NYDA 2020/21 Quarter Four & 2021/22 Quarter One Performance Reports

Meeting report

Upon officially opening the virtual meeting, the Chairperson welcomed all Members of the Portfolio Committee, the Department of Women, Youth, and Persons with Disabilities (DWYPD) and the Chief Executive Officer (CEO) of the National Youth Development Agency (NYDA).

NYDA Quarter One 2021/22 and Quarter Four 2020/21 Report

Mr Waseem Carrim, the CEO of the NYDA, presented 2021/22 quarter one and the 2020/21 quarter four reports to the Portfolio Committee. He started by outlining the context of the reports by pointing out that South Africa has spent most of the month of July on Alert Level Four of the COVID-19 restrictions, which have contained the rates of infections and hospital admission, albeit with economic implications for the country – especially for industries like hospitality. He acknowledged the recent protests, particularly in the province of KwaZulu-Natal (KZN), which can be viewed from multiple dimensions, including youth unemployment and inequality – which continue to marginalise young people in South Africa.

He affirmed their welcome of the re-introduction of the Social Distress Grant, as it provides benefit to many young people. He indicated that the NYDA is currently undertaking a research study to understand how young people utilise these grants; findings will be presented to the Committee in the next sitting.

He said that the Auditor-General (AG) has completed their audit of the NYDA for 2020/21 with a clean audit outcome for the seventh consecutive year. He also outlined that the AG also conducted special audits on the NYDA’s personal protective equipment (PPE) expenditure and the Youth Microenterprise Relief Fund, which were specific COVID-19 expenditures, with no findings raised. He said that the National Treasury has allocated R11 billion for employment programmes to address the unemployment crisis. Of this, R430 million has been allocated to the NYDA, R400 million to the Youth Service Fund to support 30 000 young people, while R30 million has been allocated to NYDA Grant Programme.

Concerning Youth Month and Youth Day, he said that this year (2021) it was celebrated under the theme ‘The Year of Charlotte Maxeke: Growing youth employment for an inclusive and transformed society’. He said that this was an opportunity to reflect on the achievements of youth development in South Africa, including the major challenges that still affect young people. He highlighted that the National Pathway Network (SAYouth.Mobi), which has been zero-rated by all mobile operators, was officially launched and the Youth Explorer (MPowa application) co-funded by the Department of Science and Innovation to make it easier for young people to access economic and educational opportunities has also been launched.

He said that additional progress has been made by partners in the Pathway Management Network (PMN), with multi-stakeholder efforts led by the Department of Higher Education and Training (DHET) as well as the Department of Basic Education (DBE) underway to identify suitable exit pathways for school assistants. This includes transition efforts to ensure sustainable job opportunities for young people. He indicated that there is still a need to set up the social service and agricultural workstreams. However, they are working to pilot a pay-for-performance funding model for digital skills to create 8 000 jobs and crowd in external funding for the model. He pointed out that the NYDA is already working with the provincial governments of Gauteng and the Western Cape, including civil society on the Presidential Youth Service.

In terms of the township and rural economies, he said that they are working on several programmes with the National Business Initiative around the installation, repairing, and maintenance – building on the commitments made in the Jobs Summit.

He briefed the Committee on quarter four’s performance. In this period, the NYDA had 25 Key Performance Indicators (KPIs), of which 14 were met, one was not met, and 10 were met and exceeded. This translated to an overall achievement of 96% - which is now an audited achievement. In supporting young people to participate in the economy, 1 121 grants were given. There were 1 195 relief funds, and 4 859 youth were supported with non-financial business development interventions. He pointed out that, although the scope of the businesses they support is broad, they are transitioning towards supporting tech and digital businesses in the fourth industrial revolution. However, a majority of the supported sectors were service (33%), manufacturing (17%), business consultancy (17%), tourism (17%) and marketing (16%). He added that the majority of the youth supported were in the 26-30 age range (49%), followed by 31-35 age group (42%) and nine percent in the 21-25 age group. This translated to 52% male beneficiaries, 46% females, and two percent persons with disabilities. All provinces received grant disbursements, but most of the relief grants were dispersed in the Eastern Cape and KZN, with a majority directed to the service and tourism sectors. About 43% of females-owned enterprises received the relief fund and males received the other 53%. The spatial distribution of the relief fund was majorly in Gauteng (50%) and the Western Cape (17%) with the lowest amounts in Northern Cape (one percent) and North West provinces (one percent).

