Update on African Renaissance and International Cooperation Fund: Departmental briefing

Meeting report

Briefing by the Department of International Relations and Cooperation

Ms Dineo Mathlako, Head of International Cooperation Fund, indicated that the African Renaissance and International Co-operation Fund (ARF) was established in terms of section 2(1) of the African Renaissance and International Co-operation Fund Act, 2000 (Act No.51 of 2000) and subject to direction of the Minister under the control of the Director-General (DG). In relation to the utilisation of the fund, the Advisory Committee must make recommendations to the Minister and the Minister of Finance on the disbursement of funds through loans or other financial assistance. The loans or other financial assistance was granted in accordance with an agreement entered by the country in question and the Minister of DIRCO. The assistance granted was subject to such terms and conditions as may be agreed upon by that country and the Minister, acting in each case in consultation with the Minister of Finance.

Ms Mathlako stated that the ARF had a total of six strategic objectives with a main focus on supporting peace and economic development in various African countries. The first strategic objective was aimed at promoting democracy and good governance and the Department had already supported the Southern African Development Community (SADC) election observer mission for Zambia’s Presidential elections and Seychelles Parliamentary elections. The Department also continued to provide support for the implementation Rice and Vegetables production project in Guinea Conakry and support the implementation of the Cuban Economic package to purchase South African goods.

The second strategic objective was to provide humanitarian assistance and disaster relief and this was to assist countries that were in need of humanitarian assistance and disaster relief. The Department had continued to provide support for the drought relief project in Namibia phase 2-equipping of 101 boreholes. The Department had also provided transportation for humanitarian assistance to Madagascar by Gift of the Givers and provided funding through the Public Protector for Ombudsman Research Centre (AORC). In terms of new projects, the Department provided humanitarian assistance for Western Sahara for R10 million and this was an urgent aid to the Saharawi refugees camps following the October 2015 torrential rain accompanied by violent winds and floods that caused serious material damages. The purpose of the project was to provide emergency shelter and essential relief items, including drinking water, food, and adequate nutrition and health facilities and to enable students to pursue schooling and support their well-being.

Ms Mathlako added that South Africa, the Democratic Republic of Congo (DRC) and Angola signed a Memorandum of Understanding (MoU) establishing a Tripartite Mechanism on Dialogue and Cooperation in August 2013, which was aimed at helping the DRC to consolidate peace and stability. An annual operation budget of $1.5 billion was approved, with each country contibuting equally.In this regard, South Africa was liable to pay $500 000 to the total operational budget of the Permanent Secretariat. DIRCO had established a Secretariat to administer the ARF and the ARF Secretariat was responsible for monitoring and evaluation of ARF projects. The draft Partnership Fund for Development (PFD) bill would be presented to Cabinet in the 2016/17 financial year. The PFD bill would be administered by South African Development Partnership Agency (SADPA) and the SADPA has been gazetted as a government component in 2013 to administer the PFD. SADPA would however be operationalised once the PFD Bill was promulgated. It was envisioned that once SADPA is operationalised, the ARF Secretariat would be transferred to SADPA.

Discussion

The Chairperson wanted to know the total of the strategic objectives of ARF as this was not clear in the presentation.

Ms Mathlako responded that there were six strategic objectives but the focus was only on the strategic objectives where the Department was running projects under in this particular quarter. The Department was not currently involved in any peace projects and one of the objectives of the Department was conflict resolution but there was no project that had already been undertaken under this particular objective. There was also a strategic objective that was focused on the cooperation with other African countries but there was also no project that was being run under this objective.

The Chairperson suggested that it would be useful for the ARF to delve deeper into some of the projects that were undertaken so as to get the bigger picture and this would be particularly important when the Committee was focused on its position in regard to the African Union (UN) and Agenda 2063. The presentation had provided limited information in regard to various projects that the ARF was undertaking in other countries.   

Mr W Faber (DA; Northern Cape) asked if the $1.5 million that had been approved by the Department and Minister of Finance was only aimed at helping DRC. It would be useful if ARF could ensure that the funds that had been allocated for new projects were provided in Rands than in Dollars. The Committee should be provided with a clear budget that showed the projects that were to be undertaken by the Department and the amount of money that had been allocated for those projects.  

Mr B Nthebe (ANC; North West) asked if there were any linkages between the Tripartite Mechanism on Dialogue and Cooperation which was aimed at helping the DRC to consolidate peace and stability and the AU’s position on “Silencing the Gun” in the African continent by 2020.

Mr J Londt (DA, Western Cape) wanted to know the criterion that was being used in assisting or not providing assistance to a particular country.    

