the Department”, reports as follows: 1.
Introduction The Committee considered the 2021/22 Second Quarter Performance Report (01 April 2021 – 30 June 2021, and 01 July 2021 - 30 September 2021 respectively) of the Department and its entities in virtual meeting on 8 March 2022.

This report gives an overview of the presentation made by the Department to the Committee, focusing mainly on its achievements, outputs in respect of the performance indicators, targets set for the 2021/22 financial year, and related financial performance.
The report also provides the Committee’s key deliberations and recommendations in relation to the performance presentation by the Department and its entities.

2.

Organisational Environment The Department is mandated to create a vibrant ICT sector that ensure that all South Africans have access to robust, reliable, affordable and secure ICT services in order to advance socio- economic development goals and support the Africa agenda and contribute to building a better world.
This contributes to the development of an inclusive information society in which information and ICT tools are key drivers of accelerated and sustained shared economic growth and societal development.
The Department is comprised of various public entities, namely South African Post Office (SAPO), SENTECH, Universal Service Access Agency of South Africa (USAASA), Universal 1 58 Service Access Fund (USAF), Broadband Infraco (BBI), National Electronic and Media Institute of South Africa (NEMISA), State Information Technology Agency (SITA), and.

ZADNA, the South African Broadcasting Corporation (SABC), Film and Publication Board (FPB) and the Independent Communications Authority of South Africa (ICASA).
Similarly, like the 2020/21 financial years, the 2021/22 First and Second Quarter Performance and Expenditure relatively took place during the declared state of disaster.

The President had declared a National State of Disaster on 15 March 2020, which set in motion disaster regulations with an adverse impact on the economy and South Africans in general.

3.
3.

Second Quarter Performance Overview The Department committed to achieving 39 (thirty-nine) Annual Performance Plan (APP) quarterly targets by the end of Quarter 2 (01 July 2021 - 30 September 2021) of the 2021/22 financial year.

This is a total number of quarter 2 APP targets of all six (6) Programmes of the DCDT.

Overall, the Department has Achieved 23 (59%) of the APP targets, and 16 (41%) were Not Achieved.
Overall, the Department achieved 23 (59%) of the APP targets, and 16 (41%) were not Achieved.
(see Charts below): 2 59 3.1 Second Quarter Achievements The Department realised significant achievements against the planned Second Quarter 2 targets as indicated below: (i) WSP Training Implementation Report for the period 1 April to 31 August 2021 was developed; (ii) all invoices received from suppliers were paid within 30 days; (iii) the 2021/22 Communications Plan was developed and monitored (iv) the WTDC Consultation paper was developed and consulted; (v) the International Relations and Engagement Strategy was coordinated through engagement with relevant external stakeholders; (vi) public consultations/hearings on the Draft Audio and Audio Visual content Services White Paper have been conducted; (vii) Draft Electronic Communications Amendment Bill was developed; (viii) stakeholder consultation was conducted on PC4IR Strategic Implementation Plan; (ix) broadband services to 970 connected sites were monitored and sustained; (x) funding application for Phase 2 of SA Connect was developed; (xi) funding application for Household Connectivity Programme was developed; (xii) a 3-Year Implementation Plan of the National e-Government Programme developed and approved; (xiii) training conducted through NEMISA on pre-entry Digital skills; (xiv) draft Framework on Digital Transformation and Digital Inclusion submitted to relevant stakeholders for consideration and input; (xv) first draft report on the DCDT integrated action plan in support of the NSP was developed; (xvi) draft Implementation Plan for the DDM was developed and aligned with COGTA; and (xvii) Consultation conducted with ICASA on the Performance Management System (PMS).
3.2 Second Quarter Areas of Under-Achievement The Department did not achieve sixteen of its thirty-nine planned quarterly targets.
The Department highlighted the following areas for under-achievement against its Second Quarter targets: 3 60 (i) the absence of the formalisation (designation) of the BRICS Institute for Future Networks (BIFN-S) render the achievement of the target impossible, hence the BIFN- S was not operationalised as planned; (ii) final Draft BRICS 2021 Position Paper was completed after the end of the second quarter deadline; (iii) the ICT Investment Conference target has been put in abeyance as the Department will leverage off the SA Investment Conference; (iv) the South African Post Office SOC Ltd Amendment Bill was not submitted to the Office of the CSLA as there in obtaining stakeholder inputs; (v) the Data & Cloud Policy held in abeyance due to revised directive from Minister; (vi) implementation of the Digital Economy Masterplan (DEM) delayed due to the fact that the DEM Executive Oversight Committee has not been operationalised; (vii) additional comments are being incorporated into the ICT SMME Development Strategy; (viii) the development of the Business Case for the Regulatory Reform Bill has been put in abeyance- awaiting further direction; (ix) delays in the procurement process has negatively impacted this project on Study on Cost To Communicate; (x) delays in obtaining feedback from the OCSLA has delayed the finalisation of the Postbank Amendment Bill; (xi) the process of establishing a PMO for SA Connect Phase 2 has not as yet been concluded as the Department is adopting a revised approach; (xii) the Department is revising the Digital Transformation Centre (DTC) approach due to challenges related to the Project;.
(xiii) only 20 790 installations (6 460 July, 7 531 August, and 6 799 September) of the 240 000 subsidized digital television installations 39 839 registrations were recorded (25 663 in July, 2 835 in August 2021 and 11 431 in September 2021).
However, the Department has adopted a revised approach; (xiv) delays by USAASA to deliver on the set the plans for the distribution of 400 000 vouchers of the Voucher Subsidy; and (xv) progress report reflective of GDYC matters was be submitted to DWYPD and DSD, but DCDT reported at the quarterly meetings held by the DWYPD and DSD.

4 61 4.
4 61 4.

Second Quarter Budget Overview and Expenditure Analysis Per Programme The Department of Communications and Digital Technologies (DCDT) has a total budget appropriation of R3.7 billion for the 2021/22 financial year.

Current payments amounts to R724.9 million (of which R304.3 million is for Compensation of Employees and R420.7 million for Goods and Services) of the total budget.
Transfers and subsidies accounts for R2.9 billion of the budget and is mainly allocated to departmental agencies and accounts: (i) R100.9 million to the Films and Publication Board (FPB) for operations; R508.2 million to the Independent Communications Authority of South Africa (ICASA) for operations; (ii) R98.5 million to the National Electronic Media Institute of South Africa (NEMISA) for operations; (iii) R82.1 million to the Universal Service and Access Agency of South Africa (USAASA) for operations and R95 million for distribution costs in the broadcasting digital migration project; and (iv) R64.2 million to the Universal Service and Access Fund (USAF) for operations; and a further R1.073 billion to USAF for Broadcasting Digital Migration (BDM).
There is also funding to public corporations and private enterprises: (i) R209.7 million to South African Broadcasting Corporation (SABC) for operations; (ii) R504.2 million to the South African Post Office (SAPO) as a subsidy to cover costs related to Universal Service Obligations; R100 million for Sentech to cover Dual illumination costs relating to the digital migration project; and (iii) R69.7 million to Sentech for migration of digital signals.
At the end of the second quarter, the Department spent R1.44 billion or 39.1 per cent of the total budget.

Spending at the end of the second quarter is R380.3 million or 20.8 per cent lower than projected.

This is mainly due to the slow spending under Compensation of Employees (R14.2 million), Goods and Services (R78 million), as well as Payments for Capital Assets (R9.8 million).

Transfers and subsidies is spending less by R278.2 million than was projected.
The Department has a total budget of R304.3 million for compensation of employees in the 2021/22 financial year.

At the end of September 2021, the Department had spent R133.6 million, which is lower than the projected amount by R14.2 million.

The slow spending is due to the critical vacancies not yet filled since the merger due to the structure of the Department not being finalised yet.

The Minister has issued a moratorium on 5 62 the filling of posts until this has been completed.
At the end of September 2021, the Department has reported 37 vacant positions, including the Director-General post.

Spending on Covid-19 related items is R1.2 million up to the end of the 2nd quarter.

This is for expenditure incurred for the decontamination/fumigation/fogging of the buildings whenever there are COVID cases reported in the Department.

