Centralizing Government Procurement

We’ve been reading recently about the huge sums of money spent by different cabinet Ministers in President Zuma’s government on luxury vehicles. Two points need to be made on this matter, the first point is that we seem to only read about the cabinet Ministers, but what about Deputy Minsters Provincial Premiers, Provincial MEC’s and the Mayors? The second and most critical point to be made on this matter is one relating to centralized procurement. President Zuma ought to effect a policy where the procurement of vehicles for all government officials (not just pool cars) is centralized such that one government unit is tasked with negotiating the price of vehicles and procures such vehicles in bulk. It would appear from the reports we read in the media that each Minister seems to have made his/her own arrangements regarding the type of car and the car specifications. Imagine the savings government would achieve on bulk purchasing of cars for all senior government officials, across all levels of government. Of course this idea of centralized procurement ought to be considered and applied across other services which government utilises from time to time such as mobile telecommunication services, air travel services etc. This is by no means to say I want the lowest quality for our government officials, I simply want the best service at the lowest price possible and this can only be achieved through a centralised procurement regime.

MTBPS: not so good news!

Two things stand out from Minister Pravin Gordhan’s mid-term budget policy statement (MTBPS) which he delivered to parliament on 27 Oct. The first element is the fact that for the first time in many years, our government is going to borrow money to supplement the projected budget deficit. Minister Gordhan expect SARS to raise 5% less (R34 billion) in taxes than what was communicated in the budget speech of February 2009. Coupled with this reduction in government revenues, is an increase in government expenditure as compared to the 2008/9 fiscus. These factors combined mean a budget deficit equivalent to 7.6% of the expected GDP, hence the need for borrowing. Reducing government departments’ budget to ensure that government expenditure falls within the expected revenue sounds like an obvious solution to the problem however, South Africa is a country which still requires a lot of government intervention in terms of infrastructure and human development, as such reducing expenditure would have a long-term negative social impact. Other than borrowing, the only thing Minister Gordhan could hope for is that the economy turns to a point where more people become employed and thereby increasing the overall tax base.

Poor GDP Projected

This brings me to the second element which stood out from the MTBPS which is that the Minister is projecting a 1.9% contraction in GDP by the end of 2009. This contraction in GDP puts paid to any hopes that enough jobs could be created by the end of the year to boost government’s revenue from taxes. Interestingly, revenue generated from customers and excise duties is expected to decline and the direct effect of this is that less funds will flow to the Southern African Customs Union members. Small countries such as Lesotho and Swaziland who rely so heavily on the SACU revenue will be hit very hard indeed. This lends a certain level of truth to the belief that when South Africa sneezes the rest of Southern Africa catches the flu.

What if SA Gov was run like GovSA Ltd! – Part 2

Famous American social anthropologist, Margaret Mead once said this about the role of government in society: “never depend upon institutions or government to solve any problem. All social movements are founded by, guided by, motivated and seen through by the passion of individuals.” While Mead is more famous for her contribution to the sexual revolution of the 1960’s than she is for her contribution to political theory, her statement sounds a very pertinent warning, which is that on their own, governments have an inherent limitation to act effectively in the interest of the citizens. This limitation in exacerbated by the fact that at the heart of every government and the President Zuma-led government is not different, is politics and the struggle for the control of power. James Madison even warns that, “the essence of Government is power; and power, lodged as it must be in human hands, will ever be liable to abuse” While this may make governments sound like monsters, it simply means that for governments to gain legitimacy and to dispel any mistrust in the eyes of its citizens, governments must be seen to be accountable and responsible. Group CEO Zuma’s policies, which can otherwise be termed value propositions, must clearly outline the value that GovSA Ltd intends to add to the lives of the people at the end of his current four-year term and what measures he intends putting in place to deal with those who abuse the power he as Group CEO has entrusted unto them.

GovSA Ltd’s Value Proposition

All companies must have a value proposition which seeks to define the unique benefits that will be built into the products and services they put on offer. Every compelling value proposition starts with a thorough segmentation, meaning GovSA Ltd would have to do a detailed segmentation of the SA market, looking at both the citizens and the general population. The business intelligence department (Stats SA) ought to serve as a major source of information necessary to achieving this segmentation, providing such critical information as the changing size of our population, gender split of the population, income levels of the population, among many other dimensions .