Job placements are mainly in services and retail, government, non-profit organisation, services, and media, respectively. Young people between the ages of 26-30 (44%) have more placements, followed by those 21-25 years (37%), 31-35 years (16%), and 18-20 (3%), who are majority female compared to males. He said that the North West had the highest placement (15%) while other provinces ranged between 10% – 11%.

He then briefed the Committee of quarter one’s (2021/2022) performance. He said that there were 22 KPIs, with a 63% achievement target. Two targets were met and exceeded, three were met, and three were not met. A total 231 Grants and 24 Relief Funds were disbursed to services, agriculture, hospitality, manufacturing, retail, construction, consultancy, engineering and information and communications technology (ICT) - with a majority of the grants being in the service sector (44%) and geographically situated in the Gauteng province. Job placement varies between the sectors. The jobs programme placement analysis showed 51% females and 49% males, with a retention of 90%.

He indicated that the NYDA remains committed to the Disability Strategy to be implemented in all branches, to create an enabling environment for the full participation of youth with disabilities by partnering with the South African Blind Youth Organisation (SABYO) in organising a virtual session with 80 young blind people.

2020/21 Fourth Quarter Financial Reports

NYDA’s CFO, Mr Thami Mkhwanazi, indicated that the budget for the financial year 2020/2021 was R542 million, but due to cuts related to COVID-19, it was reduced to R407 million, and this took effect from 01 July 2020. There was a further in-year cut of R14.8 million in October 2020. The overall spending is 98% as of the end of March. Employee costs were at 100%, compared to year-to-date budget; donor funding spend at 99% of the budget; COVID-19 expenditure for the year is R1.5 million. of which R77 000 was spent in the fourth quarter.

He pointed out that the budget for the first quarter for the financial year 2021/2022 was approved at R507 million. The first tranche of the grant was received on 31 May 2020. Interest income for quarter one was R242 000, which is expected to increase in the next quarter. Quarter one actual spending is R103 million, which is 81% compared to the year-to-date budget, and 20% compared to the annual budget. Employee costs were at 97% compared to the year-to-date budget, with donor funding spend being at 16% of the budget. COVID-19 expenditure in the first quarter is R358 000, and it was made up of sanitisers and branded cloth masks.

[See the presentation for further details]

After the presentation of the CEO and CFO, the Chairperson requested Dr R Hlagala, Chief Director: Youth Development, DWYPD, to comment regarding the monitoring of what the departments are doing.

She indicated that the DWYPD has set up monitoring and evaluation mechanisms to evaluate each of the programmes. She indicated that her Department is supporting the NYDA in ensuring the submission of the Integrated Youth Development Strategy and presented to the Cabinet

Discussion

The Chairperson opened the floor for the Members to ask questions, following the presentations.

Ms C Phiri (ANC) applauded the good work done by the NYDA, and for the entity not having any financial misconduct from quarter one. She wanted to know if there were any statistics on how the NYDA encouraged young people to get vaccinated. What were the tangible results of the Memorandum of Understanding (MoU) in promoting accountability?

In moving the NYDA’s internship allocation from two years to three years, what happens to the young people after the three-year period, in ensuring that they attain decent employment? What are the NYDA’s plans for young people to venture into the Special Economic Zones (SEZs) Projects? Out of the young people who have been funded, what are the statistics of those who have been employed?

The Chairperson indicated that a breakdown of the statistics had been requested from the NYDA and should have already been shared with all the Members.

Ms F Masiko (ANC) commended the work done by the NYDA and keeping the organisation afloat despite the board not being functional for quite some time. Given that there have been vacancies on the board, how then did the NYDA spend 100% on employee costs in the fourth quarter of the 2021 financial year?

What are the key lessons the NYDA had learned on the impact of COVID-19 on its total operations? Is the NYDA was planning to offer support to businesses owned by young people who have been affected by the recent unrest in KZN and Gauteng? What progress has been made on the issue of supporting start-ups of youth-owned enterprises? What has been the uptake of the SAYouth.Mobi and the Youth Explorer in terms of accessibility, especially for youth in rural areas? What progress had been made in dealing with the Information and Communications Technology (ICT) challenges for the NYDA’s Voucher Programme? Has the NYDA come forth to assist young people concerning the support by the Sanitary Dignity Programme so that young people, especially young women, benefit from the offspring of the programme? Does the NYDA have a plan to encourage young people to get the COVID-19 vaccine?