It also involves the costs of communication for providing data to officials to enable them to work from home during COVID.
No Virements were approved by the National Treasury during Q2.

4.1 Programme 1: Administration The purpose of the programme is to provide strategic leadership, management and support services to the Department.

Spending of R112 million under this item is R25.4 million lower than the projected R137.4 million up to the 2nd quarter.

The variance of 18.5 per cent is due to unfilled posts within the Department as the process of developing the organisational structure is still in progress.
Spending under Goods and Services items travel and subsistence as well as venues and facilities were lower than projected due to fewer business activities as a result of the COVID 19 pandemic.

The slow spending on Payments for Capital Assets is due to the delay in the ICT migration project and purchasing of servers and upgrading of ICT infrastructure.
There has also been changes in the ICT priorities for the department regarding the security cameras and upgrade of access control project, which is currently under procurement.

The Minister of DCDT has decided that the security features should be provided by the landlord since the Department does not own the buildings.
The Department’s facilities unit will therefore request approval from the Acting Director-General to cancel the tender in this regard and further engagements will be held with the landlord to discuss this matter.

4.2 Programme 2: ICT International Relations and Affairs The purpose of the programme is to ensure alignment between South Africa’s foreign policy and international activities in the field of ICT.
6 63 Spending of R43.2 million under this item is R8.7 million lower than the projected amount of R51.8 million up to the 2nd quarter.

The variance of 16.7 per cent is due to slow spending in goods and services: travel and subsistence due to fewer activities as a result of COVID 19 pandemic.

Furthermore, slow spending under transfers and subsidies to foreign government for membership fees is due to the savings of R7.4 million made as a result of exchange rate fluctuations.
There was also slow spending in Compensation of Employees due to unfilled posts within the branch.

4.3 Programme 3: ICT Policy Development and Research The purpose of the programme is to develop ICT policies and legislation that support the development of an ICT sector that creates favourable conditions for accelerated and shared economic growth.

Develop strategies that increase the adoption and use of ICT by the majority of South Africans to bridge the digital divide.
Spending of R14.4 million under this item is R12.8 million lower than the projected amount of R27.1 million up to the 2nd quarter.

The variance of 47.1 per cent is mainly due to vacancies that are not yet filled as the organisational structure is still being finalised.

There was also lower than expected spending under Goods and Services items on travel and subsistence due to the slow-down of activities and as a result of the work from home policy.
4.4 Programme 4: ICT Enterprise and Public Entity Oversight The purpose of the programme is to oversee and manage government’s shareholding interest in the ICT public entities and state-owned companies.

Facilitate the growth and development of small, medium and micro enterprises in the ICT sector.

Spending of R781.2 million under this item is R24.3 million lower than the projected amount of R805.5 million up to the 2nd quarter.
The variance of 3 per cent is due to slow spending on compensation of employees due to vacant posts that are not yet filled pending the finalisation of the organisational structure.

Slow spending on goods and services is mostly from funds related to the drafting of Bills for the State Digital Infrastructure Company (SDIC) and the State Digital Services Company (SDSC), as the respective business cases that would inform the Bills has not yet been finalised.
7 64 While the funds were anticipated to be spent towards at the end of the second quarter, the programme is awaiting a directive from the new Minister in terms of the Rationalization Project (which informs the business cases and Bills), which might change the policy direction and affect the intended spending.

Finally, transfers to USAF for operations (R17 million) was not made due to delays in the Department’s internal processes for the transfer.
However, higher spending than projected was made to USAASA for operations and for distribution costs related to BDM in order to accelerate the project.

4.5 Programme 5: ICT Infrastructure Development and Support The purpose of the programme is to promote investment in robust, reliable, secure and affordable ICT infrastructure that supports the provision of a multiplicity of applications and services.
Spending of R470.4 million under this item is R304.3 million lower than the projected amount of R774.6 million up to the 2nd quarter.

The variance of 39.3 per cent is mostly due to transfers to USAF (R251.3 million) for the BDM project, which was not made due to delays on the internal processes of the Department before transfers can be made to the entity.
Slow spending was also experienced in the goods and services item computer services due to an advance payment of R53 million made to SITA for 400 sites for SA connect project previously, and as a result the transfer is not currently required and will be made later in the year.

Slow spending under consultants is due to the expiry of the Memorandum of Agreement (MoA) that governs the relationship between DCDT and the Council for Scientific and Industrial Research (CSIR).
The MoA will be vetted by DCDT Legal unit, after which it can be signed by both parties.

Thereafter the Department would then request National Treasury’s approval to appoint the CSIR, which will allow the department will sign the annual contract and start the payments.

4.6 Programme 6: ICT Information Society and Capacity Development The purpose of the programme is to develop and implement strategies to build capabilities to bridge the digital divide.
8 65 Spending of R23.9 million under this item is R4.8 million lower than the projected amount of R28.7 million for the 2nd quarter.

The variance of 16.7 per cent is mainly due to slow spending on compensation of employees due to unfilled posts within the Department pending the finalisation of the organisational structure.
Slow spending on Goods and Services is due to delays in the procurement process of appointing a service provider to assist with the development of the district digital enablement plans and the finalisation of Terms of Reference to be submitted to the Departmental Bid Adjudication Committee for approval.

With regards to capital expenditure, no request for procurement of laptops was received as expected from officials during the previous months, resulting in slow spending.
4.7 Issues for the committee to note SA Connect project: The focus of the Department during the 2nd quarter continued to be on the monitoring and sustaining of the 970 sites connected to Broadband services.

Unreliable power supply remains the biggest challenge that affected connectivity at the 506 sites as well as network performance.

This was mainly due to load-shedding, power rationing and power failures at the district municipalities concerned.
Broadcasting Digital Migration project: The Department has submitted to Cabinet and received approval for the integrated rollout plan.

As outlined in the plan, the Analogue Switch- Off (ASO) is scheduled to be completed by March 2022, with the Department assuming responsibility for the management of the project.

The SAPO will still play a role with regards to registrations and while funding of this project will still be done through allocations on USAF.

