1. PRESENTATION TO THE PORTFOLIO COMMITTEE ON RURAL DEVELOPMENT AND LAND REFORM 2012/2013 ANNUAL REPORT Date: 16 October 2013 1

2. Contents Strategic Overview (Part A) Pre-Determined Objectives Performance Overview (PART B) Financial Performance Overview (Part C) 2

3. PART A Strategic Overview 3

4. DRDLR has entered in the 5th year under the current Administration. It has set the vision of creating vibrant, equitable and sustainable rural communities. Positive strides have been made in addressing the triple challenges facing our country namely: poverty, unemployment and inequality through Comprehensive Rural Development Programme (CRDP) & Land Reform programmes. 4

5. Strategic Overview The strategic thrust underlying land reform is that it should be carried out with minimal or no disruption to food security. Government views the National Development Plan as its developmental framework and the New Growth Path as its strategy. The programmes of the department are aligned to the NDP through the 2014-2019 Medium-Term Strategic Framework (MTSF). 5

6. PART B Pre-determined Objectives Performance Overview 6

7. Program 1: Administration Reduced funded vacancy rate to 10% Despite not achieving the target, critical positions in the following strategic positions were filled: 42 Senior Management posts Chief Land Claims commissioner Deputy Director General for Rural Infrastructure Development Deputy Director General for land Reform and Administration 7

8. Program 1: Administration Cont.. 68% of audit management action plans were implemented. Of the 50% organisational renewal plan targeted, 47% were implemented and the slight variance is attributed to removal of two deliverable under the renewal strategy, viz: communication Strategy & Supply chain policies 8

9. Program 1: Administration Cont.. Despite not achieving the target of 10 policies submitted to cabinet, the department has recorded the following milestones: Land Management Commission Policy was approved in Land March 2013. Policy on land Owned by Foreign Nationals (PLOF) was referred back for further consultation. Three policies were approved internally, these are: the Rural Development Policy Framework (RDPF), Land Tenure Security Policy for Commercial Farming Areas and the Restitution Policy. 9

10. Program 1: Administration Cont.. The variance on the submission of targeted policies to Cabinet is attributed to the prioritisation of participatory consultation processes and the necessary intensive research undertaken. 10

11. Program 1: Administration Cont.. 11 Strategic objective Performance indicator Baseline (Actual output) 2011/12 Actual performance against target Reasons for variance Target (2012/13) Actual (2012/13) Compliance with relevant policies and legislation governing the management of the public sector by 2014 % of budget spent 98.3%100%99.4% The variance is as a result of funded vacant posts that could not be filled. % of audit management action plans implemented New indicator 100%68% The variance is attributed to the fact that some of the activities related to some of the targeted action plans were only completed after the year end. % of funded vacant posts 11.47%10%16% The variance is attributed to the increase in the number of funded posts and is traced from the following business areas:  Programme 1: 18%  Programme 2: 5.5%  Programme 3: 41.5%  Programme 4: 13.4%  Programme 5: 13.6 %  Deeds: 11.21% % of the organisational renewal plan implemented New indicator 50%47% Two deliverables of the total targeted for the period under review, were removed and these two constitute the variance.

12. Program 1: Administration Cont.. 12 Strategic objective Performanc e indicator Baseline (Actual output) 2011/12 Actual performance against target Reasons for variance Target (2012/13) Actual (2012/13) Compliance with relevant policies and legislation governing the managemen t of the public sector by 2014 Number of pieces of legislation submitted to Parliament 4 11 4 Of the seven pieces of legislation which constitute the variance:  Three Bills were taken out of the 2012 Legislation Programme through the permission of the Leader of Government Business. These included the: - Land Tenure Security Bill and the proposed legislative imperatives will be catered for in the amendment to the Extension of Security of Tenure Act (ESTA); - Spatial Data Infrastructure Amendment Bill because the department has identified a requirement for a more controlled framework for policy development within government. - Electronic Deeds Registration Bill because of the finalisation of the policy development.  Two Bills were approved by Cabinet for public consultation just after the year end. These are: - Property Valuations Bill and - Restitution of Land Rights Amendment Bill.  The drafting of the Land Protection Bill was stopped because of a process to solidify the policy position which is expressed in the Policy on Land Owned by Foreign Nationals (PLOF).  The Communal Property Association Amendment Bill, (CPA) is being finalised in tandem with the policy.

13. Programme 1: Administration Cont.. 13 Strategic objective Performan ce indicator Baseline (Actual output) 2011/12 Actual performance against target Reasons for variance Target (2012/13) Actual (2012/13) Rural Development and Land Reform policies and legislation developed by 2014 Number of policies submitted to Cabinet Draft Green Paper on Land Reform and a draft policy developed 101The variance on the submission of targeted policies to Cabinet is attributed to the prioritization of participatory consultation processes and the necessary intensive research undertake. However, although the target was not fully achieved, the progress is as follows: -Land Management Commission Policy was approved in March 2013. Policy on Land Owned by Foreign Nationals (PLOF) was referred back for further consultation. -Three policies were approved internally, these are: the Rural Development Policy Framework (RDPF), Land Tenure Security Policy for Commercial Farming Areas and the Restitution Policy. -Rural Cooperatives Financing Facility (RuCoFF) and Policy on Rural Development Agency have gone through initial research, conceptualisation and Ministerial approval. -Communal Tenure Policy (CTP) is at the last stages of consultation. -Policy on Free Hold Tenure with Limited Extent is undergoing extensive last stages of development.

14. Program 2 : Geospatial & Cadastral Services Under this program, one of the major achievements has been the verification of 99.5% of the State land register It has also recorded significant performance in the following areas: surveying of State land in the former homelands and skills development in the form of championing training in geomatics to mitigate against the scarcity of technical expertise in this area of service. 14

15. Program 2 : Geospatial & Cadastral Services Cont.. The department continued to service the backlog of 25 spatial plans which could not be delivered in the 2012/13 financial year and this led to 14 Spatial Plans formulated out of 37 targeted for. Furthermore, the limited human resources focused on supporting Parliament in the processing of the SPLUM Bill. 15

16. Program 2: Geospatial & Cadastral Services Cont.. 16 Strategic objective Performance indicator Baselin e (Actual output) 2011/12 Actual performance against target Reasons for variance Target (2012/13) Actual (2012/13) An integrated land planning, spatial information and administrati on system to promote an equitable, sustainable land use and allocation by 2014 Number of Spatial Plans formulated 0 SDFs comple ted 3714The department continued to service the backlog of 25 spatial plans which could not be delivered in the 2011/12 financial year and this led to the variance. Therefore, the total delivered in the year under review is 39 (14 actual for 12/13 and 25 for 11/12). The focus on servicing the backlog of 25 SDFs accounted for the variance of 23 against the set target of 37. Furthermore, the limited human resources focused on supporting Parliament in the processing of the SPLUM Bill.

