AsgiSA EC strategic review 2009 by SMG

Advisory

AsgiSA-EC: Strategy review workshop report (Final draft) 1 October 2009

Disclaimer Disclaimer This report has been prepared by KPMG Services (Pty) Ltd (“KPMG”) exclusively for the benefit, information and internal use of AsgiSA-EC for the exclusive purposes of/in order to update the five-year organisational strategy and business plan under the terms of the engagement letter dated 31 August 2009, and neither this report nor its content thereof may be used for any other purposes without KPMG’s prior written consent. All information utilised to develop this report is assumed to be correct and complete. The role of KPMG has been to facilitate the strategy review session without providing technical input into the strategy and proposals/recommendations emanating from this session. As such, this report shall not in any way constitute advice or recommendations regarding whether or not AsgiSA-EC should proceed with the proposals/recommendations associated with this report. This report may not be copied, published, quoted, referred to or disclosed by AsgiSA-EC to any other third party, without KPMG’s prior written consent. No party, other than AsgiSA-EC, may rely on this report, either in whole or in part. KPMG and/or KPMG Inc, including its directors, employees and agents, and any body or entity controlled by or owned by or associated with KPMG or KPMG Inc (collectively “KPMG”) accepts no liability or responsibility whatsoever, resulting directly or indirectly from the disclosure or referral of this report to any third party and/or the reliance of any third party upon this report or the contents thereof, either in whole or in part and AsgiSA-EC agrees to indemnify and hold KPMG harmless in this regard from and against any and all claims from any person or party whatsoever, expenses, liability, loss or damages arising from or in connection thereto.

©2009 KPMG Services (Pty) Ltd, the South African member firm of KPMG International, a Swiss cooperative. All rights reserved. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative

Contents The contacts at KPMG in connection with this report is:

Gary Simms Director Tel: 043 721 0893 Fax: 043 721 0886 Mobile: 082 469 5403 gary.simms@kpmg.co.za

Gugu Nxiweni Associate Director Tel: 041 395 1500 Fax: 041 395 1700 Mobile: 071 749 4499 gugu.nxiweni@kpmg.co.za

Pg. Executive summary

Background

Workshop approach

Working group feedback

Way forward and next steps

Presentations – Appendices A. Provincial Agriculture and Rural Development Strategic Perspective (Thandi Mbete – EC DARD) B. Eastern Cape Rural Development Strategy – implications for AsgiSA-EC (Zolile Ntshona – EC SECC) C. Mzimvubu Water Resource Development (Ingerop Agrica) D. Where are we – CEO presentation (Simpiwe Somdyala – AsgiSA-EC) E. Detailed workshop programme

Disclaimer All information utilised to develop this report is assumed to be correct and complete. The role of KPMG has been to facilitate the strategy review session without providing technical input into the strategy and proposals/recommendations emanating from this session.

Executive Summary Introduction

Emerging strategy considerations (continued) Key strategic proposals/recommendations

This report summarises the input received from participants and recommended proposals to the AsgiSA-EC Board of Directors (herein after referred to as “AsgiSA-EC BoD”)

“Special” Fund for rural development

emanating from the AsgiSA-EC strategic workshop held at the Fish River Sun on the 13th

AsgiSA-EC should establish and administer a “Special” fund which would focus on co-ordinating rural development

and 14th August 2009.

funding from private sector corporate social investments, donors and donor agencies, development funding institutions, etc.

This strategic review session was mainly driven by need to review and update the

Partnership-leverage implementation model

organisational strategy following government’s redefined priorities and renewed focus on

This model would entail strategic partnerships with other entities and the different spheres of government, to ensure that the organisation focuses on leveraging off these partnerships and not “re-invent the wheel” or duplicating effort. AsgiSA-

rural development. As part of the ongoing strategy review processes, this session was

EC would also need to ensure alignment with both provincial and national government programmes relating to rural

also held in a view to share lessons learnt from first year of operation, ensure ongoing

development.

stakeholder dialogue on the strategic direction of the organisation.

Geographic focus

The strategy session provided delegates with the opportunity to discuss the strategies that AsgiSA-EC would employ and to address the need to continue focusing its efforts on areas that have potential to impact positively on the lives of the rural communities by increasing their economic participation, creating sustainable jobs and improving their incomes, thereby directly improving rural livelihoods.

Although the initial focus was historically viewed as the Mzimvubu Development Zone, there was a view that this should be amended to cover the Eastern Cape with a focus on the previous Transkei homeland and the rural areas therein.

Nodal and cluster approach This approach was recommended as the proposed approach towards the implementation of AsgiSA-EC’s rural development mandate. The nodal approach focuses on ensuring high impact in identified “nodal” areas with the village(s) being the nucleus of a particular node. The cluster approach focuses on ensuring high impact across a number

Delegates were divided into four groups, each tasked to discuss a specific topic as depicted in the table below:

of nodes.

Building local institutional capacity

Working group

Working group focus

At the centre of the AsgiSA-EC model should be the mobilisation and building of local institutional capacity.

Working group 1

Funding models and resource mobilisation

Facilitate implementation of HIPPs

Working group 2

High Impact Priority Programmes (HIPPs) and project enablers

The role of AsgiSA-EC going forward was proposed to be centred on facilitating the implementation of the identified

Working group 3

Stakeholder mobilisation and institutional capacity

the HIPP.

Working group 4

Strategic location and organisational capacity

Niche focus

HIPPs and projects. In order to make this possible, AsgiSA-EC would need to narrow and specify their role within each of

Emerging strategy considerations

It was proposed that the niche focus of AsgiSA-EC is to play a catalytic and supportive role in rural economic development within the Eastern Cape. AsgiSA-EC must play a niche role, distinctive of other organisations (direct) but also provide support to existing organisations where necessary (indirect).

