ATC220526: Report of the Portfolio Committee on International Relations and Cooperation on the 3rd quarter 2021/22 performance and expenditure of the Department of International Relations and Cooperation and the ARF, dated 9 March 2022

International Relations

Report of the Portfolio Committee on International Relations and Cooperation on the 3rd quarter 2021/22 performance and expenditure of the Department of International Relations and Cooperation and the African Renaissance and International Cooperation Fund, dated 9 March 2022

The Portfolio Committee on International Relations and Cooperation (the Committee), having received and considered the 3rd quarter 2021/22 performance and submission to National Treasury, of the Department of International Relations and Cooperation (the Department), and the African Renaissance and International Cooperation Fund (ARF) on 9 February 2022, reports as follows:

 

1. Introduction

 

1.1 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,[1] 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, and South Africa’s Missions abroad, its entity, the African Renaissance and International Cooperation Fund (ARF), on policies, financial spending patterns, administrative issues, and it holds the Department and entity accountable for their operations and functions. The Committee is an important mechanism for ensuring oversight over the conduct of South Africa’s international relations and cooperation policy.

 

1.2 Purpose of the quarterly performance reports

The quarterly performance reports are a building bloc towards the Committee’s annual Budgetary Review and Recommendation Report (BRRR). 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 the 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 based its assessment of the Department and its entity, on tabled service delivery plans as outlined in the Annual Performance Plans 2021/22 of both; and the 2021 State of the Nation Address. The Committee linked domestic priorities to the Department’s Strategic Plan 2020 – 2025 and aligned the information to priorities and measurable objectives as set out in the National Development Plan (NDP).

The Committee also examined the expenditure report as published by the National Treasury. These reports are commonly known as section 32 Reports[2].

The report further gives an overview of the presentations made by the Department and its entity, focusing mainly on its achievements, output in respect of the performance indicators and targets set for 2021/22 and the financial performance. The report also provides the Committee’s key deliberations and recommendations relating to the performance of the Department and its entity.

 

1.3       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[3]. 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[4]. 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.

 

1.4       Measurable objectives of the Department

The Department had identified the following strategic objectives for implementation during the reporting quarter, aimed at responding to the domestic priorities as announced by government for the reporting year as follows:

  • Provide strategic leadership, management and support services to the Department,
  • promote relations with foreign countries,
  • participate in international organisations and institutions in line with South Africa’s national values and foreign policy objectives, and
  • communicate South Africa’s role and position in international relations in the domestic and international arenas as well as to provide Protocol Services.

 

  1. Opening remarks by the Chairperson of the Portfolio Committee, Mr SOR Mahumapelo MP

In his opening remarks, the Chairperson noted that the South African delegation had returned from the 35th Ordinary Session of the Assembly of Heads of State and Government of the African Union. He was looking forward to the time the outcomes of the Summit would be presented to the Committee. He further reminded the Members that quarterly reports were an important oversight tool, from which the performance of the Department is monitored and the BRR Report would be developed.

Due to the State of the Nation Address the following day, and the members’ various traveling engagements as a result, he requested that the Department keep their presentations and responses to questions concise, without compromising on quality.

 

2.         Performance of the Department in general

The quarterly report reflects the high level 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 footprint had grown from 34 in 1994 to 125 diplomatic missions in 2022, situated in 109 countries throughout the world.

True to the fact that the Department operates in an ever changing international landscape, its work during the 3rd quarter was influenced by these events. The international turbulence was due to the rapid weakening of the rand against major currencies; the resultant impact on the global economic outlook, the plummeting oil prices and the advent of the Coronavirus pandemic. The COVID-19 pandemic has affected diplomatic operations across the world. Most countries introduced travel restrictions and resorted to digital means to conduct their business.

The activities of the Department remained structured into the five programmes as elaborated in its Annual Performance Plan 2021/22. These are as follows:

 

  • Programme 1:  Administration
  • Programme 2:  International Relations
  • Programme 3:  International Cooperation
  • Programme 4:  Public Diplomacy and Protocol Services and
  • Programme 5:  International Transfers

 

2.1       Non-financial performance of the Department per programme: Achievements

 

2.1.1     Programme 1: Administration: It is aimed to provide strategic leadership, management and support services to the Department.

