Chief Financial Officer: SANParks
‘I can tell you about SANParks the whole day because it’s just a fascinating job for me and it’s very different in what we do.’
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CIARAN RYAN: This is CFO Talks and today I’m delighted to be joined in the studio by Dumisani Dlamini, the chief financial officer of South African National Parks, which is one of the great assets of South Africa and we’re going to get into what exactly is in that portfolio in a minute. But, first of all, welcome, Dumisani.
DUMISANI DLAMINI: Thank you very much.
CIARAN RYAN: Let’s kick-off with what exactly is South African National Parks, what is in that portfolio? I think everybody around the world would know Kruger National Park, that is one of the great parks that we have, it’s the size of Belgium and anybody who comes to this country wants to go there but can you give us the helicopter view of what this portfolio is?
DUMISANI DLAMINI: South African National Parks is a South African public entity under the Department of Environment, Forestry and Fisheries. We are a national asset to South Africa, we look after more than four million hectares of conservation land, which forms about 67% of the land.
CIARAN RYAN: 67% of the land in South Africa is national park?
DUMISANI DLAMINI: No, 67% of conservation land. So the other conservation land will fall under provincial, as well as local, municipalities, and that’s why we are National Parks. So you’ve got different game reserves and other different kinds of parks.
CIARAN RYAN: Right, so is it possible then for people at a provincial level – for people who are not from South Africa, we have nine provinces here – a province can have its own national park, it doesn’t fall under you?
DUMISANI DLAMINI: Absolutely and I will give you two examples, in KZN we have Ezemvelo KZN Wildlife, which is a provincial park, also in the Western Cape we’ve got CapeNature. So you’ll find that in the North West and in different provinces they have conservation that forms part of the provincial portfolio.
CIARAN RYAN: So we’re talking here about the National Parks, give us a sense of what is in that portfolio, what are the big flagship parks?
DUMISANI DLAMINI: We have 19 functional parks in total and in that we have got a number of beautiful parks and each park offers a unique experience. To take you through some of the flagship parks, and people might not know SANParks but they definitely know Kruger National Park because everyone who comes to South Africa doesn’t want to leave without visiting the Kruger National Park, it is one of our biggest parks, it covers over two million hectares of land, as you have indicated, the size of Belgium.
New four-star lodge at Skukuza
CIARAN RYAN: It takes a day to drive from north to south.
DUMISANI DLAMINI: It takes a day to drive from north to south, it’s a beautiful park, you find different animals in any of the camps. So you can be in Mopani, which is the northern part of the park, you can go to Punda Maria, you can go to Lower Sabie, you can go to Skukuza, so we have many offerings. Our latest tourism product in that particular environment we have built a 250-bed lodge, it’s a four-star hotel in the bush with absolutely top-notch services.
CIARAN RYAN: Is this in Skukuza?
DUMISANI DLAMINI: This is in Skukuza, 250 beds, Wi-Fi, Smart TV, an absolute state-of-the-art offering. So we want you to experience all that and be able to watch animals. In fact, you can experience the most stable Wi-Fi in that environment.
CIARAN RYAN: Why is that, is it because there’s no external noise or interference, why is that?
DUMISANI DLAMINI: It’s because we are as an organisation investing more in networks and infrastructure because we understand that we have got different kinds of generations of our customers. There are those who want to be peaceful in the park, who don’t want to watch TV and don’t want any disturbance, but you’ve also got some who like the bush life but also want a taste of modern in it. So you have to actually offer both, so you can see animals, you can experience the bush, you can look at the scenery, learn about nature, you must be able to come back to an airconditioned environment, watch TV, have nice designer food and be able to login to your social media and post what you have experienced.
CIARAN RYAN: Tell us about some of the other parks?
DUMISANI DLAMINI: Our other flagship park is Table Mountain, one of the most beautiful parks in South Africa and one of the most recognisable mountains in the world. It’s a beautiful city because everyone wants to go to Cape Town and one of the most iconic places that you will want to go to will be Table Mountain. It’s been declared as one of the Seven Wonders of the World, so you can’t miss it, it’s the busiest place, there’s a beautiful view when you get to the top of the mountain, it’s like you’re in another Cape Town in the mountain itself.
CIARAN RYAN: Do you know how many people go up Table Mountain roughly each year?