The key strategic issues emerging from the session and the working groups, which should emanate in the development of detailed proposals to the AsgiSA-EC BoD, are included in the table that follows.

Rural Development Agency With government proposing the formation of a Rural Development Agency (RDA), there was a proposal that AsgiSA-EC and ECRFC, whose mandates are more aligned to each other, merge to form the core of the Rural Development Agency. Whilst it was acknowledge that there was an existing cabinet resolution for AsgiSA-EC to be a subsidiary of ECDC, it was felt that the wider mandate of ECDC could result in AsgiSA-EC losing focus.

Background This section briefly highlights the background to the strategy review session

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Background Introduction

Expected outcomes

AsgiSA-ECâ&#x20AC;&#x2122;s strategy workshop was held at the Fish River Sun from 13 to 14 August 2009.

Management expected the following outcomes from the strategy review session:

The event is used as a platform to in assisting you with the review and re-alignment of the

strategic priorities, implementation plans and key performance indicators for AsgiSA-EC. AsgiSA-EC has to date developed and adopted an organizational strategy, five-year

Alignment of the strategy and operational plans of ASGISA-EC with provincial priorities, particularly the Rural Development Strategy

Facilitate stakeholder and expert input on the ASGISA-EC strategy

requirement of R546 million for 2009/2010 financial year and R622 million for 2010/2011

Obtain broad stakeholder consensus on the position of ASGISA-EC

financial year.

Broad stakeholder input and agreement on the 5 year strategy and focus for ASGISA-

business plan, implementation plan and balanced scorecard. Included therein is a funding

EC, HIPP focus areas and funding model

To date, AsgiSA-EC has only received a Treasury commitment for R150 million for the 2009/2010 financial year and R100 million for the 2010/2011 financial year.

Suggested solutions to address key project implementation problems.

As a result of the funding shortfall, management has embarked on a process to re-align the strategic priorities, implementation plans and key performance indicators in line with the commitment received to date. AsgiSA-EC approached KPMG and ECSECC to facilitate the reviewing and re-alignment of

Why the review The strategy review was driven by a number of considerations, including:

New term of government and redefined national and provincial priorities. This includes the renewed focus on rural development.

Review alignment with current government programmes and strategic direction

Kick-start the annual strategic review process and share lessons learnt from first year of operation

Ensure ongoing stakeholder dialogue on the strategic direction of AsgiSA-EC.

Methodology and approach This section defines the methodology and approach utilised to facilitate the strategy review session

Workshop approach Approach utilised KPMG and ECSECC were the key facilitators, with KPMG performing the lead facilitation role.

Obtain overview of national and provincial policy and strategy paradigm

More than 60 participants and stakeholders attended the two day strategy workshop held from 13 â&#x20AC;&#x201C; 14 August 2009. The output of the strategy workshop is intended to provide input into revising the existing AsgiSA-EC organisational strategy document.

Obtain input on current AsgiSA-EC strategy and HIPP programmes including key lessons learnt

Conduct group discussions and obtain input (through parallel sessions) on future strategy

Identify and highlight key emerging strategy considerations

Collate workshop inputs and recommendations

Prepare workshop output report

Close project

Detailed approach General

A detailed workshop programme was developed and utilised for the day. Refer to Annexure E for detailed programme. Participants received preparatory material outlining key information regarding the workshop, including expected outcomes and what was expected from the workshop participants.

National and provincial policy and strategy paradigm

A brief presentation was made by Ms Thandi Mbete of the Department of Rural Development (DARD) on the Provincial Agriculture and Rural Development Strategic Perspective. Thandi focused on the provincial six pillar strategy being developed and the planned institutionalised co-ordination and integration of effort. For a copy of the presentation, refer to Annexure A.

A second presentation was made by Mr Zolile Ntshone of ECSECC focusing on the implications of the provincial rural development strategy for AsgiSA-EC. For a copy of the presentation, refer to Annexure B.

Current AsgiSA-EC strategy and HIPP programmes

Ingerop Africa made a presentation to the plenary on the Mzimvubu Water Resource Development. For a copy of the presentation, refer to Annexure C.

The CEO of AsgiSA-EC, Mr Simphiwe Somdyala concluded the session with a presentation on the progress on the implementation of the current strategy. Simpiwe presented some of the highlights from the year that has passed and also highlighted key lessons learnt, including thoughts for group discussion and deliberation. For a copy of the presentation, refer to Annexure D.

Workshop approach (continued) Approach utilised

Obtain overview of national and provincial policy and strategy paradigm

Obtain input on current AsgiSA-EC strategy and HIPP programmes including key lessons learnt

Conduct group discussions and obtain input (through parallel sessions) on future strategy

Identify and highlight key emerging strategy considerations

Collate workshop inputs and recommendations

Prepare workshop output report

Close project

Detailed approach (continued) Group discussions and input on future strategy

The delegates divided themselves into four groups, with each group being tasked with discussing one of the following topics:

Funding Models and resource mobilisation (principal facilitator: Gugu Nxiweni – KPMG)

High Impact Priority Programme (HIPPs) and project enablers (principal facilitator: Gcobani Ntshanga – AsgiSA-EC, co-facilitator Garry Simms – KPMG )

Stakeholder mobilisation and institutional capacity (principal facilitator: Chuma Sangqu – AsgiSA-EC, co facilitator Siv Helen Hesjedal – ESCECC)

Strategic location and organisational capacity (principal facilitator: Luvuyo Thomas – AsgiSA-EC, co-facilitator Jacques Buchner – STBB)

The following presentations were made by the following individuals: Working group 1:

Reg Max (PWC)

Janine Baxter (AsgiSA-EC).

