AsgiSA EC strategic review 2009

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Includes an overview of the process and recommendations of the Eastern Cape's special purpose vehicle for rural development which initially focuses on the former Transkei and more specifically, Mzimvubu

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AsgiSA-EC:

Strategy review workshop report (Final draft)

1�October�2009

Advisory

1©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

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.

2©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

E.��Detailed�workshop�programme

D.��Where�are�we�– CEO�presentation�(Simpiwe�Somdyala�– AsgiSA-EC)

C.��Mzimvubu�Water�Resource�Development�(Ingerop Agrica)

B.��Eastern�Cape�Rural�Development�Strategy�– implications�for�AsgiSA-EC�(Zolile

Ntshona – EC�SECC)

A.��Provincial�Agriculture�and�Rural�Development�Strategic�Perspective�(Thandi�Mbete

– EC�DARD)

Presentations – Appendices

10Working group feedback

4Background

35Way forward and next steps

3Executive summary

6Workshop approach

Pg.

Contents

The�contacts�at�KPMG�

in�connection�with�this�

report�is:

Gary SimmsDirector

Tel: 043�721�0893

Fax: 043�721�0886�

Mobile:�082�469�5403

gary.simms@kpmg.co.za

Gugu NxiweniAssociate Director

Tel:���041�395�1500

Fax:��041�395�1700�

Mobile:�071�749�4499

gugu.nxiweni@kpmg.co.za

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.

3©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

Executive Summary

Introduction

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”)�

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

and�14th�August�2009.

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

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

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

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

stakeholder�dialogue�on�the�strategic�direction�of�the�organisation.

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.

Delegates�were�divided�into�four�groups,�each�tasked�to�discuss�a�specific�topic�as�

depicted�in�the�table�below:

Emerging strategy considerations

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.

Strategic�location�and�organisational�capacityWorking�group�4

Stakeholder�mobilisation�and�institutional�capacityWorking�group�3

High�Impact�Priority�Programmes�(HIPPs)�and�project�enablersWorking�group�2

Funding�models�and�resource�mobilisationWorking�group�1

Working group focusWorking group

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.

Niche focus

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).

Facilitate implementation of HIPPs

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

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

the�HIPP.

Building local institutional capacity

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

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�

of�nodes.

Geographic focus

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.

Partnership-leverage implementation model

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-

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

development.

“Special” Fund for rural development

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

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

etc.�

Key strategic proposals/recommendations

Emerging strategy considerations (continued)

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KPMG�International,�a�Swiss�cooperative

Background

This�section�briefly�highlights�the�background�to�the�strategy�review�

session

5©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

Background

Introduction

AsgiSA-EC’s�strategy�workshop�was�held�at�the�Fish�River�Sun�from�13�to�14 August�2009.�

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�

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

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

financial�year.��

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.��

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.

Expected outcomes

Management�expected�the�following�outcomes�from�the�strategy�review�session:

� 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

� Obtain�broad�stakeholder�consensus�on�the�position�of�ASGISA-EC

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

EC,�HIPP�focus�areas�and�funding�model

� Suggested�solutions�to�address�key�project�implementation�problems.

6©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

Methodology and approach

This�section�defines�the�methodology�and�approach�utilised�to�facilitate�

the�strategy�review�session

7©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

Workshop approach

KPMG�and�ECSECC�were�

the�key�facilitators,�with�

KPMG�performing�the�lead�

facilitation�role.

More�than�60�participants�

and�stakeholders�attended�

the�two�day�strategy�

workshop�held�from�13�– 14�

August�2009.

The�output�of�the�strategy�

workshop�is�intended�to�

provide�input�into�revising�

the�existing�AsgiSA-EC�

organisational�strategy�

document.

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.

Detailed approach

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

8©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�cooperative8

Workshop 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.

Detailed 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

9©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

Workshop 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.

Detailed 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

10©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

This�section�outlines�the�issues�raised�at�the�different�working groups�and�

the�proposals/recommendations�emanating�from�these�working�groups

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KPMG�International,�a�Swiss�cooperative

Working group feedback – focus areas

Working group 3: Stakeholder mobilisation and institutional capacity

Group focus

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

� Approach�towards�stakeholder�facilitation

� Building�local�institutional�capacity

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

� Use�of�extension�officers�and�departmental�linkages

� Linkage�to�institutions�of�higher�learning,�including�partnerships�and�alignment�

to�different�spheres�of�government.

