Presentation by the Minister of Communications, Ms. A.F. Muthambi on the occasion of the presentation of 2015/16 annual report and audited annual financial statements of Brand South Africa in Parliament
Honourable Chairperson and Members,
Nation Brand, COO effect to Consumers and Investors
A country image is the mental picture of a country, the sum of beliefs and impressions people hold about the place. Every nation has an image which colours both the consumer’s perceptions of a country’s products and services and investor’s perceptions of the country as a place in which to do business.
Products bearing a ‘made in Germany’, ‘made in Switzerland’ or ‘made in Japan’ labels are commonly regarded as high quality, due to the reputation of these countries as top world manufacturers and exporters.
Consumers continue to associate and evaluate a given product line with specific countries. France is well known for perfumes, German cars, and Japanese electronics. These are just some of the examples where national image is synonymous with quality, workmanship, durability, style or taste. In fact, research has shown that the country of origin effect is product specific.
This nuance is important ‘because of the increased sourcing of production by multinational firms and their use of global, standardised advertising for their products.
In fact, one can argue that the only time we really stop to separate country of origin, country of manufacture, country of assembly is when we are buying expensive items or products that fall under the category of “fair-trade.” Research has shown that the country of origin effect is product specific.
Honourable Chairperson and Members,
The Role of Nation Brand
A Nation Brand is about using strategic marketing to promote a country’s image, products, and attractiveness for tourism and foreign direct investment. This implies that countries “behave, in many ways, just like brand, they are perceived in certain ways by large groups of people both at home and abroad; they are associated with certain qualities and characteristics.”
In a global economy increasingly driven by services, a country’s brand impacts virtually every aspect of its international engagement, and thus plays a critical role in its economic, social, political and cultural progress.
Without a powerful and positive reputation or “nation-brand”, no country can consistently compete for consumers, tourists, investors, and gain the respect and attention of other countries and the world’s media.
A clear, believable and attractive national brand is achieved when the country’s main organisation, activities and investments are accidentally or deliberately organised around a clear and shared vision, and when its communication channels with the rest of the world are harmonised.
Honourable Chairperson and Members,
Context and Complexities of the work of Brand South Africa
Marketing a brand is a tough and complex task; and this is even more so when brand is an entire nation. The challenges are multiplied by the size and diversity of the target market, which is the entire world, and the critical 54.million stakeholders at home.
The primary objective of Brand South Africa is to develop and implement pro-active and co-ordinated marketing, communication and reputation management for South Africa. The ultimate aim is to make a contribution towards economic growth, job creation, poverty alleviation and social cohesion by encouraging local and foreign investment, tourism and trade through the promotion of Brand South Africa.
The Brand South Africa’s work is guided by South Africa’s national objectives of economic growth, job creation, poverty alleviation and social cohesion, as reflected in the Constitution, the Medium Term Strategic Framework, National Policy Frameworks (IPAP2), Nine-Point Plan, the National Development Plan (NDP), the National Communications Framework and the International Relations Strategy.
In accordance with the outcomes based performance management framework adopted by government in 2010, BSA contributes to three outcomes; Outcome 4; on increased competitiveness; Outcome 14 social cohesion and nation building and Outcome 12; pride and patriotism, active citizenship.
Honourable Chairperson and Members
On Board and Governance Matters
Allow me on behalf of the Ministry and the Departments, to convey my word of gratitude to the previous Board of Trustees, whose tenure ended in March 2016, under the leadership of Chairperson, Ms Chichi Maponya, who together with the rest of the Board, served the nation with distinction and commitment.
The term of the office for Board Trustees coincided with the coming to an end of the then CEO of the entity’s contract, Mr Miller Matola whom we acknowledge his contribution to Brand South Africa.
The tenure of the ‘Trustees’ as they are called, ended on the 12 March 2016, but they remained registered as Trustees at Master’ of the High Office as at 31 March 2016.
As the Ministry, following the appointment by The Presidency, we welcome the new Board of Trustees under the stewardship of Ms. Khanyisile Kweyama and CEO Ambassador Kingsley Makhubela.
Chairperson and Members, we need to point out that these prominent South Africans who serve in the Board of Trustees are not remunerated for their services and this has been the position ever since the Trust was created in 2002.
Honourable Chairperson and Members
On key Performance Targets and challenges
Achievements
In the main, Brand South Africa achieved most of their targets with programme 2 achieving all planned targets for this financial year. Brand South Africa received a clean audit, which is the first since its inception.
Other notable achievements include the following:
- A positive cash flow from operating activities.
- For the first time after three years of reporting a deficit, the entity has reported a surplus in its books, which is sufficient to fund the accumulated prior year deficit.
- Main cost drivers were reduced and more synergies were sought.
- No irregular expenditure was incurred.
- The entity, however, incurred R150 000 on fruitless and wasteful expenditure and this relates to the interest incurred on late penalties to SARS in the first quarter.
- The vacancy rate at Brand South Africa has dropped from 28% in the 2011/12 financial year to 4 % in the 2015/16 financial year and the staff complement is dominated by women in most categories of employment within the organisation.
