‘Home Affairs will suffer irreparable harm’: Auditor-general flags number of delayed projects

The Citizen - 19 October 2022

Key targets relating to the department's modernisation projects have not been achieved.

The Department of Home Affairs has to address a number of challenges and bolster its Information technology (IT) systems to improve service delivery.

This is according to the Auditor-General’s office.

On Tuesday, the office briefed Parliament’s Portfolio Committee on Home Affairs regarding the department’s audit outcomes for the 2021/2022 financial year, which ran from April 2021 to March 2022.

Annual performance report

During the briefing, Fhumulani Rabonda, deputy business executive at the Auditor-General’s office, informed the committee that Home Affairs submitted its annual performance report, but there were material misstatements that needed to be adjusted.

“We managed to correct the material misstatements that we had identified during the [audit] process,” he said.

Rabonda revealed that the department has achieved 69% of its annual targets in the 2021/2022 financial year.

However, key targets relating to the department’s modernisation projects – which includes Abis and e-Visa system – as well as the the establishment of the border management agency (BMA) have not been met.

He explained that the department had set targets that it intends to achieve by 2024 in the medium-term strategic framework, which was reviewed in 2019.

“We had looked at the current year’s performance report [and] what does it tell us in relation to these targets they have set themselves. We [have] highlighted the fact that the targets in relation to modernisation projects are behind schedule,” he said.

Rabonda pointed that while the border management agency has been formed, it is not yet fully functional due to the implementation protocols that have not been signed at this stage.

Modernisation projects

e-Visa and BMCS

Regarding the e-Visa system and Biometric Movement Control System (BMCS), Rabonda said the Auditor-General’s office has identified there were “significant control deficiencies” and warned that these needed to be given attention.

“If they are not addressed, the modernisation projects may have similar significant control deficiencies as the legacy systems. This means that what Home Affairs will have new systems with the same problems,” he continued.

Rabonda explained that these deficiencies were caused by poor project management and governance processes within Home Affairs’ IT internal department.

“Over the past few years, we have been reporting that there is leadership instability in the ICT environment in Home Affairs. So our recommendation is that action plans should be developed and implemented to address the significant control deficiencies,” he added.

Earlier this year, Home Affairs revealed it was working on the e-Visa system, which allows tourists visiting South Africa to apply for their visas online and thereafter be issued virtually.

The paperless virtual visa is intended to combat visa fraud and open South Africa as a desirable destination. 

The department had also indicated at the time that it was in the process of developing the BMCS, which will enable the capturing of fingerprint and facial biometric data of all travellers who enter or exit South Africa.

This system is expected to be rolled out at 34 ports of entry across the country – including major airports and land borders.

Abis system

Budget increase

Meanwhile, Rabonda further told the committee that phase one of the Automated Biometric Identification System (Abis), which was launched in 2018, is yet to be completed.

Home Affairs had targeted to finish the first phase by December 2021, and the department has spent at least R294 million on this phase.

Rabonda revealed that the budget of the Abis project, which is aimed at ending identity theft, has increased from R410 million to R475 million as a result of delays and “technology becoming more expensive”.

“There is a need for the department to monitor closely the remaining budget to avoid having the need to having to ask more funds for this project because if that is not done then government may find itself with a project that they need to fund more from the limited budget that is available,” he told the committee.

He said the delays were caused by IT firms, EOH and Idemia.

“You will remember that EOH decided to pull out of a number of government projects including this one and on doing so the department appointed Idemia as the service provider,” he continued.

In May 2021, the committee heard how EOH allegedly flouted tender processes to score the Abis contract, valued at more than R400 million, from the department.

Payments made to EOH regarding the Abis project amounted to R283 million.

The company was then slapped with a penalty by the department and was subjected to a Hawks investigated.

“The delays by service providers saw the department invoking penalties of R62 million in terms of EOH and R3 million regarding Idemia,” Rabonda added.

‘National adverse impact’

The Abis system was introduced to replace the Home Affairs National Identification System (HANIS), which was said to be manually operated and outdated.

According to the department, Abis aims to act as a fundamental baseline for the national identification system and will consolidate South African and foreign nationals’ data into a single base.

Rabonda noted that the importance of the Abis system, saying it would have a “national adverse impact” if it was not completed.

“The department will suffer irreparable harm if it’s not successfully implemented because this project is critical to resolving some of the risks faced by Home Affairs and the Security Cluster as a whole. Hence we are saying there is a need to appreciate the impact the department’s service delivery, the economy and security of the state.

“Everybody who is involved needs to jealously guard this project to make sure that all that needs to be done is done within time and effectively so,” he explained.