5.
Committee Observations and Recommendations 5.1 The Department Having considered the 2021/22 Second Quarter Performance and Expenditure Report of the Department, the Committee noted: (i) its appreciation for the presentation made by the Department; (ii) with concern that the Department did not achieve 16 of its 39 targets in the period under review; 9 66 (iii) that the targets not achieved included delays in the finalisation of the South African Post Bank Amendment Bill and the Postbank Amendment Bill, Data and Cloud Policy, ICT SMME Development Plan; the study on Cost to Communicate and Digital Transformation Centre, the target for subsidised digital television installers have not been met and delays on distribution of voucher subsidies amongst others; (iv) that there was a moratorium on some entities as a result of a process of review of all entities.
This process has been concluded and it has been finalised BBI and Sentech will merge; (v) and welcomed the intervention by the Department to broker a deal between the litigant and the country on spectrum auction (Part B); (vi) that unreliable power supply remains the biggest challenge that affected connectivity for SA-Connect programme at the 506 sites as well as network performance, and (vii) commended all entities for the areas of achievement in the period under review.
5.2 SAPO On SAPO, the Committee noted: (i) its appreciation for the presentation by the SAPO considering an improvement in performance; (ii) with concern that there has been lack of adequate funding and that it was experiencing various other challenges, which include COVID-19 related issues; (iii) that SAPO requires new revenue generation avenues; (iv) with serious concern that SAPO historical debt that needs to be dealt with as it has an impact on performance; (v) with concern that SAPO offices closed due to various issues including non- payment of rent; (vi) concern in that SAPO had a R 563 million loss and experienced a procurement moratorium; (vii) with concern that there was a high number of theft at branches of SAPO; (viii) with serious concern the depletion of Board Members at SAPO; and (ix) with appreciation that SAPO Postbank Bill would be referred to the Committee in due course.
5.3 USAASA 10 67 The Committee noted (i) that USAASA and USAF areas of under-achievement included irregular, wasteful and fruitless expenditure, the failure to distribute and install the required Set Top Boxes (STBs) amongst others; and (ii) that Cabinet approved the extension of the USAASA Board.
5.4 SENTECH The Committee noted: (i) that Cabinet has approved the Sentech Board; (ii) the positive financial performance for the Second Quarter; (iii) that the broadband portfolio continues to provide potential for additional revenue streams; (iv) that the Managed Infrastructure Services portfolio would attract potential customers when the Nasrec Data centre is complete; (v) that the overall network performance was above SLA, however connectivity service underperformed due to power related issues; and (vi) that the migration project remains a high risk but USAASA has agreed to revise the installation prices as per request from suppliers, and this should assist with stakeholder management for the migration project team.
5.5 SITA The Committee noted: (i) with appreciation that Cabinet has approved SITA Board appointments; (ii) that SITA achieved 12 of its 16 targets for the period under review; (iii) that the overall performance results exclude the SA-Connect KPI in that SITA Board approved a request to remove it from the APP; (iv) that SITA has entered into a Business Agreement (BA) with the South African Post Office (SAPO) from 01 April 2021 to 31 March 2024; and (v) that a number of initiatives between the two entities are currently underway which include the Jitsi Meeting Platform, ageing IT Infrastructure and Data Centre Challenges, the use of Cloud Platforms to modernize applications, moving the SAPO Trust Centre onto the GCPE and a skills collaboration.
11 68 5.6 BBI The Committee noted: (i) that for the quarter under review, 13 of the 19 targets were achieved; and (ii) that of the six targets not achieved, three pertained to the financial sustainability of the entity and the others to a resilient network, the socio-economic transformation target and organisational enablement 5.7 NEMISA The Committee noted: (i) that NEMISA achieved 15 of its 18 targets for the period under review; (ii) that the entity has achieved 83 percent of its set targets; and (iii) that areas of under-achievement included the creation of work experience for interns, training of citizens in basic digital learning and basic technology courses.
5.8 ICASA The Committee noted: (i) its appreciation for the work done by ICASA, in particular, the spectrum auctioning process; a. that the spectrum auction process was due to start; (ii) its appreciation for the corporation between the private and public sectors; (iii) that the tangible societal benefits such as 500 police stations, 18 000 schools and over 5 800 government clinics will be digitally connected as part of the spectrum auctioning conditions; (iv) that ICASA would make lawful interventions on the Cost to Communicate on broadband data and voice; and (v) that input costs are high and with the auction process, ICASA will be able to hold applicants accountable on costs.
5.9 SABC The Committee noted: 12 69 (i) a great sense of appreciation for the continued improvement in performance by the SABC; (ii) that the SABC was on track and that an 87 percent achievement of its mandate was achieved; (iii) with appreciation that the entity managed to recover revenue and develop a robust target operating model to ensure that it is agile and competitive; (iv) the improvement of profit by SABC of R77 million; (v) with concern that the SABC reported a loss of R155.4 million for Quarter 2; (vi) that the revenue was below budget by R 394.1 million; (vii) that the advertising revenue was also below budget by R289,7 million; (viii) that sponsorship revenue exceeded budget by R35,0 million; and (ix) with concern the regulatory and legislative bottlenecks that affect SABC negatively.
5.10 FPB The Committee noted: (i) with concern that vacancies are not yet filled at the FPB; a. that vacancies are as a result of the moratorium placed on the entity, which it was trying to address by preparing a strategy document for FPB to ensure that its role is maintained; (ii) the secondment of Dr Boloka to FPB as acting CEO; (iii) with concern the 'going concern' and sustainability matters including irregular expenditure, fruitless and wasteful expenditure; and (iv) that the Films and Publications Amendment Act has come into operation as indicated by the President and will fundamentally change the mandate of the Board.
6.
Recommendations 6.1 The Department The Committee recommends that the Minister should ensure that: (i) processes are in place to ensure that all areas of under achievement are addressed; a. present a mitigation plan with emphasis on improvement on planning and resourcing to achieve the targets and eliminate underachievement in the Portfolio; 13 70 (ii) the Department presents an update on irregular expenditure and consequence management thereof; (iii) international membership fees are paid in full; (iv) SAPO Board Member appointments are finalised; (v) a clear action plan to fill all vacant posts is provide to the Committee; (vi) the DTT Project Team appears before the Committee to present a Stakeholder Management Plan; (vii) a plan to mitigate the unreliable power supply that impacts negatively on network performance for the SA-Connect programme is present to the Committee; (viii) the Department must appear before the Committee to present a proposal on a revised SABC Funding Model; (ix) all legislative reforms needed to transform the sector be expedited so that the Committee can finalise them before the end of the current parliamentary term; and a. present to the Committee an updated Legislation Programme.
6.2 SITA The Committee recommends that the Minister should ensure that: (i) plans to address the Auditor-General’s findings are presented to the Committee on; and (ii) SITA, during its next appearance before the Committee, reports in detail its Business Agreement with SAPO.

6.3 NEMISA The Committee recommends that the Minister should ensure that: (i) NEMISA presents a Plan of Action to address areas of under-achievement.
6.4 ICASA The Committee recommends that the Minister should ensure that: (i) ICASA continuously updates the Committee on the auctioning of spectrum; 14 71 (ii) companies are held accountable for the tangible societal benefits such as digital connectedness of 500 police stations, 18 000 schools and over 5 800 government clinics; and (iii) ICASA appears before the Committee to present on the lawful interventions for the Cost-to-Communicate programme.
6.5 SABC The Committee recommends that the Minister should ensure that: (i) the Department fast-track legislative and regulatory reforms to guarantee financial viability of the SABC.
6.6 SAPO The Committee recommends that the Minister should ensure that: (i) there must be a concerted effort by the Department to save SAPO because of its footprint and proximity to service delivery to communities; (ii) its mandate remains relevant; (iii) SAPO has a full Board complement; (iv) the various challenges at SAPO are addressed expediently; a. such as SARS and inability of the entity to collect revenue from its clients; (v) a strategy is in place for SAPO to receive the necessary resources to function optimally and efficiently; (vi) the cash flow crisis at SAPO is resolved expediently; (vii) security at SAPO outlets is improved and processes are in place to deter the high number of theft at various SAPO branches; a. present to the Committee its plans for mitigating risks associated with security; (viii) the Postbank Board vacancies are advertised and ultimately filled; (ix) SAPO provide a timeline for filling of critical vacancies; and (x) the human resource element at SAPO is improved to ensure good governance a. SAPO present to the Committee a framework for good governance.
6.7 FPB The Committee recommends that the Minister should ensure that: 15 72 (i) a timeline is presented to the Committee on filling of all vacancies at the FPB; (ii) the Board appears before the Committee to present on irregular, fruitless and wasteful expenditure; (iii) once finalised, the ‘FPB of the Future’ Strategy is presented to the Committee; and (iv) the Board updates the Committee of the plans for the implementation of the Films and Publications Amendment Act.
6.8 BBI The Committee recommends that the Minister should ensure that: (i) processes are in place to ensure that the targets that was not achieved during the period under review are achieved in future; and (ii) BBI appears before the Committee with a remedial plan.
6.9 Sentech The Committee recommends that the Minister should ensure that: (i) Sentech appears before the Committee to provide assurance on how it plans to assist other entities to achieve the Department’s mandate; and (ii) Sentech presents its mitigation plans to the Committee on network performance, especially relating to the impact of power outages on connectivity.
6.10 USAASA/USAF The Committee recommends that the Minister should ensure that: (i) processes are in place to ensure that the targets that were not achieved during the period under review are achieved in future; and USAASA/USAF appear before the Committee with a remedial plan.

Report to be considered.

16 73 3.

Report of the Portfolio Committee on Trade and Industry on the Public Protector Report (No.
37 of 2018-19) on a systemic investigation into allegations of illegal conversion of goods-carrying Toyota Quantum panel vans into passenger-carrying minibus taxis to transport members of the public for reward, dated 22 March 2022 1.

The Portfolio Committee on Trade and Industry, having considered the Public Protector Report (No.
37 of 2018-19) on a systemic investigation into allegations of illegal conversion of goods-carrying Toyota Quantum panel vans into passenger-carrying minibus taxis to transport members of the public for reward, and whether the Minister had complied with the remedial actions determined by the Public Protector, reports as follows: 2.