Challenges
Some of the targets which were not achieved in programme 3, mainly related to the fact that USA Country manager was only appointed in the middle of the financial year, hence this impacted on set targets which we all know, targets are broken-down into four (4) quarters to make to totally yearly targets.
As reported to you last week, we have directed all our entities not to report on partially achieved targets in future, and Brand South Africa is one of those entities affected by this.
Brand South Africa is at 1% with regard to the employment of people with disabilities as compared to the national 2% target set by cabinet .As the Ministry, we have been assured by the entity, that plans are ongoing in filling a management position with a person with disability.
Lastly, marketing every aspect of the country including managing the reputational deficit posed by a variety of things such as online racial intolerance, in communities and schools; protests which are destructive to government property requires more than just the entity’s 59 permanent staff, including those employed in its China, US and UK offices.
Additional information
Domestic Activities
During the second half of the financial year, when South Africa was faced with severe droughts and water restrictions, Brand South Africa partnered with the North West Premier’s Office, Operation Hydrate, Nelson Mandela Foundation and local media to distribute water in the Swartruggens area.
Brand South Africa implemented Play Your Part (PYP) roadshows which reached all provinces to promote active citizenship in the country.
The South African Competitiveness Forum (SACF) is one of Brand South Africa’s strategic platforms through which it consults with stakeholders from business, government, civil society and academia.
During the year under review, Brand South Africa’s primary SACF action plan took the competitiveness and reputation discussion to each of the nine provinces. The outcome of the provincial SACF discussions will inform planning for a Nation Brand Forum that Brand South Africa which was recently hosted in the current 2016/17 financial year.
Youth Empowerment
Government has stressed the importance of empowering and working with the youth. It is in this regard that Brand South Africa made significant progress in reaching the youth locally through strategic partnerships.
- The partnerships included Young, Free and Educated, a programme of the Association for Responsible Alcohol Use that focuses on the youth and responsible alcohol consumption.
- The Bokamoso Mentorship Programme, an entrepreneurship programme targeting school learners; and
- PrimeStars on the Step Up 2 a Start-Up Programme, a youth initiative which encourages entrepreneurship and innovation among disadvantaged high school learners in urban areas, peri-urban townships and rural areas across South Africa.
African Agenda, BRICS, USA and UK
The NDP outlines the need for increased intra-African trade, underpinned by human and regional integration cultural products, is a major reputation enhancer, and brings South African culture into the homes and lives of its African peers.
Brand South Africa undertook a number of dialogues in six African countries (Angola, DRC, Ghana, Kenya, Nigeria and Senegal) under the theme, ‘Re-imagining the Future towards AU Agenda 2063: The Ties that Bind Us’.
Brand South Africa conducted a reputation management programme in the United Kingdom, the USA and the BRIC markets to position South Africa as a competitive destination.
What makes this picture more interesting is the fact that South Africa not only attracted the bulk of FDI projects, but is also (together with the UK) the second largest source of FDI projects on the continent.
South Africa’s footprint in the continent (in terms of business and FDI) is a major competitive advantage. Brand South Africa published a special report on the need for cultural competence when entering or engaging with peer African markets.
International Indices
- According to the EY Africa Attractiveness Survey 2015, South Africa is the top destination for foreign direct investment (FDI) projects: the country attracted 121 projects in 2014/15.
- The World Competitiveness Report indicate that South Africa’s overall position improved by one position to 52 out of 148 economies; with improvements recorded in the country’s economic performance and infrastructure.
- South Africa’s sound financial sector and its well-established corporate governance track record remain key competitive offerings to the world;
- Challenges in the same Report, however, the country dropped in position on business efficiency and government efficiency, which is a cause for concern as we position the country as an investment destination
Research projects and strategic advice to government
The mandate of Brand South Africa requires the understanding of domestic trends, perceptions and factors, which impact on the pride and commitment of South Africans to the Nation.
The South Africa’s Domestic Perceptions Research findings contribute to developing an understanding of how South Africans perceive the Nation Brand, and tracks indicators such as national pride, attitudes, values and beliefs.
The findings also help the entity to understand and respond to a dynamic and evolving national identity.
During the year under review the following were executed:
- Brand South Africa shared findings with the Africa Steering Committee of the Department of Public Enterprises to assist state-owned companies with market insights, and strategic advice pertaining to market entry and reputation strategies.
- Brand South Africa also provided input to the Department of International Relations and Cooperation (DIRCO), particularly to relevant missions and country desks.
Over 80% of the population claim that they are extremely proud to be South Africans and being a South African is how the people in the country identify themselves.
Challenges evident from the findings include the following:
- There is a need to encourage active citizenship beyond the comfort zones of home and family, church and religious activities, and organised politics.
- Indian and White respondents to the study have a perception that they have not benefited much from South Africa’s democracy – this has implications for both social cohesion and pride/commitment to South Africa
- Lack of employment opportunities poses challenges to the reputation of government.
- There is a lack of trust in leadership among the country’s youth.
- The most worrying issues South Africans cite are crime, corruption and unemployment.
- Race and historical legacy issues impact on social cohesion, reconciliation and social integration.
