Budget Briefing

Meeting report

FOREIGN AFFAIRS PORTFOLIO COMMITTEE
11 February 2004
BUDGET BRIEFING

Chairperson: Dr P Jordan (ANC)

Documents handed out:
Department of Foreign Affairs Presentation on Budget

SUMMARY
The newly appointed Director-General, Mr A Ntsaluba, briefed the Committee on the Department's strategic priorities, progress on transformation, and their budget and financial strategies. The Committee discussed various issues arising, including the status of the Department'sTraining Institute, recruitment drives, the status of various foreign property, and the allocation of funds for specific projects and operations.

MINUTES
Mr Sithole (ANC) apologised for the absence of the Chair and noted he would act as Chair until Dr Jordan arrived. He welcomed the Department representatives, especially the newly appointed Director-General (DG), Mr A Ntsaluba.

Mr Ntsaluba introduced the Department representatives and then outlined the budgetary process. He said it had followed the normal process of interaction within Cabinet, followed by the structuring of an internal budget. Then they had re-approached the Department of Finance and requested some further funding for certain projects. Some of this had been granted, but the Department was currently reprioritising the budget to provide for those projects and State of the Nation address priorities.

Mr Ntsaluba noted that the Department had, in the latter half of 2003, grouped their strategic priorities into long-term (10 years), medium-term (5 years) and short-term (2004/05) strategies. The broad strategic priorities focussed on conducting and co-ordinating South Africa's international relations and promoting foreign policy objectives through monitoring foreign policy, advising government and providing consular services.

With regard to global governance, the DG noted that the Department would be paying attention to the transformation of the United Nations, as well as participating in negotiations and international agreements. It would also focus on conflict resolution and disarmament, and combatting terrorism and transnational organised crime.

He said the Department would apply itself to strengthening the African Union (AU) and its institutions as well as working towards stability and economic integration on the continent. It would also aim for further regional integration through SADC and SACU. He noted that a trade agreement with the EU would shortly come into operation.

Mr Ntsaluba emphasised the importance of South-South co-operation and noted that the Department would be drawing closer to countries through the CARICOM and AASROC. South Africa would host the Brazil-Africa Forum in 2004 where the forum would consider expanding to incorporate other members of CARICOM. The political and economic strategic policies of the Department focussed on expanding tourism and concluding free trade agreements (FTA) with various countries. The Department also supported the bid for the 2010 Soccer World Cup.

Mr Ntsaluba said the major challenge of the previous year had been implementing the new structure of the Department - the long-term goal was to further expand by about 700 posts. A number of posts had been funded, but were not currently filled. The DG said the Department had been on an extensive recruitment drive during the previous year, which, combined with internal promotions, had resulted in the filling of a great number of funded vacancies. Mr Ntsaluba said that by June there would be more posts filled.

He said there was a structured process of induction and orientation for three months to teach recruits all needed competencies. The course was largely based on findings from visits to five different countries to examine their foreign services. The demographics of both the training programme and the mission administration courses showed that previously disadvantaged persons were in the majority. They had decided to limit recruitment and selection to twice a year in order to synchronise postings and facilitate internal promotions.

Mr Ntsaluba noted that the Department was transforming itself. Mission appointments tended to be more representative as they were often political appointments, while many career diplomats worked at head office. A major challenge was ensuring a greater representation of women at higher levels.

The DG said it had become necessary to acquire a new building as the Department was currently spread over six or seven buildings. This acquisition process had already started and should be completed by December 2006.

Mr Ntsaluba then discussed the change in budget structure that now contained four programmes as opposed to the previous five. This had been achieved by relocating certain sub-programmes in order to streamline functions. Regarding the Department's financial performance for 2003/04, the R10 000 that appeared as a saving had been allocated and would be transferred in due time.

With regard to the 2004/05 budget, Mr Ntsaluba said that in addition to the Department's baseline allocation, they had received an additional R99 million for policy options. About R115 million had been deducted from the budget due to discrepancies in exchange rate projections.

With regard to international commitments, he said the Department had been given R15 million of the R55 million requested in order to strengthen South-South co-operation. It concerned the Department that no money was allocated for conflict resolution or for the renovation of a building to house the UNDP in South Africa. The Department's archaic IT systems and the need to upgrade was acknowledged by the Treasury, but they felt it would take more time for the roll-out and funds would be provided at a later stage. Mr Ntsaluba said the Department had requested R100 million in order to acquire property abroad in order to cut down on rent expenses. Treasury was not opposed to this, but said a study was needed to show that this was cost-effective. He then discussed the lack of funding given to the African Renaissance Fund (responsible for supporting various projects in Africa) and said this was problematic as the fund was currently fully allocated. Regarding certain important projects that had not been provided for, the Department had reprioritised certain funds. Several embassies were opening in African countries to ensure SA representation across the continent.

Discussion
Mr Geldenhys (DA) asked why there appeared to be a lack of whites in training programmes.

Mr Makoena (ANC) said he felt there might be a lacuna between the recruitment needs of the Department and the training at universities. He suggested the Department communicate with university academics. Regarding the budget's format, he was dissatisfied that there was no asset register reflected.

