The Islamist insurgency in Mozambique’s Cabo Delgado province demonstrates the need for states to develop and fund capable defence forces able to respond to security threats, according to Cyril Xaba, Chairperson of the Portfolio Committee on Defence and Military Veterans.
Xaba was speaking at a webinar on the South African Defence Budget co-presented by the Centre for Military Studies and the Security Institute for Governance and Leadership in Africa at the University of Stellenbosch on 29 April.
He said the state needs to be able to balance the ability to respond to security threats like in Mozambique with the broader social needs of the state and that there needs to be urgent in-depth debate about the role and function of the South African National Defence Force (SANDF) and how it fits into broader macro-economic planning, especially given the broad decline in interest in defence.
Xaba noted that by 1989 South Africa was in the top 20 military spenders in the world, but with democracy, defence funding dropped. The only time there was an increase was during the 1999 arms deal, but this left little funds for the South African Army to re-equip and today the SANDF has little funding to operate and upgrade the equipment it acquired.
In late 2020 the Department of Defence indicated a reduction in capacity due to funding constraints, with existing acquisitions under pressure, such as Hotel and Biro for a hydrographic survey and inshore patrol vessels respectively. “National Treasury declined a Parliamentary recommendation on the ringfencing of additional funding of SA Navy frigates and submarines. These matters will require further engagement by the committee chair,” Xaba said.
He pointed out that while defence spending has been shrinking, operational commitments expanded greatly after 2001, both regionally and continentally. Going forward, the defence budget is likely to remain under pressure, resulting in inadequate funding of research and development, routine maintenance and operations.
Xaba said the defence budget requires broader debate outside parliament, with a key question whether defence and social spending are balanced or if they have been tipped in the wrong direction.
Dr Nina Mari Taylor from the University of Stellenbosch’s Faculty of Military Science looked at the economics of the defence budget and noted South Africa’s rising debt to Gross Domestic Product (GDP) ratio is taking away from defence expenditure. Declining defence spending also means fewer people are being employed by the armed forces and the armed force’s contribution to South African labour participation has declined since 1998.
She warned that South Africa’s economic outlook is flat, with little growth (under 2%) of GDP predicted in the coming years. “We can’t gain more revenue if we don’t have more growth,” she said, as more revenue for defence needs more growth.
“The defence budget has dramatically decreased since the 1990s, placing a great deal of pressure on the armed forces to maintain a standing army for territorial protection. Focus needs to be placed on maintaining an economic environment that will promote growth and thus increase revenue allocations. The recommendation is that continued focus be placed on reducing debt/GDP ratio; reducing the gap between government spending and revenue, and avoiding a credit downgrade.”
Dr Moses Khanyile, Director of the Centre for Military Studies at the University of Stellenbosch, noted that defence spending is not necessarily based on economic growth as countries are often forced to spend on defence during bad times if there are security threats. For example, the Stockholm International Peace Research Institute noted that despite a global contraction of 4.4% in 2020 due to the COVID-19 pandemic, defence spending increased in real terms by 2.6% ($2 trillion in 2020), including in Sub-Saharan Africa.
“Economic growth is important but it does not follow that higher growth will increase defence spending,” he said, while the converse is also true. Nevertheless, South Africa’s poor debt/GDP ratio and declining credit rating is impacting on government’s ability to raise capital as well as the defence industry. Denel is particularly hard hit as it is unable to raise capital and deliver on defence projects. “It is important we retain a healthy credit rating which will impact SOEs in particular defence SOEs,” Khanyile said.
He pointed out that defence is competing with other priorities, especially those pertaining to socio-economic development: education, social security, crime prevention and health. While defence deployments and other operational requirements will always exceed available financial resources, sympathy and support for an increased budget is compromised by a perception of wastages, ineffective leadership and lack of corporate governance.
Khanyile said South Africa needs to decide on whether to reduce operational deployments in line with the declining defence budget allocation (repurposing the SANDF to focus on border protection and developmental duties) and reconfigure the SANDF to retain an absolute minimum of core capabilities and capacity with a reduced ambition for power projection.
Another option is to work smarter with limited resources, such as extract value from immoveable defence assets like land; make more use of cheaper reserve force members; and generate funds through things like the sale of intellectual property.
Khanyile concluded that “we have to accept the fact that the declining defence budget is not sustainable at all because national security is a constitutional imperative. We have to feel safe and must make sure South Africa is safe all the time. Something has to be done regarding the capital acquisition budget.”
Professor Ronney Ncwadi from Nelson Mandela University noted the extended social benefits of funding a defence force, including humanitarian assistance, disaster relief, search and rescue, and domestic and regional stability that enhances economic growth. “If we don’t fund the military, society will experience a welfare loss,” he said.
Professor Anthoni van Nieuwkerk from the University of the Witwatersrand said there is a need to turn the security sector around in order to advance the national interest, especially with South Africa expected to play a leading role in the intervention in Cabo Delgado. He added that closer to home, poverty and inequality are threats to national security and crime and corruption result in instability and insecurity that demand the attention of government and the security sector.