Group focus

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

� Funding�model�for�AsgiSA-EC

� How�to�mobilise�resources�from�government

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

� Management�of�funds�to�projects

� Micro-financing

� Private�sector�involvement/funding

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

Group focus

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

� Relevance�of�HIPPs

� Agreement�on�key�HIPP�focus

� HIPP�targets

� HIPP�budgets

� Identification�of�key�enablers�(particularly�for�agricultural�development�- Capacity�

development�and�infrastructure�development)

� Lessons�learnt�and�addressing�these�going�forward

� Existing�Irrigation�schemes�and�linkage�to�HIPPs

Working group 1: Funding models and resource mobilisation

Working group 4: Strategic location and organisational capacity

Group focus

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

� Agreement�on�/�continued�applicability�of�vision,�mission�

� Strategic�principles�going�forward

� ST�solution�to�legislative�listing�(e.g.�TDRF�or�ECRFC)�– agreement�on�

appropriate�vehicle�to�achieve�strategic�objectives

� LT�strategic�considerations:�Long�term�solution�for�rural�development�in�the�

Eastern�Cape�(eg.�EC�RDA,�consolidation�of�PE’s,�etc)�

� Methods�and�approach�towards�influencing�shareholder

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

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KPMG�International,�a�Swiss�cooperative

Working group feedback – key issues and recommendations

Proposals/recommendationsKey issues

Focus Area: Funding model and resource mobilisation

Working group 1: Funding models and resource mobilisation

In� line� with� the� issues� discussed,� the� group� made� the� following�

proposals/recommendations:

� Adoption� of� funding� model� with� proposed/recommended� changes� as� identified�

below.

− 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.

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.

� 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.

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

informed�by�such�processes.

13©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

Proposals/recommendationsKey issues

Focus Area: Structures

Working group 1: Funding models and resource mobilisation

In� line� with� the� issues� discussed,� the� group� made� the� following�

proposals/recommendations:

� 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.

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.

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KPMG�International,�a�Swiss�cooperative

Working group feedback – key issues and recommendations

Proposals/recommendationsKey issues

Focus Area: Investments

Working group 1: Funding models and resource mobilisation

In� line� with� the� issues� discussed,� the� group� made� the� following�

proposals/recommendations:

� Adoption�of� investment�policy�principles�with�proposed/recommended�changes�as�

identified�below.

− The� focus� and� main� investment� policy� driver� should� be� developmental�

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.

− 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.

Group�participants�discussed�the�following�issues:

� 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�

could�be�viewed�as�possible�political�interference�and�could�adversely�impact�on�the�

autonomy�of�AsgiSA-EC.

� The� need� to� clarify�whether� proposed� investments� in� technology� are� focused� on�

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.

� 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.

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KPMG�International,�a�Swiss�cooperative

Working group feedback – key issues and recommendations

Focus areas: General

General

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

In� line� with� the� issues� discussed,� the� group� made� the� following�

proposals/recommendations:

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

Agriculture� &� Agro-processing,� Forestry� Development,� Water� Resource�

Development�and�Hydro�&�alternative�energies.

� For� each� of� the� HIPPs,� AsgiSA-EC� should� identify� other� relevant� mandated� role-

players� and� that� a� consultative� process� be� followed� and� roles� clearly� established.�

These� roles� should� be� agreed� to� ensure� a� co-operative� approach� and� to� create�

efficiencies.

� 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.

Group�participants�discussed�the�following�issues:

� Whether�or�not�the�existing�HIPP�projects�still�relevant�and�appropriate�for�AsgiSA-

EC

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

whether� there� is� any� overlap� or� conflict� with� the� roles,� mandates� and/or�

competencies�of�other�Departments�or�entities

� Whether�AsgiSA-EC�should�play�a�role�of�facilitation�or�implementation

� Whether�the�short�to�medium�term�targets�for�each�of�the�HIPP�KPAs�should�be�

revised�or�amended.

Proposals/recommendationsKey issues

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KPMG�International,�a�Swiss�cooperative

Working group feedback – key issues and recommendations

Focus Area: Agriculture and Agro processing

General

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

In� line� with� the� issues� discussed,� the� group� made� the� following�

proposals/recommendations:

� Identify,�prepare�and�assess�business�cases�to�government

� Explore�and�formulate�partnerships�with�local�authorities

� 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.

Group�participants�discussed�the�following�issues:

� Need�to�consider�elements�of�infrastructure�to�support�these�initiatives�eg.�roads.

� Need�for�clarification�on�land�ownership�matters.

� Capacity�and�or�skills�restrictions�for�implementation�and�sustainability

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

Proposals/recommendationsKey issues

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KPMG�International,�a�Swiss�cooperative

Working group feedback – key issues and recommendations

In� line� with� the� issues� discussed,� the� group� made� the� following�

proposals/recommendations:

� 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.