GovSA Ltd must also have a clear value proposition defining how it intends to package and deliver services to its customers, the citizens and the general population of South Africa. Each division of GovSA Ltd ought to design a specific value proposition based on the overall vision that is yet to be defined by the Group CEO, which vision in turn should be guided by the overall plan as defined by the Strategic Planning division (so far only a green paper on what the role of this division will play has been put to Parliament). Over and above the definition of the service offering, other key elements of the value propositions of the different divisions of GovSA Ltd would include the nature of the after-sales service which GovSA Ltd wishes to offer. Another critical element of the value proposition relates to pricing, i.e. is GovSA Ltd intending to offer its services at a low cost or charge a premium. Additional considerations for the value proposition relate to the distribution of the services themselves, or put differently, the ease with which the customers (citizens and the population in general) can access the services offered by GovSA Ltd. If one were to do a swot-analysis of President Zuma’s government, service delivery and policing would arguably feature at the top of the list of weaknesses, among a list of many other weaknesses. High levels of crime and HIV/AIDS would be high on the list of threats currently facing our country, among the many other threats.

Service Delivery

President Zuma would therefore have to put his Group CEO hat on in an effort to come up with a value proposition regarding both service delivery and policing. Most of the services delivered by government usually have a price tag thus, once the value proposition regarding service delivery has been defined, it must be very clear to the general population that the value they stand to derive from buying these services somehow is equal to or ideally, exceeds the cost involved in purchasing those services. Ultimately service delivery depends on the quality of people’s skills & attitude as well as the infrastructure and technology used to deliver those services. Key to government’s success towards effective service delivery, is that it must put its citizens first therefore the South African government’s philosophy of “Batho Pele – People First” seems to be inspired by government’s desire to put its citizens first. A study titled “Integrating Service Delivery Across Levels of Government: Case Studies of Canada and Other Countries” co-authored by Professors J. Roy and J Langford found that there are “two trends driving a global demand to integrate the delivery of citizen-oriented services across levels of government. First, government agencies are adopting a citizen-centric philosophy in the delivery of their services because they see better outcomes and because technological advances make it easier to do. And second, governments, nonprofits, and the private sector are all increasingly using collaborative networks across organizational and political boundaries to do business because they have found the network model dramatically improves their effectiveness.” Many have applauded the SA Revenue Service (SARS) for the introduction of an electronic, online tax-filing service. The e-filing service serves as one of the best examples of how government is using technology to enhance the delivery of the tax filing service. To be sure, e-filing will also make government more effective in collecting the taxes due from its citizens. Taking other key government services online would leap-frog government’s service delivery efforts and standards. Imagine therefore being able to book for your driver’s license renewal online or being able to track online the progress of a case the police are handling on your behalf. The study quoted above also gives other pointers about critical factors necessary for the success of technology-enabled service delivery. Chief among these are the need for a single service provider across all levels of government, coupled with a single government portal providing a link between the citizens and the relevant government department(s).


Policing

Policing, is one of the services which are largely delivered by government to the population in general free of any direct charges( the police derives it’s funds from taxes), meaning government derives little if any revenue at all for delivering this service. One of the key elements of effective policing, is community policing. Convetional police can never fight crime effectively on their own. In 1994, the Bureau of Justice Assistance in Washington DC published a study on community policing (“Understanding Community Policing: A Framework for Action”) and this document outlines two complimentary elements necessary for successful community policing strategies, namely “community partnership” and “problem solving”. The document goes on to explain these two elements as follows: “to develop community partnership, police must develop positive relationships with the community, must involve the community in the quest for better crime control and prevention, and must pool their resources with those of the community to address the most urgent concerns of community members. Problem solving is the process through which the specific concerns of communities are identified and through which the most appropriate remedies to abate these problems are found.” The South African government’s value proposition regarding policing must therefore include a strong community participation component. To get back to Margaret Mead’s point, government alone will not solve social problems, the role of the individual within the community therefore is key in spefically solving the crime problem, among many social problems which exist.

If Group CEO Zuma and GovSALtd are to prove successful over the next three and a half years until the next general elections, he would be well advised to make sure that technology is at the heart of his service-delivery plan and that strong partnerships are forged between government departments and the community in general.