17. Program 2: Geospatial & Cadastral Services Cont.. 17 Strategic objective Performa nce indicator Baseline (Actual output) 2011/12 Actual performance against target Reasons for variance Target (2012/13) Actual (2012/13) An integrated land planning, spatial information and administratio n system to promote an equitable, sustainable land use and allocation by 2014 Number of hectares of State land in the former homeland s surveyed 66% (993 726.4313 hectares) 2.7 million hectares 2.4 million hectares (2 350 374.9975) The target of 2.7million hectares was set before the exact extent of land to be surveyed was determined and as such, the variance is attributed to the fact that the target set was an estimate since the extent of unsurveyed land was not accurately established during targeting.

18. Program 2: Geospatial & Cadastral Services Cont.. 18 Strategic objective Performan ce indicator Baselin e (Actual output) 2011/1 2 Actual performance against target Reasons for variance Target (2012/13) Actual (2012/13) An integrated land planning, spatial information and administration system to promote an equitable, sustainable land use and allocation by 2014 Average number of working days taken to process registrable diagrams, sectional plans 21 days14 days21 daysVariance is attributed to limited skilled and experienced personnel and staff shortages. Other projects (such as State land audit, calculation of extent) kept the officials out of offices thus affecting the turnaround time on the processing of registrable diagrams and sectional plans. It must be noted that other offices such as the Surveyor General Western Cape and Bloemfontein met the target of 14 days.

19. Program 2: Geospatial & Cadastral Services Cont.. 19 Strategic objective Performanc e indicator Baseline (Actual output) 2011/12 Actual performance against target Reasons for variance Target (2012/13) Actual (2012/13) An integrated land planning, spatial information and administration system to promote an equitable, sustainable land use and allocation by 2014 % of the State land register verified 54%100%99.5%A slight variance in the verification of the State land is attributed to the fact that field workers were denied access to certain areas. Furthermore, some land parcels could not be located at all in some areas. A total of 5 931 land parcels in KwaZulu-Natal, Gauteng and Free State mostly residential in nature could not be verified.

20. Program 2: Geospatial & Cadastral Services Cont.. 20 Strategic objective Performa nce indicator Baseline (Actual output) 2011/12 Actual performance against target Reasons for variance Target (2012/13) Actual (2012/13) An integrated land planning, spatial information and administration system to promote an equitable, sustainable land use and allocation by 2014 Operatio nal e- cadastre e-Deeds version 1 completed. Workshops completed E-cadastre not yet operational. E- cadastre developed The develop- ment processes has in the year under review delivered on the following: -Planning documents -Design documents -Content management -User access management -The portal The non achievement of targets on the development of the E-cadastre is attributed to the fact that the project fell behind schedule due to a number of reasons including disagreement between the department and the service provider. However, all disputes were resolved. The department subsequently developed a “catch-up” plan however delivery deadlines within the plan may not be realised, hence the department is developing a detailed plan for all deliverables to be achieved within realistic timeframes. The development processes has in the year under review delivered on the following: Certain planning documents, certain design documents and development verification to the Gijima system development and test environment in respect of:  Content management  User access management  The portal

21. Program 2: Geospatial & Cadastral Services Cont.. 21 Strategic objective Performance indicator Baseline (Actual output) 2011/12 Actual performance against target Reasons for variance Target (2012/13) Actual (2012/13) Skills development and sustainable economic opportunities created by 2014 Number of people trained in geomatics 1 programme initiated. The examinations for pupil Cadastral officers were set. 6057*The training programme takes two years to complete. The variance is as a result of trainees who have not graduated.

22. Program 3 : Rural Development In pursuit of promoting vibrant, sustainable and equitable rural communities, the department performed significantly well in the following service areas: Assisting rural communities with agricultural infrastructure and services, Providing households with access to socio-economic infrastructure using the CRDP model, Skills development (especially targeting rural youth) in order to improve rural livelihoods and creating Jobs through rural development initiatives. 22

23. Program 3 : Rural Development Cont.. In these performance areas, the department did not just meet its commitments for the year under review; it exceeded its set targets. This is viewed as a positive indication towards the realisation of the CRDP objectives. 2131 households access food security interventions. More than 4500 people assisted to access skills to improve rural livelihoods A total of 5881 youth were trained through the NARYSEC programme during the year under review. 23

24. Program 3 : Rural Development Cont.. 24

25. Program 3 : Rural Development Cont.. 25

26. Program 3 : Rural Development Cont.. 26

27. Program 4 : Restitution The Commission on Restitution of Land Rights finalised a total of 602 land claims between 1 April 2012 and 31 March 2013. The variance is attributed to the fact that most of the senior and executive management positions were filled which contributed to the improvement on the capacity of the Commission to deliver. The Commission settled more financial compensation claims where research work had already been completed and fewer cases which warranted referral to court resulting in an administrative settlement. 27

28. Programme 4 : Restitution A total of 376 land rights restored or awards of alternative equitable redress were finalised out of 380 targeted for. Disputes between the family members and the delays in the conveyancing processes were among the other challenges that contributed to the slight variance. 28

29. Program 4 : Restitution 29

30. Programme 5 : Land Reform Land reform remains a critical priority of the department and one of the central pillars of the CRDP. The program acquired and allocated a total of 157 556 hectares of land to beneficiaries. Improving the productivity of the acquired farms, forms part of the department’s support provided to emerging farmers, in this regard then a total of 200 farms were placed under the Recapitalisation and Development program over the financial year under review. 30

31. Programme 5 : Land Reform Cont.. Department performed significantly well in creating 1059 jobs through the land reform program. Job creation and training of farmers aimed at improving productivity of the land reform farms play a significant role in promoting sustained rural livelihoods in line with the objectives of the CRDP. 31