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)

Focus Area: Agriculture and Agro processing (continued)

Dry Land Cropping

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

Proposals/recommendationsKey issues

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KPMG�International,�a�Swiss�cooperative

Working group feedback – key issues and recommendations

Focus Area: Agriculture and Agro processing (continued)

In� line� with� the� issues� discussed,� the� group� made� the� following�

proposals/recommendations:

� 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.

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.

Irrigation and fruit production

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

Proposals/recommendationsKey issues

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KPMG�International,�a�Swiss�cooperative

Working group feedback – key issues and recommendations

Focus Area: Agriculture and Agro processing (continued)

Livestock

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

In� line� with� the� issues� discussed,� the� group� made� the� following�

proposals/recommendations:

� Consider�CASP�funds

� 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.

Group�participants�discussed�the�following�issues:

� Fencing�and�in-farm�infrastructure�may�be�poor�or�inappropriate

� Farm�roads

� Constraints�by�Land�Bank�loans

� Lack�of�infrastructure�and�enabling�plant

� Awareness,�capacity�and�experience�of�current�long�haul�costs�to abattoirs.

Proposals/recommendationsKey issues

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KPMG�International,�a�Swiss�cooperative

Working group feedback – key issues and recommendations

Focus Area: Forestry

In� line� with� the� issues� discussed,� the� group� made� the� following�

proposals/recommendations:

� 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

� Dept�Public�enterprises�to�be�discussed

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

in�line�with�bilateral�agreements�with�DAFF.

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

� Struggle�with�SFRA�licensing

� Communal�land�and�mobilisation�of�communities

� Ports�and�infrastructure

� Forestry�considered�last�area�for�expansion.

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

Proposals/recommendationsKey issues

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KPMG�International,�a�Swiss�cooperative

Working group feedback – key issues and recommendations

Proposals/recommendationsKey issues

Focus Area: Water Resource Development

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).

Group�participants�discussed�the�issue�of�duplication�in�planning�(municipalities�focus�

on�drinking�water).

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

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KPMG�International,�a�Swiss�cooperative

Working group feedback – key issues and recommendations

Proposals/recommendationsKey issues

Focus Area: Hydropower and alternative energies

In� line� with� the� issues� discussed,� the� group� made� the� following�

proposals/recommendations:

� 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.

Group�participants�discussed�the�potential duplication�in�what�ELIDZ�and�AsgiSA-EC�are�

doing.

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

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KPMG�International,�a�Swiss�cooperative

Working group feedback – key issues and recommendations

Focus Area: Tourism

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

In� line� with� the� issues� discussed,� the� group� made� the� following�

proposals/recommendations:

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

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�

current� gaps,� ensuring� mobilization� of� communities� and� facilitating� or� intitiating

strategic�partnerships.

� Tourism�remain�as�a�stand-alone�HIPP.

Group�participants�discussed�the�following�issues:

� This�HIPP�is�very�broad�and�other�entities�have�specific�mandates�eg.�EC�Tourism�

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.

� 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/recommendationsKey issues

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KPMG�International,�a�Swiss�cooperative

Working group feedback – key issues and recommendations

Focus Area: Human settlement

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

Group�participants�discussed�the�following�issues:

� Question�about�AsgiSA-EC’s�role�in�respect�of�Human�Settlement�and�Planning

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

Proposals/recommendationsKey issues

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KPMG�International,�a�Swiss�cooperative

Working group feedback – key issues and recommendations

Focus Area: Approaches to stakeholder management (national, provincial and regional)

Working group 3: Stakeholder mobilisation and institutional capacity

In� line� with� the� issues� discussed,� the� group� made� the� following�

proposals/recommendations:

� 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.�

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

encouraged.� Long� term� partnerships� should� rather� be� entered� into with� exiting�

institutions�that�have�expertise�(e.g.�ECATU,�IDT,�and�DEDEA).�

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

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.�

� Develop�exit-criteria�for�winding�up�support�to�a�project/community�that� is�not�only�

based�on�time,�but�sustainability.�

� AsgiSA-EC/RDA�to�have�provincial�reach�and�mandate.�

� Scope� should� include� enterprise� development,� tourism,� infrastructure,� integrated�

planning.�

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:

−Ward�committees�

−CDWs

−Traditional�leaders�

−Councillors

� 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

� Consider�what�time�of�the�year�consultation�is�carried�out/project�started,�esp.�due�

to�migration,�agricultural�seasons�etc.