(to be continued)

What if SA Gov was run like GovSA Ltd! – Part 1

The idea of government that is run like a company is not a new one, the government of Dubai is a very good example of how such an idea can be put to work successfully. It is precisely because it is such a simple yet powerful idea that the idea is worth exploring further now that South Africa happens to have a new government in charge. I invite you therefore to imagine that our government under the leadership of President Jacob Zuma was run like a publicly listed commercial company which I shall call GovSA Ltd! Imagine President Zuma as Group Chief Executive Officer of GovSA Ltd and the Minsters in charge of the different vertical functional ministries as the Managing Directors of these divisions of GovSA Ltd. Imagine that the Treasury headed up by the Chief Financial Officer and Statistics SA as the division and department, respectively, which provide support services to all the other divisions of GovSA Ltd serving both vertical and horizontal functions. Statistics South Africa would play the same role as that of the business intelligence department, providing critical information to be used by the managers within Gov SA Ltd in making their decisions. Imagine the head of the newly formed ministry of Strategic Planning as government’s Chief Operations Officer accountable to the Group CEO (the President).Imagine also that the National Assembly, our parliament as the Board with each member of the Assembly as a Director on this Board, with the Speaker of the Assembly as Chairman of the Board of Directors of GovSA Ltd. Imagine that the Assembly was subject to not only the constitution of the country in terms the oversight role it ought to have over GovSA Ltd but that such oversight responsibilities were enforced and adhered to as per the guideline set out by the Institute of Directors of SA (IoD). Imagine still that the South African citizens and population in general as both shareholders and customers of Gov SA Ltd. By itself, this analogy of government run as a company is interesting however if the structure of the SA government is to be aligned to that of a publicly listed company, then GovSA Ltd ought to operate and execute like any responsible listed company.

The positioning of brand GovSA SA Ltd.

The official website of office of the Group CEO (read the President), defines his vision as “Excellence in governance for a better life for all”. The Group CEO has further defined the values that ought to guide the behaviour of all the divisions of GovSA Ltd and the six values are: Fairness; Loyalty; Openness; Empowerment; Integrity and Excellence. The problem however is that almost six months after taking over as Group CEO of GovSA Ltd, Group CEO Zuma is yet to define a new vision statement, with the above statement having been carried over from the previous Group CEO. However it is becoming quite apparent that Group CEO Zuma is intent on using the outcomes of the recently published green paper on Strategic Planning as a guide towards crafting a new vision statement that will determine his tenure as Group CEO.

The Importance of Propositions

In their book titled “Blue Ocean Strategy”, W.C Kim and R Mauborgne describe three types of strategy propositions, namely: Value Proposition which is about attracting buyers; Profit Proposition which seeks to enable the derivation of profit from the defined value proposition and a People Proposition, which seeks to motivate those working for or with the organization to execute the strategy. Kim and Mauborgne emphasise the fact that each of these propositions do not work in isolation but together in concert.


(to be continued)

Wave-Power as source of renewable energy

According to reports in popular and academic media, our planet has long been suffering from the stresses caused by carbon dioxide polution and green-house gas emissions into the atmosphere.One of the biggest culprits of carbon dioxide emissions are the many electricity power stations using coal to generate electricity. Currently, ESKOM generates a vast majority of the power it supplies from coal-power stations with a small amount of ESKOM’s electrical power output coming from both hydro-energy as well as South Africa’s only nuclear-energy station in Koeberg. Over the past number of decades many individuals and organizations have been experimenting with renewable sources of energy, with a specific aim of producing electricity and these experiments have explored such energy sources as solar, nuclear, geothermal, wind and water. In South Africa, the efforts to find alternative renewable sources of energy are led by, among others, the Sustainable Energy Society of South Africa (SESSA),a non-governmental organization. SESSA’s stated aim is to use renewable energy and thereby reduce the dependence of South Africa on the carbon-emitting energy-production methods.

