Defence and military veterans minister Nosiviwe Mapisa-Nqakula has warned that the extreme budget cuts that her department has had to endure in recent years could cripple the entire defence industry, including small, medium and micro enterprises.
The department oversees the SA National Defence Force (SANDF), which is responsible for defending SA against external military aggression and plays a key role in peacekeeping missions in Africa.
Its budget allocations have been declining in real terms, a situation that is not helped by rising military personnel costs and poor financial controls. It has‚ over the years‚ been hit with a string of negative audit reports‚ ranging from qualified to disclaimer‚ which is the worst possible audit outcome.
The department’s budget stands at about R46bn for the financial year, decreasing by R15bn over the medium-term expenditure framework (MTEF).
“The reduction of over R15bn over the MTEF has placed us in a very difficult position. Our capital budget has effectively been reduced to a trickle and the operating budget is under extreme pressure,” Mapisa-Nqakula said in her budget vote speech in parliament on Tuesday.
“While we are fully aware of the fiscal challenges that SA has, the reduction to our allocation has a devastating affect, not only on the defence force, but also our defence industry and the many SMMEs in the supply chain,” she said.
The SANDF partly relies on small, medium & micro enterprises to provide it with various services ranging from food supplies to electronic equipment.
“If we are honest with ourselves, we now face the reality that if we do not intervene in a decisive manner, we will lose our state-owned defence industrial base and the ability to repair, maintain and overhaul most of our defence systems,” Mapisa-Nqakula said.
She said this not only compromises the state’s ability to maintain equipment in service, but also fundamentally affects the longer-term ability to remain “relevant and ready to conduct effective operations in the future”.
“Should this happen, we may well find ourselves reliant on foreign powers for our main equipment, and this will come at great strategic expense.”
The minister said the ability to maintain main equipment for operations has declined to the point “where we need to ask if it is in fact viable to continue to throw resources at them”.
“This coupled with the demise of the defence industry and in particular Denel [state-owned arms manufacturer] has placed us in a very precarious position. Our defence capabilities are heavily reliant on the defence industry and in particular Denel.”
Denel, which is one of the many parastatals struggling to recover from state capture, has recorded huge losses in recent years and is struggling to pay salaries.
Among other measures to tackle the crisis facing defence, Mapisa-Nqakula said she had requested the CEO of Armscor, the procurement agency for the department, to collaborate with the chief of the defence force and the secretary to develop a pragmatic recommendation on how to modernise the SANDF under the fiscal and industry constraints.
The defence review — an assessment finalised in 2015 that measures SA’s combat-readiness and proposes what must be done about it — found that the SANDF was in a state of severe decline that needed immediate attention.
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