Annual Report
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2019/20 Annual Report ECRDA AR 2020 | PG 1 For attention: Honourable Nomakhosazana Meth Member of the Executive Council for the Department of Rural Development and Agrarian Reform. The Board has the honour of submitting the Annual Report of the Eastern Cape Rural Development Agency (ECRDA) for the period 01 April 2019 to 31 March 2020. _____________________ Ms Lulama Nare Chairperson of the Board Registered Name Eastern Cape Rural Development Agency Physical Address Infi nity Place, 14 St Helena, Beacon Bay Contact Number 043 703 6300 Email [email protected] Website www.ecrda.co.za External Auditors AGSA Company Secretary Frank Botha PR329/2019 ISBN: 978-0-621-48833-3 PG 2 / ECRDA AR 2020 ECRDA AR 2020 | PG 3 EASTERN CAPE RURAL PART A PART A: GENERAL INFORMATION DEVELOPMENT AGENCY /10 GENERAL INFORMATION 1. ECRDA Information 11 2. Strategic Overview 12 3. Organisational Structure 14 4. Statement of responsibility 15 ABBREVIATIONS 5. Chairperson Foreword 18 6. Chief Executive Offi cer Overview 24 7. Chief Financial Offi cer Overview 32 AFS Annual Financial Statements PART B: PERFORMANCE INFORMATION APP Annual Performance Plan PART B /36 1. Auditors Report: Predetermined Objectives 37 ARDA Agrarian Research and Development Agency PERFORMANCE 2. Situational Analysis 37 ASGISA Accelerated Shared Growth Initiative of South Africa INFORMATION 3. Performance Information by Programme 38 BRP Business Rescue Process CEO Chief Executive Offi cer DAFF Department of Agriculture, Forestry and Fisheries PART C: GOVERNANCE DRDAR Department of Rural Development and Agrarian Reform PART C /44 1. Introduction 45 DRDLR Department of Rural Development and Land Reform GOVERNANCE 2. Portfolio Committees 45 EC Eastern Cape 3. Executive Authority 45 ECDC Eastern Cape Development Corporation 4. Accounting Authority 46 5. Risk Management 51 ECRDA Eastern Cape Rural Development Agency 6. Internal Audit 51 ECRFC Eastern Cape Rural Finance Corporation 7. Internal Audit and Audit Committee 52 8. Compliance with laws and regulations 52 EIA Environmental Impact Assessment 9. Fraud and Corruption 52 GRAP Generally Recognised Accounting Practice 10. Minimising Confl ict of Interest 52 GDP Gross Domestic Product 11. Code of Conduct 53 12. Health Safety and Environmental Issues 53 HA Hectare 13. Company / Board Secretary 53 HIPPs High Impact Priority Projects 14. Social Responsibility 53 HOD Head of Department HR Human Resources PART D: HUMAN RESOURCE MANAGEMENT IDC Industrial Development Corporation IOD Institute of Directors 1. Introduction 55 2. Human Resource Oversight Statistics 58 IT Information Technology PART D /54 2.1. Personnel Cost by Programme 58 MEC Member of the Executive Council HUMAN RESOURCE 2.2. Personnel cost by salary band 58 MoU Memorandum of Understanding MANAGEMENT 2.3. Performance Rewards 59 2.4. Training Costs 60 NDP National Development Plan 2.5. Employment and Vacancies 60 PDP Provincial Development Plan 2.6. Employment Changes 62 PFMA Public Finance Management Act 2.7. Reasons for staff leaving 62 2.8. Labour Relations: Misconduct and disciplinary action 63 PSC Project Steering Committee 2.9. Equity Target and Employment Equity Status 64 RED Rural Enterprise Development Hubs SALGA South African Local Government Association PART E: FINANCIAL INFORMATION SCM Supply Chain Management UFH University of Fort Hare PART E /66 1. Report of the Audit Committee 69 UJ University of Johannesburg FINANCIAL 2. Report of the External Auditor 71 3. Annual Financial Statements 76 UNISA University of South Africa INFORMATION PG 4 / ECRDA AR 2020 ECRDA AR 2020 | PG 5 OPERATIONAL HIGHLIGHTS 2019/20 AUDIT OPINION UNQUALIFIED BUDGET ALLOCATION LIVESTOCK DEVELOPMENT R168 566 million BUDGET ALLOCATION: PROJECT FUNDING R1 million for irrigation R129 651 million for projects system at Zigudu Feedlot STIMULUS FUND: Additional R4,29 million for Zigudu, AGRO-PROCESSING Mqanduli and Ncora feedlots BUDGET ALLOCATION: R15,382 million for project Project Sales and Revenue implementation LIVESTOCK SALES 210 cattle sold at the three feedlots SALES REVENUE: R2, 415 million LIVESTOCK Average PRICE R11 500 MQANDULI RED HUB: R1,4 million CATTLE COSTS: NCORA RED HUB: R1,2 million 60 cattle procured for Zigudu MBIZANA RED HUB: R1,2 million and Mqanduli feedlots for R588 000 EMALAHLENI RED HUB: R1,5 million CATTLE TRAILERS: TSHABO FLORA RED HUB: R9,5 million 3 cattle trailers bought for the three BUDGET USE: feedlots for R223 000 Employee costs • Plant holding facility • Erection of a boundary fence Two tractors with implements • Two shipping containers Tools and equipment • Bush clearing and contour flattening Land preparation • Delivery of plant rootstock • Professional fees. PG 6 / ECRDA AR 2020 ECRDA AR 2020 | PG 7 FORESTRY