Working group 2:

Thukela Mashologu (AsgiSA-EC)

Working group 3:

Chuma Sangqu (AsgiSA-EC)

On Day 2, a representative from each group gave feedback to the rest of the convention, with the opportunity for other members to pose questions or add their comments.

Workshop approach (continued) Approach utilised

Obtain overview of national and provincial policy and strategy paradigm

Obtain input on current AsgiSA-EC strategy and HIPP programmes including key lessons learnt

Conduct group discussions and obtain input (through parallel sessions) on future strategy

Identify and highlight key emerging strategy considerations

Collate workshop inputs and recommendations

Prepare workshop output report

Close project

Detailed approach (continued) Key emerging strategy considerations

On Day 2, a representative from each group gave feedback to the rest of the workshop participants, with the opportunity for other members to pose questions or add their comments.

The CEO of AsgiSA-EC, Mr Simpiwe Somdyala, presented to the group the high-level emerging strategy issues. An opportunity was given to participants to give their input into this consolidated input.

Workshop input collation

KPMG and ECSECC facilitated the collation of inputs and recommendations to the future strategy.

Workshop output report

This report represents the workshop output report and was developed by KPMG with the input of ECSECC and AsgiSA-EC management.

Working group feedback This section outlines the issues raised at the different working groups and the proposals/recommendations emanating from these working groups

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Working group feedback – focus areas Working group 3: Stakeholder mobilisation and institutional capacity

Working group 1: Funding models and resource mobilisation Group focus

Group focus

This working group was requested to focus on the following areas:

Funding model for AsgiSA-EC

Approach towards stakeholder facilitation

How to mobilise resources from government

Building local institutional capacity

Best structure to support above (e.g. Eastern Cape Rural Development Fund)

Agreement on approach to be followed (e.g. Nodal and cluster approach)

Management of funds to projects

Use of extension officers and departmental linkages

Micro-financing

Private sector involvement/funding

Linkage to institutions of higher learning, including partnerships and alignment to different spheres of government.

Working group 2: High Impact Priority Programmes (HIPPs) and project enablers

Working group 4: Strategic location and organisational capacity

Group focus

This working group was requested to focus on the following areas:

Relevance of HIPPs

Agreement on / continued applicability of vision, mission

Agreement on key HIPP focus

Strategic principles going forward

HIPP targets

HIPP budgets

ST solution to legislative listing (e.g. TDRF or ECRFC) – agreement on appropriate vehicle to achieve strategic objectives

Identification of key enablers (particularly for agricultural development - Capacity development and infrastructure development)

LT strategic considerations: Long term solution for rural development in the Eastern Cape (eg. EC RDA, consolidation of PE’s, etc)

Lessons learnt and addressing these going forward

Methods and approach towards influencing shareholder

Existing Irrigation schemes and linkage to HIPPs

Concept of RDA and how AsgiSA-EC aligns/positions itself

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Working group feedback – key issues and recommendations Working group 1: Funding models and resource mobilisation Focus Area: Funding model and resource mobilisation Key issues Group participants discussed the following issues: The need to ensure that the funding model differentiates between short term and

long term funding requirements in view of the need to match funding sources with funding requirements. The need to specifically identify the role that can be played by community trusts

and local government within the AsgiSA-EC funding model. This was in view of the existence of community based structures and trusts which may have access to funding for projects situated in their respective areas, and the existence of funding from local government for specific projects within their jurisdiction.

Proposals/recommendations In line with the issues proposals/recommendations:

The need to access private sector funding and to access available private sector

financial tools. With respect to funding, private sector corporate social investment (CSI) funding, in particular from those entities who are beneficiaries of government contracts, was identified as a potential funding source that could be tapped into by AsgiSA-EC. In order to co-ordinate such CSI funding effectively, it was identified that a structure would need to be put in place. Refer to issues discussed in focus area: structures. The need for direct government funding for AsgiSA-EC operating expenditure as

opposed to relying on revenue derived from project management and administration to fund such operating expenditure.

the

group

made

the

following

Adoption of funding model with proposed/recommended changes as identified

below. −

−

The need to balance funding that is received from government and that which is

received from external funders. This was identified as something that could become a potential issue going forward if not managed properly, particularly in view of the extent of funding which may be required for the projects. In essence, the view of the group was that should external funding far outweigh government funding, such external funders could directly or indirectly influence the direction of AsgiSA-EC in a way that could affect the envisaged mandate and impact originally intended for AsgiSA-EC.

discussed,

−

Funding sources: Add local government and community trusts as a potential funding source that could be accessed for projects which are within the respective local government jurisdiction and are on communal land. When sourcing funding, AsgiSA-EC should manage the risks associated with different funders including regulatory or reporting requirements. As such, it was proposed that risk management be added as a cross cutting part of the funding model. That government should directly fund the operating expenditure of AsgiSA-EC. Although the proposed funding model included income derived from project management and administration fees, the group participants felt that the aforementioned fees should be viewed as an add-on to the proposed government funding. Operational funding includes salaries and overheads (both fixed and variable). The need to quantify the asset base being referred to within the funding model and perform a due-diligence on the TDRF.

The balance between government and external funding be maintained at a

minimum ratio of R1:R1 basis, provided that nothing would prohibit this ratio from moving favourably towards more government funding. Recapitalisation of AsgiSA-EC by government on a yearly basis taking into account

that the organisation is less likely to generate sufficient project investment returns in the short term.

The need for proper risk management processes and a funding approach which is

informed by such processes.

Working group feedback – key issues and recommendations Working group 1: Funding models and resource mobilisation Focus Area: Structures Key issues Group participants discussed the following issues: Possibility of establishing a special fund for rural development in the Eastern Cape.

