ATC191023: Budgetary Review and Recommendation Report of the Portfolio Committee on International Relations and Cooperation, dated 23 October 2019
The Budgetary Review and Recommendation Report of the Portfolio Committee on International Relations and Cooperation, dated 23 October 2019
The Portfolio Committee on International Relations and Cooperation (the Committee), having considered the performance and submission to National Treasury for the medium term period of the Department of International Relations and Cooperation (the Department), reports as follows:
The Portfolio Committee received the presentation on the Annual Reports 2018/19 of the Department of International Relations and Cooperation and its entity, on 9 October 2019. The Committee also received presentations from the Auditor-General, and the Risk Management and Audit Committees on the annual performance of the Department.
- The mandate of the Committee
The Portfolio Committee on International Relations and Cooperation, is a committee of Parliament mandated by the sections 55 and 92 of the Constitution of South Africa, to oversee and ensure accountability in the formulation and conduct of South African foreign policy. Consequently, the Committee conducts oversight on activities of the Department of International Relations and Cooperation, its policies, financial spending patterns, administrative issues, and it holds the Department accountable for its operations and functions. The Committee is thus mandated by the Constitution to legislate, conduct oversight over the Department and also facilitate public participation. The Committee may also investigate any matter of public interest that falls within the foreign policy area of responsibility. The Committee is thus an important mechanism for ensuring oversight over the conduct of South Africa’s international relations and cooperation policy.
- Purpose of the Budgetary Review and Recommendation Report
In accordance with section 5 of the Money Bills Procedures and Related Matters Amendment Act 2009 (Act No.9 of 2009), the National Assembly, through its committees, must assess service delivery performance of each national department and submit Budgetary Review and Recommendation Report (BRR Report) for each department, for tabling in the National Assembly. The process allows the National Assembly to evaluate the effective and efficient use and forward allocation of resources; and may make recommendations on forward use of resources. These reports will be considered by the Standing/Select Committees on Appropriations and Finance, respectively, when they make recommendations to the Houses of Parliament on the Medium Term Budget Policy Statement (MTBPS).
In compiling this report the Committee, as mandated by section 5 of the Money Bills Procedures and Related Matters Amendment Act 2009, based the assessment of the Department on its service delivery plan as outlined in the 2018 State of the Nation Address. The Committee linked domestic priorities to the Department’s Medium Term Strategic Framework for the period 2014 – 2019 and aligned the information to priorities and measurable objectives as set out in the strategic plan.
The Committee examined the expenditure report as published by the National Treasury, commonly known as section 32 Reports of the Public Finance Management Act (PFMA) 1999 (Act 1 of 1999). Reference was also made to the Auditor General’s report on the 2018/19, Budget Vote 6 and the Department’s Annual Report 2018/19. The Annual report contains the Department’s service delivery information, reflecting its performance in 2018/19 reporting period.
- The core function and mandate of the Department
The overall mandate of the Department is to work for the realization of South Africa’s international relations policy objectives. In terms of the provisions of the Constitution, the President of the Republic of South Africa bears the overall responsibility for the country’s foreign policy and international relations. However, the Department is entrusted with the formulation, application and implementation of South Africa’s foreign policy which is derived from South Africa’s domestic priorities.
The Minister of International Relations and Cooperation (the Minister) assumes overall responsibility for all aspects of South Africa’s international relations, albeit in consultation with the President. The Minister also liaises and consults with members of the Cabinet on overlapping issues and on the priorities and programmes of other departments that bear an international relations element. In the same breath, other Cabinet ministers are required to consult the Minister on their international role.
- Measurable Objectives of the Department
The Department had identified the following strategic objectives for implementation during the reporting year, aimed at responding to the domestic priorities as announced by government for the reporting year as follows:
- Efficient, effective, economical and fully capacitated Department;
- Enhance the African Agenda and Sustainable Development;
- Provide strategic Public Diplomacy direction nationally and internationally;
- Strengthen political and economic integration of the Southern African Development Community (SADC);
- Strengthen of South-South Relations;
- Strengthen of relations with strategic formations of the North;
- Strengthen Political and Economic Relations;
- Participate in the Global System of Governance;
- Provide effective Protocol Services;
- Strengthen Multilateralism through financial contributions
During the reporting period, the thrust of the work of the Department remained anchored on these overarching priorities as confirmed by the January 2018 Cabinet Lekgotla and the 2018 State of the Nation Address (SoNA). In its work on these priorities, the Department is supported by the following activities:
- Organisational support;
- Rendering of professional services and
- Organisational strengthening.
- Policy focus areas
- Analysis of the Department’s prevailing strategic and operational plans
The Annual Report reflects the highlights of a number of diplomatic activities carried out by the Department including its Missions abroad. At the time of reporting, South Africa’s representative drive had grown from 34 in 1994 to 125 diplomatic missions in 2018/19 in 108 countries abroad, and through the accreditation of more than 160 countries and organisations resident in South Africa. The extended footprint also put the resources of the Department under pressure, especially within the current constrained fiscal environment of South Africa.
The Department has a dynamic role to play in the improvement of the lives of South Africans. This is achieved through identifying strategic opportunities for skills and knowledge development, targeted investments, and growing markets for South Africa’s products and services. This way, the Department ensures that international relations work is linked and responds to domestic imperatives.
During the reporting period, the Department remained focused towards implementing strategies and mechanisms to bolster regional and continental political and economic integration. These are the apex priorities of South Africa’s foreign policy. The inherent foreign policy outlook guided the Department’s engagements in Africa, and with partners in the global South, developed nations of the North as well as in multilateral relations.
It ensured that South Africa’s foreign relations contributed to an environment that is conducive to sustainable economic growth and development; and serve as a basis for addressing government’s identified urgent priorities. The Department’s priority was to pursue African development and enhanced international cooperation. This was in support of government’s key targets, as outlined in the medium term strategic framework.
- 2018 State-of-the-Nation Address.
In his February 2018 State-of-the-Nation Address, President Cyril Ramaphosa indicated that there would be continuity in South Africa’s foreign policy. He pointed out that the consistent theme of foreign policy playing a role in the development of Africa and South Africa would remain. He further indicated that South Africa’s foreign policy activities would remain aligned to the National Development Plan. To this end, President Ramaphosa highlighted that government would organise an Investment Conference in the next three months from the date of the state of the nation. The conference would be targeting both domestic and international investors, to market the compelling investment opportunities to be found in our country. Special economic zones remained important instruments to be used to attract strategic foreign and domestic direct investment and build targeted industrial capabilities and establish new industrial hubs.
President Ramaphosa noted that attracting investment would be a key driver of economic growth. This was particularly relevant in terms of the mandate of the Department in its conduct of Economic Diplomacy. In terms of South Africa’s investment drive, President Ramaphosa noted that “the levels of growth that we need to make significant gains in job creation, will not be possible without massive new investment”. The Initial Investment conference attracted around R300 billion in investment pledges from South African and international companies. There was also a significant increase in foreign direct investment last year. In 2017, we recorded an inflow of foreign direct investment amounting to R17 billion. Official data shows that just in the first three quarters of 2018, there was an inflow of R70 billion.
Boosting intra-Africa trade forms part of South Africa placing Africa at the centre of its Foreign Policy. The Continental Free Trade Area (AfCFTA) was seen as an important part of this, given its potential for boosting trade. In this regard, President Ramaphosa stated that “the agreement on the establishment of African Continental Free Trade Area offers great opportunities to place South Africa on a path of investment-led trade, and to work with other African countries to develop their own industrial capacity”. The agreement would see the creation of a market of over a billion people with a combined GDP of approximately $3.3 trillion.
Tourism was regarded another area which provides the country with incredible opportunities to, quite literally, shine. Tourism was seen as an integral part of South Africa’s strategy for growing the economy. Attracting tourism also forms part of South Africa’s international relations through its Bilateral Relations, thus making it very relevant to South Africa’s foreign policy. In terms of tourism, President Ramaphosa stated that he already spoke at length about the huge potential that exists for the expansion of the tourism sector. The country’s concerted efforts to market South Africa as a prime destination for tourists has yielded positive results, with significant annual growth in the number of foreign visitors. In the past year (2017), the President continued, there were 10 million tourists who came to the country. The intention was to raise this to 21 million by 2030, targeting, among others, the largest and fastest growing markets of India and China, as well as strong markets on our continent. In addition to direct jobs, this export industry could generate as many as 2 million more jobs in food and agriculture, construction, transport, retail, and the creative and cultural industries by 2030.
South Africa has acceded to the Tripartite Free Trade Area agreement, which brings together SADC, COMESA and the East African Community. It would open market access opportunities for South African export products, contribute to job creation and the growth of South Africa’s industrial sector.
In terms of the Blue Economy, President Ramaphosa noted that South Africa’s mere location as a country meant it can harness the potential of its oceans to grow the economy. Since the Operation Phakisa on the Oceans Economy in 2014, President Ramaphosa pointed out that “we have secured investments of nearly R30 billion and created over 7,000 direct jobs”. The investments have been mainly in infrastructure development, marine manufacturing, aquaculture, and the oil and gas sector. These investments were expected to create over 100,000 direct jobs and more than 250,000 indirect jobs.
The President saw Space Diplomacy as providing South Africa with an opportunity to play a role in technological and scientific innovations that are key in the advancement of humanity. In terms of scientific innovations, the President noted as follows “Today, we choose to be a nation that is reaching into the future. In doing so, we are building on a platform of extraordinary scientific achievement”. The successful construction in the Northern Cape of the MeerKAT telescope, the world’s largest and most sensitive radio telescope, and the development of the Square Kilometre Array has enabled South Africa to develop capabilities in areas such as space observation, advanced engineering and supercomputing.
The President highlighted that South Africa would, in 2018, take over the chair of the BRICS group of countries. It would give priority to the promotion of value-added trade and intra-BRICS investment into productive sectors. At the end of its term, South Africa handed over the chairship of BRICS to Russia in December 2018.
- Alignment to National Development Plan (NDP) and the 2018 MTBP Statement and the 2014-2019 Medium Term Strategic Framework
In Chapter 7 of the NDP entitled “Positioning South Africa in the world”, the National Planning Commission argued that government’s global and regional policy-making stance should be South Africa-centric. It should also improve South Africa’s integration in the region, on the continent, among developing countries, and in the world with measurable outcomes. The National Planning Commission also argues that policy-making should be guided by the following principles and objectives:
- Focus on what is achievable without over-committing to possibilities of regional and continental integration.
- Foreign Policy should be evaluated on a regular basis to “ensure that national interests are maximised”.
- Remain an influential member of the international community;
- Deepen cooperation with Brazil, Russia, India and China as part of the BRICS group while promoting regional and continental integration;
- Stabilise the regional political economy through increased integration and cooperation; and
- Achieve measurable outcomes related to food, energy, education, health, transport and communication infrastructure, national defence, adjustment to climate change and economic growth to benefit all South Africans.
- Service delivery environment
In its examination of the Annual report of the Department, the Committee observed that the Department had aligned itself with the prescripts of Chapter 7 of the National Development Plan entitled “Positioning South Africa in the world”. (National Planning Commission (2011): One of the objectives of the national development plan is to enhance South Africa’s position in the region and the world, and to increase trade and investment.
The plan states that the country’s foreign policy should be shaped by the interplay between diplomatic, political, security, environmental, economic and regional dynamics that define international relations. The country should position itself as one of Africa’s powerhouses, leading development and growth on the continent. Integration with the Brazil-Russia-India-China-South Africa group of countries should be deepened. In this regard the Department is doing its part in contributing to the realisation of the plan’s development goals. These are achieved through continuing to support regional and continental processes, responding to and resolving crises, strengthening regional integration, contributing to an enabling trade environment, increasing intra-African trade, and championing sustainable development and opportunities in Africa.
The Department recognises that the NDP proposed expansion of South Africa’s trade and global market share. To achieve this, a greater productive and export capacity and global competiveness across the region needs to be built. The Department’s strategic focus is thus to advance a developmental integration agenda in Southern Africa. This would be achieved by combining trade integration, infrastructure development and sector policy coordination.
As such, the integration of the Southern African Development Community and regional neighbours is critical for the economic development of the region. It is also seen as critical for South Africa’s global competitiveness. South Africa would continue to use structured bilateral mechanisms and high level engagements to reinforce and expand cooperation in the political economic, and social and security spheres. This would be for the purposes of contributing to the achievement of national priorities.
The Committee in its analysis of the Annual report 2018/19, observed that the Department continued with its concerted efforts to execute South Africa’s international relations strategy to address the country’s domestic challenges. In this regard, the National Development Plan enjoins the Department to contribute towards addressing the identified triple challenges of poverty, inequality and underdevelopment. The NDP requires the Department to create a better life for all South African. This it should do while meeting the country’s international obligations in a dynamic and complex global terrain. In this vein, South Africa’s foreign policy objectives remained predicted on the country’s national interest and identity.
The narrative of Africa being the bedrock of South Africa’s foreign policy gained more credence during the current stint as a non-permanent member of the United Nations Security Council (UNSC) for the period 2019 to 2020. South Africa was endorsed by the African Union (AU) in 2018 to take up this position. This was reported as a demonstration of confidence in South Africa’s leadership and the country’s resolve to place African issues high on the agenda of the UNSC. Dealing with the root causes of conflict on the continent would remain central to South Africa’s work as incoming Chair of the AU from January 2020.
It was reported that the Department would improve its Economic Diplomacy Strategy. This would enable the Department to leverage the country’s diplomatic footprint to increase investments in the country and facilitate opportunities for South African businesses. The Minister believed that ‘plans can only come into fruition in a deliberately created conducive environment’. She said this informed, in part, South Africa’s continued mediation efforts in the Kingdom of Lesotho. The work of the Facilitation Team would continue beyond the reporting period. It would contribute to the full implementation of the SADC Roadmap on Constitutional, Public Sector, Security Sector, Media, Economic and Parliamentary Reforms.
It was reported that the goals of peace and development in Africa would find support from South Africa’s relations with the Global South. In this regard, South Africa assumed the Chairship of BRICS from 1 January to 31 December 2018 under the theme: “BRICS in Africa: Collaboration for Inclusive Growth and Shared Prosperity in the 4th Industrial Revolution”. The BRICS bloc continues to be a leading source of foreign direct investment with its economies exceeding US$1 trillion.
