DBSA Development Fund Overview

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• DBSA Development Fund Overview
• Mathanda Mathenjwa
• 14 July 2006

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Background of DF

• Section 21 Company
• Registered on the 21 December 2001
• Capitalized by DBSA to the tune of R510 million
  to date
• Estimated recapitalisation for 2006/7 is R118
  million
• Operates within the borders of South Africa

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Mandate

• Local Government Development
• Local Economic Development
• Community Development

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Clients

• Local Government
• - District Municipalities
• - Local Government
• Provincial Government
• Utilities
• NGOs, CBOs and Communities

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Support Areas

• Skills Development
• Training of officials and councilors (I.e.
  financial management, HR, performance management,
  LED etc.)
• Systems Development
• Management Information Systems (financial
  management, administration, GIS, etc.)
• Planning Aspects
• Development Credit

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DF Performance

• Commitments R479 million
• Disbursements R246 million
• Municipalities supported 195
• Projects approved 419

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Lessons Learned

• A number of factors have been identified as
  constraints inhibiting service delivery
• Grant Funding alone does not necessarily result
  in success
• Effective project management results in
  successful capacity building initiatives
• Classroom training is not the most effective way
  to build capacity of municipal officials
• Lack of coordination of programmes results in
  duplication of resources
• Capacity constraints occur at all stages of
  implementation including preparation of MIG
  projects

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• As many of us are aware by now, Project
  Consolidate has identified serious capacity
  constraints in many of our municipalities arising
  from a shortage of properly qualified managers,
  professional and technical personnel. We have
  taken the necessary decisions to attend to this
  urgent matter
• State of the Nation Address of the President of
  South Africa, Thabo Mbeki,
• 3 February 2006

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• The Development Bank of Southern Africa is
  currently assembling a task force of engineers
  and project managers, to be named Siyenza Manje,
  to contribute to operational and strategic
  capacity in distressed municipalities, and to
  accelerate the roll out of basic services
• Budget Speech 2006 by the Minister of Finance,
  Trevor A Manuel
• 15 February 2006

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• We are collaborating with the Development Bank
  of Southern Africa (DBSA) to mobilise experts to
  provide professional support for programme and
  project implementation. They will provide
  hands-on technical support during all phases of
  the project management cycle. We will also focus
  on low-capacity municipalities, especially nodal
  municipalities and former cross-boundary
  municipalities, with a view to assisting them to
  develop effective service delivery plans
• Debate on the State of the Nation Address
  Minister for Provincial and Local Government,
  Sydney Mufamadi
• 8 February 2006

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Genesis of Siyenza Manje Initiative

• National Advisory Working Group (NAWG) identifies
  strategic DBSA role in project consolidate (DBSA
  Chair of NAWG, and serve as PC Secretariat)
• Presidential Lekgotla President asks chair of
  DBSA to provide 1 of many interventions to
  support capacity building at municipal level
• DBSA Development Fund Board approve a dedicated
  project deployment task force programme (Siyenza
  Manje) as prompted by Government to augment and
  sustain the Project Consolidate thrust

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Key Features of Siyenza Manje

• Ownership Government
• Management DBSA Development Fund
• Coordinated Approach Linkages partnerships (no
  duplication, synergy)
• Key Context Sustain thrusts of Project
  Consolidate over long term, and immediately
  augment local project capacity
• Intervention Character Centralised project
  focused task force
• Horizon Long term

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Purpose and Composition of Task Force

• The purpose of the task force
• provide specialized, capable professional
  services for project development and
  implementation, primarily in low-capacity
  municipalities
• hands on, practical and project focused capacity
  building
• General composition of the task force
• project management
• engineering/technical services
• financial management / treasury services

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Siyenza Manje - a Core Programme of DBSA DF
(which was restructured to focus in this priority
area)