Reference was made to the existence of the KwaZulu Natal (KZN) Growth Fund used to stimulate economic development within the KZN province. The need to address the impact on projects from not receiving agreed upon funding

and resources on time. This was identified as being potentially due to third party procurement delays.

Proposals/recommendations In line with the issues proposals/recommendations:

discussed,

the

group

made

the

following

Establishment of special fund – eg. rural development fund. Creating a bridging fund which should be applied in instances where there are third

party delays to providing funding and resources to AsgiSA-EC funded projects. This fund should be primarily funded from returns on project investments. Create portfolios in order to manage funding from the different funding sources. In order to ensure PFMA compliance, AsgiSA-EC would need to be pro-active and

get Provincial Treasury approval/dispensation for the above.

Working group feedback – key issues and recommendations Working group 1: Funding models and resource mobilisation Focus Area: Investments Key issues

Proposals/recommendations

Group participants discussed the following issues:

In line with the issues discussed, the group made the following proposals/recommendations: One of the proposed criteria for development investments was that of an overriding Premier/MEC directive to fund particular projects. The group identified that this Adoption of investment policy principles with proposed/recommended changes as could be viewed as possible political interference and could adversely impact on the identified below. autonomy of AsgiSA-EC. − The focus and main investment policy driver should be developmental The need to clarify whether proposed investments in technology are focused on

funding as opposed to AsgiSA-EC playing the role of a micro-lender. As a result, it was felt that the investment policy adopts a developmental funding approach linked to investments in sustainable projects.

new technology inventions or merely advancing technology. Where the focus was on investing in new inventions, how the intellectual property associated with investments in technology would be managed. − The Micro-lending vs. Development Funding debate. The group was of the opinion

that the investment policy would need to be focused on providing development funding to sustainable projects and the wording and criteria selection would need to reflect that. That rural development and in particular project infrastructure investment should

follow a commercial development approach with infrastructure investment made to enable and in some areas improve project access to markets. The need to ensure that there is no duplication of effort and that stakeholders

involved in this arena do not compete in funding projects. Ensuring that AsgiSA-EC’s own supply chain management is driven by efficient

procurement policies and procedures.

−

Shareholder compact with shareholder needs to address the issue of directives in respect of projects to be funded. AsgiSA-EC technology investments should rather focus on technology advancement and not ownership in order to avoid issues and costs related with intellectual property emanating from technology ownership. Incorporate the need for management to develop and document clearly defined exit strategies as one of the investment criteria.

AsgiSA-EC should focus on using government procurement as one of the means to

mobilising/accessing market for the projects. AsgiSA-EC should leveraging off other similar entities / entities with similar focus as

a first priority.

The need for incorporating exit criteria for project selection criteria. In this regard,

there was a view that there was best practice exit strategies available and that AsgiSA-EC should access these.

Working group feedback – key issues and recommendations Working group 2: High Impact Priority Programmes (HIPPs) and project enablers Focus areas: General Key issues

Proposals/recommendations

General Group participants discussed the following issues: Whether or not the existing HIPP projects still relevant and appropriate for AsgiSA-

In line with the issues proposals/recommendations:

discussed,

the

group

made

the

following

That all the existing HIPPs remain relevant with the primary HIPP focus being on

EC A lot of discussion focused on determining AsgiSA-EC’s role in the HIPPs and

Agriculture & Agro-processing, Forestry Development, Development and Hydro & alternative energies.

Water

Resource

whether there is any overlap or conflict with the roles, mandates and/or competencies of other Departments or entities For each of the HIPPs, AsgiSA-EC should identify other relevant mandated roleplayers and that a consultative process be followed and roles clearly established. Whether AsgiSA-EC should play a role of facilitation or implementation These roles should be agreed to ensure a co-operative approach and to create Whether the short to medium term targets for each of the HIPP KPAs should be efficiencies. revised or amended. That AsgiSA-EC’s role be considered “catalytic”, however this would require an element of both facilitation and implementation which would be determined on a project by project basis. The targets should remain as currently identified, however short to medium term

targets should be assessed in terms of realistic constraints eg. funding or capacity. Consequently shortfalls or gaps in targets would be identified for further goal setting eg. funding initiatives. Improvement of local training institutions. There is a need to look at other failed agricultural projects, and look for ways to

resuscitate them. Climate change needs to be considered during the planning stages of HIPP projects. Post-settlement support is a possible role for AsgiSA-EC, or at least a consideration

within the Province. Look at lessons learnt from other provinces and identify best practice from within

SA and outside of SA.

Working group feedback â&#x20AC;&#x201C; key issues and recommendations Working group 2: High Impact Priority Programmes (HIPPs) and project enablers Focus Area: Agriculture and Agro processing Key issues

Proposals/recommendations

General Group participants discussed the following issues: Need to consider elements of infrastructure to support these initiatives eg. roads.

In line with the issues proposals/recommendations:

discussed,

the

group

made

the

following

Need for clarification on land ownership matters.

Identify, prepare and assess business cases to government

Capacity and or skills restrictions for implementation and sustainability

Explore and formulate partnerships with local authorities

Lack of integrated planning between role players could lead to duplication or gaps.

Create a process for community facilitation / community resolution

Create programmes for awareness, training and capacity building

Enhance site assessment processes to ensure planting on productive land

Joint planning between the institutions and role-players with clear responsibilities and formulate partnerships or co-operative arrangements.

Proposals/recommendations

Dry Land Cropping Group participants discussed the following issues: Existing budgets restrictions vs. expected targets The lack of storage facilities eg. silos Input suppliers (fertilisers, seeds, chemicals) Funding commitment for infrastructure (fencing) Value Addition (requirements for processing in form milling, pack houses etc)

In line with the issues proposals/recommendations:

discussed,

the

group

made

the

following

Identify capabilities in line with budget and constraints, identify shortfalls and identify other funding sources eg. Land Bank, IDC, DBSA, etc.