The Department was reported to have sought to integrate the human rights and development agenda in all areas of its work. As Co-Chair of the G20 Development Working Group, it prioritised key developmental areas for South Africa and Africa in industrialisation, infrastructure development and the fight against illicit financial flows out of the continent.
- Global delivery environment
During the reporting period, the Department’s international relations programme continued to be implemented within a global environment that was characterised by changes in global politics which have resulted in complex shifts that require an astute foreign policy strategic stance from South Africa.
It was reported that the right-wing populism has seen a resurgence of narrow nationalism and even nativism throughout Europe, Eastern Europe and the USA. It has been further observed that the conflation of narrow nationalism, which pivots away from multilateralism and unilateral stances relating to trade, peace and security, is reminiscent of a world that gave rise to the two World Wars and the tensions of the Cold War. The conflicts in North Africa, the Maghreb and the Sahel were indicative of regional conflicts that have the potential to become global in nature.
As a result of the fluid international political environment, it was noted that South Africa would need to develop a foreign policy stance that strengthens the bridging role. South Africa has played the role over the last 25 years between the different global blocs premised on a largely independent foreign policy orientation. This would allow South Africa to contribute to strengthening and democratising the global multilateral system. South Africa’s interest is that it fosters peace, stability, prosperity, equality and human rights for all people, especially in Africa, and work towards establishing equality between countries. It is South Africa’s considered view that equality, democracy and prosperity within countries cannot be established without working towards equality between countries.
Despite the inherent undemocratic nature of the United Nations Security Council (UNSC), with the domination of the permanent five, South Africa’s view has been positive. It believes that the UNSC and organs linked to the UN, created a global multilateral public order that provided for a rules-based system to deal with issues such as global peace and security, development, human rights and trade.
During the reporting period, the Southern Africa Development Community (SADC) region remained politically stable. South Africa, however, would continue to impress on partners and work with them to consolidate democracy and peace for development.
South Africa concluded its Chairship of SADC in August 2018, which was under the theme: “Partnering with the Private Sector in Developing Industry and Regional Value Chains”. South Africa’s undertaking during the chairship was to continue to bolster economic growth in the region. This included having a dedicated focus on harnessing the participation and enhanced cooperation of the regional private sector in the implementation of the SADC Regional Industrialisation Strategy and Roadmap.
It was reported that South Africa intends to use its third tenure in the UNSC to promote the maintenance of international peace and security. It would do this through advocating for the peaceful settlement of disputes and inclusive dialogue. It would also advocate for close cooperation between the UNSC and other regional and sub-regional organisations.
- Major highlights in the work of the Department in 2018/19 financial year
During this reporting period, South Africa maintained a wide and healthy diplomatic presence in all regions of the world. This was in support of its global international relations agenda with Africa as central to its foreign policy. South Africa’s engagements and priorities on the African continent remain focused and poised on the strengthening of bilateral relations; the promotion of peace, security and stability; economic cooperation and integration; and the overall enhancement of the African Agenda.
South Africa continued engagements with strategic partners is a response to addressing South Africa’s national priorities as reflected in the National Development Plan. Accordingly, the year under review witnessed strengthened bilateral political and economic relations through the 24 structured bilateral mechanisms and 47 high-level visits to promote South Africa’s national priorities. The outcomes of these engagements would manifest through the direct and indirect investment by South Africa’s key partners in strategic sectors of the economy.
South Africa election to assume the Chair of the AU for 2020 is testimony of the tireless efforts of the department and is confirmation of South Africa’s leadership role on the continent. South Africa’s chairing of the AU in 2020 will coincide with the final year of South Africa’s membership of the United Nations Security Council (UNSC), providing the Department with a unique opportunity to leverage the capacity of the UN in order to contribute towards ending conflicts on the African continent.
During the reporting period, South Africa emphasised its commitment to continental integration when it deposited its Instrument of Ratification of the Agreement establishing the African Continental Free Trade Area (AfCFTA). The AfCFTA is expected to create the world’s largest free trade area and will significantly increase intra-African trade and investment.
The Department ensured the successful operationalization of South Africa’s theme, “Partnering with the Private Sector in Developing Industry and Regional Value Chains”, during its Chairship of the Southern African Development Community (SADC) from August 2017 to August 2018. President Cyril Ramaphosa, as outgoing
Chair, presented a hand-over report to Namibia during the 38th SADC Ordinary Summit of Heads of State and Government, held in Namibia from 17 to 18 August 2018. The summit endorsed that industrialisation would remain the overarching theme and that subsequent themes be aligned to this so as to facilitate sustainable implementation and assessment of the SADC Industrialisation Strategy and Road Map.
During October 2018, South Africa ratified the SADC-Common Market for Eastern and Southern Africa (COMESA)-East African Community (EAC) Tripartite Free Trade Area (TFTA) Agreement. The area is already contributing positively to South Africa’s and the region’s economic development.
The Department’s plurilateral engagements included cooperation among countries and groupings of the South. These were with Brazil, Russia, India, China and South Africa (BRICS); India, Brazil and South Africa (IBSA); and the Indian Ocean Rim Association (IORA). The development of common positions on political, economic, social and human rights issues remained essential in addressing the historic marginalisation of countries of the South.
The Department led the successful hosting of the 10th BRICS Summit in Johannesburg in July 2018. The BRICS leaders adopted the Johannesburg Declaration, which further consolidated the gains of BRICS practical cooperation in:
global political security
global governance of financial and economic
The Department contributed to South Africa’s ability to deliver on its obligations as Chair of IORA for the 2017 – 2019 period, including the hosting of the 18th IORA Council of Ministers (COM) in Durban on 2 November 2018. The ongoing work by the Department to reform the Indian Ocean Rim Academic Group (IORAG) was key to strengthening the role of academia in the association. A Special Declaration to commemorate former President Nelson Mandela’s Centenary was adopted and the IORA Nelson Mandela “Be the Legacy” internship programme was established. The Department’s involvement with IORA resonates with the objective of sustainable economic development of South Africa’s oceans.
In line with South Africa’s commitment to South-South cooperation, the Department continued to engage the IBSA South-South development cooperation mechanism. This contributed to the decision to elevate the IBSA brand internationally, using, among others, the legacy of Nelson Mandela. IBSA’s activities will be expanded to enhance cooperation with other developing countries through the IBSA Fund for the Alleviation of Poverty and Hunger, a model for South-South based development cooperation. South Africa remained irrevocably committed to the realization of the goals of Agenda 2063 Africa’s blueprint and vision for an integrated, prosperous and peaceful continent, “the Africa We Want”.
In line with the view expressed in the National Development Plan (NDP) that Europe may continue to be a powerful political economic force in the world for at least the next 20 to 30 years, the Department continued to build its relations with the European Union (EU). South Africa is the only African country, and one of 10 globally, which has a Strategic Partnership with the EU. The EU remains South Africa’s leading trade and investment partner. The EU, as a bloc, represents 73,7% of total Foreign Direct Investment (FDI) stocks in the country. Over 2 000 EU companies operate in South Africa, creating more than 500 000 direct and indirect jobs.
The hosting of the Seventh South Africa-EU Summit, held on 15 November 2018 in Belgium, was the highlight of the Strategic Partnership. The key outcome of this summit was the adoption of a joint statement that identified areas of multilateral, bilateral and regional cooperation. South Africa assumed the Chairship of the Southern African Development Community.
Multilateralism remains a focal point of South Africa’s foreign policy. Engagements in these forums are premised on the need to advance the priorities reflected in the NDP and the development priorities of developing countries. The UN remains the most important multilateral institution and the centre of global governance.
South Africa, assuming its third term (2019 – 2020) as a non-permanent member of the UNSC, represents a strong vote of confidence from the international community.
The Department is therefore focused on using this opportunity to reposition the country and to reclaim and reassert its role as a key player in international affairs.
The Department is building on President Mandela’s legacy of working towards a peaceful, just and prosperous world. During the UN General Assembly 73 in 2018, UN member states recognised the period from 2019 to 2028 as “The Nelson Mandela Decade of Peace”.
On 20 September 2018, South Africa conducted bilateral engagements with strategic partners by promoting South Africa’s national priorities as reflected in the NDP. Structured bilateral mechanisms are important platforms for government-to-government cooperation. During the year, the Department was instrumental in convening 24 structured bilateral mechanisms and a total of 47 high-level engagements. These engagements resulted in sales of manufactured value-added exports of R4, 425 billion with further commitments in the investment pipeline to the value of R250 billion. During the same period, the total tourist spent increased from R80,3 billion to R82,4 billion, year-on-year.
The Department continued to render consular assistance to South Africans travelling, working, studying and living abroad. Due to the serving nature of the work, Consular Services form the “face” of the Department. The forms of support provided included the processing of 279 cases of South African nationals in distress abroad, 322 civil processes, 113 new prisoner cases, 198 mortal remains cases, 23 cases of the whereabouts of South African citizens, one adoption, eight abductions and 51 extradition requests. Consular Services continued to provide legalization services for public documents and attended to general consular enquiries.
- Overview and assessment of the financial and non-financial performance of programmes of the Department and its entity for the 2018/19 financial year
- Financial expenditure trends of the Department and its entity
The Department continued to operate in an uncertain international environment which is volatile, uncertain, complex and uncertain (VUCA) and budget constraints. At the end of the 2018/19 financial year, the Department had a total expenditure amounting to R6,370 billion, which is 97,2%, against the available budget of R6,553 billion.
The overall expenditure was diagnosed as having been influenced by a number of factors such as:
Compensation of employees
The overspending of R124 million on compensation of employees is due to compensation of employees ceiling (COE) which does not cover filled post salaries and wages.
Goods and services
The underspending in goods and services of R128 million is due to the favourable average exchange rate against the budget rate.
Transfers and subsidies
The underspending in transfers and subsidies is mainly due to the transfer payment for South African Development Partnership Agency (SADPA) which was not paid during the year due to the non-operationalisation of SADPA and due to the favourable average exchange rate against the budget rate.
Payments for capital assets
The underspending is attributable to a New York capital projects that has been put on hold. This was reported mainly due to the Department deferring some of its planned capital projects, and delays in acquiring land for two missions in New York. Furthermore, there was a notable appreciation in the exchange value of the rand against the US dollar in the last quarter of the financial year. This resulted in savings in foreign currency-denominated goods and services of the Department.
The Department’s expenditure was noted to have increased from R5,997 billion in 2017/18 to R6, 370 billion in 2018/19, which represents an increase of 6%. The increase in expenditure was reported as due to: Programme 1: Due to the increase in rental for office accommodation for the AU organs and UN as well as an increase in unitary fee payments for OR Tambo Building based on the contractual agreement.
Programme 4: Due to the expenditure relating to the hosting of the BRICS Summit.
Programme 5: Due to the increase in South Africa’s membership contribution for the A, SADC and UN. However, there was a notable decrease in Programme 2 under goods and services: Mainly due to a favourable average spot rate against major foreign currencies.
Table 1: Total expenditure for the 2018/19 financial year
Total percentage spent (%)
1 513 809
1 355 490
3 383 266
3 377 476
Public Diplomacy and Protocol
6 552 768
6 370 239
Source: Annual Report of the Department of International Relations and Cooperation 2018/19
- Analysis of financial performance of the Department and its entity for the 2018/19 financial year
Spending trends per programme were aligned to service delivery of the Department and its entity.
- Programme 1: Administration
The Department reported that during the period under review, the Programme continued to provide support with regard to the development of the overall policy and management of the Department. This was achieved through efficient, effective and economical utilisation of scarce resources.
The expenditure for Programme 1 was at R1,3 billion or 89,7% of the total available budget of R1,5 billion for the 2018/19 financial year. The underspending was mainly attributable to the Department momentarily deferring the commencement of new capital projects, and delays in finalising the acquisition of land for the two missions in New York.
The bulk of the expenditure incurred was for goods and services and capital assets; and related to the international property portfolio and domestic properties, respectively. Specific expenses incurred by the Department were in terms of operating leases and operating payments for the foreign municipal charges and rental costs. The expenditure was also due to the increase in rental costs for office accommodation for the Pan African Parliament, United Nations offices and the African Union Organs, as per the respective host country agreements. In addition, the Department also saw an increase in finance lease payments related to the unitary payments of the Public Private Partnership (PPP) contract of the head office building, ending in 2034.
- Programme 2: International Relations
This programme’s preliminary expenditure for 2018/19 amounted to R3,377 billion or 99,8% of the total available budget of R3,383 billion for the financial year. Compensation of employees, and goods and services accounted for the bulk of expenditure under this programme. This was particularly cost of living allowances paid to transferred officials and operating leases paid for office and residential accommodation in missions. The underspending under the programme was mainly as a result of foreign exchange gains realised on foreign currency-denominated expenses.
- Programme 3: International Cooperation
Under this programme, the expenditure for 2018/19 amounted to R525, 7 million or 99,9% of the total available budget of R526,5 million for the financial year. The increase is mainly due to the realignment of missions dealing with multilateral issues to Programme 3. The underspending under the programme was mainly as a result of foreign exchange gains realised on foreign currency-denominated expenses, including cost containment measures implemented by the travelling.
- Programme 4: Public Diplomacy and Protocol Services
The programme’s preliminary expenditure for 2018/19 amounts to R352,5 million or 99,8% of the total available budget of R353,2 million for the financial year. The increase in spending from the previous year is due to the expenditure relating to the hosting of the BRICS Summit.
- Programme 5: International Transfers
The programme’s preliminary expenditure for 2018/19 amounted to R759,0 million or 97.8% of the total available budget of R775,9 million for the financial year. The The increase from the previous year is mainly due to the increase in South Africa’s membership contribution for the AU. The savings were also realised due to the appreciation in the exchange value of the rand against the US dollar; affecting membership contributions to foreign and international organisations.
It was reported that the National Treasury approved the use of unspent funds of R118,590 million from Programme 1 to cover the shortfall on the AU contribution under Programme 5.
In addition, the virements were approved amounting to R10,995 million from Programme 1 goods and services to Programme 4 goods and services due to reprioritisation of the Department’s commitments to cover the BRICS Summit expenditure.
- Compensation of employees’ expenditure ceiling
The Department’s Compensation of Employees (COE) entails salaries and benefits as determined by the Public Service Act of 1994 as amended. The Department finds itself in a peculiar situation in managing its foreign staff complement, which consists of transferred officials stationed in missions abroad and further supported by Locally Recruited Personnel (LRPs). The LRPs are employed in terms of the local legislation of the receiving country. Consequently, the predetermined COE ceiling remains a challenge to the Department due to the volatility of the nature of the benefits accorded to the transferred staff stationed abroad. These are as determined by the Foreign Service Dispensation, as well as payment of salaries and wages payable in foreign currencies.
