President Cyril Ramaphosa oral replies in the National Council of Provinces
11 September 2018
QUESTION: Youth Employment Service Programme
The Youth Employment Service initiative was conceptualised as a partnership between government, labour, civil society and the private sector.
Launched in March this year, the initiative aims to provide meaningful work experience for young people on a scale that will have a significant and lasting impact on employment, on the economy and on broader society.
It aims to develop the skills and capabilities of young people.
It is one of the ways through which the social partners are working to provide pathways for young people into the world of work.
Participating youth will be placed in corporate workplaces, in small and medium-sized enterprises, or in a number of community hubs that will create new micro-enterprises.
The initiative complements existing government internship programmes such as the Public Service Graduate Recruitment Scheme, which was launched recently to attract the best graduates into the public service.
The private sector, as part of the YES initiative, will ensure placements occur within all sectors of the economy.
Big businesses will also facilitate the placement of young people in small, medium and micro-sized enterprises within their supply chain.
A not-for-profit entity has been set up by the private sector to manage the day-to-day coordination of YES.
A website portal called yes4youth has been launched.
This platform allows young people to register for placement opportunities.
Over the past few months, the YES initiative and the relevant government departments have been putting in place administrative and regulatory mechanisms to implement the initiative.
A YES Hub has been launched in Tembisa in Gauteng, offering training on Microsoft, financial literacy, hospitality, as well as demonstrations on urban farming.
The YES initiative is determined to demonstrate the power of collective action in tackling youth unemployment.
I thank you.
QUESTION : Implementation of the process of lifestyle audit
I have directed the Director-General in the Presidency to lead the process of establishing the nature, form and scale of lifestyle audits of members of the Executive and those who occupy positions of responsibility.
A Technical Task Team has been established consisting of the Presidency, Auditor-General, South African Police Service, South African Revenue Service, State Security Agency, Anti-Corruption Task Team, Office of the Public Service Commission and Financial Intelligence Centre.
Various options are currently being considered for the implementation of the audit, with a view to developing a sustainable model that is consistent with our Bill of Rights and relevant legislation.
The Technical Task Team is expected to provide a set of recommendations for consideration by the President by the end of October 2018.
This will enable me to further apply my mind and will provide an oportunity for further consultation before a final decision is reached on the nature, form and scale of the proposed lifestyle audits.
The lifestyle audits will further strengthen our system of financial declarations for the Executive and public servants.
Currently, members of the Executive make declarations annually to Parliament and to the Secretary of Cabinet, while senior officials and officials in supply chain management make annual submissions to the Public Service Commission.
The lifestyle audits would be in addition to the work done by various law enforcement agencies, which continually monitor the lifestyles of those suspected to be engaging in corruption, fraud and other criminal activities.
The Asset Forfeiture Unit, for example, continues to seize the proceeds of crime from suspected or convicted individuals.
The Financial Intelligence Centre follows illegal financial flows on a daily basis, while the South African Revenue Service is holding tax evaders to account.
The Anti-Corruption Task Team reported that in the last financial year, 345 people were arrested for corruption and corruption-related offences and 250 were convicted.
These achievements demonstrate that government is hard at work, fighting corruption and fraud.
We have no doubt that the lifestyle audits will contribute significantly in defeating corruption and the abuse of public resources for private gain.
I thank you.
QUESTION: Governance of state-owned enterprises (SOEs)
Since the State of the Nation Address in February, government has taken decisive steps to address the severe financial, operational, governance and structural challenges facing our state owned enterprises.
We have worked to strengthen governance by changing the Board appointment process to ensure that people with expertise, experience and integrity are appointed.
The appointment of new boards at strategic SOEs like Eskom, Transnet and Denel has done much to improve confidence and create conditions for operational and financial recovery.
Several of these boards have undertaken measures to uncover corrupt activities and hold those responsible to account.
We are changing the way that SOEs have been working by ensuring that Board members are not directly involved in procurement responsibilities, and strengthening audit processes by working with the Auditor-General as an external auditor.
In April 2018, we authorised the Special Investigating Unit to probe allegations of malfeasance, fraud and corruption in Eskom and Transnet.
Will soon be able to make announcements about progress in SIU investigations and civil recoveries that can be immediately pursued against wrongdoers.
Government continues to support investigations by law enforcement agencies, National Treasury and the Commission of Inquiry into State Capture into the affairs of SOEs.
All these efforts will culminate in the referral of all relevant matters for criminal prosecution and civil recoveries.
By undertaking these measures, we are improving the capacity of SOEs to contribute to the country’s developmental agenda.
Several SOEs are critical to the functioning of the economy, and therefore make a direct contribution to growth, employment creation and transformation.