32. Programme 5 : Land Reform Cont…. Changes were made on the indicator “number of irrigation schemes under revitalisation” and its targets were moved from the Land Reform Program to the Rural Development Program. This was informed by the fact that revitalization of irrigation schemes has a lot to do with infrastructure development which is the competence of the Rural Infrastructure Development Branch. As a result of this, both the indicator and its targets were moved to the Rural Infrastructure Development Branch. 32

33. Programme 5 : Land Reform Cont…. Programme 5: Land Reform Strategic objectivePerformance indicator Baseline (Actual output) 2011/12 Actual performance against target Reasons for variance Target (2012/13)Actual (2012/13) Strategically located land acquired and allocated by 2014 Number of hectares acquired 392 850321 122 ha157 556 ha The department changed from a hectare- driven approach to acquisition of going- concerns (existing agricultural business concerns). Furthermore, 25% of the land acquisition budget was shifted to fund the Recapitalisation and Development Programme. Recapitalisation and development support provided to land reform beneficiaries and rural communities by 2014 Number of new farms under recapitalisation 387416200 Farms under recapitalisation and development require intensive investment. Therefore, as a result of limited financial resources, the projected targets could not be realised as planned. Skills development and sustainable economic opportunities created by 2014 Number of jobs in land reform projects New indicator2881059 The strategic partners responded positively to the call for job creation and as such, jobs created exceeded the target set. Number of farmers trained 277595421Challenges were experienced with the administration and collection of data on training. 33

34. Key priorities for the forthcoming financial year The National Development Plan (NDP) identifies the following policy imperatives, which will be the focus of the coming MTSF period: 1) Improved land administration and spatial planning for integrated development with a bias towards rural areas 2) Up-scaled rural development as a result of coordinated and integrated planning, resource allocation and implementation by all stakeholders 3)Sustainable land reform (agrarian transformation) 4)Improved food security 5)Smallholder farmer development and support (technical, financial, infrastructure) for agrarian transformation 6)Increased access to quality basic infrastructure and services, particularly in education, healthcare and public transport in rural areas 7)Growth of sustainable rural enterprises and industries characterised by strong rural-urban linkages, increased investment in agro-processing, trade development and access to markets and financial services– resulting in rural job creation 34

35. PART B 2012/1213 Financial Performance 35

36. 36 2012/13 Financial Performance Summary In the year under review, the department focused on developing policies and legislation with a view to strengthen the realisation of its mandate. As a result, extensive public consultations on key policies were held. This proved to be a significant cost driver in the year under review Details on the various policies and legislation implemented by the department are outlined in the Predetermined Objectives part of the Annual Report. The implications of the new policies and legislation will require the department to increase internal capacity to adequately support implementation. The year 2013 marks the centenary of the 1913 Natives Land Act. In this regard, the last quarter of the financial year focused on activities geared towards marking the centenary and reversing the legacy of the past. The project to identify state-owned land parcels from the ownership register managed by the Deeds Registries was completed. The construction of the Nkosi Dalibhunga Mandela Legacy Bridge, and access road between Mvezo Village and the N2 turn-off in the King Sabata Dalindyebo Local Municipality in the Eastern Cape was also completed. Funding of this project was in collaboration with the Eastern Cape Provincial Government. Expenditure for the year amounted to R8.9 billion representing 99.4% of the final appropriation (2011/12: R7.9 billion and 98.3%). This reflects an increased spending of 1.1% or R922 million. Unspent funds of R55 million (0.6%) remained attributable to delays in filling vacant funded posts. The variances per programme are detailed in the notes to the appropriation statements. As disclosed in the Appropriation Statement, virements were effected to accommodate excess expenditure in the relevant programmes. The shifting of funds within a programme was also effected in accordance with the Public Finance Management Act.

37. 37 2012/13 Financial Performance Summary cont…. The Deeds Registries are established in terms of the Deeds Registries Act, 1937 (Act 47 of 1937). The main source of funding is fees charged on the registration of deeds and on the sale of deeds information. The entity keeps full records of the financial affairs separately from that of the department. Shortfalls in the account, if any, are appropriated from savings in the budget of the department under Programme 2. The entity’s audited annual financial statements are included in this Annual Report. The Agricultural Land Holding Account was established in terms of the Land Reform: Provision of Land and Assistance Act, 1993 (Act No. 126 of 1993). The entity receives its funding from the department’s appropriated funds. It keeps full records of its financial affairs separately from that of the department. The entity’s audited annual financial statements are included in this Annual Report. The Ingonyama Trust Board is established in terms of the provisions of the Kwazulu-Natal IngonyamaTrust Act, 1994 (Act No 3 of 1994). Its core business is to manage land for the material benefit and social wellbeing of the individual members of the tribes. The entity’s audited annual financial statements are disclosed in its own Annual Report. The department did not have conditional grants transferred to other spheres of government; it had partnership agreements with entities of government as implementing agents to implement various projects on its behalf. It had transferred over R195, 9 million to these entities during the period under review. Funds that were not utilised at year-end are disclosed as receivables. On Public Private Partnership the relocation of the department’s Tshwane staff into one office campus has not progressed as anticipated. This is mainly due to the negotiations that are still taking place with the preferred bidder and National Treasury taking into account the risks associated with the review that was instituted by the reserve bidder. The department has established governance committees to assist the Accounting Officer in discharging his duties and responsibilities for the effective administration of the department.

38. 38 2012/2013 Financial 2012/2013 Financial Performance Performance R’000 2012/13R’000 2011/12R’000 Budget Allocation8,974,085 8,136,697 Actual Expenditure 8,919,567 7,997,725 Spending as a Percentage99.39%98.29% Unspent Funds136, 982 188,244 Unspent Funds as a Percentage 1.5% 2.3% Reasons for unspent funds:  Current senior management vacancy rate is 19.93 %

39. 39 Spending Per Programme Spending Per Programme PROGRAMME 2012/132011/12 Final AppropriationR’000 Spending 31/03/13R’000 Spent % Final AppropriationR’000 Spending 31/03/12R’000 Spent % Programme 1: Administration 1,107,2741,103,43099.65940,483934,24499.34 Programme 2: Geo-spatial and Cadastral Services 550,932548,36499.53587,010582,98899.31 Programme 3: Rural Development 1,086,2081,075,58499.02866,868786,39690.72 Programme 4 : Restitution 2,885,7532,865,75399.312,393,0512,376,29099.30 Programme 5: Land Reform 3,343,9183,326,45699.483,349,2853,317,80799.06 Total 8,974,0858,919,56799.398,136,6977,997,72598.29

40. 40 Virements Virements SHIFT FROMSHIFT TO AMOUNT R’000 Geospatial and Cadastral ServicesRural Development (NARYSEC) 45,000 RestitutionLand Reform (ALHA)75,766 Land ReformAdministration (Corporate Support Services) 16,000 These virements were effected for the following reason:  From Land Reform to Administration to augment the shortfall under goods and services for the renewal strategy  From Geospatial and Cadastral Services to augment the shortfall on the NARYSEC programme for stipend,the programme is extended to four years.  Restitution to Land Reform(ALHA) to implement Restitution development projects in terms of Recapitalisation and Development policy.