Later in the briefing, Rabonda said the Abis project was one of the major causes of irregular expenditure for Home Affairs (R12.8 million) in the 2021/2022 financial year.

 

3 Hour Delays for Tourists at SA’s OR Tambo International Airport with New Biometric Chaos

SAPeople – 19 Oct  2022

Tourists from around the world have had to wait in customs on average for at least three hours at OR Tambo International Airport due to the piloting of a new biometric system, according to the DA that says it has been alerted to these delays in tourists being able to reach the public arrivals area.

The Biometric Movement Control System (BMCS) appears to have been untested, and has effectively gone “live”, instead of being piloted first.

“To take piloting of the systems live concurrently goes against pilot study principles which should be a mini-version of a full-scale study or a trial run done in preparation of the complete study,” points out Manny de Freitas MP – DA Shadow Minister of Tourism.

“The delays create a negative impression to those entering South Africa. In addition, it creates havoc for tour itineraries and programmes which are pre-planned, pre-booked and carefully timed so that tourists maximise their time in our country.”

De Freitas claims some tour groups have had to actually skip pre-booked and pre-paid activities because of these delays at the Joburg airport.

The DA says this is just another example of the ANC failing to understand the major impact on tourism that inefficiency and unprofessionalism have. And that these tourists will go back to their countries and relate their bad experiences which “further impacts negatively on our tourism numbers”.

De Freitas has submitted official questions to the Minister of Home Affairs about the BMCS and the piloting thereof, and has discussed it with DA Home Affairs colleagues.

Similar delays were experienced in 2016 at OR Tambo with the rollout of the biometric system then, to collect data on people arriving and leaving South Africa.

www.samigration.com

 

 

Converting SA to full e-visa system tripped up by huge backlog, tech challenges, says Sisulu

News 24 – 18 October 2022

 

• The tourism and aviation industries have both been hit hard by the impact of the Covid-19 pandemic.
• Even before the pandemic hit, the implementation of a full e-visa system was used as an example of how it can be made easier for travellers to visit the country.
• Although it does not fall directly under her department, Minister of Tourism Lindiwe Sisulu addressed the challenges at the annual general assembly of the Airlines Association of Southern Africa.

The implementation of e-visas to facilitate travel to the country is being tripped up by a huge backlog in converting the paper-based system to a computerised one, according to Minister of Tourism Lindiwe Sisulu.

"We continue to advocate for solutions in the areas that support and enable aviation such as visa facilitation. A lot of work has been done by the Department of Home Affairs as a partner to the sector and most recently, the rollout of e-visas in various countries, including seven African countries was implemented," Sisulu said at the 52nd annual general assembly of the Airlines Association of Southern Africa (AASA) taking place near Kleinmond.  

"Yes, we have a problem with our visa system and a lot of work still has to be done regarding the ability to implement [more] e-visas. There has been many discussions about the inefficiency of our visa regime and we have taken a resolution to follow intercontinental trends. However, we have difficulties."

She acknowledged that a lot of complaints have been received from SA's neighbouring countries about the time it takes to obtain visas. 

"We have made a commitment to get on the e-visa issue as soon as possible, but the backlog is huge. Just converting what we have on paper to being computerised is taking a lot of time. We are sorry that we are behind. It is a technology and backlog issue," Sisulu told News24 Business on the sidelines of the assembly.

She applauded Zambia for its recent announcement on waiving visa requirements for tourists from various overseas markets, many of which are key source markets for most destinations within the southern African region. 

"The easing of the visa requirements is a stimulus for integrated marketing of the region. But we must do more than just advocate," said Sisulu.

Aaron Munetsi, CEO of AASA, emphasised that it is important for government to consult with the airline industry before making policy decisions. 

"As we saw throughout the pandemic, governments often make the right noises, but fail to follow-through with suitable actions or the appropriate support," he said. 

Examples he gave of how data-based solutions can help airlines and airports increase their competitiveness in terms of customer experience include touchless biometric scanners, e-passports, e-visas and e-waybills.   

"Governments promise to slash red tape to become more business-friendly, yet these are some of the low-hanging fruits that will lubricate the flow of legitimate people and goods between and across markets. By providing these positive travel and trading experiences, we will become more competitive and attractive in our own right, but crucially, also as destinations and markets for investment, tourism and commerce," said Munetsi.

www.samigrtion.com

 

 

Staggering challenge ahead for South Africa

Busnesstech - 18 October 2022

When finance minister, Enoch Godongwana, delivers his Medium-Term Budget Policy Statement (MTBPS) towards the end of the month, he will need to focus on policies that accelerate real economic growth and address the financial future of Eskom, say wealth management specialists at Citadel.