 

The Audit Action Plan was submitted to the National Treasury for review and implementation of the plan is monitored by the Audit Steering Committee.

The Department facilitated a capacity building session on conflict resolution, mediation and negotiation with youth from the 22 to 26 November 2021. The youth were empowered on issues of conflict resolution, mediation and negotiation in line with UN resolutions UNSCR 1325 and UNSCR 2250.

Furthermore, an MOU was concluded between the Department and the Ministry of Foreign Affairs of the Republic of Kenya in November 2021. The MOU was to establish a framework of cooperation activities for the development on foreign policy research and analysis, training of diplomatic personnel and exchange of information and publications between parties.

 

2.1.2     Programme 2: International Relations

The programme is aimed to promote relations with foreign countries to strengthen South Africa’s political, economic and social relations with targeted countries. This is achieved through the outcomes of structured bilateral mechanisms and high-level visits reflecting national priorities, the African Agenda and the Agenda of the South. These remain important vehicles for cooperation and promoting South Africa’s national priorities. The national priorities of government as well as the needs of Africa (such as the New Partnership for Africa’s Development (NEPAD) as espoused in the National Development Plan (NDP), are also pursued in bilateral relations. Focus is also placed on the strengthening of economic diplomacy initiatives undertaken by Missions for the promotion of South Africa’s trade, investment and tourism potential and opportunities.

The Department continued to use bilateral engagements as instruments to pursue South Africa’s National Interest. These included structured bilateral mechanisms, the high-level visits and economic diplomacy initiatives undertaken at by the Missions abroad. The engagements also focused on areas of mutual interest between South Africa and other countries, and included exchange of ideas and views on a wide spectrum of bilateral and global issues that include, but not limited to, the nexus between security and development, human rights issues, trade and investment promotions.

During quarter 3, the Department intensified Economic Diplomacy and focused on image building activities in South African missions abroad. These initiatives were aimed at promoting, amongst others, the country’s economic interests, exploring investment opportunities, tourism promotion, skills development and cultural exchanges.

 

2.1.3     Programme 3: International Cooperation

Through this programme, the Department participates in international organisations and institutions. This was reported as in line with South Africa’s national values and foreign policy objectives. The programme assists the Department to enhance international responsiveness to the needs of developing countries and Africa. This is achieved through negotiation and influencing processes in the Global Governance System; towards a reformed, strengthened and equitable rules-based multilateral system. The Department continued to participate in various multilateral meetings to influence the outcomes of such meetings and remain an active member of the international community as espoused by the NDP.

The Department aimed to develop a long term strategy for South Africa’s membership /candidatures and identify which memberships to pursue, however, it was not achieved. The Department has since decided to abandon this exercise and would not seek any new membership.

The proposal for an emergency temporary waiver of some Trade-Related Aspects of Intellectual Property Rights (TRIPS) is important for the marginalised to be granted technology transfers to produce vaccines for the duration of the pandemic; and the latter was during consultations between Minister Pandor and the Head of the World Economic Forum (Africa).

The outcome of the G20 Summit in October 2021 in Rome Italy, in which South Africa participated, was the adoption of the G20 Leaders declaration. The text of the declaration outlined three dimensions of the 2030 Agenda for Sustainable Development, namely: economic, social and environmental, key in achieving sustainable development. The G20 Leaders were able to agree on the “role of open, fair, equitable, sustainable, non-discriminatory and inclusive rules-based multilateral trading system,” and on the “necessary reform of the World Trade Organisation” in line with the Osaka and Riyadh Initiatives.

 

2.1.4           Programme 4: Public Diplomacy and Protocol Services

 

The programme is meant to communicate South Africa’s role and position in international relations in the domestic and international arenas. It is also aimed to provide protocol services. The Department implemented and monitored its Public Diplomacy strategy. Protocol and consular services were extended as requested.

 

3.         Financial performance of the Department

 

Quarter 3 expenditure trends

The actual total expenditure for the 3rd quarter of 2021/22 financial year amounted to R933.0 million compared to the cash drawings of R1.463 billion representing a variance of 36% lower than what had been projected. Therefore, the actual expenditure (including expenditure not interfaced and invoices not paid) as at end of December 2021, amounted to R4.540 billion which represent 70% spent as compared to the budget of R6.518 billion.