Perform current and long terms needs assessments and develop business cases for funding and implementation.

Explore and formulate partnerships with key suppliers.

Determine consolidated budgeted funding amongst role-players and direct funding to AsgiSA-EC as an implementing agent, with funding ring fenced for specific purposes

Develop business cases and look for partners for joint funding on a commercial basis.

Proposals/recommendations

Irrigation and fruit production Group participants discussed the following issues: Institutional arrangements which were seen to be confusing (Trust, Producers

Assembly and Local Traditional Authorities) Infrastructure may be dilapidated Access to seedlings for citrus may only be possible by 2012 due to increased

demand. Choice of areas and crops sometimes not ideal.

In line with the issues proposals/recommendations:

discussed,

the

group

made

the

following

Government to be requested to determine and define best institutional

mechanisms for schemes Perform status quo and needs assessments and create ring fenced refurbishment

plan and investment plan Medium to long terms needs to be immediately assessed and to be assessed with

realistic available and expected supply. Thereafter AsgiSA-EC should implement a procurement plan to address the above. Market intelligence programmes to be established to determining, on a commercial

basis, realistic levels of demand and supply. Land assessment programmes would be required to determine viability and alignment with plausible and required crops to ensure maximum yields, volumes and create efficiencies.

Proposals/recommendations

Livestock Group participants discussed the following issues: Fencing and in-farm infrastructure may be poor or inappropriate

In line with the issues proposals/recommendations:

discussed,

the

group

made

the

following

Consider CASP funds

Farm roads Constraints by Land Bank loans Lack of infrastructure and enabling plant Awareness, capacity and experience of current long haul costs to abattoirs.

Identification of potential Public Private Partnerships Consider sharing of infrastructure such as loading ramps Consider partnerships with existing operators Should look at the opportunities for local abattoirs.

Working group feedback â&#x20AC;&#x201C; key issues and recommendations Working group 2: High Impact Priority Programmes (HIPPs) and project enablers Focus Area: Forestry Key issues Group participants discussed the following issues: Funding constraints and sources Post settlement support for land claimants Poor or inappropriate roads and infrastructure Competition with agricultural land Fire damage and loss, as well as the lack of facilities to deal with the aforesaid Skills development/capacity building is required

Proposals/recommendations In line with the issues proposals/recommendations:

discussed,

the

group

made

the

following

IDC should be the first source of funding Improvement of local training institutions and development of practical capacity

building and skills development programmes in line with training FIETA training objectives and mandate as required by the Skills Development Act Resolution of issues with communities (proper community facilitation) by creating

community facilitation/resolution plans and increasing awareness

Struggle with SFRA licensing

Dept Public enterprises to be discussed

Communal land and mobilisation of communities

Integrated planning initiatives, in line with the general comments, to be considered

Ports and infrastructure

in line with bilateral agreements with DAFF.

Forestry considered last area for expansion.

Working group feedback â&#x20AC;&#x201C; key issues and recommendations Working group 2: High Impact Priority Programmes (HIPPs) and project enablers Focus Area: Water Resource Development Key issues Group participants discussed the issue of duplication in planning (municipalities focus on drinking water).

Proposals/recommendations In line with the issue discussed, the group made the proposal/recommendation that the focus should be on multipurpose use of water resources (joint planning).

Working group feedback â&#x20AC;&#x201C; key issues and recommendations Working group 2: High Impact Priority Programmes (HIPPs) and project enablers Focus Area: Hydropower and alternative energies Key issues

Proposals/recommendations

Group participants discussed the potential duplication in what ELIDZ and AsgiSA-EC are In line with the issues doing. proposals/recommendations:

discussed,

the

group

made

the

following

Investigate opportunities in other areas eg. thermal energy opportunities in

Ukhahlamba AsgiSA-EC should be focusing on areas with no electricity Hydropower should be separated from the other forms of energy.

Working group feedback â&#x20AC;&#x201C; key issues and recommendations Working group 2: High Impact Priority Programmes (HIPPs) and project enablers Focus Area: Tourism Key issues Group participants discussed the following issues: This HIPP is very broad and other entities have specific mandates eg. EC Tourism

In line with the issues proposals/recommendations:

discussed,

the

group

made

the

following

Need to perform an assessment of roads and infrastructure needs and motivation of

Board. The role for AsgiSA-EC within the HIPP Perceived plans in place with other role-players, however there was a lack of

visible implementation.

needs with business plans, driven from both an economic and historical perspective. Linkages with other role-players eg. ECTB, ADM etc. AsgiSA-EC role should be a high level role focused on determining and addressing

Tourism destinations may be hampered by infrastructure matters eg. Roads. Whether or not the tourism HIPP should rather be considered as a transversal

matter in other HIPPs.

Proposals/recommendations

current gaps, ensuring mobilization of communities and facilitating or intitiating strategic partnerships. Tourism remain as a stand-alone HIPP.

Working group feedback – key issues and recommendations Working group 2: High Impact Priority Programmes (HIPPs) and project enablers Focus Area: Human settlement Key issues Group participants discussed the following issues: Question about AsgiSA-EC’s role in respect of Human Settlement and Planning

Proposals/recommendations In line with the issues discussed, the group made a proposal/recommendation of the need to further assess and redefine AsgiSA-EC’s role within this HIPP

Perhaps this HIPP is overarching rather than a specific, stand-alone HIPP Strong possibility for overlaps if not managed carefully and contradiction with legal

roles eg local authorities.