Maarten Ackerman, chief economist at Citadel, says all eyes will be on Godongwana to see if he will prioritise pragmatic policies that stimulate real business growth and job creation, instead of bowing to populist pressures that prioritise social spending but have no lasting positive impact on the country.

“South Africa is still stuck in a balancing act between weak growth and populist needs that will continue indefinitely, such as the Basic Income Grant,” said Ackerman. As a country, it is vital that South Africa gets the economy going to address poverty and inequality in a sustainable way.

“In terms of South Africa’s macro-economic outlook, it’s essential to note that there was yet another revenue windfall in addition to the revenue overruns in recent years. So, we’ll need to see what the finance minister does with that. We’d like to see the windfalls being used productively – not just on once-off, temporary social spending that does little to nothing to drive economic growth,” the economist said.

From an investment perspective, Citadel’s chief investment officer, George Herman, urges Godongwana to address the Eskom situation. “We would appreciate any guidance the finance minister can give in terms of the intention to de-leverage the Eskom balance sheet. I think and hope that is going to be a core focus of the 2022 MTBPS,” said Herman.

Eskom has requested that the government relieve its debt balance sheet of approximately R200 billion, while recently informing the Standing Committee on Public Accounts that it was carrying a total debt burden of approximately R400 billion, which could not be serviced due to its current cashflows and liquidity problems.

It was also facing outstanding municipal debt to the tune of around R40 billion.

It was recently reported that Eskom expects to receive tranches of R20 billion of taxpayers’ money over the next few years to deal with its debt-servicing commitments, much to the dismay of taxpayers who are already paying for a service they are not fully receiving as a result of the rolling blackouts, which have recently escalated.

In 2021, Citadel also expressed the hope that the minister would be prudent and use the opportunity presented by additional revenue to get the country out of its “very tight fiscal position”. At the time, Ackerman said: “If we don’t get the economy going very soon, we might have some further fiscal challenges in the next two to three years.” Today, fiscal reform is still a great priority.

Colin Coleman, the former MD of Goldman Sachs in Sub-Saharan Africa, told BusinessLive that the budget is about more than making the numbers look good for the ratings agencies. “It’s about how we’re breaking out of our structural constraints and problems.”

“Yes, the benefit of fiscal consolidation is to reduce the cost of capital to increase investment, but that’s an insufficient condition for investment,” he said.

Coleman stressed that the budget also needs to address the “festering sore” that includes unemployment, lawlessness, corruption, public mismanagement, and the country’s structural low-growth issue.

Deep structural woes at Eskom

Intellidex chair, Stuart Theobald said that South Africans know that the country is deeply rooted in an energy crisis, but may not understand the staggering challenge that lies ahead of it.

The analyst noted this past week that, based on outdated estimates in the country’s 2019 Integrated Resource Plan, it will need to procure and develop approximately 78,000 MW of energy capacity by 2030.

By 2035, however, 12 of Eskom’s 15 coal plants will have retired, wiping 33,000MW from the grid. If an optimistic plan by the government to get newer stations like Medupi and Kusile fully operational and the lifetime of Koeberg is extended, this means that South Africa needs to get at least 50,000MW of new energy on-grid over the next 12 years, Theobald said.

This is a ‘stupifying’ amount of energy required, he said, and South Africa faces an incredible challenge on two key fronts: cost and politics.

On the former, the Intellidex chair said that even leaning into cheaper energy technologies like renewables will carry immense costs.

“Solar photovoltaic and onshore wind is now much cheaper than fossil fuel production, but you need storage to even out supply capacity. Based on current global capital costs for different types of technologies, we need to invest R1.8 trillion to R3 trillion to build that capacity, depending on technology spread,” he said.

“And that doesn’t even consider the investment required to expand the grid to handle the volumes.”

The analyst noted that this cost is staggering – accounting for up to half of South Africa’s entire GDP, and even spread over 10 years, is equivalent to the total spend of a Medupi every year.

On top of the cost, South Africa’s energy sector also has to deal with the other massive hurdle: the government.

Theobald noted that the country is awaiting the results of a 9,600GW energy bid window, but historically, politics and generally poor management of procurement have delivered very little.

Urgent procurement of 2,000MW of energy ended up delivering only 150MW, and the most recent bid window saw only three projects – out of 25 – deliver, totalling 420MW. The analyst said that the country has managed to deliver only 1,400MW of new energy over the last few years.