� Recognise�that�social�facilitation�is�a�long�process.�Contracts�with�service�providers�

should�ensure�sustainability.� Facilitation� requires�great� deal� of� flexibility,� not�one-

size-fits-all�approach.

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

level�organisations

Proposals/recommendationsKey issues

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KPMG�International,�a�Swiss�cooperative

Working group feedback – key issues and recommendations

Focus Area: Building local institutional capacity

Working group 3: Stakeholder mobilisation and institutional capacity

In� line� with� the� issues� discussed,� the� group� made� the� following�

proposals/recommendations:

� 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.�

� Institutions�that�can�assist�with�capacity�development�of�project�members:�

�CRD�(WSU)�(cooperatives�and�social�facilitation)�

�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� and� follow� up� of�

projects/communities�where�AsgiSA-EC�is�involved.

� Social�facilitators�should�have�conflict�resolution�mechanisms.

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

� 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�

to�youth�development�strategies.

� Participation�from�the�onset�enhances�the�speed�of�decision�making

Proposals/recommendationsKey issues

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KPMG�International,�a�Swiss�cooperative

Working group feedback – key issues and recommendations

Focus Area: The proposed AsgiSA-EC cooperative model

Working group 3: Stakeholder mobilisation and institutional capacity

In� line� with� the� issues� discussed,� the� group� made� the� following�

proposals/recommendations:

� 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�

approaches�and�initiatives�for�cooperative�development.

� Legal� issues� about� shareholding� and� ownership� of� cooperatives� need� to� be�

investigated.�

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�

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�

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.

Proposals/recommendationsKey issues

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KPMG�International,�a�Swiss�cooperative

Working group feedback – key issues and recommendations

Focus Area: Nodal and Cluster approach

Working group 3: Stakeholder mobilisation and institutional capacity

The�group�proposed/recommended�that�further�engagement�with�the�model�is�made�by�

partners.

In�principle�endorsement�of�the�model,�but�engagement�must�take�place�on�the�

following:

� 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

Proposals/recommendationsKey issues

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KPMG�International,�a�Swiss�cooperative

Working group feedback – key issues and recommendations

Focus Area: Linkage to institutions of higher learning

Working group 3: Stakeholder mobilisation and institutional capacity

In� line� with� the� issues� discussed,� the� group� made� the� following�

proposals/recommendations:

� 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.

� 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.

Group�participants�discussed�the�following�issues:

� 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�

future�development.

� 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�

future�development.

Proposals/recommendationsKey issues

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KPMG�International,�a�Swiss�cooperative

Working group feedback – key issues and recommendations

Focus Area: Vision, Mission & Strategic Goals

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

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

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�

recording,�documentary�and�otherwise�- being�governance�of�supply�chain�aspects�-

is�maintained.

� AsgiSA-EC� should� not� abdicate� its� core� role� of� pursuing� co-ordination,� integration�

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.

The�following�issues�are�considered�relevant:

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

� 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.

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

vigorously�pursued.��If�anything,�the�present�strategic�goals�should�be�augmented�in�

order� to� read� in� them,� the� ultimate� positioning� of� AsgiSA-EC,� which� should� be�

aligned�to�shareholder�mandate.

Working group 4: Strategic location and organisational capacity

Proposals/recommendationsKey issues

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KPMG�International,�a�Swiss�cooperative

Working group feedback – key issues and recommendations

Focus Area: Institutionalisation

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

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

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� the� subsidiary� arrangement� with� ECDC� should� only� be� considered� as� an�

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�

AsgiSA-EC�PFMA�listing�application.

� That� AsgiSA-EC� should� never� depart� from� its� original� mandate� of� improving� the�

livelihoods� of� the� rural� communities� and� to� engage� vigorously� on any� directives�

which�require�it�to�dilute�its�original�mandate.��AsgiSA-EC�should�also�be�mindful�of�

the� broader� responsibilities� which� may� be� assumed� with� a� “Rural� Development�

Agency” eg.�social�facilitation.

The�following�issues�are�considered�relevant:

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

− 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:

− That� a� PFMA� listing� application� has� been� made� by� AsgiSA-EC� and� some�

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�

(by�way�of�a�Cabinet�resolution)�was�given�to�aligning�AsgiSA-EC�with�ECDC�so�

that� it� can� become� auditable.� � However,� this� consideration� would now� be�

abandoned�by�the�shareholder.�

− The�MEC� for� DEDEA� has� indicated� that� consideration� was� to� be� given� to� an�

AsgiSA-EC� merger/amalgamation� with� an� alternative� `existing� legal� or� PFMA�

listed�entity.��This�view�galvanised�a�previous�position�which�was�made�by�the�

Premier�to�a�contingent�of�AsgiSA-EC,�which�included�two�board�members,�that�

the�merger/amalgamation�of�AsgiSA-EC�is�still�going�ahead.

