Rural homesteaders lose out as Ingonyama Trust money goes to a bloated bureaucracy
Trust required by law to spend 90% of its income on KwaZulu’s people
● The Ingonyama Trust has once again failed to adhere to the legal mandate it was given by the act of parliament that created it in 1994.
Its February presentation to parliament’s portfolio committee on agriculture, land reform & rural development should have indicated its current efforts to provide benefit to the communities and entities it is responsible to — all of which are specified in the KwaZulu-Natal Ingonyama Trust Act.
Instead, the 2019/2020 budget presentation once more exposed the gaps in delivery that have long been raised anecdotally by those who feel short-changed.
The act clearly mandates that the Ingonyama Trust and the trust land be administered for the benefit and welfare of specified communities.
The Ingonyama Trust financial regulations provide that “an amount not exceeding 10% of the trust income may be utilised for the operational costs of the accounting authority … including ordinary administrative costs”. That means 90% of its income should be spent on its beneficiaries — ordinary people living in KwaZulu-Natal.
In the early days, the trust’s financial reports show adherence to the regulations. In its 2005/2006 financial presentation, payments to communities and traditional authorities were recorded at more than
R12m. At the time it stated: “It is trust policy that where income accruing to the trust is from an identifiable traditional authority area then that money must be earmarked for that particular community less the 10% retained in terms of finance regulation 10(2).”
But, in about 2007, the board introduced a policy that required residents living on trust land (land they already own under customary law) to enter into 40-year leases with the board — with rental obligations. This has generated significant income for the Ingonyama Trust and much controversy and unhappiness on the ground.
The rentals are the subject of litigation that is scheduled to resume in the Pietermaritzburg high court when the Covid19 restrictions have been lifted. The challenge — being brought by the Council for the Advancement of the South African Constitution, the Rural Women’s Movement and seven informal land-rights holders — relates to whether the leases the residents have been made to sign comply with the constitutional right to security of tenure and laws such as the Public Finance Management Act.
The trust’s website states that lease rentals are collected by the Ingonyama Trust board and “allocated to that particular traditional council for development purposes”. However, there is little evidence that this is being done. The February presentation shows little actual spending on traditional councils or beneficiaries.
Alarmingly, recent financial records show vast increases in spending on “land tenure management and planning”. This cost line was just under R1.67m in 2018 and jumped to almost R20.5m a year later. The latest performance and financial report presented to the portfolio committee shows a further significant increase — this time more than R113m is budgeted for “land tenure management and planning”. This is in addition to more than R52m allocated for “administration” for the period.
In the second quarter the board spent just R2.4m on traditional councils or beneficiaries out of its allocated budget of just under R21m for “traditional council/community support”. Spending on educational awards and bursaries for the period was reflected as zero. This is a shift from the past when educational grants were made.
On several occasions previously — and again in the February presentation — underexpenditure on this has been explained away by the board as being “due to no significant requests for disbursement of funds from community beneficiaries”. This was argued as far back as 2007, when the board said it was concerned about the slow uptake of funds and was “investigating alternate methods for the release of funds”.
The portfolio committee has repeatedly asked why the release of funds to communities should be demand-driven. It has consistently asked the board for details of its support for the beneficiaries of the trust, as required by the act, to no avail.
The board has, however, encouraged traditional councils to create entities it is calling “community development trusts” and to present business plans for these. Training in this regard was to have been provided to the traditional councils, but in the 2019/2020 cycle this training is reported as zero.
An amount of R4.6m was reported to have been spent on just two community workshops. No details of these workshops were provided in response to questions from MPs during the February presentation.
In October 2019, portfolio committee chair Mandla Mandela told the board to submit a five-year report for the period 2014–2019, detailing what monies had been ploughed back into communities and to each traditional council. He noted that only 10% of the board’s income is meant to be spent on administration and 90% is meant to be distributed to beneficiaries.
No such report was tabled at the portfolio committee meeting in February, nor was any explanation given for why this did not happen.
The committee chair has again asked the board chair to present a report detailing community outreach projects that have provided support to beneficiaries over the past five years. This is due to be presented at a portfolio committee meeting scheduled for May 12.
The Ingonyama Trust is legally required to administer trust land for the benefit and welfare of beneficiaries and communities identified in its founding act. The trust and its board have repeatedly failed to show that they are complying with this clear mandate.
Not only are they extracting rents from structurally vulnerable customary landrights holders, but those legally questionable rentals appear to be bolstering a bloated bureaucracy that is being run in direct defiance of its mandate — so far without consequence.