The Department has developed a strategy to manage the cost of employees’ budget, and some of the measures have already been implemented. This includes suspension of the filling of vacant posts, early retirement, laying off some of the LRPs, limiting overtime payments, suspending payment of acting allowances and limiting leave encashment.
The Department has also embarked on a process to realign the departmental structure as one of the measures to manage the COE budget. This process will be implemented in the new financial year.
- Fruitless and wasteful expenditure
As disclosed in Note 32 to the annual financial statements, a total amount of R1,911 million was been recorded as fruitless and wasteful expenditure during the year under review. Fruitless and wasteful expenditure mainly arose from the costs incurred by missions on vacant properties, which could not be disposed of by the Department.
- Irregular expenditure
The National Treasury noted the suspected incidences of irregular expenditure, involving transactions valued at R298,016 million. Irregular expenditure arose as a result of contravention of Supply Chain Management (SCM) legislation.
- Supply Chain Management
The Department continued with a centralised procurement approach to enhance its service-delivery improvement plans. This included the revision of the financial delegation of authority as well as training of senior management members serving in three bid committees, namely: specification, evaluation and adjudication. The Department continued to strengthen its procurement process in order to enhance its service-delivery improvement plans through an invoice tracking system. This is aimed to improve and monitor the turnaround time in adherence to the 30 days, payment period, and the implementation of checklist for Supply Chain Management (SCM) transactions. This would lessen and control irregular, fruitless and wasteful expenditure.
During the year under review, Asset management remained a key focus area. The Department implemented additional measures in terms of an audit action plan, consequent to the negative audit outcome in the 2017/18 financial year. These measures included biannual asset verifications in all missions and Head Office visits to missions that needed assistance.
3.2.11 Gifts and donations received in kind from non-related parties
Gifts and donations are received in kind from non-related parties in the execution of foreign policy at missions abroad. These normally emerge during high-level visits as appreciation. The detail is illustrated in Annexure 1K of the financial statements.
3.2.12 Other agency services
The Department renders agency services on behalf of other departments, public entities and provinces that have staff members stationed abroad. This also happens where departmental delegations travel abroad for official purposes, including institutions. In addition, the Department also renders agency services on behalf of the Department of Home Affairs in relation to immigration and civic services rendered abroad, and locally as well as issuance of temporary accredited members of the diplomatic community.
The Department has entered into agreements through signed Memoranda of Understanding (MoUs) with the relevant departments. The purpose is to set out the administrative arrangements concerning cooperation between the department and the relevant department at South African missions. This includes the payment of advance payments by partner departments.
3.2.13 Infrastructure-related expenditure
The Department has allocated R185 million towards infrastructure spending for 2018/19. This allocation funded existing infrastructure development and the renovation and refurbishment of state-owned chanceries, official residences and staff accommodation. During the period under review, the Department completed the extensive renovation and modernisation, including refurbishment, of the Official Residence in Brasilia, which will lead to a reduction in its rented portfolio as well as optimal use of state-owned facilities.
The pilot project for the acquisition of land and development of a Chancery and staff accommodation in New York City, met with challenges. It was initiated in partnership with the private sector, and was unable to proceed. In the circumstances, the capital budget was redirected to renovating 13 state-owned properties in Namibia and one property in Swaziland. The planning for both projects was completed in 2018/19 and will be issued to the market early in 2019/20.
In addition, planning for the extensive modernisation and renovation of the chanceries in Paris and The Hague are in progress. Both these projects are subject to local heritage prescripts.
These changes in capital priorities have resulted in an underspending of the 2018/19 capital budget. The Department has requested the unspent budget to be rolled over to 2019/20 to finalise the refurbishment projects that were started in 2018/19.
The Department requested a roll-over of funds amounting to R300 million from the 2017/18 financial year to the 2018/19 financial year It was not approved by National Treasury.
- Public-Private Partnership Agreements
The Department continued to service the existing Public-Private Partnership Agreement (PPPAs) with Main Street 717 (Pty) Ltd, concluded in 2009. This is done through quarterly meetings of senior managers as well as monthly operational meetings for operational managers. In addition, the meetings also deal with other governance and operational issues. The term of the PPPA is 25 years, ending in 2034. The total cost incurred in relation to the agreement for the financial year 2018/19 was R246 742 million per annum.
- Future plans of the Department – Foreign Service Bill 2015
The Department will continue to pursue regional political and economic integration, promote Africa’s development through sustained South-South solidarity and mutually beneficial relations with the North, and engage in multilateral systems and processes of global governance in advancing South Africa’s foreign policy priorities.
The main focus areas during the reporting period 2019 to 2020 will be:
The Department will use South Africa’s tenure as a nonpermanent member of the UNSC to promote international peace and security through advocating peaceful dispute resolution and inclusive dialogue. The Department will also focus its efforts on enhancing cooperation and improving efficiency between the UN, the AU and other regional and sub-regional organisations.
South Africa will assume the Chair of the AU for 2020. The Department remains determined to re-iterate Pan- Africanism and to take the project of Pan-African unity, integration and development to the next level, being guided by the continent’s strategic political and development aspirations as espoused in Agenda 2063. will also ensure that AU-UN coordination is further enhanced and elevated, also considering South Africa is the current AU champion for AU-UN cooperation.
The Department, through South Africa’s Chair of IORA (2017 – 2019), will continue to advocate for the restructuring of the global political, economic and financial architecture to be more balanced, representative, inclusive and equitable and ensure that the international system rests on the important pillars of multilateralism and international law.
The Department has tabled the Foreign Service Bill during the 2015/16 financial year for processing by the Parliament. The Bill is aimed at, among others, the establishment of a single foreign service for the Republic of South Africa; for the administration and functioning of the Foreign Service; and for the establishment of mechanisms that enhance the execution of international relations. The Foreign Service Bill, 2015 was adopted by the National Assembly in November 2018, and considered by the National Council of Provinces (NCOP) in February 2019. The NCOP suggested an amendment, which is yet to be considered by the Portfolio Committee on International Relations and Cooperation.
It was reported that the Department intends to undertake a review of the organisational structure to align to current developments, challenges and changes in order to deliver on South Africa’s foreign policy and government priorities.
- New or proposed activities – South African Development Agency
In addition, the Department is continuing with plans to operationalise the South African Development Partnership Agency (SADPA) and finalise the Partnership Fund for Development Bill (PFD). The process is aimed at repealing the African Renaissance and International Cooperation Fund Act, 2000 (Act 51 of 2000), in order to support South Africa’s outgoing development cooperation policy by providing funding and technical support for the development initiatives. Finalisation of the Partnership Fund for Development Bill, aimed at repealing the African Renaissance and International Cooperation Fund Act, 2000 (Act 51 of 2000) is in progress.
In strengthening the governance issues of the ARF, the department has developed an operational framework; appointed a full-time ARF secretariat; shared internal audit and appointed an audit committee as well as developed a risk management plan.
- Performance information
During the reporting year, the core of the Department’s work of conducting South Africa’s foreign policy remained predisposed towards Africa and South-South cooperation. The objectives described in its Annual Performance Plan (APP) 2018/19, are based on the NDP.
- Analysis of non-financial service delivery performance of the Department and its entity for the 2018/19 financial year
The Committee considered and analysed the Annual Report of the Department of International Relations and Cooperation for the 2018/19 financial year. In its analysis of the report, the Committee also enlisted input from the Office of the Auditor-General, the Audit Committee and the Internal Audit.
The focus of the assessment was on the performance of the key programmes of the Department comprising of Administration, International Relations, International Cooperation, Public Diplomacy and Protocol Services and International Transfers. The Department’s performance was measured against its own set targets as identified in the Strategic Plan of 2015-2020. It was also measured against Government’s key priorities identified in the President’s State-of-the-Nation Address (SoNA) of February 2018 and the Government’s Medium Term Strategic Framework 2014-2019. Other key measures comprise of the moral values and principles that underpin the country’s foreign policy. The source documents for this analysis include the 2018 Estimates of National Expenditure (ENE); the 2018 State-of-the-Nation Address; the Delivery Agreement for Outcome 11 (2014-2019) as well as the Department’s Strategic Plan 2015-2020.
The performance of the entity, the African Renaissance and International Co-operation Fund (the ARF) for 2018/19 is also assessed in this report.
- Non-financial performance per Programme
- Programme 1: Administration
Main objective: The purpose of the programme is to develop overall policy and manage the Department with the intention of ensuring an efficient, effective, economical and fully capacitated department.
During the reporting period, the Department managed to maintain the vacancy rate at 9,9%, which is below the national average vacancy rate of 10%. The filling of vacant posts continued to be affected by the ceiling placed on the compensation of employees’ budget and as a result, the department could not fill critical vacancies.
During the reporting period, the Department finalised the outcomes of the annual performance assessments and effected payment of incentives by 31 March 2018 as per the amended Public Service Regulations, which came into effect in August 2016. Ninety-eight per cent of eligible Senior Management Service (SMS) members signed and submitted performance agreements within the prescribed time frame for the 2018/19 performance.
The Diplomatic Academy was successfully recertified for 9001:2015 standard in May 2018 during the recertification audit conducted by the South African Bureau of Standards. The Ministerial Task Team on the Diplomatic Academy was established in January 2019 and has commenced its work to explore the establishment of an Institute of Higher Learning for Diplomacy.
The Department initiated and hosted the Economic Diplomacy Training Forum. A key objective of the forum is to institutionalise Economic Diplomacy as a diplomatic tool used by both state and non-state actors to realise political economy objectives and realign South Africa’s foreign policy towards the delivery of Vision 2030 as envisaged in the National Development Plan (NDP).
The ICT system has not been fully integrated, converged and secured. The reason was that the refresh of the infrastructure has not been completed which serves as a prerequisite for integration of the system between missions and headquarters. The Committee observed that delays in integration of the ICT system is negatively impacting on the optimal operations of information sharing.
During the reporting year, 85 training programmes were delivered to 1721 officials from the Department and other government departments in order to address competencies required to respond to the constant global changes in international relations and diplomacy. Three capacity-building programmes were hosted on Conflict Resolution, Negotiations and Mediation. The department enrolled 58 new interns in its 2018/20 Internship Programme and absorbed 11 interns from the previous intakes through the recruitment and selection process.
The Department also hosted a solidarity colloquium focusing on the plight of the Western Saharawi women was held. The theme focused on innovative ways in which we can advance gender equality and the empowerment of the women of Western Sahara, particularly in the areas of social protection systems, access to public services and sustainable infrastructure. The outcome of the colloquium was a declaration of support and commitment for the betterment of women and children of Western Sahara.
Furthermore, the Department convened a workshop with the provincial investment promotion agencies to share the investment case and projects of the nine provinces so as to assist missions in promoting these projects and attracting investments. The Department was an active participant in the Planning Committee for the President’s Investment Conference, held in October 2018, as well as in facilitating invitations of investors from South African missions abroad and engaging with the Pretoria-based Diplomatic Corps.
During the reporting period, the Department facilitated and provided consular assistance to all 995 cases reported about South African nationals in distress abroad. This included attending to 279 cases of South African nationals in distress abroad, 322 civil processes, 113 new prisoner cases, 198 mortal remains cases, 23 cases of the whereabouts of South African citizens, one adoption, 8 abductions and 51 extradition requests.
The Office of the Chief State Law Adviser (International Law) (OCSLA (IL)) provided legal advice and support to government departments, including DIRCO, on all aspects of international law. OCSLA (IL) continued to engage with the Commission on the Limits of the Continental Shelf, which is currently considering South Africa’s Extended Continental Shelf submissions. OCSLA (IL) is playing a leading role in deep seabed mining and the process of developing the Mining Code. These processes are in line with Operation Phakisa and have the potential to contribute significantly to the economic development of South Africa.
The Department received a qualified audit opinion on movable tangible assets, as it did not maintain a reliable asset register. As a result, Asset management remained a key focus area and the Department implemented additional measures in terms of an audit action plan. It also did not achieve the 30-day payment period for its service providers. As a result, it The Department continued to strengthen its procurement process in order to enhance its service-delivery improvement plans through an invoice tracking system to improve and monitor the turnaround time in adherence to the 30-day payment period.
- Programme 2: International Relations
Main objective: The purpose of this programme is to promote policies, strategies and programmes to advance South Africa’s national priorities through strengthened political, economic and social relations with targeted countries.
The National Development Plan’s narrative is that South Africa should engage in political and economic relations, as they are important vehicles for promoting South Africa’s national priorities. Engagements with the individual countries of the South and the North should contribute to the five national priorities. This would include, prioritising increased exports of South African goods and services; increasing Foreign Direct Investment (FDI) with technology transfers into value-added industries and mineral beneficiation; as well as increased inbound tourism and skills enhancement.
In response to the aspirations of the NDP, the Department has adopted an Economic Diplomacy policy as a driver towards its contribution to addressing domestic challenges. The Department conducted a range of structured bilateral engagements through Africa; Asia and the Middle East; Americas and the Caribbean; and Europe.
South Africa’s structured bilateral mechanisms (SBMs) and high-level engagements provide an important basis for the strengthening of political and economic partnerships in the various regions of the world. These remain important vehicles for cooperation and promoting South Africa’s national priorities as reflected in policy documents such as the National Development Plan. Bilateral mechanisms enable the Department to address its domestic imperatives as well as meet its shared aspirations at continental and global levels, and provide the platform to advance national priorities and lobby support for multilateral engagements and common positions. Through these engagements, the priority needs of Africa and the South are pursued and bilateral relations are further deepened and expanded.
Most structured bilateral mechanisms and high level visits contain an economic component through which South Africa’s economic interests are pursued. South Africa’s global network of Missions, constitute an important resource in the pursuit of economic objectives, and the promotion of trade and investment in their respective countries of accreditation.
During this reporting period, nine additional SBMs took place, resulting in a total number of 24 SBMs for the year. Twenty-seven additional high-level visits took place, which resulted in a total number of 47 high-level visits for the year. The annual target was exceeded by 60% and 135% respectively. South Africa utilised both the SBMs and high-level engagements to advance and promote the priority needs of Africa and the South.
