Indications are the once highly touted Defence Review 2015 will end up in the archives with only minor implementation unless there is a drastic change of fortune in funding for the South African military machine.
Earlier this month the Joint Standing Committee on Defence (JSCD) was briefed on a funding model for the Defence Review by the Department of Defence (DoD)/National Treasury task team. This team was instituted at the behest of Defence and Military Veterans Minister Nosiviwe Mapisa-Nqakula to seek alternative methods of funding to implement the Review, produced by Roelf Meyer in 2012 on instruction from then defence and military veterans minister Lindiwe Sisulu.
The DoD in its latest annual report, for the 2017/18 financial year, noted a lack of funding was preventing implementation of milestone one – arresting the decline of the SA National Defence Force (SANDF).
Concluding its presentation the task team noted “due to fiscal circumstances National Treasury is unable to fund implementation of the Defence Review 2015 over the medium term expenditure framework”.
It also pointed out to the JSCD there is “limited scope for significant revenue generation by Defence”. This is reference to suggestions the SANDF and DoD investigate “asset sweating” as a potential income source.
In this regard the task team presentation said “endowment assets are valued at R160 billion which is substantially lower than initially estimated” adding the amount that can be leveraged from these assets, mostly land and facilities, is estimated at R1.5 billion from the 2020/21 financial year and onward. It also adds the rider that any revenue generated should be available to offset current expenses.
“Force rationalisation is the largest opportunity for reducing annual expenditure but this requires significant upfront costs – subject to the finalisation of the force design and structure requirements of the national defence force.”
Looking ahead the task team advises “Defence Review 2015 and the ‘Plan to Arrest the Decline’ remains the long term vision, value proposition and policy position as articulated by Cabinet”. It suggests, in the interests of sustainability that the SANDF complies with budget reduction and allocated ceilings in targeted areas while reconfiguring toward “a steady state sustainable foundation”.
“South Africa will have to agree to a significantly reduced level of defence ambition for the future and correspondingly reduce expectations for the defence function,” according to the presentation.