 

Expenditure per programme

 

3.1       Programme 1: Administration

Programme 1 spent R329.4 million of the projected expenditure of R447.4 million. The lower than projected spending was mainly on the budgets for goods and services and payments for capital assets. The lower than projected spending on the budget for goods and services was attributed to the Bandwidth (computer services) ICT invoices. These could not be processed for payment as a result of the Department’s challenges in the processing of invoices arising from the expiration of the contract with the service provider. Also, the delays in the implementation of the property management strategy, due to the unavailability of the Bid Evaluation Committee contributed to the low spending.

The low spending on the budget for payments for capital assets was attributed to delays in the delivery of laptops and desktops for Head Office staff, and the non-processing of the public-private partnership infrastructure project payment. These transactions could not be processed by the Basic Accounting System due to an incorrect value date entered into the system. The value date has since been corrected and payment was made in January 2022. The recommendation for the appointment of the service provider and the addressing of issues with the Bid Evaluation Committee were concluded in February 2022.

 

3.2       Programme 2: International Relations

 

Programme 2 spent R412.8 million of the projected expenditure of R774.8 million.

The lower than the projected expenditure, was as a result of low spending on the budget for compensation of employees and goods and services, due to expenditure for all missions which was not timeously entered into the Department’s Basic Accounting System. The reason was that the contract with the service provider (of the currency convertor system) of the Information Communication Technology system, which is designed to relay information on spending by all missions to the Basic Accounting System, expired at the end of October 2021.

The Department reported having submitted a request for approval from the National Treasury (Office of the Chief Procurement Officer) to renew the Department of International Relations and Cooperation’s contract with its service provider. The Department has requested approval from the National Treasury for the Department to deviate from prescribed supply chain management requirements in its procurement of the services of the sole service provider. The Department has submitted that this service provider was the only one in the country who could provide such a service. The Department reported that the appointment for the sole service provider has since been resolved in February 2022.

 

3.3       Programme 3: International Cooperation

Programme 3 spent R75.6 million of to the projected expenditure of R146.0 million. The low spending on goods and services is attributed to the non-availability of the Information and Communication Technology system to timeously interface with the Basic Accounting System and report on spending by all missions, as the contract with the service provider (of the currency convertor system) of the Information Communication Technology system expired at the end of October 2021. The Department has submitted a request to the National Treasury (Office of the Chief Procurement Officer) to renew its contract with the sole service provider without following the laid down supply chain management requirements, as the service provide is the only one in South Africa who can provide such a service. The appointment for the sole service provider has since been resolved in February 2022.

 

3.4       Programme 4: Protocol Services and Public Diplomacy

Programme 4 spent R66.0 million of the projected expenditure of R80.2 million. The low spending was mainly due to less travel due to the unanticipated lockdown restrictions.

 

3.5       Programme 5: International Tranfers

Programme 5 spent R48.9 million of the projected expenditure of R14.6 million. The high expenditure trend was attributable to payment of the outstanding membership contribution for the African Union. It was paid in the 3rd quarter after receipt of National Treasury approval for virement of funds.

 

3.6      Covid-19 spending

The Department has spent R600 000 on personal protective equipment for the head office.

 

3.7      Personnel

The Department spent R1.912 billion or 14.2 per cent lower than the projected spending of R2.230 billion on compensation of employees at the end of December 2021. The R1.912 billion in actual spending is R318 million lower than the projected expenditure of R69 million as at the end of December 2021. The underspending is attributed to spending on compensation of employees for all missions which was not timeously entered into the Department’s Basic Accounting System.

 

4. The African Renaissance and International Cooperation Fund (ARF)

During the reporting period, South Africa continued to play an active role in supporting initiatives aimed at enhancing the African Agenda. One of the ARF strategic objectives is the promotion of democracy and good governance, which is in line with South Africa’s foreign policy. This is done through support and active participation in the implementation of the aspiration of the AU’s Agenda 2063.

In pursuing this objective, South Africa had extended the Lesotho Peace process facilitation.