The Department is committed to utilise its mission footprint to engage in Economic Diplomacy initiatives to contribute to the achievement of South Africa’s domestic priorities. The Economic Diplomacy initiatives pursued through South Africa’s network of missions contributed to gaining market access for South African goods, especially for agricultural products, and sourcing investment with notable investments made in energy, renewable energy and automotive manufacturing. In addition, the marketing and branding initiatives undertaken by the South African missions abroad were aimed at portraying South Africa as a stable democracy, a safe investment destination and a reliable trading partner.
In terms of the Africa sub-Programme there were engagements in each region.
Since the dawn of democracy in 1994, South Africa has placed Africa at the centre of its foreign policy. This is largely influenced by the liberation history, which was anchored in Pan-Africanism and South-South solidarity. South Africa’s national interests are inseparably linked to the well-being of the continent and the promotion of continental unity, peace, security and prosperity.
South Africa continued to support the continental initiatives and efforts to advance continental integration. The African Agenda 2063 and its Action Plan, the recent ratification of the Continental Free Trade Agreement (AfCFTA) in Addis Ababa and many other efforts are seminal developments in the determined journey towards an integrated, united, peaceful, and prosperous continent.
The Department reported that work still needs to be done to ensure that the peoples of Somalia, South Sudan, Mali, Libya, Central African Republic, Democratic Republic of Congo (DRC), Lesotho and Madagascar will enjoy peace and stability. To this end President Ramaphosa has appointed Special Envoys to address issues in the following areas: Retired Deputy Chief Justice Dikgang Moseneke is the Leader of the Facilitation Team for ensuring the implementation of SADC decisions on reforms in the Kingdom of Lesotho; Mr Ebrahim and Mr Roelf Meyer assist in supporting the mediation process in Madagascar; and former President Thabo Mbeki assists in mediation in the DRC and the Great Lakes Region.
Guided by its foreign policy imperatives, South Africa continued to commit to play an active role in resolving these crises. Efforts to entrench democracy, rule of law and good governance on the continent are bearing fruit as can be seen in the conducting of regular and successful elections. The continent has also emerged as one of the most important and strategic regions for South Africa’s economic development.
The Southern Africa region remained one of the significant regions of Africa. Its importance to South Africa could be attributed to long-standing historic bonds, regional affiliation to Southern African Development Community (SADC) and its geographic positioning. The region has remained relatively stable, though harshly affected by drought and slow economic growth.
With regard to Southern Africa, the NDP advocates that South Africa should implement a focused regional integration strategy. It is essential to strengthen political cohesion within the Southern African Development Community (SADC) and ensuring political stability and economic viability through strengthening governance and institutional capacity within SADC. The integration of SADC remains critical for the economic development of the region and for South Africa’s global competitiveness. In response to that, in 2018 South Africa remained engaged in a number of Bi-national Commissions (BNCs), at head of state level.
During the reporting period, President Cyril Ramaphosa undertook working visits to the Republic of Zambia and the Democratic Republic of Congo (DRC), the Republic of Mozambique, and the Kingdom of eSwatini, and the Republic of Zimbabwe. During these visits, President Ramaphosa with President Edgar Lungu, President Joseph Kabila, President Felipe Nyusi, His Majesty King Mswati III, the two heads of state assessed the status of implementation of bilateral agreements, and held discussions with a view to further strengthening and deepening bonds of friendship and cooperation between Zimbabwe and South Africa. Some of his visits formed part of a long-standing tradition in the region, whereby newly elected heads of state pay courtesy calls on the neighbouring countries.
In response to the devastating impact of tropical cyclone Idai in the region, Minister Sisulu undertook working visits to the republics of Mozambique and Zimbabwe on 28 March 2019, where the impact of the cyclone was most lethal. The working visits were also aimed at offering South Africa’s support to the countries affected, through humanitarian aid and logistical support – in line with the spirit of Ubuntu.
In pursuit of promoting regional political and economic integration, South Africa concluded its Chairship of SADC in August 2018, under the theme: “Partnering with the Private Sector in Developing Industry and Regional Value Chains.
As Chair of SADC, South Africa has been involved with the SADC Organ in matters relating to the promotion of peace and security in the region as a whole. Furthermore, South Africa participated in SADC electoral observer missions (SEOMS), which covered the elections in the region for 2018, including in Zimbabwe, Madagascar, Malawi and the DRC.
With regard to East Africa region, there have been regular interactions between South Africa and the respective countries in the East African region.
The East Africa region provides South Africa with great opportunities in terms of strengthening bilateral political relations and expanding the Economic Diplomacy footprint. The region is also a key variable in terms of the continent’s peace and security dynamics and migration issues, while at the same time, it boasts huge potential in advancing South Africa’s agenda with regard to Operation Phakisa and the Oceans/Blue Economy.
President South Africa continued to play a positive role in the peace process in South Sudan. During the period under review, President Ramaphosa received President Salva Kiir of the Republic of South Sudan on 10 December 2018 to discuss the peace process in South Sudan, as well as bilateral cooperation between the two countries.
In his capacity as the President’s Special Envoy to South Sudan, Deputy President Mabuza paid working visits to the Republic of South Sudan, the Republic of the Sudan, the Republic of Uganda and the Republic of Kenya from 14 to 18 October 2018. Discussion centred on the promotion of long-term stability, peace and development in South Sudan.
South Africa’s economic footprint in the North and Central Africa region has improved significantly during the period under review. The region remained an important area of consideration in terms of the complex and broader geopolitical and security environment on the continent. The region poses great potential economically, but also has its limitations due to peace and security challenges in the region.
During the period under review, President Ramaphosa received President Brahim Ghali of the Saharawi Arab Democratic Republic on 5 June 2018 for a State Visit.
The State Visit was aimed at deepening solidarity and commitment to the right of the Saharawi people to self-determination and the facilitation of humanitarian support
Deputy President Mabuza undertook a Working Visit to the Republic of Equatorial Guinea from 11 to 14 October 2018 to represent the Government of South Africa at the Jubilee Celebrations of the 50th Independence Day Celebration of Equatorial Guinea in Malabo. The visit was also used as an opportunity to strengthen bilateral
relations between South Africa and Equatorial Guinea.
Deputy Minister Landers undertook a Working Visit to Saharawi refugee camps in Tindouf, south-west Algeria, from 12 to 15 October 2018. During the visit, Deputy Minister Landers reiterated South Africa’s principled position on Western Sahara.
West Africa is politically and economically a dynamic region, and remains a key area for South Africa’s strategic engagements and focus on the continent, especially with
regard to matters of peace and security, trade, investment and natural resource exploration. President Ramaphosa received President Nana Akufo- Addo of the Republic of Ghana during a State Visit to South Africa from 4 to 6 July 2018. The two presidents used the opportunity to review the good bilateral relations and cooperation between the two countries. President Ramaphosa also undertook a Working Visit to the Federal Republic of Nigeria on 11 July 2018 and held discussion with President Muhammadu Buhari, where bilateral relations were strengthened.
The Department was involved in a series of engagements in East Asia and Oceania. The countries of East Asia and Oceania have cooperation agreements with South Africa in wide-ranging scientific and technical areas of expertise and have become important skills-development partners. Japan, the Republic of Korea (ROK) and Australia contributed substantially to the skills development priority of South Africa.
Since the Investment Conference in South Africa in October 2018, new investments from Japan into the South African economy have been made by Nissan in the automotive sector and the establishment of a Komatsu campus in Johannesburg.
China remains South Africa’s number one trading partner globally. The total trade for 2017 stood at R319 billion and increased to R339,6 billion in 2018. The challenge of reducing the substantial trade deficit with China remains and the focus of South Africa’s Economic Diplomacy with China is on the promotion of beneficiated and value added goods.
During the incoming State Visit of President XI Jinping on 24 July 2018, 16 agreements/memoranda of understanding (MoUs) were signed, with a total monetary value of US$15,36 billion. During the outgoing State Visit of President Ramaphosa to China on 2 September 2018, five agreements/MoUs were signed between the respective governments. An additional three cooperation documents were signed, ranging from state-owned enterprises to private-sector cooperation with a total monetary value of US$1,19 billion.
Sub-programme: Middle East
With regard to the Middle East region, the pursuit of South Africa’s domestic priorities in the Middle East region continued in particular with countries of the Levant. The region is perceived as one of the most diverse and complex regions globally, and the work of South Africa continued to face widening and increasingly intersecting conflicts, having a deleterious impact on the region in all spheres.
The South Africa and the State of Palestine also signed an Agreement in Cooperation in the Field of Tourism on 13 September 2018. South Africa remains firmly convinced that continued dialogue and support of a peaceful solution is the only viable option that can effectively address the Middle East Peace Process (MEPP) and will continue to participate actively in the international community’s endeavours in promoting peace talks and negotiations and support for the MEPP. Since becoming a member of the Brazil, Russia, India, China and South Africa (BRICS) forum, South Africa has ensured that the Palestinian agenda was included in BRICS summits and that it was purposefully deliberated.
South Africa, through its tenure as a non-permanent member of the United Nations Security Council (UNSC) for the period 2019 to 2020, which is dedicated to the legacy of the late President Nelson Mandela, will continue to call on the international community to coordinate and strengthen concerted efforts and put forward constructive measures for peace in the Middle East with common participation.
In July 2018, President Ramaphosa undertook state visits to the Kingdom of Saudi Arabia (KSA) and the United Arab Emirates (UAE). These visits resulted in pledges of US$10 billion each from both the KSA and UAE, contributing to the achievement of the investment targets set by the President. Saudi Arabia is investing in the construction of a multi-billion-rand solar energy plant in the Northern Cape. It is also in the process of funding a feasibility study towards the construction of an oil refinery as part of its investment in South Africa’s energy sector.
South Africa has ensured that international attempts to resolve the conflict in Syria continue to receive attention. The BRICS Foreign/International Relations Ministers Meeting, held in New York on 27 September 2018, “reaffirmed their commitment for a political resolution of the conflict in Syria, through an inclusive “Syrian-led, Syrian-owned” political process that safeguards the state sovereignty, independence and territorial integrity of Syria, in pursuance of UNSC Resolution 2254 (2015).
Central, South and Southeast Asia
Total bilateral trade between South Africa and India has increased steadily over the past few years. Indian investments into South Africa currently stand at approximately R115 billion (US$8 billion) and have created an estimated 18 000 jobs. There are 140 Indian companies that have invested in South Africa. India is in the process of establishing the Gandhi-Mandela Centre of Specialisation for Artisan Skills at the Tshwane South TVET Campus, and has partnered with the Department of Higher Education and Training, which will develop a curriculum of specialised courses in Mechanical Fitters, Boiler Makers, Electricians and Millwrights.
South Africa’s accession to the Treaty of Amity and Cooperation in Southeast Asia, currently under discussion, indicates South Africa’s intentions to strengthen ties with Southeast Asia in general, and with the Association of Southeast Asian Nations (ASEAN) in particular. Trade between South Africa and ASEAN is growing. In 2017, trade with ASEAN totaled R112 billion, growing to R117 billion in 2018. South Africa’s largest trading partners in Southeast Asia are Thailand, Indonesia, Malaysia and Vietnam.
In the North America, South Africa has cordial relations with the countries of North America, managed through high-level structured bilateral mechanisms, such as the South Africa-United States (US) Strategic Dialogue at Ministerial level, and the South Africa-Canada Annual Consultations at Director-General level.
The US remains one of South Africa’s most important trade and investment partners and the single largest contributor of development assistance to South Africa, the bulk of which goes to health under the President’s Emergency Plan for AIDS Relief (PEPFAR).
In the Latin America and the Caribbean, South Africa maintained cordial relations with countries in the region through structured bilateral mechanisms and high-level engagements. This was done in pursuit of South Africa’s national priorities, with particular focus on expanding economic ties with the region. Countries of Latin America and the Caribbean view South Africa as a priority partner and gateway to the African continent.
South Africa continued to build on existing solid relations with Cuba. The relations continued to explore further opportunities for development, particularly in cooperation in education, defence, science and technology, agriculture, health services, infrastructure development, housing and water and sanitation. The South Africa-Cuba Agreement on Economic Assistance enhances economic collaboration with Cuba through increased exports of South African goods and through establishing channels for payment, which will result in improved future bilateral trade relations.
During July 2018, a group of 700 South African students returned from their medical studies on the Nelson Mandela/Fidel Castro (NMFC) Programme in Cuba. The 700 NMFC students who returned from Cuba constituted the largest number of students yet to have completed five years of medical studies in Cuba, and who would pursue
their sixth year in South Africa. The renewal of the 2012 Health Cooperation Agreement with Cuba was signed by the then Minister of Health, Dr Aaron Motsoaledi, and his Cuban counterpart in Havana on 3 March 2019.
From 4 to 8 July 2018, the Foreign Minister of Venezuela, Jorge Arreaza, undertook a bilateral visit to South Africa, during which the two countries agreed to harness energy opportunities, including exploring the option of diversification of energy sources.
The Chilean Government’s Nelson Mandela Scholarship Programme continues to provide scholarships for South Africans to pursue postgraduate studies at Chilean universities, as well as 10 scholarships for short courses in public administration for public servants, annually.
Embraer Brazil, in partnership with Airlink, invested more than US$10 million in the South African Training Centre located at the OR Tambo International Airport. The center has the capacity to train and instruct more than 2 000 professionals per year from the African continent and the Middle East, including pilots, engineers, mechanics and flight attendants. In addition, there are more than 150 of Embraer’s aircrafts operating in Africa and South Africa.
In strengthening bilateral relations with Western Europe during the 2018/19 financial year, Western European states remained among the key trading partners for South Africa. The enhancement of economic and political relations topped the agenda of the high-level strategic engagements with the industrialised economies of Western Europe during 2018 as these countries remain primary sources of Foreign Direct Investment (FDI) flows into South Africa. FDI from Western Europe continues to play a major role in contributing to South Africa’s industrialisation and transformation agenda. Most of the investments went to the financial, manufacturing, mining, transportation and retail sectors. Investment in the automotive sector also increased significantly.
Figures from the South African Reserve Bank (SARB) at the end of 2018 showed that Western European countries accounted for R2,6 trillion in global FDI stock in South Africa and participation in the President’s Investment Summit in October 2018 from this region was high.
The majority of Western European partners are moving away from development assistance in support of economic development as they have determined that South Africa has become a middle-income country with which they should strengthen trade relations.