41. 41 Personnel establishment and Personnel establishment and vacancy rate vacancy rate PROGRAMMENumber of postsNumber of posts filledVacancy Rate % Programme 1: Administration 1,5971,30718.15% Programme 2: Geo-spatial and Cadastral Services 1,1011,0445.17% Programme 3: Rural Development 52927248.58% Programme 4 : Restitution 60752313.83% Programme 5: Land Reform 66357014.02% Deeds Registration 1,2831,13911.22% Total 5,7804,85516%

42. 42 Corporate Governance In order to strengthen accountability and weaknesses in the internal control systems: The Risk and Compliance Committee, chaired by a member of the Audit Committee has since been established and its recommendations are implemented timeously The Risk Management framework has been updated and the operating and fraud risk registers of the Department have also been updated Standard Operating Procedures are in the process of being developed The Department of Rural Development and Land Reform remains committed and will continue to implement financial management control measures to ensure that service delivery targets are met effectively and efficiently. Internal and External Audit recommendations are implemented

43. 43 Audit outcome for 2012/13 Financial 1.The departmental Audit was completed by the Auditor-General of South Africa (AGSA) within the legislated deadline of 31 July 2013. 2.The audit report was issued by AGSA on 31 of July 2013 and the department has obtained an unqualified audit opinion for the first time after receiving qualified opinions in prior years. 3.The audit report contains emphasis of matter regarding significant uncertainties. These matters were not as a result of audit findings but as disclosed upfront by the department in the notes to the AFS. The AG deemed it necessary to bring these matters to the attention of the users of the AFS. The emphasis was on: 3.1 Claims instituted against the department amounting to R3 602 million. These claims are subject to the outcome of legal proceeding. As a result, no provision for any liability (interest and legal costs) has been made in the financial statement of the department. 3.2 The department has a possible liability towards the claimants in terms of the Restitution of Lands Rights Act, 1994 (Act No. 22 of 1994). The total amount of claims verified and on route for approval in terms of section 42D of this Act amounts to approximately R205 million, for which once approved by the Minister it will increase the commitment amount disclosed in Note 21 to the AFS. 3.3 The department has a possible obligation to pay municipal rates on properties of the department. The municipalities may levy rates on properties within their areas in accordance with their rates policies for current and prior years. The ultimate outcome cannot be presently determined and no provision for any liability in respect of municipal rates that may result has been made in the AFS.

44. 44 Audit outcome for 2012/13 Financial cont… 4.Other important matters were reported by the AG and the department has already developed Management Action Plans in order to address these matters. The action plans are monitored monthly by management and progress is reported to the Audit Committee for oversight. 5.As at 30 September 2013, the department has fully implemented 51% of the totals findings raised, 35% were partially implemented, 7% not yet implemented due future implementation dates and 6% are no longer applicable. This was discussed with AGSA. 6.The department remains committed to maintaining the unqualified audit opinion that it received and will continue to implement measures to attain this ideal.

45. Financial Performance as at 30 September 2013 45

46. 2013/2014 Financial Performance summary as at 30 September 2013 1.Total spending to the end of the 2nd quarter amounted to R5.0 billion, representing 53.8% of the appropriated funds. Administration spent 64.1% Geo-spatial and Cadastral Services spent 64.6% Rural Development spent 71.8% Restitution spent 50.3% Land Reform spent 46.3% 46

47. 47 Per Programme R’000 Current budget SpendingBalance % spent Budget as % of total Spent as % of total Drawings Under / (over) spent% spent Q1 1. Administration 940,652 602,904 337,74864.1%9.9%11.8% 456,268 (146,636)30.2% 2. Geo-spatial and Cadastral Services 508,504 328,736 179,76864.6%5.4%6.5% 237,698 (91,038)22.4% 3. Rural Development 1,227,423 881,640 345,78371.8%13.0%17.3% 616,881 (264,759)34.6% 4. Restitution 3,388,048 1,703,793 1,684,25550.3%35.8%33.5% 2,425,459 721,66611.6% 5. Land Reform 3,395,113 1,571,582 1,823,53146.3%35.9%30.9% 1,640,439 68,85721.7% Total9,459,7405,088,6554,371,08553.8%-- 5,376,745 5,376,745 288,090 288,09020.6%

48. 48 Per Branch R’000 Current budget SpendingBalance % spent Budget as % of total Spent as % of total Drawings Under / (over) spent% spent Q1 1. Administration 940,652 602,904 337,74864.1%9.9%11.8% 456,268 (146,636)30.2% Ministerial Services 19,760 16,790 2,97085.0%0.2%0.3% 9,175 (7,615)40.1% Management 84,669 49,423 35,24658.4%0.9%1.0% 34,009 (15,414)28.0% Internal Audit 34,501 11,202 23,29932.5%0.4%0.2% 15,592 4,39011.3% Financial Services 303,788 159,221 144,56752.4%3.2%3.1% 157,889 (1,332)23.8% Corporate Services 251,472 227,194 24,27890.3%2.7%4.5% 117,301 (109,893)39.6% Provincial Coordination 246,462 139,075 107,38756.4%2.6%2.7% 122,302 (16,773)31.0% 2. Geo-spatial and Cadastral Services 508,504 328,736 179,76864.6%5.4%6.5% 237,698 (91,038)22.4% National Geomatics Management Serv 408,547 283,745 124,80269.5%4.3%5.6% 203,987 (79,758)23.8% Spatial Planning and Land Use Man 99,957 44,992 54,96545.0%1.1%0.9% 33,711 (11,281)16.6% 3. Rural Development 1,227,423 881,640 345,78371.8%13.0%17.3% 616,881 (264,759)34.6% NARYSEC 508,917 468,693 40,22492.1%5.4%9.2% 262,022 (206,671)42.1% RID 354,571 207,531 147,04058.5%3.7%4.1% 177,548 (29,983)31.0% REID 363,935 205,416 158,51956.4%3.8%4.0% 177,311 (28,105)27.5% 4. Restitution 3,388,048 1,703,793 1,684,25550.3%35.8%33.5% 2,425,459 721,66611.6% 5. Land Reform 3,395,113 1,571,582 1,823,53146.3%35.9%30.9% 1,640,439 68,85721.7% Total9,459,7405,088,6554,371,08553.8%-- 5,376,745 5,376,745 288,090 288,09020.6%