This was as per the recommendations of the 41st Ordinary Summit of Heads of State and Government held in the Republic of Malawi, which decided that the role of the SADC facilitator to the Kingdom of Lesotho continue till August 2022. This would continue to bring peace and stability in SADC, particular the in Kingdom of Lesotho, as it goes to general elections in September 2022.

During the reporting period, four (4) of five (5) targets under programme: administration have been achieved as set in quarter 3, thus 80% achievement for the prgramme. The Secretariat has continued to monitor the active projects in collaboration with missions abroad to ensure that funds are utilized for what they were intended for.

A total of six (6) targets were achieved in quarter 3, thus 66.66% overall achievement and three (3) were not achieved. Reasons for non-achievement were that no requests were received for consideration by the ARF Advisory Committee for the following two targets:

- project funded to operationalise the AfCFTA;

- training development and capacity-building projects funded; and

 as a result, the funding was prioritised for critical humanitarian projects.

 

5. Findings by the Committee

 

After due deliberations on the contents of the 3rd quarter reports for 2021/22 of the Department and its entity, the Committee made the following findings:

 

5.1       The political work of the Department was commendable and provided a degree of optimism. The Department was applauded for building relations with different countries across the world.

5.2      The Committee felt beyond shock and anger, and that the normal patience was exhausted, at the continued poor performance on operational matters, especially on financial management, by the Department.

5.3      The Department continued to submit presentations late to the Committee, leaving it with very limited time to interrogate the inputs. It was not acceptable that an excuse was advanced that the Department got the programme late, instead the quarterly reports are a compliance matter, which the Department should know and be ready to report on at every quarter.

5.4      The Department presented that as of 31 December 2021, the actual expenditure (including expenditure not interfaced and invoices not paid) amounted to R4.540 billion which represented 70% spent as compared to the budget of R6.518 billion.

5.5      A concern was raised regarding the continuing concern from previous quarters, of celebrated low expenditure trends. It was becoming clear that the Department’s service delivery trajectory was not in sync with its allocated budget. The overall spending at the end of quarter 3 was said to be at 70%, then the Department would have to resort to financial dumping. It would accelerate its expenditure in order to cover the remaining 30% by the end of the financial year. Concrete plans were sought for the remaining budget, which ought to be at 25%.

5.6      The Department was asked to explain why BT Communications has remained a green contract, providing services to the Department, despite an objection from National Treasury. The information should also show who owns BT Communications, its directors; how much it was being paid a month, and since its contract expired in December 2020, the amount of money it has been paid since then. Since the ever green contract was regarded irregularly awarded from the start, and that the ICT infrastructure of the Department has been on a downhill since, it created a doubt that perhaps someone is benefitting from the failures of ICT systems.

5.7      It was argued that the Foreign Service Act 2019 should be implemented. The Department should adhere to the Committee’s recommendations on the property management strategy and related matters. The seeking of a milestone report from Public Works would be a good starting point, to enable the Department to implement clause 8 of the Act, which should not be delayed any further. Without this report, it would be like painting a house even before it is built. The Committee also asked for updated reports on the asset register for movable assets, and on the maintenance processes of identified state-owned properties abroad.

5.8      It was noted that the Portfolio Committee should have a session solely addressing ICT matters. The special meeting should spend more time focusing on Programme 1, since this was the programme in which most of the aforementioned issues occurred being ICT, property management, procurement and supply chain issues. The programme is regarded the backbone of the Department. If it was not dealt with, all the oversight efforts would become a futile exercise.

5.9      Clarity was sought on the discussions, if any, between the Department and that of Home Affairs regarding the implementation of the Protocol on free movement of people in the continent. It was asked about progress on the establishment of one-stop border posts at South Africa’s ports of entry. It would be essential to reduce the time that people and goods take to go through the border posts for the implementation of the AfCFTA.

5.10    The ECOWAS countries were congratulated for being the fast growing economies in Africa. South Africa was lauded for engaging with the region, through the recent visits by President Ramaphosa to Nigeria, Senegal, Ghana and Cote D’Ivoire. The country was expected to do business with this region in order to diversify trade and reap the low hanging fruits of the AfCFTA. It was further noted that the Free Trade Agreement would bring about opportunities, however more attention should be on managing border control, to ensure that the Border Management Authority facilitates trade with the rest of Africa.

