The Department of Defence needs R1.8 billion to start implementing the first phase of the 2014 Defence Review and asked National Treasury for this amount last year. However, the request was denied, forcing the Department to try and find other ways of funding implementation.
This is according to the Department of Defence Strategic Plan 2015-2020 and Annual Performance Plan 2016 presentation, which was delivered to the Parliamentary Portfolio Committee on Defence and Military veterans on 4 May.
According to the presentation, the Department of Defence requested the R1.8 billion in July 2015 to partially address the costing of implementing Milestone 1 of the Defence Review for FY2017/18. “However, no additional funding to fund the implementation of the SA Defence Review 2015 was received from NT [National Treasury],” the presentation said.
Milestone 1 of the SA Defence Review, which was approved by Cabinet in March 2014 and Parliament in June 2015, is arresting the decline in critical capabilities of the South African National Defence Force (SANDF). “However, 2016 SA Defence review deliverables…will be implemented within current resource allocation. The main risk to the implementation of Milestone 1 is funding. If funding is not forthcoming it will push the implementation of Milestone1 beyond the MTEF [Medium Term Expenditure Framework,” according to the presentation document.
Defence minister Nosiviwe Mapisa-Nqakula, in her budget vote speech last week, said that this year will be devoted to planning the implementation of the Defence Review. “I am happy to report that since the previous debate, significant work has been done to lay the foundation for the incremental implementation of the Defence Review 2015.”
Mapisa-Nqakula said the work includes development of a new Force Design and Force Structure; completing the Cyber Warfare Strategy and Sensor Strategy for border safeguarding; reworking officer and non-commissioned officer career paths; training personnel in specialized musterings such as medicine, aviation and engineering in partnership with countries such as Cuba and Russia; recovering the Astra trainer fleet that was due for disposal; and developing the profile of the future soldier.
The Defence Review Milestone 1 Costed Implementation Plan (first iteration) will be finalised and taken through the Departmental Programme Budget Evaluation Process to form a departmental input to the 2016 medium term expenditure framework process.
As a result of the lack of funding, the Department of Defence is looking at other ways to generate income, including reimbursements from the United Nations, disposal of defence equipment, compensation for intellectual property, public private partnerships, compensation for work done by the Defence Works Formation for work done to other departments and funding through “leveraging and sweating of DoD surplus, redundant and estate.”
The DoD hopes to get approval for a Defence Review Implementation Account and receive authority to retain revenue on behalf of the DoD so there is less reliance on the fiscus.
“Whilst there is great appreciation for the competing pressures on the fiscus, the persistent and continued downward trend in real terms of the funding allocation to defence has reached a point where the DoD runs the risk of losing some of its current capabilities in addition to previous losses thereby compromising national security to defend and protect the Republic. Such a decline in funding is also visible in the slow pace in terms of the renewal, maintenance and repair of our prime mission equipment,” the Department said in its presentation this month.
“In the battlefield soldiers continue to use old and obsolete equipment with poor serviceability that hampers UN reimbursements.
“Reduction of budget allocations (Rm 350 on the SDA [Special Defence Account]) to the defence industry is hampering a critical enabler to the overall industrial development of the country.”
Mapisa-Nqakula is concerned about the lack of funding, saying this will have serious implications on the defence function of the Republic of South Africa. The R5.5 billion reduction in the defence budget over the MTEF period will have negative consequences, she said, regarding the ability of the DoD to rejuvenate the SANDF, the compensation of employees, the ageing of the force, in increase in the skills gap, a growing loss of expertise and an insufficient number of members to sustain operations.
“Over the last seven years, the reduction in the operating and capital portions of the defence allocation has adversely affected training and operations. This has far-reaching implications for the DOD and the country, given the ever increasing demands being placed on the SANDF,” the minister said.
“A comparative analysis of our SADC partners further underscores how under-funded the SANDF is. Examples include: Zimbabwe 2.7% of GDP; Botswana 2.7%; Angola 3.5%; Namibia 4.4%; Swaziland 2.0%; and Lesotho 2.2%.” South Africa spends 1.05% of its GDP on defence but this is set to drop to .98% of GDP for FY 2018/19.
Nevertheless, the minister said that “it is a great accolade for the Defence Force that, despite the constraints under which it operates, it still manages to execute assigned operations with commendable professionalism and success.”