On 7 May 2019, the Public Protector’s Report (No.


37 of 2018-19) on a systemic investigation into allegations of illegal conversion of goods-carrying Toyota Quantum panel vans into passenger-carrying minibus taxis to transport members of the public for reward was referred to the Portfolio Committee on Trade and Industry for consideration and report, with specific reference to matters falling within its ambit (Announcements, Tablings and Committee Reports, 7 May 2019, pp 3).

3.
The Committee was required to consider whether it was satisfied with the remedial action taken by the Minister of Trade, Industry and Competition to take urgent and appropriate steps to harness and foster good, effective and efficient working relations between the National Regulator of Compulsory Specifications (NRCS) and the South African Bureau of Standards (SABS), as well as to ensure that these two entities complement each other in the interests of government, members of the public and any other applicant who may be in need of their services.
4.

Therefore, it should be noted that the purpose of this report is not to discuss the merits and demerits of the findings of the Public Protector with regard to its investigation, but to focus on and determine whether the remedial action identified by the Public Protector has been implemented, and whether the Committee was satisfied with the steps taken by the Minister in this regard.

74 5.
74 5.

Furthermore, it should be noted that the remedial action determined by the Public Protector is binding, until set aside by a court of law on judicial review; therefore, compliance with the remedial action is mandatory.

6.
6.

The Department of Trade, Industry and Competition (DTIC), together with the NRCS and the SABS briefed the Committee on 23 February and 9 March 2022 respectively, where they expressed a view on the findings, the DTIC’s decision to not take the remedial action or some of the findings on judicial review, and further highlighted the steps taken by the Minister to address the remedial action determined by the Public Protector.

7.
7.

In their presentations on 23 February 2022, the NRCS and the SABS informed the Committee that no remedial actions were directed at them.

However, in their view, the Public Protector’s report contained a number of factual and legal inaccuracies, which would have supported a position to take the report under review.

8.
8.

As the NRCS and the SABS are entities reporting to the DTIC, they informed the Committee that these two entities had sought permission from the DTIC to take the report under judicial review within 30 days of its publication.

9.

However, the DTIC informed the Committee that “as no direct adverse findings were made against the Department” or the entities reporting to it, it was of the view that in the spirit of cooperative governance it would not be supportive of such an approach.
Therefore, as a result of this decision not to take the matter under judicial review, the Minister is in effect bound to implement the determined remedial action.

10.

In light of the above, the Committee then requested the DTIC and its entities to brief the Committee on 9 March 2022 on the steps taken by the Minister in addressing the remedial action as prescribed in the report.

11.
11.

The DTIC informed the Committee that the Minister had subsequently complied with the remedial action and had facilitated the creation of a Memorandum of Understanding (MOU) that formalised the areas of cooperation and collaboration between the NRCS and the SABS.

75 12.

As a result of the MOU, a Joint Working Committee comprising of representatives of both entities was established to: i.

Manage cooperation and consultation on matters dealt with by both entities; ii.

iii.
iii.

Implement mutually agreed programmes and projects; and Share information.

13.

Furthermore, the DTIC informed the Committee that joint management meetings between the NRCS and the SABS had been instituted to deal with operational issues to further foster collaboration and cooperation.

14.

The DTIC informed the Committee that it would continue to monitor the implementation of the MOU to ensure ongoing compliance with the remedial action from the Public Protector.

15.
15.

Therefore, the Committee, having considered all the facts presented to it, was satisfied with the steps taken by the Minister and was of the view that he had complied with the remedial action as prescribed by the Public Protector.

76 4.
Report of the Portfolio Committee on Trade and Industry on the Department of Trade, Industry and Competition’s Second and Third Quarter Financial and Non-Financial Performance for the 2021/22 Financial Year, dated 16 March 2022 The Portfolio Committee on Trade and Industry, having assessed the service delivery performance of the Department of Trade, Industry and Competition (DTIC), against its mandate and allocated resources, in particular the financial resources for the period 1 July to 31 December 2021, on 16 February 2022, reports as follows: INTRODUCTION The second and third quarter of the 2021/22 financial year was marked by continued economic recovery albeit slow with the gross domestic product growing by 2,9 per cent since 2020.
However, the July unrest in the Gauteng and KwaZulu-Natal provinces had a significant negative impact on the economy during the third quarter of 2021.

As a result of the unrest, the DTIC had to reprioritise some of its work and resources to assist affected businesses.

This, combined with the continued impact of the COVID-19 pandemic, negatively impacted the achievement of some of its targets during this period.
As a result, it had only achieved 85 per cent of its targets in the second quarter and 77 per cent in the third quarter of the 2021/22 financial year.

1.1.

Mandate of the Committee Section 5 of the Money Bills Amendment Procedure and Related Matters Act (No.

9 of 2009) requires the National Assembly, through its committees, to annually assess the performance of each national department over an 18-month period.
This culminates in a committee submitting a report of this assessment known as a Budget Review and Recommendation (BRR) Report.

The overarching purpose of the BRR Report is for the committee to make recommendations on the forward use of resources to address the implementation of policy priorities and services, as the relevant department may require additional, reduced or re-configured resources to achieve these priorities and services.
This Act gives effect to Parliament’s constitutional powers to amend the budget in line with the fiscal framework.

1 77 The current process forms part of ongoing oversight of the DTIC’s financial and non-financial performance.

This will inform the next BRR process.

Furthermore, Parliament’s Annual Performance Plan (APP) requires submission of reports on departments’ quarterly performance.

1.2.
1.2.

Purpose of the Report The purpose of this report is to monitor the financial and non-financial performance of the DTIC against its predetermined objectives and quarterly milestones as part of the Committee’s ongoing budgetary oversight.

This report assesses the non-financial and financial performance for the second and third quarter of the 2021/22 financial year, namely from 1 July to 31 December 2021.

1.3.
1.3.

Method The Committee was briefed by the DTIC on their second and third quarter performance for the 2021/22 financial year on Wednesday, 16 February 2022.

1.4.

Outline of the contents of the Report Section 1 of the report provides an introduction to the report including its purpose, and method.
Section 2 outlines the DTIC’s strategic objectives, assesses its financial and non-financial performance against its APP for the 2021/22 financial year from 1 July to 31 December 2021 and Section 3 outlines the key issues raised by the Committee during deliberations.

Section 4 provides the Committee’s concluding remarks followed by a note of appreciation in Section 5 and the recommendation in Section 6.

DEPARTMENT OF TRADE, INDUSTRY AND COMPETITION 2.1.


Strategic Goals The DTIC’s performance was in line with its strategic objectives, which guided its work and was aligned to its programmes.
The strategic goals were as follows1: 1 DTIC (2021a) 2 78 • Promoting structural transformation, towards a dynamic industrial and globally competitive economy; • Providing a predictable, competitive, equitable and socially responsible environment, conducive to investment, trade and enterprise development; • Broadening participation in the economy to strengthen economic development; • Continually improving the skills and capabilities of the department to effectively deliver on its mandate and respond to the needs of South Africa’s economic citizens; • Coordinating the contributions of government departments, state entities and civil society to effect economic development; and • Improving alignment between economic policies, plans of the state, its agencies, government’s political and economic objectives and mandate.
2.2.

Overview and assessment of the financial and non-financial performance2 This section provides a comparison between the DTIC’s second and third quarter non-financial performance milestones as outlined in its APP against its second and third quarter performance reports for the 2021/22 financial year, and outlines its financial performance for the period under review.

2.2.1.

Non-Financial Performance 2.2.1.1.


Second Quarter Performance The DTIC had 40 targets for this quarter, six of which had not been achieved.

This represented an 85 per cent achievement of targets during the quarter.

This is a decline from the 93,3 per cent achievement of targets in the first quarter where 28 of the 30 targets had been met.
The six targets that had not been achieved were: • The target for the implementation of the Internal Capacity Building Plan had been 12 per cent completion by the end of the second quarter in terms of structure fit for purpose, culture change, coaching, upskilling and reskilling as well as recognition framework.

However, the DTIC had only completed six per cent of the process in terms of structure fit for purpose, culture change, upskilling and reskilling as well as recognition framework.
In 2 DTIC (2021a) and (2021b) 3 79 relation to structure fit for purpose, the process change had been initiated by Executive Board decisions and the procurement process had not been initiated at that stage.