49. R’000 Current budget SpendingBalance % spent Budget as % of total Spent as % of total Drawings Under / (over) spent% spent Q1 Compensation of employees 1,821,186 845,264 975,92246.4%19.3%16.6% 787,266 (57,998)22.2% Goods and services 1,148,344 1,166,695 (18,351)101.6%12.1%22.9% 705,933 (460,762)47.0% Interest and rent on land - 4,583 (4,583)--0.1%- (4,583)- Payments for financial assets - (9) 9---- 9- Provincial and local governments 160 210 (50)131.4%-- 69 (141)61.8% Departmental agencies and accounts 2,545,291 1,216,536 1,328,75547.8%26.9%23.9% 1,202,470 (14,066)20.8% Foreign governments and int. org. 1,400 1,772 (372)126.6%-- 1,400 (372)- Public corporations and private entities 118,540 89,842 28,69875.8%1.3%1.8% 61,332 (28,510)27.2% Non-profit institutions 2,849 712 2,13725.0%-- 1,424 712- Households 3,787,181 1,712,804 2,074,37745.2%40.0%33.7% 2,607,924 895,12011.2% Buildings and other fixed assets 1,000 2,785 (1,785)278.5%-0.1%- (2,785)- Machinery and equipment 32,120 19,469 12,65160.6%0.3%0.4% 7,802 (11,667)32.2% Biological assets - 256 (256)---- - Land and subsoil assets - 27,735 (27,735)--0.5%- (27,735)- Software and intangible assets 1,669 - --- 1,125 - Total9,459,7405,088,6554,371,08553.8%-- 5,376,745 5,376,745 288,090 288,09020.6% Per Economic Classification 49

50. 50 Compensation of employees R’000 Current budget SpendingBalance % spent Budget as % of total Spent as % of total Drawings Under / (over) spent% spent Q1 1. Administration 596,845 251,259 345,58642.1%32.8%29.7% 282,794 31,53520.9% Ministerial Services 15,799 7,714 8,08548.8%0.9% 6,862 (852)26.3% Management 65,815 23,854 41,96136.2%3.6%2.8% 20,978 (2,876)18.1% Internal Audit 30,902 6,390 24,51220.7%1.7%0.8% 13,881 7,4919.9% Financial Services 89,491 39,791 49,70044.5%4.9%4.7% 48,095 8,30422.0% Corporate Services 167,862 74,440 93,42244.3%9.2%8.8% 81,467 7,02721.7% Provincial Coordination 226,976 99,069 127,90743.6%12.5%11.7% 111,511 12,44221.8% 2. Geo-spatial and Cadastral Services 338,928 174,027 164,90151.3%18.6%20.6% 188,464 14,43721.5% National Geomatics Management Serv 253,694 150,110 103,58459.2%13.9%17.8% 162,856 12,74623.5% Spatial Planning and Land Use Man 85,234 23,917 61,31728.1%4.7%2.8% 25,608 1,69114.1% 3. Rural Development 435,312 202,127 233,18546.4%23.9% 97,921 (104,206)22.4% NARYSEC 259,937 129,618 130,31949.9%14.3%15.3% 24,643 (104,975)24.4% RID 77,960 26,438 51,52233.9%4.3%3.1% 31,597 5,15914.5% REID 97,415 46,070 51,34547.3%5.3%5.5% 41,681 (4,389)23.6% 4. Restitution 222,265 100,216 122,04945.1%12.2%11.9% 109,110 8,89421.8% 5. Land Reform 227,836 117,634 110,20251.6%12.5%13.9% 108,977 (8,657)26.5% Total 1,821,186 1,821,186 845,264 845,264 975,922 975,92246.4%-- 787,266 787,266(57,998)22.2%

51. 51 Goods and services R’000 Current budget SpendingBalance % spent Budget as % of total Spent as % of total Drawings Under / (over) spent% spent Q1 1. Administration 315,520 312,722 2,79899.1%27.5%26.7% 170,612 (142,110)46.4% Ministerial Services 3,861 8,927 (5,066)231.2%0.3%0.8% 2,313 (6,614)93.4% Management 18,199 24,805 (6,606)136.3%1.6%2.1% 13,031 (11,774)61.8% Internal Audit 3,539 4,774 (1,235)134.9%0.3%0.4% 1,711 (3,063)23.2% Financial Services 209,159 118,066 91,09356.4%18.2%10.1% 109,739 (8,327)25.0% Corporate Services 61,627 117,823 (56,196)191.2%5.4%10.1% 33,077 (84,746)98.5% Provincial Coordination 19,135 38,328 (19,193)200.3%1.7%3.3% 10,741 (27,587)93.4% 2. Geo-spatial and Cadastral Services 78,770 71,494 7,27690.8%6.9%6.1% 40,038 (31,456)33.5% National Geomatics Management Serv 67,051 51,453 15,59876.7%5.8%4.4% 33,359 (18,094)32.8% Spatial Planning and Land Use Man 11,719 20,041 (8,322)171.0%1.0%1.7% 6,679 (13,362)37.5% 3. Rural Development 429,480 538,173 (108,693)125.3%37.4%45.9% 328,069 (210,104)65.1% NARYSEC 248,741 338,488 (89,747)136.1%21.7%28.9% 237,379 (101,109)60.6% RID 34,571 119,891 (85,320)346.8%3.0%10.2% 16,392 (103,499)230.7% REID 146,168 79,794 66,37454.6%12.7%6.8% 74,298 (5,496)33.9% 4. Restitution 136,007 158,205 (22,198)116.3%11.8%13.5% 73,682 (84,523)36.3% 5. Land Reform 188,567 90,675 97,89248.1%16.4%7.7% 93,532 2,85720.2% Total 1,148,344 1,148,344 1,171,269 1,171,269(22,925)102.0%-- 705,933 705,933(465,336)47.0%