Working group feedback – key issues and recommendations Working group 3: Stakeholder mobilisation and institutional capacity Focus Area: Approaches to stakeholder management (national, provincial and regional) Key issues Group participants discussed the following issues: Involve stakeholders in decision making and project implementation Use local municipalities better for coordination of the work of stakeholders. Involve

local municipalities from the start. Key structures:

Proposals/recommendations In line with the issues proposals/recommendations:

discussed,

the

group

made

the

following

Bilateral meetings to be held urgently with identified stakeholders that responded to

the invitation to attend the strategy session. Identify political champions at Local Municipal and District Municipal level.

−Ward committees

The employment of a large cadre of social facilitators directly by AsgiSA-EC is not

−CDWs

encouraged. Long term partnerships should rather be entered into with exiting institutions that have expertise (e.g. ECATU, IDT, and DEDEA).

−Traditional leaders −Councillors

Make use of local resources for social facilitation; these can be included in the local

Engage councillors and traditional leaders together – not separately. Always engage leadership before engaging community members Stakeholder identification should take place for each project Meet all stakeholders the same time, not separately – and not once off

area committee. Identified people from community and project steering committee members can then be trained both on technical production related skills and social facilitation skills Develop guidelines for community mobilisation and organisation in AsgiSA-EC

projects.

Consider what time of the year consultation is carried out/project started, esp. due Develop exit-criteria for winding up support to a project/community that is not only

to migration, agricultural seasons etc.

based on time, but sustainability.

Recognise that social facilitation is a long process. Contracts with service providers AsgiSA-EC/RDA to have provincial reach and mandate.

should ensure sustainability. Facilitation requires great deal of flexibility, not onesize-fits-all approach.

Scope should include enterprise development, tourism, infrastructure, integrated

planning.

Top-down approaches do not function, thus there needs to be support for local

level organisations

Working group feedback – key issues and recommendations Working group 3: Stakeholder mobilisation and institutional capacity Focus Area: Building local institutional capacity Key issues Group participants discussed the following issues: Weak institutional structures at project level Projects often driven by a few individuals only Role clarification of different stakeholders

Proposals/recommendations In line with the issues proposals/recommendations:

discussed,

the

group

made

the

following

Ensure women are the core of the people trained to increase sustainability. Build local institutional capacity through work with partner organisations and the

establishment of community trusts, CPAs, coops etc.

Ensure women are the core of the people trained to increase sustainability.

However, women do not take part in the project steering committee. Tie projects Institutions that can assist with capacity development of project members: to youth development strategies. CRD (WSU) (cooperatives and social facilitation)

Participation from the onset enhances the speed of decision making

Tsolo FET College and Universities (agricultural skills) Department of Labour (when skills needs are identified) AgriSETA (agricultural skills) ASGISA-EC to support the development of a provincial cadre of Abakwezeli through

the proposed Co-operative Development Institute. These will be selected from existing institutions as well as community level (co-operatives and social facilitation) Training/support for project steering committee and local level organisations should

also include financial and administrative skills, book-keeping etc. Technical

project implementers need to be monitored by the local community/steering committee – to ensure success of projects.

There

should be medium/long term mentoring projects/communities where AsgiSA-EC is involved.

and

Social facilitators should have conflict resolution mechanisms.

Working group feedback â&#x20AC;&#x201C; key issues and recommendations Working group 3: Stakeholder mobilisation and institutional capacity Focus Area: The proposed AsgiSA-EC cooperative model Key issues Principled endorsement, but there is need to engage on the following issues: Secondary cooperative to be formed by primary cooperatives - not from the top Independence and autonomy and the principals of cooperation should for the basis

Proposals/recommendations In line with the issues proposals/recommendations:

discussed,

the

group

made

the

following

Partnership project with DEDEA to carry out audit of existing coops in target areas. Engagement with DEDEA and other entities to learn from existing and past

for the model. Voluntary participation in cooperatives and organic formation of cooperatives to

avoid past mistakes of cooperatives created by state institutions. Members should be the owners of secondary cooperative - ASGISA-EC as

approaches and initiatives for cooperative development. Legal issues about shareholding and ownership of cooperatives need to be

investigated.

shareholder? Beneficiation and profit sharing Sharing of risk and contractual agreements between primary cooperatives and

secondary coop Long term support and mentoring of primary cooperatives to ensure sustainability

and ensuring quality of produce Voluntary participation in cooperatives and organic (bottom up) formation of

cooperatives to avoid past mistakes of cooperatives created by state institutions. Payment turn-over time for produce Link to existing Agri-parks Provide link between homestead and subsistence producers and surplus

production.

Working group feedback – key issues and recommendations Working group 3: Stakeholder mobilisation and institutional capacity Focus Area: Nodal and Cluster approach Key issues In principle endorsement of the model, but engagement must take place on the following:

Proposals/recommendations The group proposed/recommended that further engagement with the model is made by partners.

Joint stakeholder engagement Linkage to IDPs Ward based planning – who drives it: ASGISA-EC or LM? Projects within nodes must be based on identified need The involvement of other sector departments Revisit the GDS projects as basis for project and cluster selection Combination of bottom-up and top down approaches to planning and development

projects

Working group feedback â&#x20AC;&#x201C; key issues and recommendations Working group 3: Stakeholder mobilisation and institutional capacity Focus Area: Linkage to institutions of higher learning Key issues

Proposals/recommendations

Group participants discussed the following issues:

In line with the issues discussed, the group made the following proposals/recommendations: Organisation should address research, development and innovation to set itself apart from other organisations. This is the area that gives a cutting edge and drives Research & Development and innovation in the rural development field as core areas future development. of ASGISA-EC should be considered, but be done in partnership with other institutions. Organisation should address research, development and innovation to set itself apart from other organisations. This is the area that gives a cutting edge and drives Higher Education Institutions used as partners in training and capacity development future development. as well as research. There could be closer linkage with HEI and research institutes for research, impacts monitoring and longitudinal studies in areas where ASGISA-EC work. This would enhance the understanding of impact at level of community and broader economy. Research & Development and innovation in the rural development field as core areas

of ASGISA-EC should be considered, but be done in partnership with other institutions. Higher Education Institutions used as partners in training and capacity development

as well as research. There could be closer linkage with HEI and research institutes for research, impacts monitoring and longitudinal studies in areas where ASGISA-EC work. This would enhance the understanding of impact at level of community and broader economy.