Working group 4: Strategic location and organisational capacity

Proposals/recommendationsKey issues

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KPMG�International,�a�Swiss�cooperative

Working group feedback – key issues and recommendations

Focus Area: Shareholder mobilisation

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

� That�a�social�compact/social�charter�should�be�drafted�(refer�to recommendation�in�

Focus�Area:�Institutionalisation).��This�approach�would�ensures�the�following:

− Streamlining� of� communication� lines� between� management,� the� Board� and�

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�following�issues�are�considered�relevant:

� AsgiSA-EC,� like�any�parastatal�organisation� is�faced�with�several�challenges,�some�

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:

− 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.

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

positioning�of�AsgiSA-EC.

Working group 4: Strategic location and organisational capacity

Proposals/recommendationsKey issues

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KPMG�International,�a�Swiss�cooperative

Stakeholders present

Details of stakeholdersStakeholder grouping

� 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

� 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

� Ukhahlamba�DM

� OR�Tambo�DM

� Alfred�Nzo DM

� Nyandeni Local�Municipality

� Chris�Hani�DM

� Intsika Yethu Municipality

Provincial�and�National�Government�Department

Local�and�District�Municipalities

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KPMG�International,�a�Swiss�cooperative

Stakeholders present (continued)

� CapespanOther

Details of stakeholdersStakeholder grouping

� KPMG

� Ingerop

� PWC

� Development�Bank�of�Southern�Africa

� ECRFC

� IDC

� ELIDZ

� CSIR

� Independent�Development�Trust�(IDT)

� Agri Africa

� Ruliv

� Hluma

� Ntinga Development�Agency

� Eastern�Cape�Socio-Economic�Consultative�Council

AsgiSA-EC�Service�Providers

Public�Sector�Entities

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KPMG�International,�a�Swiss�cooperative

Way forward and next steps

This�section�outlines�the�recommended�way�forward�and�road�ahead for�

AsgiSA-EC

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KPMG�International,�a�Swiss�cooperative

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:

Conduct strategy

review workshop

Refine strategy

proposals/

recommendations and

develop detailed

strategic initiatives

Obtain BoD and

shareholder approval for

strategic proposals/

recommendations

Refine�and�update�five-year�

organisational�strategy�and�

business�plan

Update�detailed�

implementation�plans

Deploy�revised�organisational�

strategy

Phase 1: Strategy review Phase 2: Strategy refinement Phase 3: Strategy Implementation

Weeks

Activities

1

2

3

4

5

6

1 3 6 10 13 16

Completed

Detailed�

proposals/recommendations�to�

be�tabled�to�BoD for�approval�and�

shareholder�for�ratification

Involves�developing�and�

documenting�the�key�initiatives�

and�issues�that�need�to�be�

addressed

This�activity�needs�to�include�

developing�performance�

measures,�deadlines�and�an�

allocation�of�accountability

AsgiSA-EC�management�to�update�

five-year�strategy�document�with�

approved�BoD strategy�proposals/�

recommendations

A�detailed�implementation�plan�

encompassing�how�the�strategy�

will�be�governed,�resourced,�

monitored�and�measured�should�

be�developed

Strategy�to�be�deployed�

at�both�project�and�

organisational�level

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KPMG�International,�a�Swiss�cooperative

The�recommended�model�is�

designed�to�ensure�proper�

strategy�development,�

implementation�and�

monitoring�of�the�

organisational�strategy�and�

HIPP�implementation�once�

developed.

Recommended strategy development lifecycle model for AsgiSA-EC:

In�order�to�ensure�that�the�AsgiSA-EC�delivers�according�to�it’s�mandate�and�contributes�towards�the�improvement�of�rural�livelihoods,�alignment�to�national�

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

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�

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

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

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.

National�priorities

AsgiSA-EC�Organisational�

Strategy

Provincial

government

National�

government

Other�

StakeholdersDBSA

HIPP�focus,�targets�and�

implementation�plans

Agriculture�&�

Agro�processing

Forestry�and�timber

Infrastructure�

development

Alternative�energy

Tourism

Human�settlement

Monitor�success�of�AsgiSA-EC�Strategy Monitor�success�of�HIPP�implementationMonitor�achievement�of�

government�priorities

Strategic input Strategic developmentStrategy and HIPP implementation,

measurement and monitoring

AsgiSA-EC

Provincial�priorities

Way forward and next steps (continued)

Recommended