DUMISANI DLAMINI: I must get those numbers for you; I believe that it’s over one million.
CIARAN RYAN: Over one million and the Kruger National Park, do we know how many people go there?
DUMISANI DLAMINI: Kruger is also gaining so many numbers and I think this year it’s going to reach two million.
CIARAN RYAN: Two million through Kruger each year?
DUMISANI DLAMINI: Correct, so it’s a huge number of people coming to our park, we want more.
CIARAN RYAN: Wow and can it accommodate more?
DUMISANI DLAMINI: It can accommodate more, we need to do some tweaks to our infrastructure so that we can accept more visitors because some of the infrastructure is getting [old] and we are currently working on it very much. Just to finish off about the other parks, you can go to Addo Elephant Park, which is in Port Elizabeth, it boasts the most amazing giant animals, the elephants, as well as the other members of the Big 5.
CIARAN RYAN: They are different elephants.
DUMISANI DLAMINI: Yes, the park was solely established to conserve elephants from right when it happened many years ago, up until now. It’s one of the most amazing parks that you can experience but be careful, you must book early because it’s going to be full.
Kgalagadi offers a unique desert wilderness
CIARAN RYAN: So you need to book months in advance if you want to go there?
DUMISANI DLAMINI: You need to book months in advance and if you are lucky and there’s a cancellation, then you might be able to get a spot. But if you are in Port Elizabeth it’s not a bad place to visit. Then the fourth one is the Kgalagadi Transfrontier Park, bordering Namibia and Botswana, it’s one of the most beautiful parks that you can visit.
CIARAN RYAN: It’s semi-desert there, a bit like the Karoo desert.
DUMISANI DLAMINI: Yes.
CIARAN RYAN: What is unique about that park?
DUMISANI DLAMINI: It has beautiful and unique animals, it has amazing lions that are a little bit different to the lions that you’ll find in other parks. It’s just amazing when you see these animals, even if you’ve seen them in another park, these are a little bit different to the lions in Kruger National Park or the other parks.
CIARAN RYAN: Right, they are a little bit whiter.
DUMISANI DLAMINI: They are whiter and extremely beautiful. It’s a beautiful place for camping and to spend time with the family.
CIARAN RYAN: It’s less sophisticated than Kruger, if you want the real authentic African bush experience that’s where you go.
DUMISANI DLAMINI: Yes, that’s where you go. It will take you almost a day-and-a-half to drive there. You can fly to Upington and drive from there, that’s also an option. It’s a beautiful park to visit.
CIARAN RYAN: So from Johannesburg how long does it take to get there?
DUMISANI DLAMINI: I would say one-and-a-half days.
CIARAN RYAN: The other thing is there’s not a lot of accommodation there, so there you really need to book in advance.
DUMISANI DLAMINI: You need to book in advance and just to give you a sense of the bookings, some of the accommodation can be booked two years in advance.
CIARAN RYAN: Two years, my goodness, is it possible to stay outside the park and go in on a day trip?
DUMISANI DLAMINI: It’s possible but you must remember, the Northern Cape is not good on accommodation, so you have to do your research well, check the distance to the park so that you can manage your itinerary properly.
CIARAN RYAN: Okay, so there’s 19 parks and I think you’ve discussed the four flagships, which is the Kruger, Table Mountain, Addo National Park and Kgalagadi.
DUMISANI DLAMINI: But we also have others, the Karoo, Mokala, Golden Gate National Park, which is just four hours from Johannesburg.
CIARAN RYAN: It’s beautiful because it’s right on the border of Lesotho and some of the most stunning mountain scenery.
DUMISANI DLAMINI: If you want to breathe fresh air it’s priceless.
CIARAN RYAN: It’s one of my most favourite parts of the country, the Eastern Free State, Lesotho, that area, I just love the mountains there.
DUMISANI DLAMINI: It boasts a Basotho cultural village, where you can learn so much about the origin of Basotho, how they live and their traditions, which is just amazing information.
CIARAN RYAN: Yes, okay, and what other ones?
DUMISANI DLAMINI: The other ones are Marakele, it’s just over 200 kilometres away from Johannesburg at the beginning of Limpopo, you’ll also find the Big 5 there, it’s not far to go and you can be in and out in a day.