Ms T Masondo (ANC) asked what progress had been made by the NYDA since its last report to the Committee in quarter two, regarding the release of State’s land, training of youth in agriculture and funding of youth enterprises in agriculture. Has the NYDA linked with the national disability machinery and the Presidential Working Group on Disability? Have all the targets in the third quarter been achieved in the fourth quarter, including the outstanding targets in the financial year 2020/2021? What lessons can be learned from the impact of COVID-19 in the NYDA’s operations? What is the status of the National Youth Policy (NYP) 2030 and the NYDA Amendment Act?

Ms N Sharif (DA) congratulated the NYDA for reaching most of their targets, including having corrective measures for each of their targets. She wanted to know if the CEO of the NYDA felt supported by the DWYPD. How does the CEO take the Democratic Alliance’s (DA) recommendation for the NYDA to work with the Department of Agriculture in terms of the new green economy? Does the NYDA know the businesses affected by the unrest in KZN and Gauteng, and how has that affected its operations?  

Mr S Ngcobo (DA), concerning young people with disabilities, wanted to know which organisations the NYDA has partnered with and what criteria was used in identifying them. How was the Disability Strategy different from the one the DWYPD had developed? Has it been linked with the national disability machinery? What has the role of the Department been in the development of this Strategy?

Mr L Mphithi (DA) asked for the list of stakeholders that the NYDA has a Memoranda of Understanding (MoU’s) with, including how these benefit young people. What are the plans for cultivating the network base of young entrepreneurs? What was the feedback on the allegations of the NYDA’s website being hacked? What was the Department’s plan on the recent data published by Stats SA, on high youth unemployment?  

Ms A Hlongo (ANC) asked how far was the process of getting NYDA offices to all local municipalities.

Ms P Sonti (EFF) wanted to know how the Department could make sure that the young people are accommodated in the job opportunities in all the provinces. How many of the funded youth enterprises were affected by the unrest in the KZN and Gauteng? What key lessons could be learned from the impact of COVID-19 on the NYDA’s operations? Of the youth and women-owned companies, what was the average assistance offered per company due to COVID-19?

Responses

Mr Carrim thanked the Members for their questions and inputs, and he added that the questions always help the NYDA to move forward.

Concerning the Agency’s leading efforts to encourage young people to get vaccinated, Mr Carrim indicated that they noted that, for unvaccinated youth, there are two categories: those sceptical of the vaccine, and those who are unsure and need more information. Therefore, the NYDA’s focus has been to prepare internal and external stakeholders to showcase those that have been vaccinated, to provide testimonials through YouTube, webinars, the NYDA’s website, and posters. This has been a joint effort with the Government Communication and Information System (GCIS) and the Department of Health, to raise awareness on vaccination. For example, they have a ‘Facebook Friday’, where they invite young doctors to answer young people’s questions about the vaccine. They are also running an internal raffle competition for staff, where they send their pictures of getting vaccinated for a R500 prize; this campaign has also been extended to young people for them stand a chance win data bundles. The NYDA has also, among other things, introduced a buddy transport to vaccination sites for young people.

Mr Carrim responded to the question about the MoUs. He highlighted that a MoU is not considered part of the targets if it is not committed to addressing the issues affecting young people. The CEO also indicated that he was happy to disclose the list of agreements and what they entail for young people.

He commented on the issues of the length of the internships by pointing out that these programmes were useful for young people. This is because internships generally tend to be short, thus lengthening them does have a certain degree of benefit in providing a level of practical experience. He indicated that they have lobbied with their partners to ensure that young people are matched with good roles so that they attain quality experience and mentorship during the internships. However, in terms of permanent jobs, the CEO highlighted that such required a broader measurement beyond the NYDA, as the economy must grow above three percent for more young people to be absorbed into permanent positions after their internship.

Responding to Ms Masiko’s question on the 100% spend over employee costs, he said that originally, the NYDA had a budget of about R540 million and there were cuts from the National Treasury to the entire budget, while many of the Agency’s donors refused their donor commitments due to COVID-19. Therefore, to incorporate those cuts, the NYDA requested and obtained permission from the National Treasury to use the portion of the employee-cost initially allocated to the board to absorb the budget cuts. Hence the cost of compensation was transferred to goods and services.

He responded to the question about the impact of COVID-19 on the Agency’s operations, indicating that the Agency used technology to its advantage, as his staff was working remotely throughout the lockdown period. He also acknowledged issues of internet access for young people during this time.