5.11    More details were sought, on the South Africa – Nigeria Youth dialogue launched by President Ramaphosa and President Buhari. The information should show the criteria used for youth participation, and whether it extends to other African youth elsewhere in the continent.

5.12    Clarity was sought whether the Department had the capacity to monitor all international agreements, including the details on specific sector obligations arising out of those engagements. It was further asked whether the Department had the capacity to implement these agreements, furthermore, whether there was an inter-departmental mechanism to ensure these agreements are translated into concrete programmes for the mutual benefit of the countries involved. It was noted that without an enforcement mechanism, the Department would simply become a lobbying agency with no capacity to monitor whether agreements were translated into concrete economic programmes.

5.13    Public Diplomacy should play a pivotal role in picking up and addressing how South Africa is perceived by the world. The Department should be able to respond in a particular area of work, because of how they are perceived in that particular country. It is important to monitor South Africa’s status in terms of the global perception graph, and ascertain whether it is getting worse or better. Everything revolves around the effective spending of taxpayers’ money. If negative perceptions are not dealt with, it may repel investors or persuade other countries not to politically engage with South Africa. Quantification is essential to have tangible results in the end.

5.14    The operationalisation of the South African Development Partnership Agency (SADPA) continues to be delayed. The National Treasury has submitted comments on the South African Development Partnership Fund Bill to the Department, and further engagements are going to take place between the National Treasury and Department of International Relations and Cooperation, especially on possible efficient and effective institutional arrangements through which the mandate of SADPA could be actualised.

5.15    It was suggested that in the future, the Department’s presentations should focus on the quantification of agreements. Such quantification was not in practice since the PFMA does not require it, so even in the Medium Term Expenditure Framework there is no quantification in some areas. Yet, it was believed quantification was necessary in order to show people that there is value for money, based on what the country invests in international relations. The quantification should be able to show the citizens how many agreements have been entered into, with how many countries, and the total monetary value of each agreement. This was considered necessary to demonstrate the extent to which the country’s international investments have impacted on poverty, inequality and unemployment in percentage terms, as set out in the National Development Plan. The amounts invested in time and fiscus in these agreements, should be seen and interpreted, in tangible terms, through their impact on the challenges South Africa faces as a society.

5.16    South Africa is doing a lot of work around the maintenance of peace, either through deploying its own forces within the African continent, or through deep diplomatic engagements internationally. Through intelligence work, the Department should be able to predict and forecast on what is likely to emerge in particular countries as a result of these efforts. It needs to be demonstrated which possible scenarios or catastrophes have been avoided through this investment of taxpayers’ money. It is necessary to show how inter-departmental collaboration and engagements have quantitatively contributed to various areas of work. In this way, the Department would depend on empirical evidence to inform their reports to the Portfolio Committee, which in turn would report to the House.

 

6. Responses by the Department

 

6.1      The Department began by asserting that the ARF is not an instrument which focuses solely on matters relating to Pan-African solidarity. It is an instrument at their disposal which, broadly speaking, helps the Department deepen its foreign policy implementation, it is a tool of South Africa’s Foreign Policy.

6.2      With regard to Cuba, the decision to extend a donation for food security was made as a result of a foreign policy priority on South-South cooperation and global solidarity. The Department was taken aback by statements made by some members indicating that South Africa has international obligations to respect, on the basis that Cuba is under sanctions. It was emphasised that Cuba is under unilateral sanctions. This was not endorsed by the United Nations. In fact, in June 2021, an overwhelming majority in the UN General Assembly voted in favour of lifting the unilateral blockade against Cuba. A number of 184 countries, including South Africa, were against the imposition of these blockades.

6.3      Concerning the matter of food security as it relates to Cuba, the Department reminded members that DIRCO, together with the ARF, have previously made interventions concerning food security in Zimbabwe and South Sudan. So, their intervention in a food security issue in Cuba was concomitant with the Department’s objectives and past actions. In the previous Portfolio Committee meeting, it was never indicated that this R50 million contribution was a loan. It had to be clarified that this was a committed contribution to intervene in Cuba in relation to the massive food security challenges it faces. It was a donation – and there is no ambiguity.