CIARAN RYAN: When we say the Big 5, we mean the Big 5 animals, which is what foreign tourists want to see.
DUMISANI DLAMINI: Yes, the real Big 5, then you’ve got Mokala, there’s the Richtersveld, there’s Mountain Zebra and there you can see almost 2000 zebras because it was solely designed just to accommodate and conserve mountain zebras. They are called mountain zebras for a reason because they look like mountain zebras, they are different from the zebras at Kruger National Park.
‘We don’t want to be one of those state entities that’s generating a loss for the state’
CIARAN RYAN: I think you’re doing a great job of selling South Africa, I feel like I’ve got to get out more and travel myself. This is quite an extraordinary national asset, these 19 parks, tell us a little bit about your role as chief financial officer, what is your annual budget and we should probably establish upfront that whenever you have a government department or state-owned company that it’s reliant on state funding. National Parks is different because it does have a source of revenue, which are the fees that tourists pay when they go in there, you are largely self-funding.
DUMISANI DLAMINI: If you look at how other national parks internationally function, they are mostly funded by government, you can have a look at the USA, Canada and so on. So that’s what makes South Africa unique because we are self-generating and, in fact, we generate 80% of our revenue, I’m going to put that into context in a moment. Just in this past financial year we had a turnover of over R3 billion.
CIARAN RYAN: That is pretty extraordinary, does that include state funding, the 20% that you make from the state?
DUMISANI DLAMINI: The 20% will be what the government has actually given, which is a basic grant, including an infrastructure grant, which we mainly use to upgrade our infrastructure. The rest is self-generated, which makes it extraordinary. To give you a few figures, if you look at our balance sheet with over R4 billion in assets but if you look at our total infrastructure, it’s got a replacement value of about R19 billion and I’m talking about both above ground and underground infrastructure, so it’s a huge entity. If you look in terms of turnover, it’s a medium-size almost JSE-listed company because if you turnover that kind of money. We had strong cash resources at the end of the financial year with R1.8 billion. If you look at how we have progressed up until now, just the past three-quarters of this current financial year, which ends on March 31, we are already sitting with
R2.2 billion in cash resources. So we are very strong on profitability and, by the way, because we are a state entity we don’t call it a profit, we call it surplus. If you check exactly what happened in a previous year, we had a surplus of about R207 million, just this past financial year that was audited we are sitting at R414 million, which almost doubled the previous financial year.
CIARAN RYAN: Why is that? Are you spending less on maintaining the infrastructure? I’m sure you’re not.
DUMISANI DLAMINI: It’s a combination of two things and one is that there’s an understanding of exactly what you are talking about, the infrastructure, there are a couple of measures that we are putting in place to address that. Currently, for example, we have 14 construction companies that are busy with maintenance and the upgrade of infrastructure in Kruger, and in different parks we have got other service providers that do anything from roads to chalets to hotels, everything, because we want to give customers that great experience. But on the other side we also made a profit from what we deliver because we run restaurants, we run hotels, we run trails, we run parks, so all those activities we run them in such a way that it assists us to generate profits because we don’t want to be one of those state entities that’s generating a loss for the state.
CIARAN RYAN: You still get 20%, even though you’re making a profit, you still get 20% of your funding from the state but you don’t really need it or am I missing something?
DUMISANI DLAMINI: I think it’s a commitment from the state towards maintaining the national asset. I wouldn’t say we need it, but you always need government backing…
CIARAN RYAN: There’s never enough money.
DUMISANI DLAMINI: There’s never enough money because if you look at what we require in order to bring our infrastructure up to scratch we need lots of billions.
CIARAN RYAN: Where is the big infrastructure spending happening at the moment, is it in Kruger?
DUMISANI DLAMINI: The big infrastructure spending is mainly in Kruger because that’s where we have got the most tourists. If half of our tourists come from that area, then that means we need to keep it like that, and you need to make sure that you maintain that traffic and the volumes that are coming to the park.
CIARAN RYAN: The roads, there are tar roads there, they are not all tar but some of them are, it always occurred to me and I’ve had a query about this, how do you repair a road in the middle of this game park when you’ve got all these wild animals around, how do you do that?