Mrs Mohamed (ANC) said she looked forward to seeing greater female representation in the higher-ranking jobs. She asked how the lack of, or substantially lower than was needed, budget allocation to such important projects as conflict resolution and South-South co-operation would affect these projects. In the past, there had been a problem of bringing synergy between government departments and asked whether Foreign Affairs was trying to improve this. Finally, it seemed that foreign missions in the North seemed to be better funded than their southern counterparts.

Mr Ntsaluba responded that Foreign Affairs worked closely with the Departments of Tourism and Trade and Industry, and regularly invited representatives to attend strategic meetings. On the issue of white people on training courses, he noted that most of the white staff members had worked there for some time and thus were not in need of training. Those statistics should change in time as the Department did not exclude white people from recruitment initiatives. He had been highly impressed with the quality of recruits in the previous intake. He conceded, however, that it was an ongoing challenge to maintain adequate linkage between the Department and academic institutions.

The DG then said he was concerned about the lack of funding for conflict resolution and the reduced funding for South-South relations, but reminded the Committee that the budget had been reprioritised to allow funding for these projects. The observation that some missions were better funded than others was correct. This was generally due to the fact that missions in the North had a pre-existing staff structure. Some missions in the South had been targeted for upgrade and money had been allocated for such.

Mr Apleni (Deputy Director-General of Corporate Services) responded to the comment on the lack of an asset register in the budget. He regretted that this was a government-wide characteristic. Government was converting from a cash accounting system to an accrual accounting system where assets would be shown, valued and depreciated over time.

Ms Nompadolo (Department) also noted that there was a committee that worked with the Deans of various universities to structure their programmes. The Department also co-operated extensively with individual professors.

Mr Sithole asked the Department to comment on what happened to foreign property belonging to the former TBVC 'homelands'.

Ms Hajaij (ANC) asked what programmes were in place for the Department to reach out to civil society, as envisaged by the AU and NEPAD principles. She also asked what plans were in place to ensure that missions abroad were fully trained to promote trade and mission policies this. She thirdly noted that although they had been promised, the Committee had never received the new training centre curriculum. She asked how the new DG viewed the working relationship between the Department and this Committee.

Mr Macintosh (DA) asked at what stage these negotiations were regarding a free trade agreement with the United States. He enquired as to the exact square meterage of the new building in Pretoria and asked whether an old building would be converted or whether one would be newly built. He then sought clarity on whether the amount allocated for the presidential inauguration amounted to R70 million. He also asked where the R100 million requested for the African Renaissance Fund would be spent, as he thought it imperative that this fund be held to account.

Mr Sigwela (ANC) asked which department, Foreign Affairs or Public Works, was responsible for the registration of foreign property and whether the departments were in agreement on such.

Mr Sithole asked the Department to comment on the role of the training institute in SADC and whether it assisted in developing the diplomatic corps in other Southern African countries. He also enquired into the relationship between the African Renaissance Fund and the writing off of African debt.

Mr Ntsaluba explained that the African Renaissance Fund's predecessor made provision for the granting of loans to African countries. A balance of about R60 million has not been fully repaid. Some of these loans are very old and some were made to our neighbours and thus it had been decided to write off this debt. The Fund, however, did not grant loans but supported activities on the continent. It is thus not self-funding and needed an allocated budget.

He said the amount allocated for the presidential inauguration was R60 million: R20 million requested on top of the R40 million baseline allocation.

Mr Ntsaluba admitted he did not know the exact area of the new building, but said that it was going to be constructed as no suitable existing site had been found. He assured the Committee that he would forward the curriculum shortly.

He said there was a need to examine what overseas property could be disposed of. Any assets would be paid into the National Revenue Fund and the Department could then make a plea for that money. He suggested it would be used to acquire needed property overseas.

Mr Ntsaluba recognised that inadequate discussions had taken place between the Departments of Foreign Affairs and Trade & Industry when the decision was made that diplomats promote trade internationally. He agreed that further training of staff in foreign missions needed to occur, and suggested that other government departments get involved in this training.

Mr Apleni noted that there was still a debate surrounding whether the Department of Foreign Affairs or Public Works should deal with the registration of foreign property. In the meanwhile Foreign Affairs still had the asset register.

Mr Ntsaluba said that the relationship between the training institute and SADC was fairly superficial, but greater SADC training was part of a long-term approach.

Mr Ramgobin (ANC) noted that the comprehensive budget stated that South Africa's national values should be promoted internationally and that the objectives of the foreign service be publicised so that they were understood internally. He asked to what extent this was occurring.

Ms Hajaij asked what was been done to finalise the disciplinary hearing of those who allegedly misbehaved while on a mission.

Mr Ntsaluba said he thought that the values were important and must be worked towards, but that more work could be done to project these values to the public. He was aware of the negative image of such drawn out disciplinary hearings, but assured that every effort would be made so that future cases would be speedily resolved.

Mr Sithole adjourned the meeting.