We cannot restore our economy to health unless we restore SOEs like Eskom, Transnet and Prasa to health.
We are working to ensure that SOEs support black industrialists through dedicated funding and transparent preferential procurement.
State owned enterprises are encouraged to source supplementary funding for developmental initiatives through options such as public private partnerships, government incentive programmes, international donor funding and an empowerment dividend, which is where the shareholder allows the entity to retain dividends to specifically finance a developmental mandate.
The Private Sector Participation Framework, which was approved by government in 2016, aims to accelerate the delivery of infrastructure projects that are key for enabling economic growth through leveraged financing with the private sector.
Government is committed to cost the SOEs’ developmental mandates more explicitly, with the financial implications to be set out more clearly in shareholder compacts.
The commercial and developmental mandates of SOEs are being aligned to the imperative for accelerated and inclusive growth and the reduction of poverty and unemployment.
I thank you.
QUESTION: Land Reform Programme
There is increasing consensus among individuals and organisations – both within the country and internationally – that accelerated land reform is essential for inclusive growth and development.
There is broad support for government’s position that the measures required to effect land reform must be guided by the Constitution, must affirm the rule of law, must enhance the property rights of all South Africans and should not undermine the economy, agricultural output or food security.
We have no reason to believe that any country would impose sanctions on South Africa for any actions that we take that are constitutional, lawful and consistent with international law.
I discussed the issue of land reform with UK Prime Minister Theresa May during her working visit to South Africa on 28 August.
She welcomed the way in which we are approaching the land issue, and understood that land reform could unlock further investment opportunities, as long as it remained legal and transparent and was the product of a democratic process.
No communication was received by my office from the government of the United States of America regarding the expropriation of land without compensation.
However, the Department of International Relations and Cooperation did meet with the Charge d’Affaires of the United States Embassy on 23 August 2018 regarding comments made on Twitter by US President Donald Trump.
The Charge d’Affaires was urged to convey to the Government of the United States, South Africa’s deep concern and to point out that the people of South Africa, of all races, are working together through Parliament and other legal platforms to find a solution to this historic challenge.
South Africa remains ready and willing to engage with any country or international organisation on its approach to land reform.
I thank you.
QUESTION : Loan Conditions attached to ESKOM and Transnet
It is not unusual for state owned entities to raise funding in the market for things like capital investment or operating costs.
They do so in accordance with standard commercial arrangements.
Eskom recently entered into a loan agreement with the China Development Bank for $2.5 billion – approximately R33 billion – which will be used to fund the construction of Kusile Power Station.
This is the third tranche of a $5 billion facility that was approved by the Ministers of Finance and Public Enterprises in 2015.
The facility has a grace period of five years and thereafter the principal amount is repayable by Eskom in 20 instalments over a period of 10 years.
There are no specific conditions for this loan.
Eskom has indicated it will not be able to make the loan agreement public since it contains information that may put Eskom at a disadvantage when negotiating in the market.
The China Development Bank facility is more competitive than the global market rate.
The loan is government guaranteed under the existing Government Guarantee Framework Agreement.
Among other things, this means that no Eskom assets have been used as security for the loan, and the China Development Bank is not entitled to any direct or indirect ownership of Eskom assets.
Transnet recently secured a R4 billion loan from the Industrial and Commercial Bank of China, not from the China Development Bank.
The loan came with terms and conditions that are standard for this type of loan.
The funds will be used to finance the general operating activities and certain capital expenditure of Transnet.
Transnet will be responsible for paying the interest and repaying the capital.
The facility is a five-year, rand denominated, quarterly amortising loan, at a floating and competitive interest rate.
I thank you.
QUESTION: Recent remarks by the President of the United States of America (USA) on Land Reform process.
As indicated in an earlier reply, the Department of International Relations and Cooperation met with the Charge d’Affaires of the United States Embassy on 23 August 2018 regarding comments made on Twitter by President Trump with regard to South Africa’s land reform process.
The Minister of International Relations and Cooperation is also in communication with her counterpart, Secretary of State Michael Pompeo, in this regard.
The Department handed over an Aide Memoire to the United Sates Embassy, which said that:
- South Africa is following a consultative process in addressing the issue of land and agrarian reform; and that it will not allow land grabs and anarchy in the process of finding a solution to the land issue.
- The current process of engagement and consultation with all stakeholders is meant to find solutions that are in the best interest of the country, the economy and the people of South Africa.
- Government has consistently indicated that this process will be undertaken within the confines of the Constitution and in a manner that grows the economy, ensures food security, and increases agricultural production.
South Africa has good political, economic and trade relations with the United States of America and diplomatic channels remain open to provide clarity on any issue of mutual interest, including land reform.
I thank you.
Issued by The Presidency, 11 September 2018