The National Development Plan (NDP) aims to eliminate poverty and reduce inequality by 2030. South Africa can realise these goals by drawing on the energies of its people, growing an inclusive economy, building capabilities, enhancing the capacity of the state, and promoting leadership and partnerships throughout society. The NLC is the largest organisation with a lotteries and sport pools regulatory and funding mandate in Africa. In line with its mandate, vision and mission, the NLC’s formulation of programme activities and targets is aligned to the political, social and economic realities of South Africa.
In particular, the NLC’s role and functions as outlined in the Lotteries Act (as amended) places an obligation on the organisation to support (directly and indirectly) the electoral mandate of Government. From a strategic perspective, the sight of government priorities provides a major opportunity for the NLC within the disciplinary context of social development and social upliftment. These include addressing unemployment and alleviating poverty in alignment with the NDP. The NLC is therefore driven by government policies on economic and social development.
The NLC is governed by policy which is significantly influenced by the political landscape in the country. The organisation has positively contributed to the outcomes in the NDP through funding initiatives that have created employment, alleviated poverty and empowered women.
South Africa’s economy is no longer regarded as stable and has experienced increasing economic pressure which has been a major driver of strikes and protests. The revenue received from the National Lottery Operator has been stagnant for the past 5 years. In addition, the number of registered NPO’s has doubled to approximately 136 000 from 2010 to 2015 implying the additional demand for funding. The high levels of unemployment also negatively affect disposable income. These falling levels in disposable income implies that basic needs come first and the purchase of a lottery ticket might not be a priority. This could contribute to people participating in alternative illegal activities that exhibit higher success of winnings. Through these tough economic times, it is envisaged that selling “hope” through a game of chance may prove to be lucrative on the sale of national lottery tickets. In addition, the NLC has positively contributed by creating and sustaining approximately 25 000 jobs sustaining in excess of an estimated 25 000 jobs.
Stats SA’s estimate for the 2016 mid-year population puts the total at 54.9 million people. (Growth of 6% in 5 years). The age profiles are as follows: 0-14 years: 28.34%; 15-24 years: 18.07%; 25-54 years: 41.44%; 55-64 years: 6.59%; and 65 years and over: 5.57%. These statistics indicate that the majority of SA’s population is eligible to play the lottery (18 years and older). Despite the general decline in poverty between 2006 and 2011, poverty levels in SA rose in 2015. When applying the upper-bound poverty line (R992 per person per month in 2015 prices), we see that more than one out of every two South African’s were poor in 2015, with the poverty headcount increasing to 55,5% from a series low of 53,2% in 2011. This translates into over 30,4 million South Africans living in poverty. It was also noted that richer children get a better quality of education; they are more likely to progress to higher levels of education, which in turn bring them much higher rewards in the labour market. Since these two lines have a strong slope in South Africa, inequality is likely to perpetuate itself from generation to generation. In the previous financial year, the NLC invested around R600 million in building Early Childhood Centres nationally in order to address issues on inequality created through education and poverty.
Playing the National Lottery could still be considered taboo in certain religious and cultural groups but the trend is rapidly changing due to the NLC exhibiting all the good causes that have been funded through proceeds from the sale of lottery tickets.
In the context of the Fourth Industrial Revolution and its disruptive effect on all economies, there are three things to consider as Africa aims to maintain its “Africa rising” narrative:
(a) The development of digital skills is paramount;
(b) All industries are being digitally disrupted, which presents an opportunity for a growing digital economy;
(c) Public-private partnerships are powerful levers for change.
The real economy and the digital economy are not mutually exclusive. The two have become one and the same as technologies blur the lines between the physical, digital, and biological spheres. The vast and growing potential of the Fourth Industrial Revolution is yet to be fully grasped. The ICT sector, industry and governments have a responsibility to unlock its potential for citizen service delivery, customer experience and innovative solutions, for a better life for all. The NLC’s Enterprise Wide Architecture aims to do exactly this from both an internal as well as external perspective. Entire systems of production, management and governance are being affected and, as digitization continues, the issue becomes intimately intertwined with addressing youth unemployment, manufacturing and harnessing human innovation. Furthermore, the increase of mobile and internet use comes with its own threats – namely cyber security, which has become a massive global problem. Prioritizing cyber security capabilities is not only important for protecting organizations and their customers’ data, assets and reputations, but also fundamental to successful digital transformation. For the NLC, online gambling has changed the landscape as people want to participate at their convenience. The scourge of illegal online lotteries and gambling has encroached into the Lottery space. The promotion of Fantasy gaming further exacerbates the situation.
The NLC has set aside necessary investments to enable staff and external stakeholders to participate in and benefit services from a secured infrastructure and enterprise architecture. Innovation remains a tool towards success, especially within an era of increasingly advancing business, social, and economical environments. We plan to introduce innovative methods of interaction, for example through use of mobile devices to allow stakeholders take on new roles as enabled and empowered participants. In order to capitalise on these opportunities, the NLC shall ensure that the developed technology roadmap encapsulates principles of a flexible, scalable, cost-effective and risk tolerant infrastructure and enterprise environment. It must however be noted that introducing new services in a network often presents challenges, among them security. At the NLC, this is addressed through the enacted ICT Governance Framework.
The proposed amendments to the Gambling Bill could positively impact on the NLC. Amendments to the Gambling Legislation in the country could possibly provide the enforcement powers the NLC requires to combat illegal lotteries as well as provide opportunities through licensing bookmakers for taking bets on the outcome of the National Lottery. However, the lack of alignment between the Provincial Gambling Legislation and the National Gambling Bill implies that illegal lotteries will still remain a threat. Fantasy Gaming is also not addressed by the legislated amendments.
During this period we introduced the “open-call” system for receipt of applications that heralded the end of the previous model of “Call for Applications” for funding good causes. The “Call for Applications” model permitted the NLC to accept applications only if they were submitted during a fixed window period (usually 3 months) on an annual basis. This often resulted in worthy and deserving causes not being able to access funding if the window period was closed. The open-call on the other hand means that applications will be accepted throughout the year at all NLC offices and there is no closing date. The open call system has resulted in operational efficiencies and the elimination of the historic application backlog.
Making inroads into reducing inequalities through provisions in the Act that now allow the NLC to pursue proactive funding based on research will help us to support innovative projects with greater impact and provide emergency support where the need arises.
The NLC through its mandate has also played a role to bring about this growth by ensuring that funds are distributed to qualifying beneficiaries. Sectors funded by the NLC contribute to job creation, rural development, infrastructure development, promoting wellness and social cohesion. This aligns to the objectives of the NDP as well as the Nine Point Plan in order to eliminate poverty and reduce inequality by 2030 and also bring about economic growth. Over R22 billion has been distributed to good causes since its inception. However, the reliance on a single source of funds does not make it possible to address the needs of the entire NGO/NPO sector in South Africa.
Corporate governance is crucial to business sustainability and growth of the organisation. The development and implementation of a proper corporate governance framework is endorsed by the Board. The Board accepts responsibility for the application and compliance with the principles of ensuring that effective corporate governance is practised consistently throughout the organisation. The Board discharges this role through its charters based on a Corporate Governance Framework which includes, amongst others, the principles of the Lotteries Act, the PFMA, Treasury regulations and good governance principles. These are further aligned to the organisations top strategic risks and reviewed annually.