Western European countries still provide the majority of South Africa’s tourist arrivals outside of the SADC region even though the sector recorded a decline of 3%. It is, however, expected that the eased visa regulations and the end of the drought in the Western Cape will boost overseas arrivals in 2019. The United Kingdom (UK) and Germany are in the top 10 leading countries for overseas tourist arrivals. The past year has witnessed a sea of change in relations between South Africa and the countries of Western Europe. Relations, which had previously been moribund, came
back to life as the leaders of Western Europe embraced the New Dawn.
In Eastern Europe, During 2018, the co-chairs of the South Africa-Russian Federation Inter-Governmental Committee on Trade and Economic Cooperation (ITEC). The ITEC is the prime high-level multisector strategic engagement mechanism between South Africa and Russia through which South Africa and Africa’s foreign policy objectives are promoted and South Africa’s NDP is advanced. Progress made in the areas of agriculture, forestry and fisheries, energy, education, mineral resources, science and technology, transport, water and sanitation and trade and industry were discussed.
The Nordic countries remained very important cooperation partners for South Africa. The cooperation was mainly in the fields of science and technology, space technology, environment, renewable energy, Blue Economy, education, capacity-building, skills development, water waste management and gender equality.
The integration of SADC remains critical for the economic development of the region and for South Africa’s global competitiveness. For building greater productive and export capacity and global competiveness across the region, it is necessary to advance a developmental integration agenda in southern Africa, combining trade integration, infrastructure development and sector policy coordination. It is essential to strengthen political cohesion within SADC, through the alignment of interlinking and interconnected regional peace and security objectives, as well as ensuring political stability and economic viability through strengthening governance and institutional capacity within SADC. This would require active participation in SADC structures and in SADC processes. South Africa assumed Chairship of SADC from August 2017 to August 2018.
SADC’s integration agenda is anchored in two tracks: political and security integration and economic integration. SADC has come up with economic and strategic blueprints to advance regional economic integration; these are the Revised Regional Indicative Strategic Development Plan (RISDP 2015 – 2020) and Regional Industrialisation Strategy and Roadmap 2015 – 2063. The region has developed and costed priority projects aimed at advancing the industrialisation agenda.
Consistent with her commitment to the promotion of good governance and deepening of democracy, during the period under review, South Africa as a SADC member state participated in the electoral observer missions in Zimbabwe, eSwatini, Madagascar, the Democratic Republic of Congo (DRC) and the Union of Comoros.
With regard to regional peace and security matters, the SADC Organ on Politics, Defence and Security Cooperation remains involved in the promotion of peace and security in the SADC region, with particular emphasis on the countries currently on the SADC agenda i.e. Lesotho, the DRC and Madagascar.
In line with South Africa’s position of continued solidarity with the people of Western Sahara, South Africa agreed to co-host the SADC Solidarity Conference with Western Sahara with the Republic of Namibia from 25 to 26 March 2019, in Pretoria. During this conference, SADC member states and like-minded countries reaffirmed their solidarity with the plight of the Saharawi people and agreed to raise the issue of Western Sahara in all multilateral fora and during bilateral engagements.
President Ramaphosa also participated in the Sixth Southern African Customs Union (SACU) Summit that was held in Gaborone, Botswana, on 29 June 2018. The summit considered the preliminary report of the council on the implementation of the SACU Work Programme of the Ministerial Task Teams on Finance and Trade and Industry.
- Programme 3: International Cooperation
Main objective: The purpose of this programme is to facilitate participation in international organisations and institutions in line with South Africa’s national values and foreign policy objectives.
The NDP has provided that South Africa’s national interest and the country’s obligations to the global community should be articulated in relation to sustainable environment; global economy; international flow of migrants, human freedom and international cooperation. Furthermore, South Africa should be positioned to be efficient and effective in regional regimes and institutions, in the country’s multiple international affiliations, especially in BRICS, and the global South, in multilateral relations and in institutions of global governance. South Africa should also strive to remain an influential member of the international community and stay at the forefront of political and economic developments.
In its response to the NDP narrative, the Department remained committed to garner support for its domestic priorities, promote the interests of the African continent, advance democracy and human rights, uphold justice and international law in relations between nations, seek the peaceful resolution of conflicts and promote economic development through regional and international cooperation in an interdependent world.
The Department has divided this programme in the following sub-programmes and strategic objectives:
Sub-programme: Global System of Governance
South Africa participated in the Regular Session of the 73rd Session of the United Nations General Assembly (UNGA73). The annual UNGA session commenced with the customary high-level General Debate, which was held in New York in September 2018.
South Africa is committed to multilateralism and a rules-based international order and to this end participates and plays an active role in all fora of the United Nations (UN) system and its specialised agencies, funds and programmes, promoting the pillars of multilateral activity, namely: global security, sustainable development, human rights and international law.
South Africa regards the UN as the foremost vehicle to advance the global development agenda and address underdevelopment and the eradication of poverty. To this end, South Africa upholds the belief that the resolution of international conflicts should be peaceful and in accordance with the centrality of the UN Charter and the principles of international law.
South Africa participates in the global system of governance to enhance international response to the needs of South Africa, Africa and developing countries through negotiations and influencing processes in the global governance system towards a reformed, strengthened and equitable rules-based multilateral system.
In order to influence the global processes, South Africa must be represented at multilateral fora to engage, influence and negotiate and to articulate its positions and ultimately to have these positions reflected in the outcomes of multilateral meetings and processes.
South Africa’s involvement in the engagement of multilateral processes and meetings is therefore to advocate for a reformed rules-based global system, which is equitable as well as responsive to its needs in particular, and the needs of the developing countries in general. The NDP stipulates that the Department of International Relations and Cooperation must retain an influential space for South Africa in key multilateral institutions.
On 8 June 2018, South Africa was elected to the UN Security Council (SC) for the period 2019 to 2020. South Africa’s third term on the UNSC is expected to build on President Nelson Mandela’s legacy of working towards a peaceful, just and prosperous world, and by serving as a bridge-builder, bringing together divergent perspectives and working towards resolving impasses which undermine the ability of the council to act where needed. South Africa’s term coincides with the African Union’s (AU) commitment to accelerate actions aimed at silencing the guns on the continent by 2020.
South Africa championed two landmark UNSC decisions on strengthening the strategic cooperation between the UNSC and the AU Peace and Security Council (PSC). Resolution 1809 (2008) formed the basis for this cooperation while Resolution 2033 (2012) built on the framework to establish specific relations and interactions between the UNSC and AUPSC such as the annual joint consultative meetings. Since then, South Africa has been consistent in its efforts to deepen AU-UN cooperation.
Its membership on the UNSC presents an opportunity for South Africa to continue this trend. South Africa will also continue to place emphasis on the importance of women, peace and security in accordance with Resolution 1325 (2000); the rule of law at national and international levels; post-conflict reconstruction and development; the peaceful resolution of conflict while fighting impunity; and championing the cause of children in armed conflict situations. South Africa intends to bring attention to issues such as preventative diplomacy and the nexus of peace and development.
On 25 February 2019, South Africa joined a growing number of states in submitting its Instrument of Ratification of the Treaty on the Prohibition of Nuclear Weapons (TPNW) to the UN in New York. South Africa’s ratification of the TPNW sends a positive signal of the country’s continued commitment towards the achievement of a world free from the threat posed by nuclear weapons and ensuring that nuclear energy is used solely for peaceful purposes. Given its unique history, as the first country to have eliminated all its nuclear weapons, South Africa is proud to have played a leading role in this process.
South Africa also participated in the G20 in pursuit of its global economic engagement. In recognition of South Africa’s efforts in the economy, President Cyril Ramaphosa was invited back to the G7 Outreach in Canada in June 2018 (after a nine-year absence).
At the United Nations Framework Convention on Climate Change (UNFCCC)’s Katowice Climate Conference (COP24/CMP14/CMA1-2) in December 2018, the
Department played a key role in helping to secure the adoption of the Paris Agreement Work Programme (PAWP) to operationalise the Paris Agreement.
Under the auspices of the UN Human Rights Council, South Africa successfully introduced the Resolution on the Elimination of Discrimination against Women and Girls in Sports, which was adopted by consensus at the 40th Session of the HRC in March 2019. This resolution will ensure that women and girls are not discriminated against in sports based on their biological traits.
Sub-programme: Continental Cooperation
Strategic Objectives: Enhance the African Agenda and Sustainable Development; and Strengthen political and economic integration of SADC.
In the area of continental multilateralism, South Africa’s pursuit of peace, security, and socio-economic development is inextricably linked with that of the continent. Consequently, Africa is at the centre of South Africa’s foreign policy and South Africa will continue to support regional and continental processes as encapsulated in Agenda 2063 to respond to and resolve political and social crises, strengthen regional integration based on the principles of Pan-Africanism, significantly increase intra-African trade and champion sustainable people-driven development, relying particularly on the potential of women and youth.
The South Africa will continue to play a leading role in conflict prevention, peacekeeping, peace-building and post-conflict reconstruction. The strengthening of the AU and its structures is a strategic priority in deepening the continental integration process. In addition, the role of regional economic communities (RECs) as building blocs in the integration process will be strengthened. The African Peer Review Mechanism (APRM) will be utilised to strengthen good governance, democracy and respect for human rights, justice and the rule of law.
South Africa will continue to utilise its membership of the AU to advance its National Interest and values, particularly in relation to democracy and good governance, and the promotion of peace and security as necessary conditions for sustainable development, the African Renaissance and the creation of a better world for all.
Since the advent of democracy in 1994, South Africa’s foreign policy has been guided and driven by the vision to achieve an African continent that is peaceful, democratic, non-racial, non-sexist, united and prosperous and which contributes to a world that is just and equitable. Thus, South Africa’s role and active engagement on the continent and within the AU cannot be overstated as the success and future of South Africa is inextricably linked to that of the African continent.
Africa’s South Africa is widely accepted on the continent and around the globe as an influential member state and is the only African country in the G20 and BRICS as well as in the top 10 strategic partners of the European Union. South Africa is also power broker in several conflicts in the sub-region and on the continent, continues to participate as a troop-contributing country to the AU and United Nations (UN) authorised peacekeeping missions; is the largest contributor to the AU budget and top African contributor to the UN budget; and continues to promote peace and stability on the African continent through preventative diplomacy, peace-making, peace-building and peacekeeping efforts.
South Africa as a member state of the AU remains committed to the organisation and it has demonstrated its desire to ensure that the AU succeeds. South Africa supports the au through strengthening its structures by attending all relevant meetings of the AU at differing levels. South Africa’s engagement within the AU aims at addressing the long-standing challenges of underdevelopment, and consequent poverty, unemployment and inequality on the continent.
Appreciating the need that the realisation of the objectives set by Agenda 2063 should be fulfilled, the adoption of a Protocol on the Free Movement of Persons in Africa, member states have committed to the African Continental Free Trade Area (AfCFTA) and the Single African Air Transport Market (SAATM) has been launched. The objective of the AfCFTA is to promote intra-African trade and offer an opportunity to create larger economies of scale, a bigger market and improve the prospects of the African continent to attract investment. The Parliament of South Africa ratified the agreement establishing the AfCFTA, which was launched during an extraordinary summit of AU heads of state in March 2018 in Kigali, Rwanda.
The AfCFTA comprises 55 African countries and, once entered into force, will constitute the largest free trade area globally. As a flagship project of the AU’s Agenda 2063, the AfCFTA aims to build an integrated market in Africa that will see a market of over one billion people with a combined gross domestic product of approximately US$3,3 trillion.
Sub-programme: South-South Cooperation
The NDP enjoins South Africa to improve collaboration and cooperation, through deeper integration and increased trade with its regional partners in Africa and the global South, in general. Particular emphasis should be placed on the role that South Africa can play in mediating the role and influence of the BRICS group. Strong and mutually beneficial cooperation among countries and groupings of the South and the development of common positions on political, economic, social and human rights issues are essential for an effective response in addressing the historic marginalisation of countries of the South. In addition, to harness emerging collective political and economic strength of countries and groupings of the South.
In its response to the NDP, former President Cyril Ramaphosa hosted his BRICS counterparts for the 10th BRICS Summit in Johannesburg and the informal meeting of BRICS leaders on the margins of the G20 Summit. The BRICS leaders adopted the Johannesburg Declaration, which further consolidated the gains of BRICS practical cooperation in (i) global political security (ii) global governance of financial and economic institutions and (iii) people-to-people relations.
Under the During the period under review, South Africa contributed to the institutional development of BRICS, particularly with regard to the NDB and the further operationalisation of the Africa Regional Centre (ARC) in Johannesburg under the Head of the ARC, Mr Monale Ratsoma. The NDB has entered into loan agreements with South African state-owned enterprises (SOEs) for sustainable infrastructure projects notably in the energy sector.
Indian Ocean Rim Association (IORA), is an organisation which is a brainchild of the Former President Mandela South Africa’s view that the Indian Ocean region should be characterised as a region of peace, stability and development. A Special Declaration to commemorate former President Nelson Mandela’s centenary was adopted. In enhancing Mandela’s legacy in IORA, the COM established the IORA Nelson Mandela “Be the Legacy” Internship Programme as a contribution to empowering and capacitating the youth of the Indian Ocean region.
South Africa’s Chairship of IORA for the 2017 to 2019 period: The 18th IORA Council of Ministers (COM) in Durban on 2 November 2018 (COM) approved the expansion of IORA membership by admitting Maldives as the 22nd Member State and Turkey and South Korea as the eighth and ninth dialogue partners, respectively.
India, Brazil, South Africa (IBSA) dialogue partnership
South Africa and the IBSA countries continued to focus on reducing poverty in least developed countries though the IBSA Fund for Poverty Alleviation. The establishment of the IBSA Fund and the disbursement of funds to IBSA Fund projects have been acknowledged as a model for South-South-based development cooperation. To date, the IBSA Fund has approved the disbursement of almost US$36 million to developing countries in the Global South and has been positively received by partner-countries whose projects it has supported. Through these 27 various projects, undertaken in 21 partner countries, all 17 United Nations Sustainable Development Goals have been supported.
IBSA was still in a slow-paced mode in the reporting year. The IBSA foreign ministers agreed on a revitalised IBSA Dialogue Forum at the Eighth IBSA Trilateral Ministerial Commission (ITMC) in October 2017. Subsequent IBSA ministerial meetings in June and September 2018 confirmed the continued relevance of and the development cooperative value provided by the political and technical cooperation platform. In this regard, they undertook to elevate the IBSA Brand internationally, using, among others, the legacy of Nelson Mandela, through the Centenary Year celebrations, as well as that of Mahatma Gandhi at 150 through a series of freedom lectures. The Inaugural Lecture was given by President Ramaphosa on 25 January 2019 in New Delhi during the State Visit.