In terms of the Culture Change Plan, this had been at an advanced stage due to early planning and commitment to the process.

• In terms of the review of the governance framework for entities and the identification of action areas, the review had not been completed due to a lack of resources.
• In terms of the target for three annual targets for revitalisation of industrial parks to be implemented, the DTIC had reported that seven Industrial Parks had been in the revitalization process.

However, this was misaligned to the quarterly target.

• There had been a target to prepare and submit one detailed report of new products and/or amendments for designation under the Preferential Procurement Policy Framework Act (Act No.
5 of 2000) to the Minister, as well as to review proposals for designation from the broader economic cluster.

In this regard, research had been conducted, however, further interventions had been required before completion.

The report had been expected to be submitted to the Minister in the third quarter.

• Participation in key stakeholder engagements, including at the National Economic Development and Labour Council, to ensure legislative support required for localisation in the Procurement Bill.
The DTIC had not had any engagements nor submitted any inputs during this quarter, as it was awaiting the engagements with the National Treasury.

• In terms of the target to adjudicate applications for local productions of films and documentaries telling South African stories, a call had been published; however, no applications had been received in this regard.

2.2.1.2.

Third Quarter Performance The DTIC had 35 targets for this quarter, of which 27 had been achieved.
This represents a 77 per cent achievement of its targets during the quarter under review.

The eight targets that had not been achieved were: • The target for the implementation of the Internal Capacity Building Plan had been 13 per cent; however, only 6,5 per cent had been implemented by the end of the third quarter.

In terms of structure fit for purpose, the process required an in-depth review and preparation after the Executive Board’s principle approval.
In terms of the Culture Change Plan, there had been delays in the item being tabled at the Executive Board.

As this was an Executive 4 80 Board driven process, process buy-in and combination at top management level was key to the success of the intervention.

Therefore, the approach would be that of an engagement process rather than project management.
• In terms of the governance framework for entities, the target planned for this indicator was to finalise the review of the framework and submit this to the Director-General and the Minister.

At the end of the third quarter, the review was still underway.

The target had not been achieved due to a shortage of resources.

• The quarterly target had been for two annual targets for the revitalisation of industrial parks to be implemented.
However, it reported that five industrial parks had been under construction, namely Babelegi, Mogwaswa/Bodirelo, Vulindlela, Isithebe and Nkowankowa, while Dimbaza had been completed and two industrial parks had been nearing completion, namely Botshabelo and Komani.
The DTIC indicated that there was a misalignment between the work that was currently being undertaken by the Spatial Industrial Development and Economic Transformation Branch in this regard and how the targets have been captured in the APP, these had been requested to be revised.

• The quarterly target had been that a draft Master plan should have been developed as per the Re-imagined Industrial Strategy; however, the draft Master plan had been presented and was still awaiting final approval.
• Only R9,7 billion of projected investments to be leveraged from projects/enterprises had been approved against a target of R13 billion.

This was due to fewer applications with low investment values being received as a result of the economic downturn and the impact of the COVID-19 pandemic.
• In terms of the call for investments in local film and television (TV) production, the target for adjudication of applications for local productions of films and documentaries telling South African stories had not been achieved, as the DTIC had not received applications in relation to the telling of South African stories.

• The target for one statistical report on company registrations from the Companies and Intellectual Property Commission (CIPC) had not been achieved.
The statistics provided by the CIPC had not addressed the requirement of company registration being finalised within one day, although this was evident from the BizPortal data.

The BizPortal data had been extracted by the Inward Investment Attraction, Facilitation and After-care branch and attached as additional evidence for the third quarter.

However, it had not been considered authentic, as it had not been included by the CIPC.
The branch would subsequently request 5 81 the CIPC to include this data in its report to address this anomaly going forward.

• A report on the impact of the DTIC and entities’ programmes on employment, economic growth, exports, imports and investment had not been published by the Economic Research and Coordination branch, as it required more time to monitor progress of these programmes and their impact.

2.2.2.

Financial Performance 2.2.2.1.


Second Quarter Of the R6,3 billion projected budget up to the 30 September 2021, R6,1 billion had been actually spent by 30 September 2021.

This resulted in an under-expenditure of R612,9 million (8,8 per cent of the projected year-to-date expenditure).

The table below details second quarter expenditure by programme.
Table 1: Second Quarter Expenditure by Programme as at 30 September 2021 Programme 1: Administration 2: Trade Policy, Negotiations and Cooperation 3: Spatial Industrial Development and Economic Transformation 4: Industrial Competitive and Growth 5: Consumer and Corporate Regulation 6: Industrial Financing 7: Export Development, Promotion and Outward Investments 8: Inward Investment Attraction, Facilitation and After-care 9: Competition Policy and Economic Planning 10: Economic Research and Coordination Total Budget 2021/22 (R’000) Available Budget (R’000) Year-to-date Projected Expenditure (R’000) Actual Expenditure (R’000) Variance (R’000) % Variance - -1,6% 10,6% 7,6% 70 161 46 053 21 508 24 108 -2 600 -12,1% 906 262 392 713 638 446 513 549 124 897 19,6% 78 859 59 412 17 917 19 447 -1 530 9 736 573 3 414 486 6 935 074 6 322 087 612 987 -8,5% 8,8% Source: DTIC (2021a and 2021b) The main contributors to underspending had been the Industrial Financing programme with an under-expenditure of R411,9 million and the Competition Policy and Economic Planning programme with under-expenditure of R124,9 million.
Other programmes that incurred significant underspending had been the Administration programme (under-expenditure of 6 82 R25,1 million); the Export Development, Promotion and Outward Investments programme (under-expenditure of R23,8 million); and the Spatial Industrial Development and Economic Transformation programme (under-expenditure of R21,8 million).
Similarly, these programmes also incurred significant underspending in the first quarter due to the slowdown in economic activities as a result of the impact of the COVID-19 pandemic.

Expenditure in the Industrial Financing programme had been expected to peak in the second quarter, however, that had not happened.

Similar to the first quarter, there had been significant underspending in transfers and subsidies.
However, the underspending grew from R416,5 million in the first quarter to R533,7 million in the second quarter The under-expenditure on the procurement of goods and services grew from R75,9 million to R80,6 million from the first quarter to the second quarter.

As alluded to previously, this was due to the impact of the COVID-19 pandemic which had caused a slowdown in economic activities.

Depicted in the table below is the financial performance in terms of the economic classification.
Table 2: Second Quarter Expenditure by Economic Classification as at 30 September 2021 Description Current payments Compensation of employees Goods and services Transfers and subsidies Payments for capital assets Payments for financial assets Total Budget 2021/22 (R’000) 1 871 796 1 046 619 825 177 7 828 423 36 354 - 9 736 573 Available Budget (R’000) 1 142 140 545 759 596 381 2 236 330 36 023 -7 3 414 486 Year-to-date Projected Expenditure (R’000) Actual Expenditure (R’000) Variance (R’000) % Variance 805 734 496 336 309 398 6 125 754 3 586 - 6 935 074 729 656 500 860 228 796 5 592 093 331 7 6 322 087 76 078 -4 524 80 602 533 661 3 255 -7 612 987 9,4% -0,9% 26,1% 8,7% 90,8% 0,0% 8,8% Source: DTIC (2021a and 2021b) 2.2.2.2.
Third Quarter Performance Expenditure recovered in the third quarter from the slow expenditure in the first two quarters.

Projected expenditure was R8,8 million while actual expenditure was R8,5 million.

This resulted in under- expenditure being reduced from R612,9 million in the second quarter expenditure to R296,7 million in the third quarter.

The impact of COVID-19 on expenditure was reported to finally have subsided in the third quarter.
Therefore, under-expenditure in the key programmes had been significantly reduced.