DUMISANI DLAMINI: We’ve got service providers that we have appointed that come with grader machines. For example, during the rainy season the roads are almost blocked in such a way that tourists can’t pass through either for game viewing or to access our tourist facilities, so we have to constantly make sure that those roads are maintained. Remember, we are now being affected by climate change and you would have seen a couple of weeks ago that there were floods in Kruger and when those floods happen there’s infrastructure that gets affected by those heavy rains because it’s more than the rain that we require. We then have to immediately start clearing the roads if there are trees on the roads, all sorts of different things but we have to deal with that so that we can clear a way for tourists because tourists don’t want to be inconvenienced.
CIARAN RYAN: Right, so the maintenance and keeping the roads open is a 24/7 thing, you’ve got to be at it every day.
DUMISANI DLAMINI: To the point where we are beefing up our maintenance team. We have been losing our people in technical services, whether it’s engineers, plumbers, artisans and quantity surveyors, they change jobs like you won’t believe it. So one of the things we are looking at is those skills, the retention of those people and paying them better, but we’re also looking at appointing service providers to complement that team so that we make sure that our maintenance is [done]. Our maintenance is like our fulltime job.
CIARAN RYAN: What is your infrastructure budget per year if you go across all of the 19 parks?
DUMISANI DLAMINI: It’s different, you’ve got what we call an infrastructure grant, in short, we call it IP, there’s IP1, IP2, IP3, IP4, it has a different budget amount. But if you’re talking about maintenance of infrastructure, last year we had R187 million and this year we have increased it to R287 million and the money that we are really planning to spend, so we are spending quite heavily on infrastructure.
Making national parks affordable for local visitors
CIARAN RYAN: The increase in surplus, you don’t call it profit you call it surplus, that you had last year, you said it was from about R204 million to R414 million. So it’s doubled, is that because of an increase in tourism numbers or is it a combination of that and the reduction in infrastructure spend?
DUMISANI DLAMINI: On the one hand it’s the reduction in infrastructure spending but on the other hand it’s not necessarily an increase in tourism numbers. What we have introduced in the last couple of years is what we call a differential pricing model, which means that the international tourist pays a higher rate than the local tourist. The reason why we are doing that is because we want to give access to local people who haven’t experienced national parks, so that’s the reason. It has also helped us to boost our revenue.
CIARAN RYAN: How do you determine when somebody goes into the park, they introduce that, the differential between the local and the foreign, and it created some disturbance for a period of time but is this common, is this how it’s done internationally?
DUMISANI DLAMINI: This is how it’s done and if you look at our prices, it’s not expensive, even if you look at what international tourists pay compared to what local people pay, it’s not that expensive. How do you distinguish it, it’s very easy, I was in Boulders recently, one of our national parks past Table Mountain, all the way up, to go and see penguins, there’s a penguin colony there and they asked me for my ID because they then associate the price of your entry to the park with your nationality. Obviously, international tourists will produce their passport and that’s how they will know how to charge them. But if you look at the landscape of South Africa, tourism has been affected by a number of things, an increase in fuel, the economy, which has been growing at about 0.5%, compared to the world economy, which is growing at 3%, and it’s affected the number of people in different tourism segments, not only in national parks. That’s why we are very grateful because even though our tourism numbers have been a bit down, but they are much better if you compare country average.
CIARAN RYAN: Just explain that.
DUMISANI DLAMINI: You will find, for example, if there’s a decrease of about 10% of tourism numbers across the tourism industry, you’ll find in the national parks there’s only a decrease of about 2% or 3%.
CIARAN RYAN: Oh, I see, okay, so it’s not as susceptible to the dips that you would experience elsewhere.
DUMISANI DLAMINI: Correct.
CIARAN RYAN: We were chatting off air, you were in Cape Town this week and I was in Cape Town last week and every time I go down there it is full of foreign tourists.
DUMISANI DLAMINI: Everywhere.
CIARAN RYAN: It’s everywhere, you don’t see them in Johannesburg because Johannesburg is not a tourism city, but they are here, they come here for business and so on. However, I think we’re attracting something like two million tourists a year to South Africa and I was doing an exercise some time ago looking at France, for example, France has a population of 80 million – I’m going on memory here, I may be wrong – but the number of tourists going there per year is 120 million, so that’s 150% of their national population.
DUMISANI DLAMINI: That’s amazing.