Ocean-Wave Energy

One of the greatest sources of renewable energy is water, more specifically the oceans. South Africa has a coastline which stretches just under 3,000 kilometers with the Atlantic Ocean to the west and the Indian Ocean to the east. Unlike the abundant solar power which is available only during day-light, the seas around South Africa’s shores pound all-day round and all-year round which makes sea waves the ideal alternative source of energy. Pelamis Wave Power, a Scottish based company is a leader in the manufacture of a structure which converts sea-wave energy into electrical energy. This structure floats on the surface of the sea and through the use of special hydraulic motors, the bouncing motion of the structure caused by the waves produces energy which is used to drive generators which produce electrical energy. Pelamis already operates a commercial wave-power farm just off the northern coast of Portugal. While the jury is still out on the commercial viability of this technology, one hopes that ESKOM has already begun exploring such alternative sources of energy as sea wave power.

Role of Government

However, ESKOM cannot be expected to act alone in finding renewable sources of electrical energy to this end, it is incumbent upon the National Energy Regulator of South Africa (NERSA) and government of President Zuma to create a legislative framework aimed at accelerating ESKOM’s long-term investment efforts into sustainable electricity-production methods. In an article appearing in the Havard Business Review, former US President Bill Clinton pionts out that "just as information technology exploded in the 1990's, green technology is set to be the major growth sector." Our government therefore must legislate for this renewable energy phenomenon before it gains critical mass.

ICASA must resolve the mobile TV debate

South Africa is estimated to have a total of 11 million households, of which 7.3 million or just over 66% own at least one television set, well within the 65,3% world average, according to information hub. http://www.nationmaster.com/ . South Africa’s household ownership rate of TV sets is extremely high by developing world and specifically African, standards. As an example, according to Nation Master, Africa’s most populous nation Nigeria, has a household TV set ownership rate of a mere 25,6%. The ownership rate in most developed countries is significantly higher than the global average, with the top ten countries recording rates above the 99% mark. From a marketing perspective, it obviously means that in the developed world, television is an effective medium through which to reach the broader population and this is clearly not so for marketers in the developing world, South Africa included, where TV has to be supplemented with other mediums.

The Mobile TV debate

Which brings me to the debate currently brewing in South Africa about whether ICASA (the Independent Communications Authority of South Africa) should issue a mobile TV license or not. Recently, free-to-air broadcaster, e.tv lodged a court application to prevent ICASA from implementing the proposed digital migration plan. According to media reports, chief among e.tv’s concerns about the digitization plan, is ICASA’s intention to commence a process aimed at issuing a mobile TV license. E.tv points out that mobile TV, sometimes referred to as Digital Video Broadcast via Handheld(DVB-H) device, a mobile broadcast format which has gained favour globally, has no track record of commercial viability in any market where it has been launched and that it would therefore be irresponsible of ICASA to award a DVB-H license without a detailed feasibility study. One would hope and assume that ICASA indeed has plans to carryout a feasibility study before issuing a DVB-H license and therefore e.tv’s protestations could be seen to be driven largely by the broadcaster’s fear of the impact DVB-H could have on the overall TV audience dynamics in South Africa.

Is mobile TV viable?

Many countries around the world have been involved in DVB-H trials since the early part of this decade. 3 Mobile, the European broadband network operator, was among the first in the world to launch a commercial DVB-H offering in the form of 3TV in Italy. Interestingly, 3TV Italy offers both free-to-air (non-subscription) and pay-tv services. Many other countries such as Finland have also been testing DVB-H and back in December of 2006 the Finnish regulatory body awarded Digita, a mobile network operator, the only DVB-H license in that country. Almost four years down the line, Digita is yet to launch a commercial offering. Marianne Hynninen, the Business Manager of Digita’s mobile TV division says, “plans are underway to launch our mobile TV service before the end of this year.” Hynninen further points outs that, “a leading media research organization in Finland (Finnpanel) estimates that there is a total of 16,000 (sixteen thousand) households situated in the area where the DVB-H signal will be broadcast.” In my view, this is a very small number given that Finland has in excess of 2,3 million households, meaning the DVB-H signal will only be available to less than 1% of Finnish households. Hynninen could not be drawn into a discussion about whether or not Digita’s mobile TV service will be commercially viable. However, based on the numbers stated above, I personally doubt very much that Digita will be depositing any profits into their bank account any time soon, unless the DVB-H signal broadcast range is increased to cover more of the country and therefore a greater number of households. Regulators in many other countries in Europe, North America and Asia have been issuing DVB-H licenses over the past few years yet to date very few of those licensed entities have launched commercially. Perhaps e.tv and other like-minded entities are justified in pushing ICASA to carryout a detailed feasibility study before issuing a DVB-H license.