The table below details third quarter expenditure by programme.
7 83 Table 3: Third Quarter Expenditure by Programme as at 31 December 2021 Programme 1: Administration 2: Trade Policy, Negotiations and Cooperation 3:Spatial Industrial Development and Economic Transformation 4: Industrial Competitive and Growth 5: Consumer and Corporate Regulation Division 6: Industrial Financing 7: Export Development, Promotion and Outward Investments 8: Inward Investment Attraction, Facilitation and After-care 9: Competition Policy and Economic Planning 10: Economic Research and Coordination Total Source: DTIC (2022) Budget 2021/22 (R’000) Available Budget (R’000) Year-to-date Projected Expenditure (R’000) Actual Expenditure (R’000) Variance (R’000) % Variance 857 651 338 401 580 707 519 250 61 457 10,6% 233 066 46 990 175 930 186 076 -10 146 - In terms of the economic classification, the recovery in expenditure was evident except in relation to the procurement of goods and services where there was still underspending of 33,8 per cent (or R175,8 million).
There had also been over-expenditure of over R3,5 million in the compensation of employees.
Table 4: Third Quarter Expenditure by Economic Classification as at 31 December 2021 Description Current payments Compensation of employees Goods and services Transfers and subsidies Payments for capital assets Payments for financial assets Total Source: DTIC (2022) Budget 2021/22 (R’000) Available Budget (R’000) 1 871 796 1 046 619 824 847 7 824 831 36 354 9 736 573 - 767 760 286 678 480 743 373 070 35 156 26 1 179 551 Year-to-date Projected Expenditure (R’000) 1 276 276 756 362 519 914 7 571 953 5 486 - 8 853 715 Actual Expenditure (R’000) 1 104 036 759 941 344 104 7 451 761 1 198 26 8 557 022 Variance (R’000) % Variance 172 240 -3 579 175 810 120 192 4 288 -26 296 693 13,5% -0,5% 33,8% 1,6% 78,2% 0,0% 3,4% 8 84 ISSUES RAISED DURING THE DELIBERATIONS The following issues relating to the performance of the DTIC were raised during the Committee’s deliberations: 3.1.
The Industrial Financing programme’s target in relation to investment leveraged: Under the Industrial Financing Programme, the DTIC had only leveraged R9,7 billion in investment against a target of R13 billion as at 31 December 2021.

The Committee enquired what factors had contributed to this target not being met.
The DTIC responded that the contraction in private sector investment remained a key concern for it given the immense downward pressure on company revenues and supply demand, brought about by the COVID-19 pandemic and the July 2021 unrest in the KwaZulu-Natal and Gauteng provinces.

This had affected enterprise confidence and commitments to investments resulting in a snowball effect across the country.
While the DTIC remained committed to discharging all of its funding obligations during the entire pandemic, it could only disburse funds when actual investment had been verified by approved private sector enterprises.

While the third quarter investment target had not been met, the cumulative target of R23 million in projected investments to be leveraged from enterprises/projects approved had been exceeded by 31 December 2021.
In this regard, R27,7 billion had been leveraged over the first three quarters of the financial year.

3.2.

Lack of uptake of the Film and TV Incentive Programme: In its presentation, the DTIC had reported that it had published a call for submission of film proposals with African local themes or stories, under the Film and TV Incentive Programme.

However, there had been no uptake in this regard.


The Committee enquired why there had been no responses, given that previous engagements the Committee had had with stakeholders highlighted the need for more local stories to be produced.

The Committee was of the view that film-making in South Africa, especially in Cape Town, is dominated by international companies, and is not convinced that there is a dearth in stories with African literary appeal.
The Cape Town film studios, being the first world-class Hollywood style film studio complex in Africa, should have been producing more films with African flair.

It was important to educate both local screenwriters and producers 9 85 to also pursue the African themes.

According to the DTIC, after publication of the call, it had engaged with local filmmakers through a webinar on the matter.

Unfortunately, and subsequently, no applications had been received from prospective filmmakers.
It had also shared the information with all the Provincial Departments of Sports, Arts and Culture, as well as Film Commissions or Entities, to encourage filmmakers to take-on this opportunity.
Furthermore, it was looking at placing the call on different advertorial platforms to create more awareness with a focus on the South African Broadcasting Corporation, as it has a broader reach and appeal in the rural areas and most other distributors are not attracted to this genre due to marginally lower revenues compared to other genres.

3.3.
3.3.

Support to enterprises under the Workplace Challenge Programme: Of the 47 enterprises supported through the Enterprise Support through Workplace Challenge Programme, the Committee requested a breakdown of how many were black-, women- and youth-owned.

In addition, what had been the impact of this support offered on township development.

Furthermore, the Committee enquired what measures were being implemented to ensure their financial sustainability and longevity.
The DTIC informed the Committee that the Workplace Challenge Programme is offered as a non- financial support intervention with the objectives of enabling participating companies to become more sustainable, enhance their productivity, compete in the global market and provide employment security through growth.

The DTIC noted that, in the second quarter, 44 of the 47 enterprises had been black-owned enterprises, while 23 and 12 had been women- and youth-owned enterprises respectively.
There had also been a total of seven enterprises supported within townships, namely four in Limpopo; two in Gauteng; and one in Eastern Cape.

In the third quarter, there had been 67 supported enterprises.

Of these, 59 had been black-owned, 33 women-owned and 18 youth-owned enterprises.

There had been a total of seven enterprises supported within Gauteng townships.

3.4.
3.4.

Special Economic Zones (SEZs) as a vehicle for job creation: Under the SEZ Programme, there are a number of investments, which are expected to create jobs.

Given the high level of unemployment, it is critical that government creates a conducive environment for business to thrive and create more sustainable jobs.

However, the Committee enquired how many actual jobs have been created.

The DTIC informed the 10 86 Committee that there were 167 operational investments located in SEZs.
These investments had generated an estimated 18 996 direct, gainful jobs as at the end of December 2021.

3.5.

Infrastructure to enable well-functioning rural SEZs: Many SEZs in rural areas are faced with infrastructure challenges, particularly in relation to water and energy supply.

Where these challenges are persistent and pervasive, investors would be discouraged from establishing in these SEZs.

The Committee enquired what measures the DTIC was implementing to address these challenges.
Furthermore, what was the progress made in addressing these challenges and attracting investment into the Nkomazi and Bojanala SEZs to facilitate job creation in the surrounding areas.

In the development of the SEZ Program, the DTIC informed the Committee that the responsible Policy Authorities were well aware of the structural deficiencies of the required infrastructure for building an industrial base that is characterised by globally competitive industrial clusters.
To this effect, the DTIC had established, among other things, a dedicated SEZ Fund that has sought to serve as a catalyst for developing pro-industrialisation platforms such as bulk infrastructure as well as top structures.

The foregoing initiative is currently being buttressed by the District Development Model, which essentially seeks to recalibrate government efforts so that the different spheres of government work toward a common vision, particularly where economic development is concerned.
Whilst government has made a concerted effort to ensure that the socio-economic impact of the SEZ Program is optimised, a few performance areas of concern have been identified.

The main area of concern has been the lacklustre investment attraction performance displayed by some SEZs, including the Nkomazi SEZ.

In an attempt to rectify the foregoing, a special technical task team (which includes Senior Managers of the DTIC) has been deployed to these SEZs.
The work of the team is supported by that of the national Project Management Unit, which has been established for the purposes of inter alia bolstering the capacity of some of these SEZs as well as improving their investment attraction record.

Since the DTIC’s intervention in the Nkomazi SEZ, there has been significant progress recorded.

Key achievements included the establishment of the entity to manage and 11 87 develop the zone; and the appointment of the board.
The current work package includes the planning and development of infrastructure.

The DTIC further noted that the proposed Bojanala SEZ, in the North West Province, had not been designated yet and was still undergoing an assessment process.

The latest proposal had been that it should initially be phased in as an Industrial Park, while simultaneously enhancing its business case and related investment pipeline.

Once this has been achieved, it would then be reconsidered for designation as an SEZ.

3.6.
3.6.

Benefits of the African Continental Free Trade Area (AfCFTA) in relation to other trading partners: The AfCFTA is intended to link the African countries into a single regional market worth about US$3,4 trillion with approximately 1,3 billion people3.

However, there is a need to ensure industrialisation and regional economic integration for this to directly benefit intra-African trade.
The Committee enquired what value the AfCFTA would create for South Africa in relation to economic development and growth in comparison to other existing trade agreements.