CIARAN RYAN: Now, of course, they have Germany there, they have Spain, cross-border traffic, but we have that too with Botswana, Zimbabwe, Mozambique and so on. If you look at the UK, I think it’s a country of about 65 million, they’re getting almost 100% per year of visitors in terms of their national population. In other words, 65 million people coming per year. We have a long way to go to get there, the problem is that we’re so far away.
DUMISANI DLAMINI: That’s exactly it, one of the key decisions that has to be taken by tourists or visitors to a particular destination is how long will it take me [to get there]. Imagine if somebody from the US has to be on a flight for 15 hours, that gets put into consideration. Whereas maybe to get to Europe it can take the person maybe seven hours, so that counts. The second thing is the issue of crime, the political stability, the economy of the country, so some of the tourists take a number of factors into account before they make a decision. That’s why you will see there is maybe a drop. If you look at us, we had seven million visitors two years ago, it dropped to 6.6 million just this previous year…
CIARAN RYAN: This is across the country?
DUMISANI DLAMINI: No, this is only SANParks, when we’re talking about seven million, we’re talking about only SANParks.
CIARAN RYAN: Local and foreign, okay.
DUMISANI DLAMINI: Both, yes.
CIARAN RYAN: That’s a huge number of people.
DUMISANI DLAMINI: It’s a huge number of people coming to our park and if you look at the split it’s about 25% international tourists and 75% local people. Obviously we want more of that because we want people to experience it, and because of the number of prestigious animals that we have like rhinos, people want to come to South Africa, we have the highest population of rhinos globally and that’s why it’s important for people to come and visit us.
R200 million per annum to fight wildlife crime
CIARAN RYAN: In the wild, in a wild environment. There are rhino farms but that’s one of the great tragedies of Africa. There was a question that I wanted to ask you about Kruger, do we still get poaching of rhinos there.
DUMISANI DLAMINI: A lot, you won’t believe that just on poaching, fighting wildlife crime, because it’s not only happening with rhino. You won’t believe it, but people are poaching plants for medicinal use, people are poaching abalone, people are poaching different kinds of animals, so we are dealing with it across all species of animals. But Kruger is the most [targeted] park, the minister has released the rhino stats and she’s the only one who is authorised to release the rhino stats, and you can see what was released last year, but if you check what we are spending, we are actually winning the war because there are less rhinos that are poached every month and every year. But we have to spend lots of money, I can tell you that we were spending about R50 million on fighting wildlife crime per annum and this year that figure is R200 million.
CIARAN RYAN: Who is behind this? Are these Asian syndicates, criminal syndicates?
DUMISANI DLAMINI: It’s criminal syndicates, it’s organised crime because you have a value chain, you’ve got a guy who is sitting in either China, Vietnam or whatever the country might be, where they order the horn, then you have got people in South Africa who organise [the poaching], all the way to a person who carries a gun and a person who cuts the horn, and a person who carries the water and the food. The guys are so cruel that they don’t mind to walk into Kruger in the evening, they can walk all night looking for a rhino, tracking it until they find it, they kill it and they cut the horn off. They will risk leopard, they will risk lions, they will risk hippos to make sure that they get that horn.
CIARAN RYAN: I have always wanted to look one of these guys in the eye and say what kind of a human being are you that you can do that? It’s so cruel, this is an engendered species, it belongs to humankind, it belongs to nature actually.
DUMISANI DLAMINI: Absolutely and what is so sad is that the guy who is poaching a rhino doesn’t care whether it’s a female or a male. Some rhinos get killed when they are pregnant, so now you are losing two rhinos instantly.
CIARAN RYAN: What has been the successful action in reducing the number of killed animals?
DUMISANI DLAMINI: We have invested in a canine unit, ground staff and dogs, we’ve invested in an airwing, we’ve got a number of helicopters and fixed wing [aircraft], we’ve invested in rangers. It has become a war now, about two years ago we lost one of our precious rangers who was shot by an AK-47 by one of the poachers because once you approach these guys it becomes a war. So it’s also a threat to our staff, who are supposed to be looking after nature, but they find themselves now doing enforcement work and this is what’s costing us lots of money. I won’t break it down for you how expensive it is just to maintain one helicopter and to comply with all the civil aviation rules and regulations, that’s one element, I’m not talking about fuel and the other associated costs that goes with that. You know how much it costs just to appoint a pilot. So it has become one of the most expensive functions that we have. We believe that if we can deal with the issue of poaching, that is money that can be redirected to look after nature.