Critical elements ICASA must consider

There are many critical questions which ICASA must surely answer vis-a-vis DVB-H licensing, these include but are not limited to: a) should the regulator issue separate licences for free-to-air and pay-TV or one licence for both services?; b) should the regulator issue a license to one or more licensees?; c) should the regulator award licences to incumbent mobile network operators and TV broadcasters (Multichoice has been testing DVB-H in South Africa since 2006) or to entities with no track record in either the telecoms nor the broadcast business and lastly d) what should be the coverage area of the DVB-H signal? I must add that in reading the document published by ICASA in December 2008, wherein the Regulator invites interested parties to apply for a license to deliver DVB-H services, it’s evident that the regulator has indeed already begun to address some of the questions listed above. I must point out that following the outcry led by e.tv, ICASA has since withdrawn its call for interested parties t apply for a DVB-H, license this is presumably to because IACSA wants to tighten up on the feasibility for the mobile TV in South Arica.

ICASA must act quickly

Perhaps a more critical element that will determine the commercial viability of mobile TV in South Africa relates to something that ICASA may not be able to influence directly and that is, the price at which DVB-H-capable handsets will go to market, as this may be the single biggest barrier to the growth of mobile TV in South Africa. Assuming however that the handset manufacturers are able to bring the price down over time, my opinion is that given the number of people in South Africa who are still without a television set in their homes, a mobile TV companion could come in very handy indeed, no pun intended. Imagine therefore watching next year’s FIFA World Cup on your mobile handset wherever you may be, or being able to keep track of your favourite soap opera, regardless of your location. For the sake of the consumer, IACSA must carryout the feasibility study on the commercial viability of mobile TV and it must do it quickly. As consumers perhaps we should all be singing those famous lyrics, “I want my, I want my MTV”, from a Dire Straits song, except this time instead of making reference to the now popular music channel South Africans would be referring to mobile, mobile TV.

How South Africa can produce world-beating athletes

Next year South Africa will host the world’s biggest sporting spectacle, the FIFA World Cup and it is quite obvious that if it were not for automatic qualification as the host nation, South Africa would be doubtful participants in next year’s finals. Since being readmitted into the international fold, South African football has failed to impress, save for the 1996 Africa Cup of Nation trophy. Having said this, a number of South African footballers have played successfully for clubs in some of the world’s best leagues. While the debate regarding poor sporting performance seems to be focused on football for now, South Africa seems to be struggling to be competitive globally in many other sporting disciplines. Tennis is a major global sport and while South Africa has produced fantastic individual players over the years, South Africa is hardly a tennis power-house, one only needs to reflect on South Africa’track record in the Davis Cup to see how poorly we have performed as a country in the game of tennis. Many other examples of poor national performance across different sporting codes can be listed. Perhaps South Africa can learn a few lessons from countries who have managed to succeed at being consistent winners on the sporting field. What I find interesting in looking at these successful countries, is that many excel at a few sporting codes. East African countries consistently produce winners in medium to long distance running. South American countries excel in ball sports such as football, volleyball and the like. The Caribbean nations excel in cricket and short distance running. Russia and the Asian countries such as China and Japan seem to excel in specialised swimming disciplines as well as gymnastics. East European countries excel in sport s such as weight-lifting. Western countries such as mainland Europe and the United State of America on the other hand seem to excel in a wider and more diverse variety of sporting codes and this could be large as result of an abundance of financial resources in these countries. Admittedly this is by no means an empirical analysis but a view based largely on common knowledge.

Prioritization and Specialization

The Ministry of Sport and Recreation (SRSA), in collaboration with the South African Sports Confederation and Olympic Committee (SASCOC) need to consider a strategy which seeks to identify sporting codes of priority. These sporting codes would then receive special funding and concerted development effort with the aim of producing athletes who can win against the best in the world. One of the ways in which SRSA and SASCOC could arrive at a shot list of the priority sporting codes would be to closely examine those sports which already derive significant community interest such as football, basketball, rugby, cricket, road running etc. While the process of prioritization would ultimately lead to a type of specialization, I do not for one second suggest that other sporting codes be neglected but I am proposing that as a country we choose sporting codes in which success will be pursued without compromise but with a clear strategy on how to develop the necessary environment to excel in these chosen sports. This leads me to a point about creating a dedicated department within the SRSA that would deal with the implementation of priority sporting codes programme.