52. 52 Transfers and subsidies R’000 Current budget SpendingBalance % spent Budget as % of total Spent as % of total Drawings Under / (over) spent% spent Q1 1. Administration 15,210 33,015 (17,805)217.1%0.2%1.1% 303(32,712)64.6% Ministerial Services --------- Management - 215 (215)---- - Internal Audit --------- Financial Services 8 2 625.4%--- (2)- Corporate Services 15,101 32,617 (17,516)216.0%0.2%1.1% 253(32,364)10.3% Provincial Coordination 101 181 (80)178.9%-- 50 (131)7972.6% 2. Geo-spatial and Cadastral Services 82,003 80,912 1,09198.7%1.3%2.7% 2,828(78,084)0.9% National Geomatics Management Serv 79,154 80,196 (1,042)101.3%1.2%2.7% 1,404(78,792)1.1% Spatial Planning and Land Use Man 2,849 716 2,13325.1%-- 1,424 708- 3. Rural Development 360,300 131,886 228,41436.6%5.6%4.4% 190,891 59,00510.9% NARYSEC - 3 (3)---- - RID 241,761 54,293 187,46822.5%3.7%1.8% 129,559 75,2665.4% REID 118,539 77,591 40,94865.5%1.8%2.6% 61,332(16,259)22.2% 4. Restitution 3,026,657 1,415,427 1,611,23046.8%46.9%46.8% 2,242,667 827,2409.5% 5. Land Reform 2,971,251 1,360,637 1,610,61445.8%46.0%45.0% 1,437,930 77,29321.5% Total 6,455,421 6,455,421 3,021,877 3,021,877 3,433,544 3,433,54446.8%--3,874,619852,74215.2%

53. 53 Payments for capital assets R’000 Current budget SpendingBalance % spent Budget as % of total Spent as % of total Drawings Under / (over) spent% spent Q1 1. Administration 13,077 5,908 7,16945.2%37.6%11.8% 2,559 (3,349)20.3% Ministerial Services 100 148 (48)148.2%0.3% - (148)237.4% Management 655 549 10683.8%1.9%1.1%- (549)42.7% Internal Audit 60 39 2164.2%0.2%0.1%- (39)15.0% Financial Services 5,130 1,362 3,76826.5%14.7%2.7% 55 (1,307)6.9% Corporate Services 6,882 2,314 4,56833.6%19.8%4.6% 2,504 19012.4% Provincial Coordination 250 1,497 (1,247)598.9%0.7%3.0%- (1,497)634.8% 2. Geo-spatial and Cadastral Services 8,803 2,303 6,50026.2%25.3%4.6% 6,368 4,0658.2% National Geomatics Management Serv 8,648 1,985 6,66323.0%24.9%4.0% 6,368 4,3836.5% Spatial Planning and Land Use Man 155 318 (163)204.9%0.4%0.6%- (318)105.6% 3. Rural Development 2,331 9,454 (7,123)405.6%6.7%18.8%- (9,454)1118.3% NARYSEC 239 585 (346)244.6%0.7%1.2%- (585)32.9% RID 279 6,908 (6,629)2476.1%0.8%13.7%- (6,908)4134.4% REID 1,813 1,961 (148)108.1%5.2%3.9%- (1,961)320.2% 4. Restitution 3,119 29,945 (26,826)960.1%9.0%59.6%-(29,945)305.9% 5. Land Reform 7,459 2,635 4,82435.3%21.4%5.2%- (2,635)13.8% Total 34,789 34,789 50,245 50,245(15,456)144.4%-- 8,927 8,927(41,318)65.2%

54. 54 Requested Adjustment Estimates for 2013/2014

55. 55 2013/14 AENE Summary 1.The department’s expenditure as at 30 September 2013 amounted to R5.0 billion, thus leaving an available budget of 4. 371 billion. 2.The approach to the AENE is the same as that to the MTEF, whereby departments must fund all additional needs towards the achievement of their identified outcomes from within their existing baseline given the Governments constrained fiscal space. The approach was then to fund all existing commitments 3.The department conducted a CRDP service delivery implementation review which resulted in reprioritising funds from Restitution and Land Reform amounting to R471 million and R629 million respectively. The purpose of this process review was to ensure alignment of the department’s budget structure to the CRDP and MTEF period and MTSF.

56. 56 Per Programme Per Programme R’000 'VOTED (MAIN APPROPRIATION) TOTAL ADJUSTMENTSADJUSTED APPROPRIATION 1. Administration 940,652 249,141 1,189,793 2. Geo-spatial and Cadastral Services 508,504 286,210 794,714 3. Rural Development 1,227,423 565,000 1,792,423 4. Restitution 3,388,048 (471,210) 2,916,838 5. Land Reform 3,395,113 (629,141) 2,765,972 Total 9,459,740 9,459,740 -

57. 57 57 Per Economic Classification Per Economic Classification R’000 'VOTED (MAIN APPROPRIATION) TOTAL ADJUSTMENTS ADJUSTED APPROPRIATION Compensation of employees 1,676,908 288,455 1,965,363 Goods and services 1,375,183 958,607 2,333,790 Provincial and local governments 141 78 219 Departmental agencies and accounts 2,481,290 (546,998) 1,934,292 Foreign governments and international organisations 1,400 373 1,773 Public corporations and private entities 118,540 (60,000) 58,540 Non-profit institutions 2,849 - Households 3,787,154 (664,994) 3,122,160 Buildings & other fix structures - 1,000 Machinery and equipment 14,827 23,260 38,087 Software and intangible assets 1,448 219 1,667 Total 9,459,740 9,459,740 -

58. 2014/2015 to 2016/17 MTEF reprioritisation and additional funding requirements 58 58

59. 59 2014/2015 MTEF Summary During 2009, the South African Government conceptualized the Comprehensive Rural Development Programme (CRDP)Comprehensive Rural Development Programme of which the key thrust of the CRDP framework is an integrated programme of rural development, land reform and agrarian change, with a strategic focus on social cohesion and development. The NDP states that since 1994, the main challenge for rural development has been marginalisation of the poor, with many rural areas and households trapped in a vicious cycle of poverty. Rural areas and communities require greater social, economic and political opportunities to overcome the legacy of marginalization and poverty. Led by the Department of Rural Development and Land Reform (DRDLR), and in collaboration with other sector specific stakeholders, the Department drafted the Priorities for the 2014 – 2019 Medium Term Strategic Framework (MTSF). In preparing for the 2014 medium term expenditure framework (MTEF) the department was therefore guided by the above Frameworks and the resources available to meet the demand of the tasks. The outcome of the baseline assessment is that the current baseline is not aligned to the CRDP process flow that will assist the department in implementing the priorities effectively. For this purpose reprioritisation of programmes within the current baseline is recommended. The department has further noted that after reprioritizing the budget within the current baseline there are still gaps,due to new policies introduced after following the green paper remain unfunded, these include the new bills that are at the final consultation processes. Over and above that structural deficiencies were identified in the budget which necessitate further funding requests. The department is therefore recommending additional funding to the amount of R6.8 billion over the MTEF period.