CIARAN RYAN: Right, we are running out of time here, this is pretty fascinating stuff. Talk very quickly about your hat as a chief financial officer, how big is your team, you have already given us your budget, I think it’s R3 billion a year, that’s a lot of money that has to be supervised and policed and so on. How many people are there in your team?
DUMISANI DLAMINI: You won’t believe it, we are supporting an organisation of about 4400 staff with a team of about 50 people. So when I say that it’s because there are a number of functions under my portfolio. As the chief financial officer of the organisation I currently look after corporate finance, which is the head office team looking after accounts payable, banking, treasury, accounts receivable, GL and reporting. I’ve got a head of department responsible for that particular function. The second function is called regional finance, so that is split into two, there’s a GM who’s responsible for that particular area and all the regional finance managers who are sitting in different parks. Then I have a GM responsible for Kruger finance and I have regional finance managers responsible for different camps in the Kruger National Park. Then I have corporate legal, which is a legal division that supports the organisation with any legal matters, so anything from legal opinion to reviewing contracts and legal advice. It’s also split into commercial law, labour law and environmental law. Then I have supply chain management, which is the biggest engine within finance – you know, government procurement, the issues of irregular expenditure, the tenders and the requests for quotation…
CIARAN RYAN: How many people are there in that unit?
DUMISANI DLAMINI: We are still establishing that unit, I am currently in the process of appointing five regional supply chain managers, and I have the head office team, so there are about 13 people who I currently have there. So that’s why I am establishing it, I have appointed a very competent manager as well in the Kruger National Park because of the nature of specialisation of Kruger, we are dealing with scientists, we are dealing with veterinary services. So I will also be appointing a specialist procurement manager who deals with the issues of airwings, how do you buy parts and spares for the aeroplane, how do you buy medicine for the animals…
CIARAN RYAN: And you have a fleet of aircraft.
DUMISANI DLAMINI: A huge fleet, I can count it with both hands in terms of the aircraft that we have. So it’s quite a big team. Then the last part that I have is what we call the resource mobilisation unit and that deals with fundraising. As we spoke about earlier, there is never enough money at SANParks, so we have established a resource mobilisation unit because there are a lot of people who like nature and would like to contribute to nature. You won’t believe it but two of the helicopters that we have were actually donated by someone. If you know how much a helicopter costs, it can be over R100 million for just the two helicopters. So the resource mobilisation unit has become a key function of our environment, there are people who help us to fight wildlife crime, there are people who help us to help communities bordering the park because we also need to look after those communities. I want to conclude that that unit has also been doing very well, you won’t believe it, but this current financial year so far we have fundraised about R83 million and that all goes to conservation in various different areas. I can tell you about SANParks the whole day because it’s just a fascinating job for me and it’s very different in what we do.
CIARAN RYAN: Have you got clean audits from the Auditor General?
DUMISANI DLAMINI: We haven’t got clean audits, we have got unqualified [audits].
CIARAN RYAN: Unqualified, are you going for clean?
DUMISANI DLAMINI: We are working for clean, it’s a very complex environment and it requires all of us to eventually be clean. We are dealing with some of the SAM issues, so it’s a matter of time, we are working for clean.
CIARAN RYAN: Final question, are you a family man, do you have children?
DUMISANI DLAMINI: I do.
CIARAN RYAN: How many children do you have?
DUMISANI DLAMINI: I am glad you asked that question, I am married to a wonderful wife, Zama Dlamini, she’s a very passionate woman who gives me ‘butterflies’ all the time. I have got two kids, one is ten, Zoe, the other one is three, Nkanyezi, which means stars. That’s my world [laughing].
CIARAN RYAN: I bet, Dumisani, we are going to have to leave it there but it was fascinating to have you in the studio and please come back again and give us an update in a few months’ time, maybe when you have wrapped up your financial year. But I think people love hearing about our parks and how they are being looked after, and well done for the job you are doing.
DUMISANI DLAMINI: Thank you very much, it would be great, there are lots of things that we are doing in that space of protected areas, we are working with the Accounting Standards Board and we’re doing fantastic things, so it would be great to share more.