Working group feedback – key issues and recommendations Working group 4: Strategic location and organisational capacity Focus Area: Vision, Mission & Strategic Goals Key issues

Proposals/recommendations

The following issues are considered relevant:

In line with the issues highlighted, the following proposals/recommendations are made:

The continued relevance of the present vision and mission of AsgiSA-EC.

Once the ultimate positioning of AsgiSA-EC has been ascertained, such as when it

The group raised the immense challenges faced by AsgiSA-EC in terms of: − Adequate resource and funding levels − Wide spread geographical areas to be covered − Community readiness − Smart partnerships with public and private sector entities respectively − Effecting a balanced management approach between facilitation and delegation

of key aspects of project operations, and − Retention of core mandates such as good corporate governance, risk

management and accountability.

becomes listed or is merged with another entity, then the present vision should be looked at in the light of the given positioning. That the present mandate (geographic focus) which confines AsgiSA-EC operations

to the Mzimvubu basin and Development Zone be reviewed and extended to look at rural development broadly in the Eastern Cape, with the current area remaining a priority. AsgiSA-EC should consider a phased approach to partnerships and not to embark

on a wholesale approach with too many partnerships done during one season. Partnerships should be evaluated periodically for effectiveness in terms of agreed objectives. AsgiSA-EC should exercise full controls on expenditure and also ensure that proper

The present strategic goals were viewed as relevant and that they should be

recording, documentary and otherwise - being governance of supply chain aspects vigorously pursued. If anything, the present strategic goals should be augmented in is maintained. order to read in them, the ultimate positioning of AsgiSA-EC, which should be AsgiSA-EC should not abdicate its core role of pursuing co-ordination, integration aligned to shareholder mandate. and facilitation of platforms that are to be established, through co-ops and/or community trusts. AsgiSA-EC should consider adding to its strategic goals reference to the agrarian

transformation strategy and Rural Development strategy by government . This could possibly be along the lines of its readiness to cooperate, coordinate and align with the position of the shareholder. AsgiSA-EC should further consider adding to its strategic goals reference to its

commitment to empowering SMMEs.

Working group feedback – key issues and recommendations Working group 4: Strategic location and organisational capacity Focus Area: Institutionalisation Key issues

Proposals/recommendations

The following issues are considered relevant:

In line with the issues highlighted, the following proposals/recommendations are made:

The present AsgiSA-EC reporting lines, include reporting to:

That a social compact/social charter should be drafted in order to define clear

− AsgiSA-EC Board of Directors − Premier (OTP) − MEC Agriculture (DRAD), and − MEC Economic and Environment Affairs (DEDEA).

The group noted, however, that the above scenario obtains from the unlisted status of AsgiSA-EC and also reflects sources of its funding (except the Board). The urgent matter of listing or determination of the ultimate position of AsgiSA-EC

should be attended to. With regards to the options available, the group raised the following:

communication guidelines and obligations of parties, and should be entered into between: − Management and the Board, and − The Board, management and the shareholder. That the ECRFC route appears to be the most viable option. However, the board

should consider ring-fencing and cleaning up the projects and operations which are currently undertaken by ECRFC prior to any integration of AsgiSA-EC with ECRFC. The Board should also ensure that they follow the legislative processes should they elect to abandoned the existing cabinet resolution which introduced the ECDC option.

− That a PFMA listing application has been made by AsgiSA-EC and some That the subsidiary arrangement with ECDC should only be considered as an

conditions raised by Treasury. The group was advised that a legal opinion on the listing application had been obtained which indicated that Treasury (National and Provincial), does not have a discretion with regards to whether or not to veto the application for listing. − That there were inherent problems with the ECRFC option and that these would

require attention before any meaningful merger could take place eg. reputation. − Fears were expressed that with the ECDC subsidiary option, AsgiSA-EC could

become “a small fish in a big pond” and its mandate could get diluted. − That the Previous MEC for DOA (now DARD) had indicated that consideration

interim measure and not permanent solution due to the following concerns:

− Wider mandate of ECDC could result in AsgiSA-EC losing focus and impact − The ECRFC Act is more suited to the AsgiSA-EC mandate and strategy. That the TDRF Fund option does not provide a viable alternative in that the TDRF

Act provides only for administration of funds and consequently does not solve the listing problem which is facing AsgiSA-EC. However, the assets which are held by the TDRF could provide much needed funding for AsgiSA-EC projects. In the event that separate listing is the preferred route, AsgiSA-EC should ensure

that it complies with the conditions communicated by provincial Treasury regarding (by way of a Cabinet resolution) was given to aligning AsgiSA-EC with ECDC so AsgiSA-EC PFMA listing application. that it can become auditable. However, this consideration would now be That AsgiSA-EC should never depart from its original mandate of improving the abandoned by the shareholder. livelihoods of the rural communities and to engage vigorously on any directives − The MEC for DEDEA has indicated that consideration was to be given to an which require it to dilute its original mandate. AsgiSA-EC should also be mindful of AsgiSA-EC merger/amalgamation with an alternative `existing legal or PFMA the broader responsibilities which may be assumed with a “Rural Development listed entity. This view galvanised a previous position which was made by the Agency” eg. social facilitation. Premier to a contingent of AsgiSA-EC, which included two board members, that the merger/amalgamation of AsgiSA-EC is still going ahead. ©2007 KPMG Services (Pty) Ltd, the South African member firm of KPMG International, a Swiss cooperative. All rights reserved. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative

Working group feedback – key issues and recommendations Working group 4: Strategic location and organisational capacity Focus Area: Shareholder mobilisation Key issues The following issues are considered relevant:

Proposals/recommendations In line with the issues highlighted, the following proposals/recommendations are made:

AsgiSA-EC, like any parastatal organisation is faced with several challenges, some That a social compact/social charter should be drafted (refer to recommendation in

of them already discussed under Focus Area: Vision, Mission and strategic goals. The group further noted that there are three foremost challenges that are instantly

recognisable:

Focus Area: Institutionalisation). This approach would ensures the following: − Streamlining of communication lines between management, the Board and

shareholder

− Institutional uncertainty: refer to Focus Area: Institutionalisation − Funding: refer to working group 1 and discussion around TDRF option − Long delays in decision making by the shareholder.

− By it’s operation, it obviates delays. That management and the Board continue to strengthen their relationships through

the charter and other bilaterals.

The impact of political changes in general to the operations and long term

positioning of AsgiSA-EC.

Stakeholders present Stakeholder grouping

Details of stakeholders Ukhahlamba DM OR Tambo DM

Local and District Municipalities

Alfred Nzo DM Nyandeni Local Municipality Chris Hani DM Intsika Yethu Municipality Office of the Presidency (Policy Co-ordination and Advisory Services Unit) Dept of Agriculture Forestry and Fisheries Dept of Co-operative Governance and Traditional Affairs

Provincial and National Government Department

Department of Water Affairs and Environment Provincial Department of Local Government and Traditional affairs (EC) Provincial Treasury (EC) Provincial Department of Agriculture and Rural Development Provincial DEDEA

Stakeholders present (continued) Stakeholder grouping

Details of stakeholders Development Bank of Southern Africa ECRFC IDC ELIDZ CSIR

Public Sector Entities

Independent Development Trust (IDT) Agri Africa Ruliv Hluma Ntinga Development Agency Eastern Cape Socio-Economic Consultative Council KPMG

AsgiSA-EC Service Providers

Ingerop PWC

Other

Capespan

Way forward and next steps This section outlines the recommended way forward and road ahead for AsgiSA-EC

Way forward and next steps Road Ahead In order to update the existing five-year organisational strategy, AsgiSA-EC needs to ensure it takes this output document, through the three phases defined below in order to successfully deploy and measure the revised strategy. AsgiSA-EC should ensure the strategy is aligned to both provincial and national programmes and ensure that it incorporates performance measures, deadlines and allocate accountability for all proposal/recommendations to the AsgiSA-EC BoD. Following the fruitful participation of various stakeholders in the strategy workshop, the key critical success factor is obtaining approval from the AsgiSA-EC BoD and shareholder as defined in activity 4, based on the road map below: Activities Phase 1: Strategy review

Phase 2: Strategy refinement

Phase 3: Strategy Implementation

6 Deploy revised organisational strategy Strategy to be deployed at both project and organisational level

5 Update detailed implementation plans

A detailed implementation plan encompassing how the strategy will be governed, resourced, monitored and measured should be developed

Refine and update five-year organisational strategy and business plan AsgiSA-EC management to update five-year strategy document with approved BoD strategy proposals/ recommendations

Obtain BoD and shareholder approval for strategic proposals/ recommendations

Detailed proposals/recommendations to be tabled to BoD for approval and shareholder for ratification

Refine strategy proposals/ recommendations and develop detailed strategic initiatives

This activity needs to include developing performance measures, deadlines and an allocation of accountability

1 Conduct strategy review workshop

Completed

Involves developing and documenting the key initiatives and issues that need to be addressed

Weeks

Way forward and next steps (continued) The recommended model is

Recommended strategy development lifecycle model for AsgiSA-EC:

designed to ensure proper

In order to ensure that the AsgiSA-EC delivers according to itâ&#x20AC;&#x2122;s mandate and contributes towards the improvement of rural livelihoods, alignment to national

strategy development,

and provincial priorities and programmes is critical to the success of the organisation. The national and provincial priorities for rural development should be

implementation and

assessed to ensure the detailed AsgiSA-EC strategy is aligned to these priorities. This should form the basis of a selection criteria for focus areas for further

monitoring of the

development of the AsgiSA-EC strategy. However, nothing precludes AsgiSA-EC from pioneering new and innovative thinking within this sector and assisting

organisational strategy and

to inform government programmes and strategic decisions relating to rural development.

HIPP implementation once developed.

Input from the various stakeholders should continue to be obtained in order to develop a holistic strategy that reflects broad consensus from key stakeholders and role players, whilst obtaining their buy-in and support. This will assist in ensuring that the developed strategy is comprehensive and fully integrated across the rural development sector. Once the strategy has been aligned it should inform the HIPP focus areas, targets and implementation plans, as well as projects wherein AsgiSA-EC will be involved. Monitoring mechanisms need to be put in place to measure the success of HIPPs and ultimately the strategy developed. Strategic input

Strategy and HIPP implementation, measurement and monitoring

Strategic development

Agriculture & Agro processing

Provincial government

AsgiSA-EC

Forestry and timber

National priorities AsgiSA-EC Organisational Strategy

HIPP focus, targets and implementation plans

Infrastructure development Alternative energy

Provincial priorities Tourism

National government

Monitor achievement of government priorities

Other Stakeholders

Human settlement

DBSA

Monitor success of AsgiSA-EC Strategy

Monitor success of HIPP implementation