The Department of Defence’s spending on salaries, the shrinkage of the Special Defence Account and ability to pay for urgent equipment upgrades were some of the areas of concern highlighted by opposition political parties following a Department of Defence presentation to the Portfolio Committee on Defence and Military Veterans.
In early May, the Department of Defence (DoD) briefed the PCDMV on how the department is doing and what its goals are. Secretary for Defence Gladys Sonto Kudjoe warned that the DoD should not expect growth in the budget allocation, requiring the DoD to adjust its spending in such a manner that it will still provide the requisite services in its mandate. Kudjoe acknowledged that the discontinuation of the Special Defence Account (SDA) during the 2021/2022 fiscal will adversely impact the capability, sustainability and modernisation of defence prime mission equipment and the defence industry.
The shrinking defence budget, which stands at .95% of GDP, means most money is being spent on the Compensation of Employees (CoE). Reduced funding and ageing legacy systems means a lot of equipment is becoming increasingly difficult and costly to maintain and repair. On the topic of unserviceable equipment, the DoD said it is in the process of advertising for an auctioneer contract (for non-military vehicles) through the National Treasury procurement process.
Kudjoe added that the DoD has identified a number of other risks, including a compromised defence direction, a prevalence of corruption and fraud, high prevalence of costly litigation, deteriorating facilities and infrastructure, forfeited rights on DoD property and outdated and non-integrated information communication technology systems.
Another challenge is government departments being invoiced for services provided to them by the DoD but payment not being forthcoming. Entities still owing the DoD include the Department of Correctional Services (veterinary services), Department of Health (North West province, for medical assistance during strikes, Kalafong hospital and Steve Biko Academic hospital for transfer of patients), Department of Military Veterans for medical assistance, Department of Public Works and infrastructure for building bridges, National Treasury for medical treatment for military pension officers and SAPS and South African Revenue Services (SARS) for veterinary services.
Another area of concern was that the development, approval and promulgation of strategies are not receiving the desired attention. “Matters related to Defence Strategies have now been placed as a Standing Item on the Agenda of the Defence Planning Board,” the DoD presentation said. For 2021/2022, Chief Defence Policy, Strategy and Planning, as well as the SANDF Chief of Staff, Lieutenant General Lindile Yam will engage with the Secretary for Defence and the Minister of Defence and Military Veterans on the need for an adjusted level of ambition that will inform the development of the DoD strategy.
The DoD only received a 70% reimbursement from the United Nations for peacekeeping contributions for 2020/21. The DoD said the under-collection of reimbursements from the UN is due to unserviceable equipment and the inability of Services and Divisions to provide serviceable equipment in order to satisfy the Status of Unit Requirements of the United Nations.
In terms of serviceable equipment, the DoD said South African Air Force (SAAF) flying hours are being curtailed by aircraft availability. Aircraft operational capability is negatively affected by several factors such as the availability of spares due to insufficient funding or long-time orders. Aircraft obsolescence is another factor affecting availability, exacerbated by a lack of funding to replace or upgrade aircraft.
Similarly, the SA Navy lacks the budget to refit and modernise its frigates and submarines while the SA Army is doubtful it will receive Badger infantry combat vehicles from Denel Land Systems due to persistent problems at the company.
Nevertheless, money is being spent on critical areas such as border protection: R225 million is going towards borderline technology and R65 million was spent for the 2020/2021 financial year, with R75 million allocated for 2021/2022 and R85 million allocated for 2022/2023. The R65 million for 2020/2021 was spent on the upgrading of facilities and technology.
In light of the reduced defence budget, the DoD said that it will pursue alternative funding options of the defence function to supplement the declining defence allocation. This will be done through revision of the approved Defence Funding Model. “As the DoD, we will also do an environmental scan to identify projects the key projects to enhance income generation for the future,” Kudjoe said.
Shadow Minister for Defence and Military Veterans, Kobus Marais, raised a number of concerns in response to the DoD presentation. He questioned the DoD’s allocation of much of the defence budget to the compensation of employees, leaving little for maintenance, equipment and operations. He also pointed out the DoD’s contradiction that the presentation said there is no money for Project Hoefyster and Biro but the DoD believes the projects will proceed. The Special Defence Account (SDA) is going down to R1 billion but the SDA also has reserves, of which the amount is not mentioned.
“The two things are not mentioned that is currently hampering or keeping us back is the mid-life upgrades of the three frigates of about R750 million each, so that is about R2.2 billion and the three submarines that urgently need mid-life upgrades,” Marais added. Platforms are also needed for 35 Squadron’s maritime security role, currently operating one very old aircraft. Nothing was mentioned about that as well as 28 Squadron’s three serviceable aircraft (C-130 Hercules medium transport aircraft) that need replacing.”
Nothing was specified about the technology that will be used as force multipliers for border safeguarding either. Marais also asked why there is a reliance on external contractors in Kudjoe’s DoD. A question he posed to the Minister of Defence and Military Veterans, Nosiviwe Mapisa-Nqakula, was that in a year of extreme budget cuts, the budget for the ministry increases from R97.2 million to R125.5 million (a 29% increase). “Given all these restraints and all these commitments because you [Kudjoe] have gone through your plans and it is a lot of commitments which you and I know that there’s not a chance in life that you can commit to all those commitments and execute all of them. Have you given thought to the reprioritisation of the department’s plan and execution of their responsibilities?” Marais asked