The DTIC noted that several preferential and free trade agreements had been concluded since the late 1990s.

These had been intended to increase South Africa’s trade with the respective partners, and also to shift the content of South African exports to include more value- added/manufactured products.
While South Africa/Southern African Customs Union’s (SACU) trade agreements with the European Union, United Kingdom and the European Free Trade Association are typical reciprocal free trade agreements (FTAs), the AfCFTA is embedded in a developmental integration framework.

Under this approach, the AfCFTA constitutes the market integration component alongside other programmes to promote industrial and infrastructure development.
This could foster potential benefits beyond market access, for example, opportunities for South African investment into manufacturing capacity and value chain integration on the continent; business opportunities in infrastructure development; and the availability of improved infrastructure that would make South African trade with the continent more cost-efficient.
3 The World Bank (2020) 12 88 In relation to Industrial Development, there has been much work at the SACU level to prepare to take advantage of the opportunities that will become available through the AfCFTA.

There has been an emphasis around value chain mapping in the following areas: Leather and Leather Products, Fruits and Vegetables, Meat and Meat Products, Textiles and Clothing, and Pharmaceuticals and Chemicals.
At the AfCFTA level, developing and concluding Rules of Origin that encourage greater levels of African production and African content in intra-African trade.

This is an essential component of the negotiating process to reduce tariffs on 90 per cent of products, as it should encourage industrial development.

Furthermore, the DTIC has initiated work at the AfCFTA on an investment protocol.
This would set a framework that should encourage greater investment into Africa in productive sectors, on products for export under the AfCFTA tariff preferences.

The protocol will thus complement the market integration framework to support industrialisation in Africa.
In conjunction with this, the AfCFTA Secretariat and African Export-Import Bank (Afreximbank) are establishing an AfCFTA Adjustment Fund to address near-term disruptions as tariff revenues are reduced and to provide funding for industrial development projects.

In this regard, the Afreximbank has mobilised a facility of US$1 billion for the development of the automotive sector, to support industrialisation in Africa.
Furthermore, the AfCFTA Council of Ministers is finalising a proposal to establish an AfCFTA Trade and Industrial Development Advisory Council.

This Council will provide policy and practical guidance to further work on industrialisation in Africa.

Currently, 98 per cent of South Africa’s exports into the Rest of Africa is by road due to poor air, maritime and rail connectivity along with other inherent supply chain deficiencies.
The International Monetary Fund and the United Nations Conference on Trade and Development claim that improving trade logistics, such as customs services, and addressing poor infrastructure could be up to four times more effective in boosting intra-African trade than tariff reductions.
Therefore, the implementation of the Programme for Infrastructure Development in Africa (PIDA) and other related initiatives (such as the North-South Corridor) is crucial to improve trade infrastructure 13 89 connectivity and enhance supply chain efficiencies between South Africa and other African countries and to capitalise on the opportunities that the AfCFTA presents.

Failure to provide logistics capacity will stifle any planned trade expansions, including the implementation of the AfCFTA.
Africa’s response to the infrastructure deficit has been comprehensive and decisive.

The continental effort is anchored by the PIDA and the various regional infrastructure master plans covering energy, Information and Communication Technology, transport (airports, ports, rail and roads) and transboundary water resources.

PIDA Priority Action Plan (PAP) 1 was comprised of 51 programmes incorporating a total of 433 projects valued at US$68 billion for the period 2010-2020.
As at the end of 2019, a total of 329 projects had been at different stages of implementation.

PIDA PAP 2 (2020-2030) was currently under development and would focus on catalysing investments into critical infrastructure along strategic corridors across Africa.

The combined estimated value of PIDA PAP 1 and PIDA PAP 2 stands at approximately US$360 billion.

3.7.
3.7.

Mergers and the risk of over-concentration: The DTIC had reported that there had been 90 notifications of mergers submitted as at 31 December 2021.

Mergers could result in more concentration in the economy and lead to higher prices impacting on consumers.

The Committee enquired whether the DTIC was implementing any measures to avoid excessive concentration of sectors in the economy.
The DTIC indicated that it was difficult to predict merger activity with certainty since merger activity was an outcome of market conditions and firm activity.

However, merger control is a tool that can prevent excessive concentration and/or mitigate negative competition or public interest impacts.

Therefore, each merger is assessed on a case by case basis and conditions are imposed where required to address competition and/or public interest concerns.
In this regard, the recent amendments to the Competition Act strengthened the Competition Commission’s enforcement capacity to reduce concentration and tackle abuse of dominance.

Furthermore, the Competition Commission had recently conducted a study which sought to deepen an understanding of the patterns of 14 90 concentration and participation in the South African economy.
The study, and other previous studies, sought to provide the basis for more strategic enforcement and policy around concentration in the economy.

3.8.

Concentration within the farming sector versus access for smaller farmers: According to the Competition Commission’s 2021 Essential Food Pricing Monitoring report, there had been a sharp decline in the number of commercial farms leading to a concentration in the market since January 2007.
This highlighted the difficulties and barriers to trade experienced by smaller farmers, which may lead to increasing prices for essential food in the future and may threaten food security.

4 The Committee enquired what remedial action has the DTIC taken to avoid continued concentration of the market and what measures have been implemented to support small-scale farmers to facilitate competition in the food market.
The DTIC reported that the Commission continues to prioritise food markets for enforcement and merger control oversight.

The recent amendments provide the basis to examine both price discrimination in inputs and buyer power on outputs that may be placing financial pressure on smaller farmers.

There have also been agreements reached with a number of merging companies that contain specific provisions to support emerging farmers and increase procurement from them.
These agreements have since been made orders of the Competition Tribunal.

In addition, the Concentration Study had proposed that there should be greater coordination across government in order to consistently address concentration which the DTIC supports.

In this regard, closer relations with the Department of Agriculture, Land Reform and Rural Development, under which agriculture falls, should be fostered.

3.9.
3.9.

Competition in the retail pharmacy sector: In relation to the retail pharmacy market, the market is currently concentrated between Dischem and Clicks, which has led to a lack of competition and an increase in prices for consumers.

The Committee enquired what mitigating measures the DTIC were implementing to address any negative pricing implications that such concentration created in the sector.
The DTIC indicated that the 4 Competition Commission (2021: 3) 15 91 sector is made up of independent pharmacies and larger groups of pharmacies.

To assess the impact of any acquisitions of independent pharmacies, the Competition Commission required that all acquisitions from Clicks and Dischem Groups be notified.
The Commission was also undertaking further research into the retail pharmacy sector to better understand the impact and some of the driving forces behind consolidation to inform both merger analysis and whether additional or alternative interventions are required.

The DTIC noted the Department of Health’s role in this regard, as pharmacies are licensed.
The Commission’s Concentration Study identified the retail pharmacy sector as one area in which there could be better coordination across Regulators and Government Departments to address growing concentration.

The DTIC had supported a call for a regulators’ forum in the Cabinet meeting where the concentration study had been presented.

3.10.
3.10.

Appropriateness of the DTIC’s key performance indicators and/or targets: There was a perception expressed that the DTIC should be shifting its key performance targets to focus on increasing investment, the lowering of the unemployment rate, the cost- competitiveness of manufacturing, and the improvement of the ease of doing business.
The Committee enquired what measures the DTIC was implementing to improve South Africa’s cost-competitiveness, such as improving the movement of containers through the Durban Port.

The DTIC advised the Committee that it has a Directorate/team through InvestSA which engages Transnet National Ports Authority to fast-track and unblock container clearances through ports.
Furthermore, InvestSA leads the Ease of Doing Business programme and has made progress on the following indicators: starting a business; dealing with construction permits; registering property; and paying taxes.

Through technical working groups, processes have been streamlined and automated.

In addition, there has been improved transparency on websites in terms of available information.

3.11.
3.11.

Delays in finalising the review of the entities’ governance framework: Under Programme 1, the review of the entities’ governance framework had not been finalised due to a shortage of resources.

The Committee requested the DTIC to clarify what the 16 92 “shortage of resources” was and what plans it had implemented to mitigate this to ensure that going forward interventions were sustainable and effective to meet the intended objectives.
The DTIC acknowledged the importance of finalising the review to ensure that key areas of governance were adequately dealt with for the 18 agencies reporting to it to function effectively.

