The Mineworkers Development Agency (MDA), the development and job creation arm of the National Union of Mineworkers (NUM), has temporarily shut its development centres and retrenched 43 staff.
The MDA is restructuring its operations after its main donor, the United Kingdom Department for Inter- national Development (DFID), reviewed the agency’s programmes in January last year. The review concluded that the “strategic direction of MDA shaped by the [development centres] is flawed”, and cited a mixed record of achievements that had set the MDA “on a course with inherently conflicting roles, which does not build its core competence”.
Sam Mphaka, the MDA’s finance and business manager, said the agency had retrained 14 000 mineworkers since it was established in 1987. About 300 000 mineworkers have been retrenched over the past decade.
The DFID funds about 60% of the MDA’s budget of about R20-million, but the grant will end in March, he said.
Monthly overhead costs were about R1,2-million, but only about R200 000 of this is spent on development, Mphaka said.
“The MDA as a development agency is no longer capacitated to carry a huge staff costs,” said general secretary of the NUM Gwede Mantashe. “Development is seasonal because it is based on donor funding … it has become too expensive to maintain fixed costs.”
The NUM established the MDA in 1987 to mitigate the effects of job losses in the mining sector. In 1995 the MDA registered as a non-profit company.
The MDA’s main achievement in the 1990s was the establishment of nine development centres, where retrenched miners learned new skills and were encouraged to start their own businesses.
The centres were registered as subsidiaries to the MDA and offered training in 33 skills for mini-enterprises. They were supposed to generate their own operating funds, but according to the British report their commercial nature contradicted the MDA’s mandate as a non-governmental development organisation. The report noted that most of the centres were only breaking even. Where they were profitable, the profits were used to cross-subsidise operational costs rather than being reinvested into the businesses.
“The [business side] of the centres was unviable and needed to be continuously subsidised by the MDA head office … [in some cases] they defeated their original purpose [as service providers] in that they became competitors to local entrepreneurs,” said Sifiso Ndwandwe, the MDA’s CEO.
The report advised the MDA to move away from its role as a service-delivery vehicle and act rather as a project facilitator by using funding to outsource training. This new strategy means that the MDA will cease “all materials wholesaling, retailing and training activities and apply its experience to its role as facilitator of services”, according to its strategic plan for 2003-2008.
“All [existing] branches and offices will be abolished … project staff will occupy the premises … that may be temporarily leased from NUM offices.”
Mphaka says donors will fund short-term projects identified by the MDA .
A separate development company has been established to operate the MDA’s commercial ventures. The company will take over the MDA’s shareholding in Marula Natural Products and its 50% shareholding in the Rural and Urban Technology Company (Rutec). Rutec was acquired jointly by the MDA and the Land Bank in 1998.
The new company will also take over the commercial activities and fixed assets of the development centres.
The 43 staff who have been retrenched believe the new direction is a tragedy for mineworkers “who look to the development centres as the light at the end of tunnel”, says Cyril Turton, the former marketing and promotions manager at the MDA. “The guy who has been in the pits all his life is the end loser, while we engage in intellectual masturbation.
“The MDA has simply become a large consultancy with nothing that differentiates it as a development agency,” said Turton. “I understand the need to restructure and move to a different stage, but the MDA has lost its geographical strength and there is an irony in the social plans it fights for and how it has treated its staff.”