Closer cooperation and the upliftment of people will also be promoted through respective grassroots development projects that are impact-driven and people-centred. India will host the Sixth IBSA Summit in 2019. The ministers established an additional Working Group on the Blue Economy, wherein the three countries would seek closer cooperation around issues affecting the Blue/ Oceans Economy and maritime governance, including coastguard cooperation.
South Africa remained strongly committed to its Strategic Partnership with the EU, which has created a platform for engagement at various levels, not only on bilateral matters, but also on matters pertaining to regional, continental and global challenges. The Beneficial political and economic relations should continue to be pursued with countries and formations of the North, as they remain major actors in the international system and substantial sources of development assistance and foreign direct investment.
Beneficial relations with strategic formations of the North leverage political and economic relations with the countries and plurilateral groupings to the advantage of South Africa, Africa and developing countries., are engaged to garner support for the African Agenda, including New Partnership for Africa’s Development projects and the Agenda of the South. These are countries usually considered to have influence in the global arena and also with resources that can be channelled to developing countries.
South African South Africa is the only African country and one of 10 globally which has a Strategic Partnership with the European Union (EU). The EU, as a bloc, is South Africa’s largest trading partner and largest foreign investor. Over 2 000 EU companies operate in South Africa, creating more than 500 000 direct and indirect jobs.
The main objective of the summit in November 2018, was to revitalise the Strategic Partnership between South Africa and the EU and to reaffirm the strength of this partnership based on shared values and interests, including effective multilateralism, the promotion of peace and security, human rights, democracy, the Rule of Law, free and fair trade and sustainable development across both regions.
President Ramaphosa also participated in the summit of the Forum on China-Africa Cooperation (FOCAC) in 2018. South Africa’s chairship was instrumental in ensuring that the African Union (AU) Commission was recognised as a full member in 2013 and that the partnership was upgraded during the Johannesburg Summit in 2015 to a mutually beneficial strategic-level partnership by Africa and China, agreeing to 10 strategic cooperation plans with Chinese financial support.
- Programme 4: Public Diplomacy and State Protocol
Main objective: The NDP provides that Public Diplomacy is fundamental to South Africa’s projection of soft power. In its implementation of this advocacy, the Department continued to enhance public understanding of South Africa’s foreign policy engagements by both local and international audiences.
The NDP states that: “It is important to develop a more sophisticated Public Diplomacy Strategy that encompasses more than a communications function. Public Diplomacy should use new media platforms, forums and social networks, as well as people-to-people initiatives”. In response to the NDP directive, the department drafted the Public Diplomacy (PD) Strategy, which encompassed more than a communication plan.
The strategy addresses the need for the implementation and management of South Africa’s reputation through the utilisation of people-to-people initiatives and new media platforms. South Africa’s diplomatic missions remain critical to our foreign policy implementation and play a pivotal role in branding and marketing the country. Heads of mission are therefore at the coalface of South Africa’s international relations. The PD Strategy enjoins us to work closely with like-minded institutions such as Brand SA, South African Tourism, etc. to chart a uniquely South African image that aims to bring much-needed investment and tourism opportunities to our shores.
This is achieved through targeted platforms that enhance the National Interest of our country through creating understanding and informing foreign and local audiences.
During 2018/19, PD played an important role in publicising the hosting of three major events, namely the Southern African Development Community (SADC) Summit; the Brazil, Russia, India, China and South Africa (BRICS) Summit; and the Indian Ocean Rim Association (IORA) Council of Ministers Meeting. During the hosting of these major events, the use of various platforms was intensified to continuously educate our target audience and showcase the diplomatic milestones achieved through our membership in these for a.
There was also a concerted effort to communicate and market the SADC Solidarity Conference with Western Sahara from 25 to 26 March 2019 at the OR Tambo Building in Pretoria.
The year 2018 was a significance year, as it marked the centenary celebration of Madiba’s life under the theme: “Be the Legacy: Celebrating the Birth of a World Icon and a Life of Service”. Guided by the spirit of Thuma Mina, government encouraged people to use 18 July as an opportunity to remember the time in which transformation gained traction in our country and celebrate the man who made an invaluable contribution to South Africa’s struggle for freedom and subsequent democracy. Missions were assisted to celebrate and mark the Mandela Centenary through a number of activities and platforms such as public lectures to reflect on the values Nelson Mandela left and how to emulate them.
In June 2018, South Africa was elected to serve on the United Nations Security Council for the term 2019 to 2020 as a non-permanent member. The Department used its Public Diplomacy platforms to promote greater public awareness and inform the media of South Africa’s involvement in peace and security efforts regionally, continentally and globally. South Africa is making in-roads in its participation in the UNSC in furtherance of national interest.
Large numbers of South Africans continue to travel around the world for various purposes, including tourism, business and employment. When they find themselves in distress, either as a result of natural or man-made disasters, South African missions are expected to provide them with consular services. In this regard, the PD also facilitated the launch of the Travel Smart Campaign and is continuously raising awareness of its importance. This has contributed to the success and visibility of the Department, especially in improving the general understanding of the consular services the department provides to South Africans abroad.
The Department continued to enhance public understanding of our foreign policy engagements by both local and international audiences. Political principals utilised various platforms such as media briefings and PPPs to reach out to the public at home and abroad and stimulate debates through dialogue and public lectures on various topical issues in the purview of international relations. These PPPs were a success as they strengthened our relations with various stakeholders such as nongovernmental organisations and civil society.
The Department continued to provide advisory services to government departments in the hosting of international conferences and summits. The Department also collaborated with the Southern African Development Community countries by providing guidance and support on protocol-related issues.
The pinnacle achievement was the hosting of the BRICS Summit in Sandton, Gauteng. BRICS countries are all in the elite group of economies exceeding US$1 trillion. Furthermore, three of the five members are nuclear powers while both Brazil and South Africa use nuclear power for energy. The preparations that had to go into the logistical arrangements for this elite group of global powers were unparalleled to any of our previous summits.
During the 2018/19 financial year, the total number of consular cases attended to amounted to 995. The Department provides Consular Services to South African citizens abroad who due to unforeseen events become distressed and destitute. In dealing with South African citizens in distress abroad, it became evident that the concept of Consular Services is rather unknown to South African society and many of our citizens are unfamiliar with the nature of the assistance they can expect when in distress abroad. The department developed a consular awareness project that informs South African citizens travelling abroad, and who finds themselves in distress, of consular assistance available to assist them. The campaign was launched on 3 July 2018, called: “Travel Smart with DIRCO”.
It also provided support to the Independent Electoral Commission of South Africa (IEC) for the 2019 national and provincial elections. In this regard, logistical support and assistance were provided to the IEC as well as to 122 missions abroad, enabling them to facilitate the registration of first-time voters living abroad, and for registered voters, approved by the IEC, to cast their ballots on 27 April 2019 in the 2019 national elections.
Another critical function is the facilitation of over 32 000 qualifying VIPs being facilitated through the state protocol lounges (SPLs) situated at the international airports at Johannesburg, Cape Town and Durban.
Also facilitated were a number of state visits of heads of state/government from various countries. Facilitated numerous international outgoing visits by the President and Deputy President were also coordinated.
- Programme 5: International Transfers
Main objective: The purpose of this programme is to honour South Africa’s financial obligations and voluntary contributions to international organisations. Under this programme, the Department reported that South Africa diligently honoured its dues and on time. However, the activities of the programme were impacted upon by foreign exchange fluctuations.
- Public Entity: Overview of the Annual Report 2018/19 of the African Renaissance and International Cooperation Fund
The Department, in consultation with the National Treasury, is responsible for the administration of the African Renaissance and International Fund (ARF), which was established in terms of Act 51 of 2000. This fund is under the control of the Director-General of the Department who must account for all payments into and out of the fund. An Advisory Committee was appointed to make recommendations to the Ministers of International Relations and Cooperation and of Finance on the disbursement of funds, as provided for in the African Renaissance and International Cooperation Fund Act, 2000.
The objectives of the ARF are to promote economic cooperation between the Republic of South Africa and other countries in particular African countries,
- promotion of democracy and good governance,
- prevention and resolution of conflict,
- socio-economic development and integration,
- humanitarian assistance, and
- human resource development.
The Fund is managed by the Department and payments are made on behalf of the Fund by the Department once concurrence is received from the Minister of Finance. This has resulted in the opening of control accounts (Payables and Receivables) in the accounting records of the Department and these accounts are reconciled to the records of the Fund. The financial statements of the Fund are prepared separately from the Department as the Fund is registered as a Schedule 3A Public Entity in terms of the Public Finance Management Act (PFMA), 1999 (Act 1 of 1999). All transactions and information arising from the work of the Fund are audited by the Auditor-General South Africa on an annual basis.
The ARF is set up as a public entity. However, it does not yet have all the features necessary, like other public entities, due to its placement within the Department’s structures. The ARF is still faced with challenges of a governance nature, due to it being located within the Department and utilizing the Department’s procurement processes. The entity does not have its own systems of financial and project management, and all its processes are manual. The ARF secretariat comprise of employees of the Department. The critical position of a Project Manager could not be filled due to the ceiling imposed on compensation of employees. The ARF has remained an important tool for the enhancement of South Africa’s development cooperation on the continent and with other identified partners.
During the 2018/19 financial year, the ARF received a total of 14 requests for funding. Of the 14 requests, six were recommended by the ARF Advisory Committee to the value of R176 838 771,10 for the approval by the Minister of International Relations and Cooperation and the Minister of Finance on the disbursement of funds through loans or other financial assistance. A total of eight requests are still under consideration.
The ARF reported the provision of financial assistance in respect of drought relief to the Republic of Namibia, which was signed on 15 June 2015. The drought relief project would bring to life 104 dry boreholes. Drilled and capped boreholes were to be equipped with solar and/ or mechanical power and pumps. Three South African service providers have been appointed to equip the 104 boreholes as identified by the Namibian Ministry of Agriculture, Water and Forestry. The ARF processed payments totalling R8 312 092.52 for the Namibia Drought Relief Project as per the objectives of the project plan in support of skills development and capacity building.
In the reporting period, the Lesotho Peace Process supported by SADC, was allocated an amount of R4 145 387.34 towards the political reform processes which are aimed at bringing about peace and stability in the mountain kingdom. Initially, SADC had appointed then Deputy President Cyril Ramaphosa as its Special Envoy/Representative to the Kingdom of Lesotho, to act as liaison and representative of the SADC Facilitation process in Lesotho. Since his appointment as the President of South Africa, President Ramaphosa has appointed the former Deputy Chief Justice Dikgang Moseneke to lead the Lesotho Reform Process.
The ARF also provided support to the African Ombudsman Research Centre (AORC). The centre is located at the School of Law of the University of Kwazulu-Natal in Durban. It is aimed at promoting capacity-building and studying of the activities, obligations and problems of the Ombudsman in Africa. The total disbursed amount for the project was R1 744 328.55.
During the reporting period, through the World Food Programme (WFP), the Kingdom of eSwatini requested the South African Government to support, an Emergency Food Assistance project for young orphans and vulnerable children (between the ages of 0 and 5 years. The project is targeted to reach 52 000 beneficiaries, to provide an on-site meal per day, made of maize, pulses and vegetable oil. In the reporting year, South Africa has, through the ARF, made a donation of R14 206 210.37 million towards the eSwatini project.
The WFP is working with farmers from three provinces in South Africa: North West, Limpopo and the Free State. Food items such as maize meal, pulses and vegetable oil were procured and distributed for the Emergency Food Assistance Project to the Government of the Kingdom of eSwatini as per the objectives of the project.
The objective of the project was to enhance South Africa’s commitment to the promotion of peace, political stability and democracy on the continent. On February 2018, Madagascar made a request for assistance from South Africa for the election that took place in November and December 2018. Subsequent to that in May 2018, the officials from the Department and the Independent Electoral Commission (IEC) visited Madagascar on a fact-finding mission for discussion with their Malagasy counterparts and to assess the nature of possible assistance South Africa could render.
The Minister of International Relations and Cooperation approved the project to assist Madagascar as per the recommendation from the fact-finding mission. South Africa then committed to assist with the airlift of the ballot papers that were printed in Johannesburg, South Africa, and delivered to Antananarivo, Madagascar, for the second round. A peaceful and politically stable Madagascar presents economic opportunities for South Africa, as well as the region as a whole, through increased bilateral trade and investment. Processed payment of R6 500 000.00 to support presidential elections in Madagascar as per the objectives of the project.
An amount of R9,396,213.70 was confirmed to have constituted an approved disbursement for the Emergency Humanitarian Assistance for Saharawi refugees as per the objectives of the project.
- The ARF financial report 2018/19
In terms of the Act, the appropriated funds, among other sources, consists of money appropriated by Parliament for the Fund. During the year under review, an amount of R38 million (2018: R22 million) was appropriated to the Fund. The Fund also received interest of R75 million from investments, relates to the amount deposited with the Corporation for Public Deposits in the South African Reserve Bank.
It was reported that a request was made to National Treasury as per section 53(3) of PFMA to retain surplus incurred in the current financial year ending 31 March 2019 with an amount of R85 million. Should approval not be granted, the ARF would be required to declare a distribution to National Treasury through the Department. The ARF considers the cash balance sufficient to pay over the surplus.
The Committee found that the overall performance of the ARF as good, and cautioned against the slow pace of migrating to an agency, the South African Development Partnership Agency (SADPA) as directed by Cabinet in 2009. The ARF was noted as working in line with the aspirations of the NDP in pursuing a peaceful and prosperous Africa. The Committee urged the Department to publicise the good work done through this foreign policy instrument.
- Report of the Auditor-General of South Africa 2018/19 on the Department of International Relations and Cooperation and its entity
The findings of the Auditor-General on the overall financial performance of the Department of International Relations and Cooperation has remained good, in terms of its financial statements, in all material respects reflecting an alignment of expenditure to the pre-determined objectives. There have been, however, issues of concern persistently highlighted by the Auditor-General which seemingly gradually affected the findings over a period of nine years.
There has been a noted pendulum swing on the performance of the Department. The audit outcomes are from a qualified audit opinion in 2015/16, to an ‘unqualified audit opinion with material findings on pre-determined objectives and/or compliance with laws and regulations’ in 2016/17, to a qualified audit opinion in 2017/18, and again a qualified audit opinion in the 2018/19 financial year.