The review was also necessary to ensure improved audit outcomes in a number of areas.

While the DTIC conceded that it had not achieved the governance framework indicator; it attributed this to resource constraints in terms of key vacancies in the area.
In this regard, the Chief Director post had been vacant since June 2019 and the Director post had been vacant since May 2019.

However, the way forward with regard to the filling of these posts would be determined through the Structure Fit for Purpose processes.

Given the importance of the review, in the interim, DTIC officials were working with the Executive team to endeavour to achieve the said performance indicator by the end of the financial.

3.12.
3.12.

Challenges faced by the Broad-based Black Economic Empowerment (B-BBEE) Commission as a trading entity: The B-BBEE Commission is currently a trading entity operating under the DTIC.

In a previous meeting, it had asserted that its challenges in relation to limited financial and human resources was impeding its ability to effectively enforce B-BBEE legislation, in particular curbing the unscrupulous practices of fronting, to achieve effective economic transformation.
The Committee enquired what remedial action was being taken to resolve these challenges.

The DTIC confirmed that the B-BBEE Commission is not a listed public entity under the Public Finance Management Act (Act No.

1 of 1999) and forms part of the DTIC’s structure under the Spatial Industrial Development and Economic Transformation programme.
Thus the DTIC provides back office support to the B-BBEE Commission in the form of its corporate services, namely financial management, supply chain management, human resource management and facilities management.

To further support the work of the Commission, a panel of researchers had been procured to provide deeper insights and analysis on compliance reports, major B-BBEE transactions, benchmarks and impact assessments.
Other outsourced services included investigative capacity, stakeholder relations and communications, as well as Corporate Governance training in eight provinces.

17 93 3.13.

Impact of under-spending on transfers and subsidies on the economy: The DTIC had an underspending of 8,7 per cent on its transfers and subsidies budget during the second quarter, particularly in relation to incentive payments (10,7 per cent) and external programmes (13,3 per cent).
This later reduced to an underspending of 1,6 per cent at the end of the third quarter.

The Committee enquired how underspending on transfers and subsidies has impacted businesses, especially in terms of the retention and creation of jobs and the impact on the broader economy.
The DTIC reported that, in the area of incentive programmes, while R3,4 billion in financial support had been disbursed to date, slower incentive disbursements had been reported in certain areas as some of the investment milestones on approved projects were being deferred by the applicants.
CONCLUSIONS Based on its deliberations, the Committee drew the following conclusions: 4.1 The Committee noted that although there had been an 85 per cent achievement in the second quarter, with six targets not met, and as a result such a decline in performance is significant.

The Committee was of the view that all the directorates concerned should work on the respective mandates to achieve maximum success.
4.2 Given the importance of industrialization to develop and grow the economy, the Committee urged the DTIC, in conjunction with relevant government departments and entities, to continue to address structural reforms needed to drive both foreign and local investment.

4.3 The Committee was of the view that Special Economic Zones are important to stimulate the economy by creating economies of scale and jobs, particularly for the surrounding areas/communities.
Therefore, the investment in infrastructure and top structures supporting these Special Economic Zones is imperative.

Much support and focus should be targeted at Special Economic Zones in rural and under-developed provinces to assist them to attract investment through the implementation of the District Development 18 94 Model.
The Committee emphasised that a seamless, inter-governmental approach across the three spheres of government was critical to ensure the success of the Special Economic Zones Programme.

4.4 The Committee urged the DTIC to accelerate the revitalisation of Industrial Parks and to ensure that this infrastructure investment is secured to ensure that they can facilitate entrepreneurial and employment opportunities in rural areas.
In the view of the Committee, this should significantly contribute to industrialisation, beneficiation and localisation imperatives.

4.5 Although the Committee welcomed that several Master Plans had been signed and agreed to, it was of the view that it would be equally important to focus on the implementation thereof and to raise awareness of their relevance in growing the economy and creating jobs.

4.6 The Committee noted with concern the continued underspending in the Industrial Financing programme.
It encouraged the DTIC to find mechanisms to reduce the time lag between the approval and disbursement of funds, such as providing non-financial support to beneficiaries to meet their disbursement requirements.

4.7 The Committee is concerned about the lack of uptake of the Film and Television Incentive Programme in terms of the call and increased support for local content.

It has observed that there is a need for funding for local content in the sector.
It further noted that it is important to raise awareness among both local screenwriters and producers that funding for local content, in particular South African stories, is available and encouraged the DTIC to continue with its efforts in this regard.

4.8 The Committee was concerned about the financial sustainability of black industrialists and implored the DTIC to ensure that non-financial support was provided to ensure the longevity of these companies.
Similarly, as mentioned above, the Black Industrialist Scheme is notably not attracting a lot of rural-based black industrialists and there is a need to mitigate such a gap.

4.9 The Committee noted the extensive work done by the DTIC and the Southern African 19 95 Customs Union Member States’ counterparts in preparing for the finalisation and implementation of the African Continental Free Trade Area.
It further noted the need for effective implementation of the industrialisation and regional economic integration programmes, which will directly benefit intra-African trade and regional development.

4.10 The Committee emphasised that while mergers may not be prevented, there is a need for the DTIC and the Competition Commission to ensure that mergers are effectively regulated to prevent over-concentration in the market.
Excessive concentration may negatively impact on consumers and create barriers to trade for smaller competitors or suppliers.

4.11 While the Committee acknowledges the administrative and other support offered by the DTIC to the Broad-based Black Economic Empowerment Commission, it remains concerned that the Commission is a trading entity rather than an independent entity.
It is of the view, that this classification inhibits the Commission’s powers and access to financial and human resources, hence its ability to execute its mandate.

APPRECIATION The Committee would like to thank the Acting Director-General of the Department of Trade, Industry, and Competition, Mr S Khan, as well as their team, for their cooperation and transparency during this process.
The Committee also wishes to thank its support staff, in particular the committee secretaries, Mr A Hermans and Mr T Madima; the researcher, Ms Z Madalane; the content advisor, Ms M Sheldon; the committee assistant, Ms Y Manakaza; and the executive secretary, Ms T Macanda, for their professional support and conscientious commitment and dedication to their work.
The Chairperson wishes to thank all Members of the Committee for their active participation during the process of engagement and deliberations and their constructive concluding remarks reflected in this report.

20 96 RECOMMENDATIONS Informed by its deliberations, the Committee recommends that the House requests that the Minister of Trade, Industry and Competition should consider developing an incentive to support the establishment of film studios in other provinces.

Report to be considered.


REFERENCES Competition Commission (2021) Essential Food Pricing Monitoring, August.

[Accessed on 8 March 2022 from https://www.compcom.co.za/wp-content/uploads/2021/09/EFPM- Report_Aug-2021.pdf].

Department of Trade, Industry, and Competition (2021a) Annual Performance Plan 2021/22.

[Accessed on 20 October 2021 from http://www.thedtic.gov.za/wp-content/uploads/DTIC- 2021-2022-Annual-Performance-Plan-March2021.pdf].
Department of Trade, Industry, and Competition (2021b) Second Quarter Report for the 2020/21 Financial Year.

Department of Trade, Industry, and Competition (2022) Third Quarter Report for the 2020/21 Financial Year.

The World Bank (2020) The African Continental Free Trade Area.

[Accessed on 16 March 2022 from https://www.worldbank.org/en/topic/trade/publication/the-african-continental-free- trade-area].

21 97 National Assembly and National Council of Provinces 1.
Report of the Select Committee on Health and Social Services, on the Protocol to the African Charter on Human and Peoples rights on the rights of persons with disabilities in Africa, in terms of Sec 231(2) of the Constitution, 1996, dated 22 March 2022.
The Select Committee on Health and Social Services, having considered the Protocol to the African Charter on Human and Peoples rights on the rights of persons with disabilities in Africa, in terms of Sec 231(2) of the Constitution, 1996, reports as follows: The Committee recommends that the Council, in terms of Section 231(2) of the Constitution, approve the said Protocol.

Report to be considered.

98