6.4      In terms of concerns around the Russia and Ukraine issue, South Africa’s position is to support the implementation of the Minsk I and Minsk II Agreements, and to call on the full working methodology of the Normandy Format, in order to bring about the cessation of hostilities between Russia and Ukraine. Both parties should publicly raise this specific matter.

6.5      It was agreed that ECOWAS is a growing region. For example, three of these countries are in the top 10 performing economies in Africa, as envisaged for 2022. Thus, Department’s objectives in West Africa were to advance national interest, using the pillar of economic diplomacy.

6.6      The Department said the agreement was aimed at strengthening people-to-people mechanisms as instruments of diplomacy. It further acknowledged that the youth in these countries were the most resourceful part of the population, and a great asset in terms of nation building, sustainable development, and peace building. The programme aims to invest in youth in terms of skills development and creating access to credit and finance. This objective of economic and financial inclusion is an important element of youth development. Both countries would utilise a programme of youth investment, ensuring that young people could participate in markets not only in South Africa and Nigeria, but also in those throughout the AfCFTA.

6.7      There was a need to utilise young people as assets for sustainable economic growth and development. In this regard, the Department has identified the need to continuously use the youth agency to deal with the nexus between security and development. President Ramaphosa and President Buhari have agreed that through government efforts, they would forecast on how best to strategise youth development which focuses on young people throughout the continent. Currently, the average population age in the continent is 24 years, while the average leadership age is 64 years. This meant that as they proceed on their processes, they must look at how to close this generation gap as a means of promoting youth empowerment in the continent.

6.8      Furthermore, the two presidents were in agreement on the need to have the Nelson Mandela Annual Youth Dialogue extended to other countries in the continent, not just South Africa and Nigeria. The Department was currently working with the Department of Women, Youth and People with Disabilities (DWYPD) to host a Nelson Mandela Youth Dialogue for 2022. This would occur in South Africa in its youth month, with a view to focus on the issues raised, but also because the 16th June is not only Youth Day in South Africa, but also the Pan-African Youth Day.

6.9      The first preparatory committee meeting on the Nelson Mandela Youth Dialogue, agreed that the DWYPD, particularly the National Youth Development Agency (NYDA), would coordinate participation in the Dialogue. In the same breath, they agreed that, owing to DIRCO’s footprint in the continent, it would liaise with different resident embassies to ensure they assist the various youth organisations with delegating youths to participate. Once this was finalised, the Department would return to the Committee and report specifically on the established criteria. It was acknowledged that not all young people have access to virtual platforms, but the Youth Dialogue would be hosted in South Africa in 2022 as a hybrid session, with some participants being physically present and others online. Furthermore, one of their objectives with this dialogue was to focus on South Africa’s way of doing things – displaying its institutions, frameworks and policies that support the youth development objective, and how it is mainstreamed in government work.

6.10    It was further stated that the Intra-African Trade Fairs had commenced. Last November the Department facilitated the Intra-African Trade Fair in Durban. Working with like-minded organisations, which also facilitate these trade platforms, would be the approach going forward. Some organisations have been suggested already, which the Department aims to pursue and support in initiating these efforts. It is true that through these platforms, and the product knowledge they bring, there would be increased trade among countries and business people within the continent.

6.11    It was further responded that BT Communications as the ICT service provider, was paid R8.4 million per month for the bandwidth. The contract with the provider expired in December 2020, and the Department had since paid R105 million from expiry of the contract to the present day. The Department intended to move out of this contract, and the termination process had already been concluded by the Bid Evaluation Committees of the Department that month. The matter was currently being recommended to the Acting Director-General for the appointment of a new company to take over. It was noted that, with the Acting Director-General’s permission, the ownership profile of the company would be sent by written communication to the Committee.