Ms Mathlako responded that the purpose of the ARF was to promote South Africa’s foreign policy. It is the role of the ARF Advisory Committee to recommend the projects to the Minister and the fund that is allocated to various countries is reactive in nature. In essence, it is DIRCO that is supposed to make a determination on whether to assist a particular country or not and the decision is often primarily based on South Africa’s foreign policy. ARF is not even privy to all the requests for funding that are coming to the country as ARF is only an agency of DIRCO. The Minister of the Department is still the one to have a final say on the approval of a particular project. It must also be clarified that ARF was not dealing with the handling of funds but with the movement of funds. It would perhaps be useful in future for ARF to always make the presentations together with the Department. The overall objective of the Tripartite Mechanism is to consolidate peace and stability in the DRC and Angola and also strengthen and deepen the strategic and long-term partnership between the three countries. Article 3 of the Memorandum of Understanding (MoU) that was signed between the three countries stipulated four areas of cooperation, namely; political and diplomatic cooperation, cooperation in different securities and public order cooperation and public administration and cooperative governance and cooperation in economic and socio-economic infrastructure.

Ms Mathlako indicated that there a number of projects that are being run by DIRCO and these included the Great Inga Hydroelectric project that is currently being run in the DRC and the Lobito Development corridor that is being done in Angola. South Africa and Angola offered to assist DRC in its on-going decentralisation process in terms of technical and capacity building. Moreover, South Africa is also committed to assist both Angola and DRC in strengthening the constitutional and legislative regulatory measures for the decentralisation of local governance and development. ARF was funding the operations of the Tripartite Mechanism and the Tripartite Mechanism is only the body that has the operational expenditure. ARF was not funding particular projects within the Tripartite Mechanism; the Mechanism was established by a MoU of three Ministers. Each of the three countries will contribute $500 000 to the Mechanism. The funds that had been allocated to various new projects were put in Dollars precisely because of the fluctuation of Rand.  ARF was only funding the Tripartite Mechanism in order to be able to operate and this was signed as a foreign policy prerogative. 

Ms Mathlako clarified that the $1.5 million is not a budget for DRC but for the Tripartite Mechanism which is based in Angola in order to assist the DRC. Each member in the Tripartite Mechanism pays an equal amount as was agreed upon by three member states.  

The Chairperson wanted to know if it was possible to find the budget allocation to the ARF in DIRCO’s budget as this was not clear in the presentation.

Ms Mathlako responded that it was indeed possible to find the budget allocation to the ARF in DIRCO’s budget. ARF is a fund therefore it is able to roll-over funds over and the fund was currently sitting with an accumulated surplus of about R1.5 billion. The budget allocation for the 2016/17 financial year was R31 000 and this was because of the accumulated surplus in the fund and the fiscus constraints that the country is going through.         

The Chairperson stated that the South Africa is playing a crucial role in the African Union and even the contribution of the country to the Union was significant. It is the responsibility of South Africa to assist with social and economic development in African countries. The focus should be on looking for African solution to African problems. The position that was put by South African to the United Nations (UN) was to avoid putting someone from outside the continent to lead peace and development in countries where there is lack of political and economic stability. The Committee should be provided with an Annual Performance Plan (APP) of ARF and any projects that are in the pipeline in the next coming months.

Mr M Khawula (IFP; KwaZulu-Natal) asked if there are any instances where South Africa could also be get funding from international donors for various programmes that are aimed at economic and social development. 

Ms Mathlako replied that South Africa was in a unique position in a sense that the country was receiving international funds like United States Agency for International Development (USAID) and most of these international donors are actually based in South Africa. USAID has recently announced the big funding for HIV/AIDS in Durban at the last AIDS conference. Most of the Western countries have developmental agencies and these agencies are bigger and centralised. South Africa is also a donor recipient.

The Chairperson indicated that South Africa needed to ensure that the African continent was able to maintain economic and political stability as stability in one country also spills over to other countries and this is exactly what is happened to the border of South Africa after the economic collapse in Zimbabwe. It would be important for South Africa to contribute towards Agenda 2063 by promoting peace and stability that would result in economic growth in the continent. It must be pointed that ARF was very prudent in terms of expenditure in the African continent considering the actual needs in the continent.

Ms Mathlako explained that the reason why the international donors are reducing their funding in South Africa was because the country is classified as a middle-income country and the focus is primarily on the low income countries. ARF would take into consideration of the suggestion to bring along DIRCO whenever when delivering a presentation to the Committee.

Adoption of minutes

24 August 2016 minutes

The Chairperson took the members through the document page by page.

The minutes were adopted without amendments.

Committee Oversight Programme

The Chairperson took members through the Committee Oversight Programme page by page.

The Committee Oversight Programme was provisionally adopted without amendments.

The meeting was adjourned.