- The Department
Regarding the financial statements of the Department as at 31 March 2019, the Auditor-General expressed a qualified audit opinion with findings.
The Auditor-General reported that the basis for a qualified opinion was with regard to movable tangible capital assets. The report elaborated that the Department did not maintain a reliable asset register in accordance with the requirements of the Modified Cash Standard (MCS), due to ineffective system of internal control over asset management.
Some of the assets listed in the asset register could not be physically verified and some assets were not recorded in the asset register. As a result, the AG was unable to obtain sufficient appropriate audit evidence that all movable tangible capital assets were appropriately disclosed. He could not confirm this by alternative means. Consequently, he was unable to determine whether any adjustments were necessary to movable tangible capital assets stated at R 708 747 000 in note 30 to the financial statements.
The Auditor-General further expressed a qualified audit opinion on cash and cash equivalents, which are investments (foreign) and cash on hand for the amounts of R383 756 000 and R4 550 000 respectively. This was due to the Department not having adequate internal control systems in place to manage movements of cash during the year. There were differences between the bank statements and information submitted for audit which management could not explain, as disclosed in note 10 to the financial statements.
The Auditor General further had emphasis on the following matters:
As disclosed in note 25 to the financial statements, the Department incurred irregular expenditure of R 298 016 000, as it did not follow a proper tender processes. The other matter is with regard to fruitless and wasteful expenditure to the amount of R1 911 000 incurred by the Department in the reporting year, as disclosed in note 26 to the financial statements, as a result of payments made on unoccupied properties abroad.
It was also reported that the accounting officer, did not ensure that financial statements were free from material misstatements. Material misstatements of disclosure items identified by the auditors in the submitted financial statements were subsequently corrected and the supporting records were provided. However, not all errors were corrected resulting in the financial statements receiving a qualified audit opinion. Another area of concern raised in the report of the Auditor General is the non-compliance with applicable legislation especially in supply chain management (SCM).
The Auditor-General raised concerns which rendered the Department the material findings, and has advised should be addressed. These were as follows:
The accounting officer has shown no progress in addressing the significant deficiencies noted over his oversight regarding financial reporting, compliance and related internal controls. has been limited response by accounting officer in addressing Although an action plan to address audit findings was compiled by management, the plan was ineffective in timeously addressing the reported control deficiencies relating to assets and compliance with legislations. This did not serve the purpose it was intended for as the appropriate level of management did not monitor the status of addressing the findings and, implementation of controls was not affected
throughout the financial year.
- Procurement and contract management
Some of the goods and services with a transaction value below R500 000 million were procured without obtaining the required price quotations, as required by treasury regulation 16A6.1. Deviations were approved by the accounting officer much as it was possible to invite competitive bids, as required by treasury regulations 16A6.1 and 16A6.4. Similar non-compliance was also reported in the prior year.
Some of the contracts were were awarded to bidders based on evaluation/adjudication criteria that differed from those stipulated in the original invitation for quotations, in contravention of treasury regulations 16A6.3(a). Similar non-compliance was also reported in the prior year.
Some of the contracts were awarded to bidders based on evaluation/adjudication criteria that differed from those stipulated in the original invitation for quotations, in contravention of treasury regulations 16A6.3(a). In 2017/18, a similar pattern of non-compliance was identified in the procurement processes for the design, construction, operation, maintenance and finance of office and residential accommodation for the South African Diplomatic Missions in Manhattan, New York City.
- Financial and performance management
Senior management involved in the asset and compliance management process did not take accountability to address previously reported deficiencies as repeat findings were noted in this regard. There was inadequate review of annual financial statements as material misstatements were noted on the current assets and disclosure items in the annual financial statements.
Furthermore, senior management did not establish sufficient monitoring controls over cash and cash equivalents to ensure bank reconciliations are properly performed and supported by proper record management systems.
- Consequence management
The Auditor General was unable to obtain sufficient appropriate audit evidence that disciplinary steps were taken against officials who had incurred fruitless and wasteful expenditure, as required by section 38(1)(h)(iii) of the PFMA. This was due to no proper and complete records having been maintained as evidence to support the investigations into fruitless and wasteful expenditure.
- Expenditure management
Effective steps were not taken to prevent irregular expenditure amounting to R298 million as disclosed in note 25 to the annual financial statements, in contravention of section38(1)(c)(ii) of the PFMA and treasury regulation 9.1.1. The majority of the irregular expenditure disclosed in the financial statements was caused by contracts that awarded based on evaluation/adjudication criteria that differed from original invitation for bid. In 2017/18 the irregular expenditure amounting to R 117 720 000 was incurred on design, construction, operation, maintenance and finance of office and residential accommodation for the South African Diplomatic Missions in Manhattan, New York City.
Effective steps were not taken to prevent fruitless and wasteful expenditure amounting to R1 911 000, as disclosed in note 26 to the annual financial statements, in contravention of section 38(1)(c)(ii) of the PFMA and treasury regulation 9.1.1. The majority of the fruitless and wasteful expenditure was caused by payments made on unoccupied properties abroad.
- Other reports
At the Department’s request, an independent consultant investigated incidents of irregular expenditure and financial misconduct. The investigation is still in progress.
The Department conducted an investigation into the misappropriation of donations and sponsorships at Head office. The investigation is still in progress.
A further investigation was conducted by the Department into the misappropriation of donations and sponsorships at one of its missions and the investigation was concluded with recommendations. It was however noted that the recommendations have not been actioned.
The Department also conducted an investigation into allegations of an accountant misappropriating money at one of its missions. The investigation is still in progress.
- The findings of the Auditor-General on the African Renaissance and International Cooperation Fund
The activities under this entity are governed by the African Renaissance and International Cooperation Fund Act, 2000 (Act 51 of 2000) (ARF Act). The Auditor-General rendered an unqualified audit opinion for the 2018/19 financial year. Overall, the performance of the entity has improved significantly since it has a permanent secretariat. The Internal Audit reported satisfied that the internal audit function is operating effectively and that it has addressed the risks pertinent to the entity in its audits.
The External Audit committee also reported that it reviewed the entity’s implementation plan for audit issues raised in the prior year and were satisfied that the matters have been adequately resolved.
- Findings by the Committee
After due deliberations on the contents of the Annual Report of the Department and its entity, the Committee made the following findings:
- The overall service delivery performance of the Department in achieving its pre-determined objectives was regarded good and healthy. This was despite the fact that the Department has to carry out its mandate within an unpredictable, at times turbulent, external environment to advance South Africa’s national priorities. Its budget is continuously under pressure and exposed to Rand fluctuations against major currencies, despite the fact that its mandate continued to grow.
- The Committee highlighted that the Department has had notable achievements in the implementation of South Africa’s Foreign Policy. Through the work of the Department and Missions abroad, South Africa has gained recognition in its promotion of multilateralism in global governance and is a respected global player, who champions the aspirations of developing countries, including those of Africa and the Global South.
- The Department has received a qualified audit opinion with emphasis of matter in 2018/19. This related to repeat findings on the completeness and existence of movable tangible capital assets. The Department did not maintain a reliable asset register on movable assets, due to ineffective system of internal control over asset management. Some of the assets listed in the asset register could not be physically verified and some assets were not recorded in the asset register. The asset register was maintained on an Excel spreadsheet instead of a reliable asset management system. It was further noted that the challenge with asset management started in 2013/14. The regression was regarded unfortunate and highly unacceptable.
- A new finding was on cash and cash equivalents. There were differences between the bank statements and information submitted for audit which management could not explain. The bank books in some cash missions were not tallying with the bank balances. The Department is heavily reliant on manual cash reconciliation which increases the risk of fraud and mismanaging of funds. A need was identified for an investigation on the matter.
- The Auditor-General has recommended steps to be taken to rectify the situation in areas reported as problematic. These are those such as:
- asset management,
- contract management;
- the increasing irregular expenditure patterns;
- ICT issues; internal controls; addressing apparent incompetence by officials; especially in the Finance branch;
- lack of consequence management on those who caused irregular,
wasteful and fruitless expenditure;
- leadership inability to address repeat findings;
- investigations into the area of cash and cash equivalents;
- and non-compliance with laws and regulations of supply chain management (SCM).
- The African Renaissance Fund (ARF) has received an unqualified audit opinion for the 2018/19 financial year. The major challenge with the entity is still around its governance structure within the Department.
- During the reporting year, the Department recorded an irregular expenditure total of R298 million. The nature of the irregular expenditure was of the procurement of goods and services without inviting competitive bids. The other factor is reported as having contracts awarded to bidders based on evaluation/adjudication criteria that differed from those stipulated in the original invitation for quotations. It was further observed that an amount of R141 million would still be incurred on ongoing though irregular multi-year contract.
- The Department incurred a fruitless and wasteful expenditure of R2 million in the reporting period. This was, among other things, due to payments being made for cleaning and security services engaged for the upkeep of vacant state-owned properties abroad. It was further observed that the Department was in receipt of a legal opinion stating that the Department could maintain some unoccupied state-owned properties abroad, however, the Department has not taken any action. Reference was made to the appalling conditions of state-owned properties in Mbabane and Luanda. The fruitless expenditure was also reported as due to flight cancellations and functions by officials of the Department without valid reasons. It was stated that there was a need for further investigations into these matters.
- Some identified root causes that contribute to the stagnation in the audit findings include inadequate capacity, skills and experience within the Financial and Asset Management Unit. There has been a recurrence of financial misstatements on the prepared financial statements of the Department requiring material adjustments from as far back as 2013/14. The bulk of repeat findings on operational matters reflect on the work of the Finance and Asset Management branch.
- There was non-compliance with supply chain management (SCM) prescripts, when awarding contracts to a company for the acquisition of land for two buildings in New York. The contract was awarded to a service provider who was not amongst the companies which initially submitted tender applications. Furthermore, the contracts were awarded to bidders based on evaluation criteria that differed from those stipulated in the original invitation for bidding, in contravention of Treasury Regulations 16A6.3(a).
The Department had signed and paid R117 720 000 on design, construction, operation, maintenance of office and residential accommodation for the South African Diplomatic Missions in New York. The initial terms were for a building covering 40 000 square meters, however the successful bidder was working on a 20 000 square meters instead.
- There was appreciation for the openness by the Department on the real root causes of the operational challenges in the Department. In this regard it was noted that investigations were underway on supply chain management irregularities with regard to the New York acquisition of land to build project. The Committee would be kept informed once the investigations have been completed.
- The Audit Steering Committee is dysfunctional, much as it is supposed to monitor the pace of implementation of audit findings.
- Non-implementation of the consequence management has created a culture of impunity and lack of respect for authority. This has resulted in recurring irregular, fruitless and wasteful expenditure.
- The ICT deficiencies in the Department have been a recurring matter since 2010. The previous annual plans of the Department have provided for turnaround strategies to address this issue, but to no avail. This is regarded as a serious matter in terms of security of information between missions and the headquarters, and between the missions themselves. The implementation of the infrastructure refresher plan has taken more than five years to take off.
- The Audit Plan of Action, meant to address the root causes of recurring findings, was reported full of deficiencies and being revised with the help of the Auditor-General. The plan would enable the Department to commit and address audit findings. Such a plan would need to have timeframes for proper monitoring by the Department and the Portfolio Committee.
- The recurring financial misstatements, cash and cash equivalents, lack of early detection of irregular expenditure, lack of capacity and requisite skills in the Finance branch, all pointed to a serious deficiency on the part of the CFO and his branch. A lack of cooperation was detected with regards to the CFO in his engagement with the Committee. This was manifested through a considered narrative that he was seeing the report of the Auditor-General for the first time in the Committee meeting. This created a high level of risk and made it difficult to entrust the finances of the Department in that Branch.
- South Africa successfully lobbied for its candidature for a non-permanent seat on the UN Security Council for the period 2019 to 2020. It also highlighted the primacy and centrality of the 2030 Agenda for sustainable Development and the Paris Climate Change Agreement.
- The predetermined compensation of employees ceiling remained a challenge to the Department. This is due to the fact that the ceiling is lower than the amount needed to compensate the existing warm bodies in the Department and missions abroad. This was also susceptible to volatility of the nature of the benefits accorded to the transferred staff stationed abroad, as well as payment of salaries and wages to the Locally Recruited Personnel.
- It has been a recurring challenge that the financial statements of the Department are submitted to the Auditor-General with mistakes, and misstatements. Both the Audit Committee and Auditor-General’s office had recommended that the Department should conduct a skills audit in the Finance Branch, to be able to identify root causes of repeat findings. However, the recommendations from these bodies have not been implemented by the Department.
- The risk management culture and practices within the Department were found to be very weak and ineffective. The senior management in the form of DDGs of the Department were not keen to attend Risk committee meetings. This is where recommendations on risk management would be discussed. There is no buy-in from this level of leadership and therefore there will be no enforcement.
- It was noted that there were still delays in payments of service providers within the DPSA’s requirement of a 30-day rule. Delays in the verification of invoices by end users was identified as a cause for the delay.
- The Department reported that it is continuing with the plans to operationalise the South African Development Partnership Agency (SADPA), in order to support South Africa’s outgoing development cooperation policy by providing funding and technical support for development initiatives. Finalisation of the Partnership Fund for Development Bill, aimed at repealing the African Renaissance and International Cooperation Fund Act, 2000 (Act 51 of 2000), is said to be in progress. The Committee has raised a concern that Cabinet approved the migration from the ARF to the South African Development Partnership Agency in 2009. The processes around the establishment of SADPA have been painstakingly slow.
- Under Programme 1, the bulk of the expenditure incurred by the Department are in terms of operating leases and operating payments for the foreign municipal charges and rental costs for the Pan African Parliament, the United Nations offices and the African Union’s NEPAD and APRM offices. According to the Host Agreement signed with the African Union in 2004, South Africa was to provide headquarters accommodation for the PAP. South Africa is also under the obligation to provide accommodation for the UN and AU institutions as agreed.
- South Africa’s contribution to peace, security and stability on the continent continued to grow considerably. The country has been supporting the African Union, United Nations and SADC efforts aimed at promoting peace and security. South Africa has been championing the need for better coordination between the African Union Peace and Security Council (AUPSC), and the UN Security Council, in terms of planning together any interventions towards conflict resolution in Africa. This is in pursuit of African solutions for African problems.
- The Department is struggling to contain the expenditure within the prescribed ceiling on compensation of employees and is also affected by currency fluctuations. The Department will use review of the departmental structure as one of the measures to manage the COE budget and will be implemented in the new financial year.