6.12    When the contract expired on the 10th December 2020, it was then extended on a month-to-month basis until 10th March 2021. These extensions were requested from the National Treasury in terms of the PFMA, but the Treasury did not grant the extension. This refusal was simply because the initial contract was already regarded as irregular. However, the Department wanted BT Communications’ services to continue in order to finalise the bids. The Department then advertised the bid immediately in July 2020, but this bid had to be cancelled due to issues around the terms of reference concluded by the Department. They then had to re-advertise in February 2021, during which they managed to finalise the process up to the stage of evaluation. However, after evaluation, there were 6 bids disqualified from the total received, with the rest failing to meet the stipulated requirements set by the Department. The Bid Evaluation Committee therefore recommended that the tender be cancelled again. They then re-advertised the bid in April 2021.

6.13    The Department was trying to move forward on this issue, and had the full intention to replace BT Communications as a service provider. The process of replacement was in its final stages.

6.14    In terms of the 19 maintenance projects, there had been progress. Nine of these projects had been finalised. 10 were still in progress and the Department was currently trying to finalise them. In terms of the maintenance of missions in Namibia, there were 6 projects on their list, and 5 had been completed. Only one was still outstanding. This was beyond the Department’s control, because they were waiting for the company to deliver the lift that needed to be replaced at the mission. Since then, the mission had also added about 4 maintenance projects that they wanted the Department to do. All four had been approved, two were already in a completion stage, and two were still in progress. The Department would also avail reports in terms of these 19 projects presented to the Committee.

6.15    It was noted that the Department did not have the relevant skilled officials in the Property Management unit, when they previously engaged with the Committee. But since then, the candidates had been re-considered, and a Chief Director of Property Management was coming in on the 1 March who was qualified for the role. A director was being interviewed in February, who they believed was qualified to do the work. It was asserted that an updated immovable asset register did exist and would be made available to the Committee.

6.16    In December, the Department approved an immovable property strategy looking at milestones concerning work that needed to be done. In terms of the Foreign Service Act, this Property Management unit had already dealt with the regulations relating to immovable property. The unit had also looked at the Foreign Service Code which regulates the operations of the missions abroad. Those chapters relating to immovable property had been updated in line with the Act. The only problem, as indicated previously, was that Bid Evaluation Committee members did not honour their invitation to meetings. This matter had been escalated to the level of the Acting Director-General. This had been dealt with and a solution found. Thus, evaluations were going forward.

6.17    Concerning the synergy between the operations and spending of the Department in Q3, it had to be indicated that the spending of the Department is 70% for administration only. The budget relating to core business is primarily for employee compensation. But, the core business expenditure in Q3 was only relating to state visits taking place in West Africa and Finland. Most of the work done in Q3 did not require the Department to spend. The missions have either done their work virtually, or the work does not need the budget. It was repeated that the goods and services budget of the Department is 70% administration it is mostly leases for offices, accommodation for heads of missions and staff, rates for foreign municipalities, medical services, and educational services. Core business spending mainly constitutes the compensation of employees, and this compensation budget is too small.

6.18    It was confirmed that the Department was planning its spending effectively and economically, noting that the spending expected in March was only on ICT goods and services. There had been delays with the delivery of ICT goods, only arriving in January 2022, and payment would only flow out in February or March this year. There was also an issue where the mission expenditure had not been interfacing into the Basic Accounting System (BAS) of the Department. This would increase the expenditure of the Department. Expenditure of about R14 million for the repatriation of South Africans during the pandemic was only approaching this February and March. This was because in quarter 3, the Department was working with South African Airways to reconcile the books and agree on an exact amount owed by the Department to the airline.

6.19    The final trigger of a spike in expenditure would be the Pan-African Parliament’s payment for the Close-out Report of the work done by DPWI in 2016, 2017 and 2018. The Department had discussed this with National Treasury, and they had agreed that the Department must re-prioritise its budget to pay for this Close-out Report.

6.20    It was noted that the Office of the Chief State Law Adviser: International Law, the Department, dealt with the questions surrounding the Department’s implementation of agreements. For all agreements signed on a particular aspect – for instance on agriculture, water or development, there were specific line function departments responsible for the implementation of these agreements. The Department reports to Cabinet twice a year to account for whether agreements are still in existence or not. There was work being done to ensure that agreements are given effect to, not only for the Department’s benefit but also for countries on the African continent which could benefit from these agreements. There were a number of agreements that had recently been signed, and it was clear that the line function departments were implementing these agreements. It was stressed that the Department had been on record in Cabinet indicating that the Department should be careful to enter into agreements when they lacked capacity to do so. This would not reflect well on South Africa, and so in such a case, the Department should focus their attention on existing agreements.