Meeting the challenge

While the challenge appears insurmountable, Eskom itself is quite optimistic that it is able to meet it.

Presenting at the Africa Renewable Energy Investment Summit in September, Eskom chief executive officer Andre de Ruyter outlined the group’s strategy to tackle the new generation problem, emphasising a strong focus on renewables as the way forward.

Compared to coal, renewable projects like wind and solar farms cost less to build, can come online in less than two years, and can ensure that the country can protect its power exports amid rising carbon tariffs, he said.

In contrast, new coal builds would come at double or even quadruple the cost, take up to 12 years to complete – which would result in even more load shedding – and would put 46% of South Africa’s exports at risk as the country would fail to decarbonise.

By the end of 2024, de Ruyter said that most of the 33,000MW shortfall caused by the decommissioning of power stations will be covered by new projects, including:

• 3,500MW from the Seriti renewables projects
• 1,440MW from Kusile entering full operation
• 2,000MW from independent power producers (IPPs) on leased land
• 3,500MW from new pumped storage
• 1,500MW from municipal procurement
• 2,600MW from REIPPP 5 projects
• 5,200MW from REIPPP 6 projects
• 7,000+MW from other projects

This energy shift is not cheap, however, with the CEO pointing out that R1.2 trillion will be needed to realise the transition.

Adding firm capacity of 7,000MW, variable capacity from renewables totalling 50,000MW and storage capacity of 10,000MW will cost approximately R990 billion to realise by 2035, he said.

Expanding and strengthening the power utility’s transmission network over 8,000km of new lines and installing 101 new substations will cost another R130 billion. Boosting the distribution capacity will add another R56 billion to the mix.

Meeting demand for economic growth

Eskom can’t meet demand and has imposed a record number of days of blackouts so far in 2022, according to Bloomberg calculations.

Load-shedding is projected to shave 1 percentage point off economic growth this year. The South African Reserve Bank lowered its gross domestic product growth forecast to 1.9% from 2% in September.

Reforms aimed at alleviating South Africa’s energy crisis could raise real private investment in the energy sector by as much as 15% per year from 2023 to 2025 and raise economic growth by about 0.9 percentage points over the first year, the central bank said.

“Investment in energy has the potential to crowd in other productive investment, creating a virtuous cycle,” the bank said in its six-monthly Monetary Policy Review, as reported by Bloomberg.

www.samigration.com

 

 

SARS introducing new ‘travel pass’ for everyone entering or leaving South Africa

Businesstech  - 18 October 2022

 

The South African Revenue Service (SARS) says it will introduce an ‘online traveller declaration system’ that all travellers need to comply with.

The new system will simplify passenger movement at South African airports, SARS said, and will come into effect from 1 November 2022.

The system aims to collect travel information and, in return, grants a traveller pass via email, said SARS.

It requires that all travellers – including South African citizens and residents, children and infants – leaving or entering South Africa by air complete the declaration. SARS said that once completed and submitted, travellers will receive a pass before they board.

The new online system will be rolled out in all South African international airports, starting with OR Tambo International Airport from 1 November, and then to others in the first quarter of 2023, the revenue service said.

“Upon arrival in South Africa, there will be instructions at the airports that will guide and inform travellers what to do next,” it said.

Currently, in terms of the declaration of goods at the airport, all people who arrive in the country are required to complete a Traveller Card (TC-01) if they have something to declare – the card is then used alongside your passport in the customs process.

Some goods that are required to be declared include things such as:

• Products purchased or acquired abroad
• Goods remodelled or repaired abroad
• Anything prohibited or restricted, or controlled under any law

When departing from South Africa, residents are further required by SARS to register valuables before their trip – this can be done at the customs office in international departures before handing luggage in.

However, tourists to South Africa can reclaim Value-Added Tax (VAT) on the goods bought during their visit to the country, added SARS.

SARS has been beefing up its tax policy and working with other institutions to ensure stricter compliance with tax law. The latest Financial Intelligence Centre (FIC) annual report showed that over R41.6 million in penalties was imposed by SARS on certain people and businesses over 2021 – many of which were instances of non-compliance.

SARS has a history of keeping tabs on taxpayers. In mid-September, Tax Consulting SA noted that the taxman can track a person’s flights as part of stricter emigration processes.

Nikolas Skafidas, a tax expert from the group said that expatriate taxpayers awaiting approval for their non-resident status might have their flights tracked into and out of South Africa by the tax authority.

He said that flight details could possibly be used by SARS when questioning the validity of an applicant’s claim that they intend to reside outside of South Africa permanently.

                  www.samigration.com