60. 60 2014/2015 MTEF Summary Summary cont…. Following engagements with National Treasury, the Department was advised to review its reprioritisation to realise savings amounting to R2 billion over the 2014 MTEF baseline. The following principles were followed in realising the savings: 1.Fund all the existing commitments as far as possible, for Restitution, Land Reform and in Administration. These include, Compensation of employees, goods and services contracts, Restitution Claims that will possibly be concluded over the medium term, Recap and development Commitments as well as land acquisition. 2.This assumed that NARYSEC commitments will be funded through the competitive bidding process 3.It was assumed that Rural Development will upscale its coordination role over the 2014 MTEF years and transfer the implementation role to the relevant sector departments with specific competencies As a result, the department’s baseline was reduced as follows over the MTEF years. 2014/15 – R500 million 2015/16 – R550 million 2016/17 – R950 million

61. 61 Existing priority programmes and spending Pressures Total Indicative 2014 MTEF Allocation9 905 305 Committed Compensation Costs(1 760 909) Transfers and Subsidies Restitution Land Reform (6 412 776) (3 351 028) (3 061 694) Remaining Funds for distribution1 731 620 Programme 1: Administration Office Accommodation Audit Fees Enterprise Project Management Office Internal Audit Plan Infrastructure and Communication Technology Security Communication through Growing Up (345 778) (141 678) (18 000) (20 000) (15100) (100 000) (30 000) (21 000) Programme 2: Cadastral and Geo – Spatial Services E-Cadastre Survey for State Domestic Facility Integrated National Spatial Information Management System (245 300) (98 300) (40 000) (107 000) Programme 3: Rural Development Rural Infrastructure Development Rural Enterprise and Industrial Development National Rural Youth Services Corps (1 278 680) (375 593) (374 882) (528 205) Total Funds Remaining(138 138) The department undertook a rigorous baseline assessment in trying to identify savings. The approach focused on allocating funding to funded filled posts, followed by contractual commitments. As outlined in the table the process led to a shortfall of R138.1 million in year one, without including other operational costs and policy priorities. We therefore concluded that relying only on the baseline assessment will still leave most Programmes unfunded for the strategic objectives to be achieved by the Department.

62. 62 Original Reprioritisation within the Original Reprioritisation within the department department Department 2014/15 2015/16 2016/17 Indicative allocation '2014/15 Proposed Repriori- tisation NEW REVISED ESTIMATE Indicative allocation '2015/16 Proposed Repriori- tisation NEW REVISED ESTIMATE Indicative allocation '2016/17 Proposed Repriori- tisation NEW REVISED ESTIMATE 1. Administration 892 993 316 700 1 209 693 947 390 333 801 1 281 191 1 006 186 351 493 1 357 679 Ministerial Services 21 020 5 800 26 820 22 830 6 113 28 943 24 280 6 437 30 717 Management 68 529 72 000 161 038 74 790 75 888 171 977 102 150 79 910 182 060 Internal Audit 36 746 26 500 63 246 38 475 27 931 66 406 40 963 29 411 70 374 Financial Services 248 565 235 398 260 725 - 246 995 261 379 - Corporate Services 265 767 140 300 398 725 275 411 147 876 415 718 284 391 155 714 440 105 Provincial Coordination 252 366 72 100 324 466 275 159 75 993 351 152 293 023 80 021 373 044 2. Geo-spatial and Cadastral Services 542 522 262 343 804 865 579 955 276 509 856 464 616 685 291 163 907 848 National Geomatics Management Services 421 662 40 000 461 662 449 331 42 160 491 491 475 579 44 394 519 973 DEEDS 13 741 98 300 112 041 14 894 103 608 118 502 17 957 109 099 127 056 Spatial Planning and Land Use Management 107 119 124 043 231 162 115 730 130 741 246 471 123 149 137 670 260 819 3. Rural Development 1 278 680 832 939 2 111 619 1 328 168 877 918 2 206 086 1 401 797 924 446 2 326 243 NARYSEC 528 205 543 036 - 572 619 - RID 375 593 507 510 883 103 392 890 534 916 927 806 414 786 563 265 978 051 REID 374 882 325 429 700 311 392 242 343 002 735 244 414 392 361 181 775 573 4. Restitution 3 717 344 (756 602) 2 960 742 3 888 859 (797 459) 3 091 400 4 098 133 (839 724) 3 258 409 Operations 366 316 383 684 - 407 184 - Grants 3 351 028 (756 602) 2 594 426 3 505 175 (797 459) 2 707 716 3 690 949 (839 724) 2 851 225 5. Land Reform 3 473 766 (655 380) 2 818 386 3 530 102 (690 769) 2 839 333 3 720 486 (727 378) 2 993 108 Department 1 196 308 (303 000) 943 308 1 291 523 (319 362) 1 022 161 1 415 912 (336 288) 1 079 624 Departmental agencies and accounts 2 277 458 (352 380) 1 875 078 2 238 579 (371 407) 1 817 172 2 304 574 (391 090) 1 913 484 Total 9 905 305 - 10 274 474 - 10 843 287 -