6.21    The Department acknowledged the request regarding the provision of a list of recently posted ambassadors, and would take this request to the Ministry and undertook to provide an immovable assets register.

6.22    The Committee was assured that the dispute with the City of Tshwane had been noted by the Department, and the Department had engaged with the City already. There had been an email from the City’s debt collectors that the Department did not owe any amount to the City, and were not in arrears. The Department thus requested the media to retract its statement concerning the Department’s allegedly unpaid accounts. However, they had developed working relations with the City, and would continue to engage with them concerning any amounts owing by embassies, so they could intervene timeously before water and electricity were cut. It was noted that the Department only pays the rates and taxes for embassies, not their water and electricity bills. It had already been arranged that the Department to meet officials in the City at least once a month.

 

7. Conclusions

The Committee is of the opinion that despite some challenges, the Department was able to perform according to the political goals it had set itself for the 3rd quarter of 2021/22 reporting period.

The general observation is that the quality of the Department’s reporting is not optimal, the frequent reference to ICT as a challenge, showed that the Department still has problems with the implementation of the ICT strategy. The incidents of low spending were equated to poor performance and the Department was cautioned against celebrating.

The COVID-19 imposed restrictions and the ceiling on compensation of employees, have negatively affected the operations of the Department, especially in the Missions, where the bulk of its activities take place. The pandemic impacted upon some of the activities of the ARF, resulting in some key targets not being achieved.

 

8. Recommendations

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 one month of the adoption of this report by the National Assembly:

8.1       Fast-track the full implementation of the digital strategy, and report quarterly on the ICT infrastructure transformation project towards a modernised system.

8.2       Ensure the interfacing of monthly expenditure of Missions into the Basic Accounting System (BAS), to ensure performance and achieving of set targets.

8.3      Ensure adherence to 30-day rule for payment of invoices from service providers, whose services the Department has consumed.

8.4      Provide documents relating to the profile on BT Communications, the current status of its contract with the Department, and an assessment report on the financial implications arising from servicing an expired contract. This would include the extension of the agreement, its alleged irregularity, and the concerns raised by National Treasury.

8.5      Consider separating the property management from Finance; and recruiting of people with qualifications in the built environment. These personnel then be charged with the responsibility of drawing up an appropriate comprehensive property management strategy in line with the Foreign Service Act 2019.

8.6      Investigate the perpetual absence of some members of the Bid Evaluation Committee and where necessary, apply consequence management.

8.7      Provide an update on the appointment of ambassadors as and when it occurs.

8.8      Develop and submit a report that shows quantitatively and qualitatively, how international investments have impacted on poverty, inequality and unemployment in percentage terms, as set out in the National Development Plan.

8.9      Finalise processes towards the operationalisation of the South African Development Partnership Agency (SADPA), to facilitate the migration from the ARF to SADPA.

8.10    The Committee recommends that the 3rd quarter performance report be passed.

 

Report to be considered.

 

Sources

 

  • Department of International Relations and Cooperation-Annual Performance Plan 2021/2022
  • Department of International Relations and Cooperation- Strategic Plan 2020-2025
  • African Renaissance Fund- Annual Performance Plan 2021/22
  • African Renaissance Fund- Strategic Plan 2020-2025
  • National Treasury, Vote 6: International Relations and Cooperation, 3rd quarter expenditure reports 2021/2022
  • Presentation by the Department of International Relations and Cooperation on 3rd quarter expenditure performance 2021/2022.
  • Presentation by the African Renaissance Fund on its 3rd quarter expenditure performance 2021/2022

 


[1] Constitution of the Republic of South Africa 1996

[2] Public Finance Management Act (PFMA) 1999 (Act 1 of 1999).

 

[3] Department of International Relations and Cooperation Annual Performance Plan 2021/22

[4] Department of International Relations and Cooperation Strategic Plan 2020-2025