• DBSA DF formed in 2001/2 with original mandate
  of
• to support local governments institutional
  capacity by providing grant funding to enhance
  and improve performance
• funded by annual capitalisation from DBSA surplus
• Originally, DBSA DF provided focused
  institutional and human capacity building grants
  to complement Government grants
• DBSA DF re-structured such that Siyenza Manje
  accounts for 80 of DBSA DF resource allocation,
  and 20 for continued institutional/human
  capacity building grants

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Siyenza Manje Roll Out

• Ninety experts will be recruited during the first
  year
• Fixed term contracts
• Phased approach
• 28 young professionals
• Phase 1 30 experts in the first quarter
• Teams deployed to municipalities in May 2006
• The deployees will spend 80 of their time at the
  municipalities and 20 at the DBSA Development
  Fund

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Progress (1) - Identification of Pilot
Interventions

• In consultation with stakeholders, eight
  provinces have been identified for a pilot phase
  for the implementation of the Task Force
• Limpopo Eastern Cape
• Free State KwaZulu Natal
• North West Mpumalanga
• Northern Cape Western Cape
• This does not mean that the other regions will
  not be considered should
• they meet the guidelines for selection

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Progress (2a) - Project Location and Type

• Province Municipality Project
• Eastern Cape Mnquma Supply of water to Siyanda
  informal settlement
• Elundini Eradication of bucket system
• Ntabankulu Eradication of bucket system.
• Northern Cape Thembelihle Hopetown bulk water
  supply
• Kamiesberg Water supply
• Siyancuma Sewer reticulation
• Free State Matjabeng Eradication of bucket
  system
• Phumelela Memel sewerage oxidation dam
• Warden construction of sewer

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Progress (2b) - Project Location and Type

• KZN Hlabisa Newsite establishment and water
  reticulation.
• Ndaka Waterborne sewerage system
• Jozini Provision of water to the rural
  community.
• Limpopo Modimolle Water reticulation
• Thabazimbi Upgrading of sewerage works
• Mpumalanga Govan Mbeki Sanitation and water.
• Ehlanzeni Water sanitation
• Albert Luthuli Water sanitation
• North West Kgetleng Financial
  management
• Moretele Infrastructure
• Moses Kotane Infrastructure
• Rustenburg Town planning

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Progress (3) Recruitment

• Interviews held in March 2006
• 62 candidates were interviewed
• 33 candidates were given offers
• 6 candidates declined
• 9 Project managers
• 9 technical experts
• 9 financial experts
• Second round interviews in June 2006
• 12 additional candidates appointed
• Interviews for second phase (30) scheduled for
  17-19 July 2006

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Progress (4) Deployment

• Deployees introduced to municipalities from 18-30
  May 2006
• Teams undertook assessments and scoping of
  identified projects
• Deployees to submitted business plans by 3-7
  July 2006

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Progress (5) Challenges

• Internal
• Business/management systems
• Structure
• Policies
• Controls
• Governance

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Progress (6) Challenges

• External
• Lack of key personnel (people in acting capacity
  - skills transfer)
• Funding gaps (project budgets - MIG)
• Institutional capacity to operate and maintain
  (budgetary expertise)
• Overall shortage of skills in SA (engineering)

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Governance Coordination Arrangements (1)

• Project Consolidate Strategic Partners
• The Presidency
• National Treasury
• Department of Provincial and Local Government
  (dplg)
• South African Local Government Association
  (SALGA)
• The DBSA Development Fund Board has approved the
  establishment of a Deployment-Sub Committee
• Comprises of Fund personnel and Strategic partner
  representatives
• Oversight of planning and operational team
• Strategic
• Source of knowledge
• Political responsibilities

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Governance Coordination Arrangements (2)

• Technical Advisory Team
• Representation from all strategic partners and
  Local Government practitioners
• Advisory services
• To provide technical expertise
• Assessment of identified projects

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Funding Requirements

• DBSA R600 million
• National Treasury R1.1 billion

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Thank You
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