Concerning the recent unrest, he highlighted that the NYDA established the Youth Enterprise Rebuilding Fund limited to the provinces of Gauteng and KZN as a response to the unrest in the provinces, with 62 applications in the KZN province and 25 in Gauteng; Sixty of the overall applications met the criteria for the fund. He assured the Members that the list of beneficiaries will be published by the end of September 2021.  

The CEO said that SA Youth had 1.4 million young people signed up, and the recent statistics showed that over 370 000 had found placement opportunities through the platform.

Concerning the ICT challenges faced by the NYDA, he said that the Agency operates multiple legacy systems, such as grants, vouchers, and training systems that must be integrated. And in July 2021, the Agency managed to merge these systems. The annual license fee for the voucher system was about R300 000, but when the Agency requested an extension from the provider while integrating the systems. However, the service provider suddenly more than doubled the cost to R800 000 a year. This, according to the CEO, was a form of exploitation; the NYDA refused to make the payment and thus had to integrate the manual system, which resulted in some problems.

On the sanitary dignity question, he responded that the Agency had not partnered with the Department about that. However, he indicated that he will reach out to the Department to contact the relevant unit dealing with the matter. He also indicated his pleasure with the young people that the Agency has supported in manufacturing sanitary dignity towels.

Responding to the question about agricultural partnerships and involvement, he indicated that, since the last report, there were 539 new enterprises through the Department of Agriculture, the DWYPD, and the NYDA.

There was only one unmet target in the previous financial year, and there are a few unmet in the first quarter of the current financial year. However, he assured the Committee that, as the country recovers from the impact of COVID-19, more targets will be met.

To the question about the NYDA’s relationship with the DWYPD, he pointed out that there is a great deal of support with a great working relationship – particularly from the office of the DG – including the raising of the additional funding from the National Treasury of R430 million, which could have not been achieved without this relationship. He further indicated that the Cannabis Masterplan was approved, led by the Department of Agriculture, with the NYDA also participating in the process.

He confirmed that there were disability organisations they have partnered with such as Blind SA, Disabled People South Africa and their affiliated groups. The CEO indicated the Agency had not consulted with the Presidential Disability Group, but he assured the Members that this will be done before the next appearance before the Committee.

In terms of market linkages, he agreed on the important role they are to play together with the Small Enterprise Development Agency (SEDA).

He then said that he does not think that the NYDA’s website has been hacked.

Concerning the statistics on youth unemployment, he indicated that he is in discussion with the Presidency around the responsible departments for responding to youth employment and unemployment. He indicated that he saw it important to have a joint statement from the NYDA, together with the Department of Women, Youth and Persons with Disabilities as well as the Department of Employment and Labour, around responding to the Stats SA report.

On the question by Ms Hlongo on expanding the NYDA’s offices to all municipalities, he said that they have expanded their services. However, due to COVID-19, the view of stakeholders, especially the National Treasury and the Office of the Presidency, recommended that the NYDA should not open more offices. But services should be rendered online and through multiple sites that are already available, instead of setting up new infrastructure.

Responding to Ms Sonti, on the companies that benefited from youth employment programmes, he indicated that a comprehensive list had already been shared with the Members. He further indicated that, in the number of youth-owned enterprises, the Agency measured both the grants and the relief fund, including the number of jobs or programmes created and sustained. For the first quarter, it was 1 500 created and sustained through the NYDA’s programmes, while in the previous financial year it was 8 500 jobs.

The CEO thanked all Members. The Chairperson gave the CFO the time to respond.

The CFO briefly re-emphasised the CEO’s response on the employee costs and its link with the in-year budget cuts.

The Chairperson gave Dr Hlangala the chance to further respond.

On the question of the status of the National Youth Policy, Dr Hlangala indicated that it had been approved and, as per the policy, the NYDA had therefore developed the integrated youth development strategy, which would be processed to the Cabinet clusters for approval. She said that the Department is also improving its online reporting system so that different government departments can report progress on what they are doing in developing and empowering young people.  

Regarding the NYDA Amendment Act, she indicated that they had extended the consultation period. They have consulted with all the stakeholders, and they will present the NYDA Amendment to Cabinet via the clusters. In responding to the unemployment rate, she indicated that the Department is working with the NYDA and the Presidency, including other partners such as the DEL, to respond to these issues.

There were no follow-up questions.

The meeting was adjourned.