63. 63 Analysis of Reprioritisation Programme 1. Administration: Current indicative allocation amounts to R892.9 million an amount of R316.7 million was reprioritized to administration which increased budget allocation to R1.209 billion whereby the main contributor is for committed costs for IT, which constitutes 12% of the total departments’ budget. Under administration programme there are costs that relates to the provincial support services (R324.5 million) and office accommodation (R141.7 million), in real terms when you deduct the mentioned allocation which amounts to R466 million. The total allocation for administration then amounts to R743.5 million which constitutes 7.5% of the total department’s budget of R9.905 billion. Programme 2. National Geomatics Management Services Current indicative allocation amounts to R542.5 million an amount of 262.3 million was reprioritized for National Geomatics Management Services which increased budget allocation to R804.8 million whereby the main contributors are Ecadastre, SPLUM and State Domestic Facility. The programme still remained with a budget shortfall of R258, 3 million for the implementation of SPLUM and the development and implementation of the E – Cadastre. Programme 3. Rural Development Current indicative allocation amounts to R1.278 billion an amount of R832.8 million was reprioritized to Rural Development which increased budget allocation to R2.211 billion whereby the main contributors are RID and REID. The programme still remained with a budget shortfall of to R872.5 million (REID) for the implementation of the CRDP concept. Additional funding for NARYSEC will be requested through economic competitive bid. Programme 4. Restitution Current indicative allocation amounts to R3.717 billion an amount of (756.6 million) was reprioritized through CRDP process which decreased budget allocation to R2.961 billion. The programme still remained with a budget shortfall of R686 million for Restitution re opening and will be submitted to NT. Programme 5. Land Reform Current indicative allocation amounts to R3.474 billion an amount of (655.4 million) was reprioritized through CRDP process which decreased budget allocation to R2.818 billion. The programme still remained with a budget shortfall of R570, 5 million for recapitalization to support small holder farmers and the establishment of the Office of the Valuer General.

64. 64 New Priority Programmes and estimated costing costing Policy Priority 2014/15 R’000 2015/16 R’000 2016/17 R’000 Total R’000 A. Improved land administration and spatial planning for integrated development with a bias towards rural areas(Implementation of SPLUM) 120, 00060, 00040, 000220, 000 B. Sustainable land reform agrarian transformation (implementation of the Office of the Valuer General) 75, 00060, 00050 000185, 000 C. E – Cadastre138, 300141, 800113 800393, 900 D. Improved food security (Rural Enterprise and Industrial Development,REID) To be revised and aligned with the DAFF bid. 872, 500924, 5541046 9872, 844, 041 E. Restitution686, 000368, 900388 4511, 443, 351 F. Smallholder farmer development and support (technical, financial, infrastructure) for agrarian transformation. Recapitalisation and Development programme. 459, 452530, 321733 5071, 723, 280 Total2, 351, 2522, 085, 5752 372 7456, 809, 572 The policy context for Rural Development includes the establishment of rural business initiatives, agro-industries, co- operatives, cultural initiatives and vibrant local markets in rural settings and the empowerment of rural people and communities (especially women and youth) within the CRDP as strategic priority number 3 within the current Medium Term Strategic Framework. The Department will submit a separate bid through the General Budget Support (GBS) Programme for National Rural Youth Services Corps.

65. Revised 2014/2015 MTEF following engagements with national treasury 65

66. 66 Revised Reprioritisation within the Revised Reprioritisation within the department department Department 2014/2015 2015/2016 2016/2017 Indicative allocation '2014/2015 Proposed Repriori- tisation NEW REVISED ESTIMATE Indicative allocation '2015/16 Proposed Repriori- tisation NEW REVISED ESTIMATE Indicative allocation '2016/17 Proposed Repriori- tisation NEW REVISED ESTIMATE 1. Administration 892,993 316,700 1,209,693 947,390 333,801 1,281,191 1,006,186 351,493 1,357,679 Ministerial Services 21,020 5,800 26,820 22,830 6,113 28,943 24,280 6,437 30,717 Management 68,529 72,000 161,038 74,790 75,888 171,977 102,150 79,910 182,060 Internal Audit 36,746 26,500 63,246 38,475 27,931 66,406 40,963 29,411 70,374 Financial Services 248,565 235,398 260,725 - 246,995 261,379 - Corporate Services 265,767 140,300 398,725 275,411 147,876 415,718 284,391 155,714 440,105 Provincial Coordination 252,366 72,100 324,466 275,159 75,993 351,152 293,023 80,021 373,044 2. Geo-spatial and Cadastral Services 542,522 262,343 804,865 579,955 276,509 856,464 616,685 291,163 907,848 National Geomatics Management Services 421,662 40,000 461,662 449,331 42,160 491,491 475,579 44,394 519,973 DEEDS 13,741 98,300 112,041 14,894 103,608 118,502 17,957 109,099 127,056 Spatial Planning and Land Use Management 107,119 124,043 231,162 115,730 130,741 246,471 123,149 137,670 260,819 3. Rural Development 1,278,680 332,939 1,611,619 1,328,168 327,918 1,656,086 1,401,797 274,446 1,676,243 NARYSEC 528,205 543,036 - 572,619 - RID 375,593 207,510 583,103 392,890 184,916 577,806 414,786 163,265 578,051 REID 374,882 125,429 500,311 392,242 143,002 535,244 414,392 111,181 525,573 4. Restitution 3,717,344 (756,602) 2,960,742 3,888,859 (797,459) 3,091,400 4,098,133 (1,139,724) 2,958,409 Operations 366,316 383,684 - 407,184 - Grants 3,351,028 (756,602) 2,594,426 3,505,175 (797,459) 2,707,716 3,690,949 (1,139,724) 2,551,225 5. Land Reform 3,473,766 (655,380) 2,818,386 3,530,102 (690,769) 2,839,333 3,720,486 (727,378) 2,993,108 Department 1,196,308 (303,000) 943,308 1,291,523 (319,362) 1,022,161 1,415,912 (336,288) 1,079,624 Departmental agencies and accounts 2,277,458 (352,380) 1,875,078 2,238,579 (371,407) 1,817,172 2,304,574 (391,090) 1,913,484 Total 9,905,305 (500,000) 9,405,305 10,274,474 (550,000) 9,724,474 10,843,287 (950,000) 9,893,287

67. IMPLICATIONS OF THE BASELINE REDUCTION Land acquisition will be affected by funds reprioritized out of Land Reform and Restitution Grants (lesser claims will be settled) As Rural Development (REID and RID) will be receiving lesser funding from the reprioritisation. This implies that current commitments that will be running over the MTEF year will remain unfunded. It is therefore, assumed that the relevant sector will inherit those existing commitments. The Policy Options as submitted still remain a necessity. However, the Rural Development funding if secured will have to be allocated to the sector departments (EARMARKED FOR THE PURPOSE ORIGINALLY INTENDED FOR BY THE DRDLR) 67

68. 68 THANK YOU