DEVELOPMENT RURAL FINANCE BUDGET ALLOCATION: LOAN APPROVALS: R1,650 million for maintenance and R6,266 million to 117 clients siviculture at Gqukunqa, Izinini, Mkambathi, Sinawo LOAN DISBURSEMENTS: R5,1 million to 94 clients and Sixhotyeni LOAN SPLIT SIVICULTURAL ACTIVITIES: Agricultural 39% 1,403ha of sivicultural activities (R1,982 million or 39%) SAPPI DONATION: SAPPI donation of seedlings worth R349,661 Non-agricultural loans R3,116 million or 61%) 61% TIMBER SALES Sinawo GEOGRAPHIC SPREAD: PLANTING (R5,5 million) 84ha at Karoo R2,160 million Mkambathi Amathole R1,446 million and Sinawo Alfred Nzo R1,322 million TIMBER SALES OR Tambo R92, 717 Mkambathi Chris Hani R67,255 (R2,4 million) Nelson Mandela Bay R10,000 JOBS: 74 81 Youth Women LOAN COLLECTIONS: 234 jobs created at Sinawo, R2,253 million Izinini, Mkambathi, Gqukunqa and Sixhotyeni BUSINESS SUPPORT AND YOUTH & WOMEN JOBS: SOCIAL FACILITATION 74 youth jobs & 81 women. BUDGET ALLOCATION: R265 000 TRAINING support at RED Hubs and at village clusters and nodes 10 Tsomo community members received computer literacy training 10 Tsomo community members were assisted to receive their drivers’ licences PG 8 / ECRDA AR 2020 ECRDA AR 2020 | PG 9 ABOUT THE ECRDA The Eastern Cape Rural Development Agency (ECRDA) is a Schedule 3C entity in terms of the Public Finance Management Act (PFMA). It was established as a result of a merger between two public entities, namely, the Eastern Cape Rural Finance Corporation (ECRFC) and AsgiSA-Eastern Cape (Pty) Ltd. ECRDA has a dedicated fo- cus on formulating, promoting and ensuring the implementation of a comprehensive integrated rural development strategy for the Eastern Cape Province. Legislative Mandate The White Paper for Agrarian Transformation in the Eastern Cape confi rms the vision for rural development that is articulated in the national Integrated Sustainable Rural Development Strategy (ISRDS) namely: “sus- tainable growth and development for improved quality of life”. This vision is elaborated as follows, “to attain socially cohesive and stable communities with viable institutions, sustainable economies and universal access to social amenities, able to attract skilled and knowledgeable people, equipped to contribute to their own and the nation’s growth and development.” In practice, this means rural communities having access to quality physical, social and economic infrastructure; land and other natural resources becoming viable assets in the hands of the rural poor; indigenous knowledge and cultural value systems being harnessed for human and social development; a vibrant arts and cultural life; and rural communities having access to information, communication and technology. In essence rural communities must be involved in a process of regeneration and there should be no obstacles to the full development of human potential. This vision serves to inspire us to work tirelessly towards transformed rural areas that are socially and economically Part A developed, as well as establishing an institutional environment conducive to rural development. ABOUT THE ECRDA PG 10 / ECRDA AR 2020 ECRDA AR 2020 | PG 11 STRATEGIC OVERVIEW Vision A vibrant and sustainable rural economy that improves the livelihoods of rural communities within the Eastern Cape. Mission ECRDA aims to drive, coordinate and facilitate implementation of integrated high impact programmes of rural development and agrarian reform in the Eastern Cape by forming Policy Mandate partnerships with rural communities, the private sector and other public sector organisa- Section 3 of the Eastern Cape Rural Finance • Acting as the governments’ agent for per- tions with the main objective of building a vibrant and sustainable rural economy. Corporation Amendment Act 2012, pro- forming any development-related tasks vides the legislative mandate of the ECRDA and responsibilities that the government which is the following objectives and powers considers may be more efficiently or ef- The objects of the corporation are to pro- fectively performed by a corporate entity Legislative and other Mandates mote, support and facilitate rural develop- • Driving and coordinating integrated pro- ment in the Province by - grammes of rural development, land re- LEGISLATIVE FRAMEWORK • Mobilising financial resources and provid- form and agrarian transformation in the ing financial and supportive services to Province The Agency is impacted upon by the following legislation with which there has to persons domiciled, ordinarily resident or • Project managing rural development inter- be alignment, compliance and consistency. These include, but are not limited to, the carrying on business within the Province. ventions in the Province following: • Promoting and encouraging private sector • Promoting applied research and innova-