Further clarity has been obtained on the mechanism used by Treasury to refund the South African National Defence Force (SANDF) for deploying South African troops and equipment to the Democratic Republic of the Congo (DRC) as a component of the Force Intervention Brigade (FIB) of the United Nations mission in that country.
The SANDF has been contributing to the FIB in the DRC since it first deployed in 2013. As part of the United Nations Stabilisation Mission in the Congo (MONUSCO), more than 1 300 SANDF personnel and South African Air Force (SAAF) rotary-winged aircraft, including three Rooivalk attack helicopters and five SAAF Oryx medium transport helicopters, have been deployed in the country at any one time as part of Operation Mistral. It is the largest contingency of peacekeepers deployed abroad by South Africa.
The UN reimburses countries that provide soldiers to peacekeeping missions, with reimbursement based on actual strength of troops in UN missions and the equipment held by them.
In the case of the SANDF in the DRC, it means the costs associated with the deployment, including salaries, rations and uniforms, accommodation, fuel, maintenance, logistics and so on are paid directly from the SANDF’s annual budget. However, the UN repayment then goes into National Treasury’s B7 account, to be accessed by other government departments.
For an organisation chronically underfunded and struggling to meet its operational and maintenance requirements, it is a bitter pill for the SANDF to swallow.
Responding to a post-budget vote question by defenceWeb in 2017, defence minister Nosiviwe Mapisa-Nqakula acknowledged MONUSCO expenditure comes from the current defence allocation, but reimbursements go to the fiscus. When it was time to service equipment leased to the UN, “the challenge is then we have to do those repairs and servicing with our own allocation.”
Following meetings between the Ministry of Defence and National Treasury, it was agreed that future UN reimbursement funds would not go to the general fiscus any more, but would be “ring-fenced” for servicing SANDF equipment.
Speaking to defenceWeb prior to introducing the R50.5 billion 2019 defence budget last month, Mapisa-Nqakula confirmed that the UN reimbursements were being transferred to National Treasury and ring-fenced for the South African National Defence Force.
Mapisa-Nqakula further acknowledged that there were “challenges” in the actual implementation of the agreement, which was reached two years ago.
defenceWeb reached out to Treasury for further details as to how the ‘ring-fencing’ worked.
Jabulane Mulambo, National Treasury Communications Officer, noted that there is no formal agreement between National Treasury and the Department of Defence regarding the ‘ring-fencing’ of UN refunds “since it is legally impossible to do so.”
“Legally, the retention of departmental revenue is dealt with in terms of section 213 (1) of the Constitution of the Republic of South Africa of 1996 and section 11 (1) (a) of the Public Finance Management Act of 1999 (PFMA). These sections require money received by the national government (department) to be paid into the National Revenue Fund, except money reasonably excluded by the PFMA or another Act of Parliament.
“Therefore, retention of departmental revenue is implemented legally through the annual allocations during the Adjusted Estimates of National Expenditure (AENE) as a self-financing expenditure. However, the Department of Defence has been advised to follow the legally provided annual AENE process to deal with refunds (i.e. retention of revenue).”
Mulambo said for the past three financial years, the Department of Defence has retained revenue generated from the UN reimbursements as a self-financing expenditure (refunds) during the annual Adjusted Estimates of National Expenditure (AENE).
“The self-financing expenditure has been ring-fenced to fund the critical elements of the Defence Review 2015 and the operational costs for activities related to the Letter of Assist (LoA) concerning Operation Mistral in the Democratic Republic of the Congo (DRC),” Mulambo clarified.
“The Department of Defence has retained UN reimbursement revenue of R182 million in 2015/16, R335.4 million in 2017/18 and R509.5 million in 2018/19 as a self-financing expenditure,” Mulambo told defenceWeb.
Another issue is the UN may make deductions for absent or unserviceable equipment. Mapisa-Nqakula had previously acknowledged South Africa had to pay penalties for equipment “which is not 100%.”
The UN has also requested South Africa to deploy more pilots and aircrew to ensure that at least a pair of helicopters are to deploy per mission.