Priority Sporting Codes Programme

The simple aim of the priority sporting codes programme would be to produce world-beating athletes within these chosen sporting codes. The programme would therefore have to concern itself with the identification of coaches to help develop and train athletes in these priority sporting codes. The Programme would also work closely with the department of Education to ensure that these sports of priority receive necessary attention at school level so that raw talent is nurtured. Perhaps more importantly, the programme would provide funding for coaching and player development as well as the building and maintenance of relevant infrastructure. The infrastructure would incorporate what could ultimately serve as centres of excellence for the identified priority sporting codes. If South Africa is to produce winners on the sporting field, then SRSA needs to have a strategy aimed at changing the way we deal with sport as a society.

SAPS needs a trully game-changing plan

An announcement by the SA Police Service (SAPS) that it is to launch a revamped police file programme on one of the SABC channels is welcome news indeed. The announcement comes only weeks after the new national police Commissioner, Bheki Cele took up office. The purpose of the show is clearly to name- and- shame suspected and known criminals with the hope that the public will tip-off the police regarding the location of individuals featured on the show. The TV show in itself however will not curb crime, the SAPS needs to ensure that it creates structures aimed at dealing with the expected public participation. These structures may include a call centre to accept tip-offs and redirect such tip-offs to the relevant SAPS departments. In my view SA’s crime problem needs to be dealt with using a much heavier hand than even the “shoot-to-kill” approach which is being touted by Commissioner Cele. Perhaps a specialist police force trained in the skill of sharp-shooting and the use of intelligent brute force is necessary at this point in our history. This armed specialist force could be something similar in nature to the famous special weapons and tactics (SWAT) team in the USA which would work side-by-side with the normal police. The role of the normal police, in my view, should be to deal with petty criminals and to maintain high visibility in the community. To further ensure success, the SAPS must combine brute force with swift investigation and prosecutorial efforts, meaning that the entire criminal justice system would have to collaborate like never before to pursue and achieve the same ends. What Commissioner Cele needs to put in place is a game-changing strategy to fight the high levels of violent crime because maintaining the status-quo just won’t cut it.

New farmers need to acquire skills

The notion of poverty reduction first came to light in the period leading up to the first democratic elections of 1994 and it was the ANC that brought focus to the idea that the best way to correct the imbalances of the past, it was necessary to find ways of reducing poverty. It’s interesting to note that in 1994 just over 48% of South African populous was living below the poverty level. Once in government, the ANC government came up with a number of strategies to address poverty, the most famous of which is the Reconstruction and Development Programme (RDP). Key to the ruling party’s strategy to reduce poverty, was the concept of land reform, especially land that was being used for farming purposes. The ANC government, under the auspices of the Department of Rural Development and Land Affairs (previously Department of Land Affairs) set up the Land Redistribution and Agricultural Development (LRAD) programme whose main aim according to official department literature, is to “help previously disadvantaged citizens from African, Coloured and Indian communities to buy land or agricultural implements specifically for agricultural purposes.” The LRAD programme offers non-refundable supplementary financing to prospective farmers from the previously disadvantaged groups to help these farmers secure land for farming and production purposes. While the LRAD is very specific about the need for those who acquire the land to undergo training to gain farming skills there are many stories to be told of failed LRAD projects precisely because the farm owners lacked the necessary skills to sustain the farming processes to keep the land productive. Government, under the leadership of the ANC must be commended for its land reform initiatives however, if the LRAD programme is to gain the necessary momentum, government must review the programme’s skills transfer methods. One suggestion is for the established farmers from whom land is being bought to retain a material stake in the farm and put in place a skills transfer programme which is based on certain targets. The idea is that the established farmer would gradually relinquish his/her stake in the farm and eventually withdraw from the running of the farm, leaving it in the hands of the now capable new land owners. These targets would be based on such measures as farm profitability and land productivity. Linked to this skills transfer programme government ought to set up short courses with the aim of giving new land-owners a quick understanding of the basics of farming. The attendance of the course must be a pre-requisite for the new owners taking ownership of their new property. Whatever happens the LRAD is too important an initiative for our country for government to allow it to fail into oblivion.