- A concern was raised as to whether the Department took the recommendations of the Internal Audit, the Audit Committee and Risk Management committee with the seriousness they deserve to address root causes to challenges of an operational nature facing the Department year on year.
- More direct answers were requested on reasons for the slow pace on consequence management processes where irregular expenditure has occurred in the Department.
- The CFO was asked whether he agreed with the report of the Auditor-General. This would give the Committee the necessary assurance that the audit outcomes will be addressed.
- More information was sought on the current powers of the Auditor-General after the amendments of the Act.
- With the recent outbreak of violence, more information was needed on South Africa’s official position on the matter; the perceptions in the rest of the continent on South Africa, and the role played by the Public Diplomacy branch on the matter. Attention was also drawn to the fact that South Africans also faced hostilities in some countries in the continent. It was a concern that the Department was perceived as not being proactive to developing responses to the outbreak of violence which affected foreign nationals and South Africans.
- More information was sought on the type of training offered by the Department.
- The Zanele Mbeki Foundation was awarded funding from the African Renaissance Fund, however, the criteria for allocation remained unclear.
- Due to the many issues impacting on the operational activities of the Department, the Committee is resolute to finalise the processes on the Foreign Service Bill 2015 before December 2019.
- Responses by the Department and the other stakeholders
The Department and other invited stakeholders responded to the Committee’s findings and observations as follows:
- The Minister thanked the Committee for the opportunity to make an input and gave the Committee assurances that the matters raised would be addressed. The Minister noted that the New York matter is in the courts and therefore details were sub-judice. She agreed with both the Auditor-General and the members of the Committee that consequence management should be enhanced in the Department.
The Minister also assured the Committee that when possible, regular meetings would be held including her office, the Director-General, the Auditor-General and the Audit Committee. In terms of expenditure, the Minister noted that the Department is affected by the expenditure ceiling and currency fluctuations. The Minister emphasised that many issues affecting the Department and its performance would be enhanced by the Foreign Service Bill, which she hoped the Committee could process as soon as possible.
The Minister informed the Committee that certain critical vacancies need to be filled. In addition, Missions were being assessed to determine where costs could be reduced. The Minister also highlighted the importance of Missions making use of efficient governance systems, with the headquarters playing a role in ensuring that all missions comply with the relevant prescripts.
She further pointed out that linked to this is the need for enhanced ICT systems to modernise the operational aspects of the Department. The Minister concluded her input by noting the importance of oversight. She assured the Committee that the Department would cooperate with the efforts to improve certain aspects of the Department.
- During the review of the organisational structure, it was decided that the departmental structure as one of the measures to manage the COE budget and would be implemented in the new financial year.
- New The Audit Action Plan existed, however it has deficiencies. The Department was reviewing its content to ensure it reflected all necessary items and timeframes.
- The skills audit process in the Department has taken off and the Department would share the progress report with the Committee.
- Challenges with asset management and financial misstatements first occurred in 2013/14. The Department will thoroughly examine capacity issues in the Finance branch. The inherent deficiency is that the Department is using Excel software to register movable and immovable assets.
- The Department had not been able to explain or correct all the errors that had been found in its financial statements. The root causes of the problems at the Department were: slow response to improving internal controls, inadequate consequence management and lack of required skills in the finance branch and at foreign missions.
- The irregularities in the awarding of the New York project had been noticed in 2017/18. Two suppliers had submitted bids but one was disqualified because it did not disclose that it was submitting a joint bid. The winning bid, meanwhile, did not meet the required auditing standards and did not have a high enough bank guarantee. It emerged that it was also in a joint bid, and the director representing the company that submitted the bid was not listed in the company that won.
A prepayment of R117 million had been made. An investigation into whether this money could be recovered was still ongoing, so it was not included in the figures presented for irregular expenditure. The Department was currently compiling an investigation report on the matter, which will be shared with the Committee once all internal processes had been completed. The Supply Chain unit also conceded that the SCM unit should have detected the discrepancies.
- The International Cooperation, Trade and Security (ICTS) cluster had done a post-mortem of the responses to the recent xenophobic violence. It was indeed a communication issue that the Department could have done more to inform the South African people. The post-mortem had revealed that unless the root causes of the violence were addressed, it would happen again. It was noted that the acting High Commissioner of South Africa in Nigeria had actually addressed the media more than twice, and that the South African Minister of Police had addressed the media in response to the attacks on the police. A sustained and comprehensive strategy was required. Economic migrants would continue to look for opportunities in South Africa, especially since Europe was beginning to close its borders.
- The low staff morale was due to human resource issues not being addressed adequately; and the fact that consequence management was not effectively implemented to assure officials that no one is untouchable; and that internal communication on issues affecting staff was not optimal, creating a sense that the Department does not care about staff welfare.
- The CFO maintained he was not in full agreement with the AG’s report as he was seeing the presentation for the first time. His issue was on parts of the report which he had been charged with. He had not had the opportunity to defend himself as he was on suspension. The Auditor General clarified that the Department was afforded the opportunity to respond to their findings. The Committee instructed the CFO to submit his response in writing the following day.
- The Department has a stream of external training encompassing internships, training for women in peacebuilding, and training of diplomats from the SADC region. Internally training is offered for heads of mission, language, corporate services as well as Attachés.
- The Auditor-General is empowered to hold the Accounting Officer personally liable for irregular, fruitless and wasteful expenditure, if the accounting officer does not take steps to prevent these contraventions. The AG can further hold the accounting officer liable if he fails to identify, investigate and hold liable the person responsible for these irregularities.
- The Auditor-General encouraged the Committee to request all investigation reports so that the results of the investigations could be interrogated.
Overall performance by the Department in the reporting year has been commendable. The Committee is encouraged by the efforts undertaken to contribute towards a better life for all in South Africa; striving for a stable and secure continent; and creating a better world for all.
The Committee unanimously expressed satisfaction that the Department has utilised its budget in accordance with its plans for 2018/19. The Department was regarded as having demonstrated full accountability to Parliament and the people of South Africa on resources spent, both human and financial, and how it contributed in the achievement of South Africa’s national priorities. The Department was applauded commended for continuing to position South Africa as a respected member of the international community, with a dynamic and independent foreign policy that speaks to the country’s domestic priorities.
The Committee noted serial weaknesses highlighted by the Auditor-General. It further welcomed the acknowledgement and commitment by the Department, to improve in addressing operational challenges, consequence management and maintaining clean governance approach. Senior management and DDGs, were regarded as critical in addressing the recurring challenges that renders the Department amenable to qualified audit opinions. Their cooperation and attendance of meetings where these issues are addressed was regarded as imperative.
The Department also expressed determination and undivided attention to pursue best practices in the areas of human resources, financial, supply chain, asset management and information and communications technology, as raised by the office of the Auditor-General. The Committee noted that there is room for improvement with necessary adjustments in service delivery.
The Committee is of the opinion that overall the Department has performed according to the goals it had set itself for the 2018/19 reporting period. The 2018/19 budgetary allocations of the Department were generally aligned to the national strategic priorities outlined in the 2018 State-of-the-Nation Address, as well as its strategic direction in terms of its Medium Term Expenditure Framework. An undertaking by the Department to improve on weaknesses identified by the Auditor-General, and working towards a clean audit, would demonstrate a positive indication of commitment of purpose by the Department to diligently execute its mandate.
In order to further assist the Department to enhance its performance, the Committee recommends that the Minister ensures that the Department implements the following and report to the Committee within three months of the adoption of this report by the National Assembly:
- Ensure that an audit action plan is developed, implemented and monitored to address the audit outcomes before the commencement of the interim audit thereof.
- Develop and report on a turnaround strategy on measures being put in place in order to have a credible asset register, to avoid findings on existence and completeness. The new asset management system should demonstrate how it will improve the audit outcome.
- Investigate cash and bank findings relating to foreign bank accounts before the end of the current financial year.
- Produce a self-assessment report card, with a detailed implementation plan, on how to close gaps identified in procurement, supply chain management, asset management, and financial statements with misstatements. The report card should include the linkages between the mandate and the structure; the required skills to deliver as per structure and job descriptions, what policies, processes and internal controls should be in place; and should include detailed training required and how to get the required skills set.
- Provide details on whether Missions’ performance is measured and monitored, as well as actions taken where Missions are not performing and/or contribute to negative audit findings.
- Conduct a skills audit in the Branch Finance and Asset Management unit to determine whether there is appropriate competencies and skills necessary for the proper preparation of Annual Financial Statements.
- Ensure the Office of the Chief Operations Officer (COO) is capacitated to address governance and administrative matters, has the necessary resources and delegated responsibilities to deal with compliance issues in consultation with the risk and internal audit committees.
- Investigate and report on the circumstances pertaining to irregular expenditure to the amount of R298 million incurred during the 2018/19 financial year. Furthermore, report with timelines on how the Department will work towards recovery, condonation or removal of irregular expenditure as per the National Treasury Framework on Irregular Expenditure.
- Develop an asset acquisition strategy and assess the possibility of leasing out, renovating or disposing of unused state-owned properties abroad.
- Upgrade ICT infrastructure of the Department and missions abroad, and capacitate the staff involved in the implementation of the ICT refresher plan to avoid exposing foreign policy related information to related risks. Report on the work of the Ministerial ICT Team and how the ICT plan will improve on the current systems.
- Provide a full report on the circumstances that led to the conception and ultimate procurement of land/property for the missions in New York and current status thereof.
- Compile a report on the circumstances impacting on the conclusion of inter-departmental negotiations relating to the establishment of the South African Development Agency (SADPA).
- Compile a progress report on the processes relating to the provision of permanent headquarters for the Pan African Parliament (PAP), as well as the agencies of the African Union (AU) and the United Nations (UN).
- Ensure that the Audit Steering Committee is resuscitated, including the appointment of members at relevant senior levels. The chairperson thereof should present quarterly progress against the Audit Action Plan.
- Ensure that there is consequence management to address the inadequacies in the work of the Finance Branch.
- Consider reviewing the organisational structure to align it to current developments and new demands on South Africa’s Foreign Policy and government priorities. The configuration of the Finance and Asset Management branch should be prioritised, to ensure a separation of finance and of property management functions.
- Clarify the role of Corporate Services Managers in the Missions, and ensure they have the necessary financial and administrative skills.
- Provide details on how the Department is strengthening the internal control environment in order to prevent and detect the irregular, fruitless and wasteful and unauthorised expenditure, and report on all instances where such unwanted expenditure was incurred, as required by section 38 (1)(h) of the PFMA.
- Require management to regularly report on disciplinary actions on financial misconduct cases in the Department. Where criminality has been established, such cases should be referred to the law enforcement agencies.
- Conduct a change management process to establish the root causes of the culture of impunity and low morale in the Department.
- Regularly engage in public meetings, roadshows and outreach programmes to disseminate the mandate of the Department, the African Renaissance Fund and foreign policy in general.
- Table a detailed plan on ways to reduce expenditure on the compensation of employees over the MTEF.
- Ensure that the African Renaissance Fund apply its criteria for funding of projects consistent with the requirements articulated in the Act.
- Expedite, notwithstanding the ceiling on compensation of employees, the filling of critical posts such as the Chief Operations Officer, Chief Information Officer, DDG Corporate Management and Contract Manager for the Department; and Project Manager for the African Renaissance Fund, to improve on internal controls.
- Report on how South Africa is responding to the African Union resolution on Silencing the Guns by 2020.
To the Minister of Finance
Investigations be undertaken, and a report be submitted, around the role played by National Treasury in the procurement processes of the New York pilot project. Consequence management should be undertaken where wrongdoing has been established.
To the National Assembly:
The National Assembly should consider the importance of the oversight requirement for the Committee which is currently not favoured by the prevailing Parliamentary Oversight Model. There is a need for the Committee to conduct oversight, at least twice a year, on South African Missions abroad. This would allow the Committee to monitor causes of irregular expenditure and non-compliance with supply chain management issues. These mentioned areas are recurring and impact on the service delivery path of the Department.
The Committee should also be allowed to attend and monitor the participation of South Africa in multilateral forums related to Foreign Policy. This is to assess the impact of the Department’s participation on the outcomes of those organisations.
The Committee should be allowed to attend the annual Heads of Missions Conference in order to sharpen oversight on foreign policy trends and priorities discussed during these conferences. The South African Missions abroad are the implementing mechanisms of the South Africa’s Foreign Policy.
The National Assembly should allow the Committee as a whole to conduct state of readiness oversight visits where the Department is responsible for facilitating the hosting of international conference with a foreign policy undertone. Furthermore, the Committee should be allowed to attend international conferences held in South Africa in pursuance of South Africa’s Foreign Policy.
Report be considered.
- Annual Report 2018-2019 Department of International Relations and Cooperation.
- Annual Report 2018/19 African Renaissance Fund
- Strategic Plan, 2015- 2020, Department of International Relations and Cooperation.
- National Treasury, 2018, Vote 6: International Relations and Cooperation, Estimates of National Expenditure 2018.
- Ramaphosa, C. 2018, State of the Nation Address at the Joint Sitting of Parliament. Cape Town.
- The African Renaissance and International Cooperation Fund Act 2000
- Standing Committee on Appropriations: 4th Quarter Expenditure Report 2018/19 financial year.
- Presentations by other departments.
 Constitution of the Republic of South Africa 1996
 Department of International Relations and Cooperation Annual Report 2018-2019
 Annual Report of the Department of International Relations and Cooperation 2018/19
 Ramaphosa C, State of the Nation Address 2018
 Presidency, 2018
 Ramaphosa C, State of the Nation 2018
 National Planning Commission, 2011
 The National Development Plan, Chapter 7: Positioning South Africa in the World)
 Department of International Relations and Cooperation, Annual Report 2018/19
 Department of International Relations and Cooperation Annual Report 2018/19
 Department of International Relations and Cooperation Annual Report 2018/19
 Department of International Relations and Cooperation, Annual Report 2018/19
 Department of International Relations and Cooperation Annual Report 2018/19
 Annual Report of the Department of International Relations and Cooperation 2018/19
 Department of International Relations and Cooperation Annual Performance Plan 2018-2019
 Department of International Relations and Cooperation Annual Report 2018/19
 Department of International Relations and Cooperation Annual Performance Plan 2018-2019
 Department of International Relations and Cooperation Annual Performance Plan 2018-2019.
 Annual Report 2018/19 of the African Renaissance and International Cooperation Fund.
No related documents