Cost-cutting hits South Africa’s diplomatic portfolio
South Africa looks set to trim its diplomatic footprint in favour of value against the backdrop of tough economic times.
- The Department of International Relations and Cooperation (Dirco) conducts its diplomatic affairs regionally, continentally and internationally.
- In his recent medium-term budget policy statement (MTBPS) speech, finance minister Tito Mboweni said: “South Africa re-joined the community of nations in 1994 and has played its part in advancing the peaceful international order.”
- However, “in these fiscally constrained times, we must relook at the strategic value of international memberships.”
All units on board
Dirco confirmed this week it is engaged in a process of evaluating its operations, with a view to reduce costs, in line with national treasury’s instruction to all government departments.
This extends beyond the realm of diplomatic subscriptions or international memberships. The process includes an assessment of South Africa’s representation abroad and how Dirco conducts its operations at its headquarters in Pretoria.
In terms of the latter, Dirco is looking at, among others, the number of delegations it sends to international events, cellphone allowances and catering, according to the department.
“Every branch within Dirco is working on this and a document will be consolidated at a later stage,” the department said.
South Africa is well represented in the international community, with its footprint of more than 120 missions dotted across the globe.
The country is also a member of regional, continental and international bodies such as the Southern African Development Community (SADC), the African Union (AU) and the United Nations (UN).
At last count, it had 126 missions stretching the length and breadth of the global community: the majority are located in Africa (37%), with the rest in the Middle East (25%), Europe (22%), and the Americas and the Caribbean (16%). This comes at a huge cost.
Too many missions, not enough diplomatic advantage
In 2013, the Government Technical Advisory Centre (GTAC), an agency of the national treasury, conducted performance and expenditure reviews of “selected programmes and policies”. Dirco was part of this process, but at the time the department did not actively participate in the GTAC review.
The review involved looking at programme spend against delivery. It concluded that Dirco spent R2.5bn a year on foreign missions. That figure was projected to rise to R3.7bn in the 2015-16 financial year. On average, the department spent R20m per mission.
This was against the backdrop of sharp depreciations in South Africa’s currency, the rand.
Some of the GTAC findings included:
- “South Africa’s [cost-of-living allowances] are 60% higher than those paid to US staff and 40–50% higher than those for UN staff, who also pay their own accommodation, unlike South African staff.”
- “Average expenditure per mission is R20m per year, but ten missions are disproportionately costly: New York, Milan, Luanda, Buenos Aires, Port Louis, Riyadh, Dublin, Tripoli, Hong Kong and Shanghai.”
- “Expenditure of missions in some countries, [such as] Russia, Austria, the Democratic Republic of Congo, Canada, Sudan, Mauritius and Israel, is […] higher than the host country’s ranking in terms of trade relations. A mere 25 countries account for 80% of the total bilateral trade with countries in which South Africa has foreign missions.”
In terms of memberships, South African negotiates its subscription to the AU every year before the start of the institution’s financial year.
The payment is based on the size of the country’s GDP.
Standard procedure in this determination involves the AU’s finance division presenting to member states’ ministers, who respond, based on their understanding of the sizes of their respective economies and their performance, and what obligations they are willing to sign up for.
South Africa follows a similar process in SADC.
Recently, the AU proposed new criteria for membership. Part of this stipulated a specific GDP-based formula for determining membership subscriptions. However, it is understood South Africa did not necessarily agree with this manner of determining financial allocations.
Dirco’s Africa unit includes the AU and SADC, the New Partnership for Africa’s Development and the African Peer Review Mechanism. There is also a unit dedicated to Europe. The department’s global governance unit encompasses the UN and other international organisations such as the Group of 20.
Sign of the times
“The distribution of the expenditure on foreign missions could be optimised to focus on countries where South Africa could potentially see the greatest return in terms of trade, tourism, investment and security objectives,” found the GTAC review.
The review was conducted during former president Jacob Zuma’s tenure, which was characterised by discord among members of his executive about policy direction. This was most pronounced in the treasury’s bid to enforce fiscal consolidation.
However, the impetus to get a handle on the public purse has been renewed with the rise of President Cyril Ramaphosa and his appointment of Mboweni to oversee the finance portfolio.
The bottom line: In the MTBPS, Mboweni announced a suite of measures to cut public expenditure. Dirco’s large diplomatic tab will not be spared this time around.