Presentation to the Select

Committee

DIRCO
 INTRODUCTION
The Department of International Relations and Cooperation derives
its mandate from the Constitution of South Africa and the NDP vision
which is further detailed in the 2014-2019 MTSF provide an overall
mandate and scope for all work done by national, provincial and
local government and informs SAs foreign policy
The draft White Paper on South Africas Foreign Policy was
approved by Cabinet and submitted to Parliament
Under MTSF Outcome 11, Government seeks to Create a better
South Africa and contribute to a better and safer Africa in a better
world through:
Enhanced African Agenda and sustainable development
Regional integration
Reformed global governance institutions, and
Trade and investment

2
 INTRODUCTION
Therefore the departments spending focus over the medium
term will be on:
sustaining economic and political relations,
participating in the global governance forums,
enhancing operational capacity by strengthening policy and
coordination in relation to outgoing South African
development cooperation and to table the SADPA Bill
Agenda 2063
review of the current legislative framework governing the
departments operations abroad, tabling the Foreign Service
Bill
undertaking of various infrastructure projects, and
implementing the property management strategy

3
 South Africas Current Global Stature
In its execution of SAs foreign policy DIRCO is informed by
SAs global stature where SA:
is a respected, active and responsible global citizen.
- hosts the second largest number of foreign representation in the
world and has a current global footprint of 125 Missions
- Is regarded as a champion for protection and promotion of
human rights
- Advocates for disarmament and the peaceful resolution of
disputes
- Place Africa central in its Foreign Policy which forms the basis
for cooperation with countries of the South and the North.
- Champions cooperation and partnership over competition in the
global arena.

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 South Africas Global Footprint

Missions per Region

Africa Bilateral 46
Africa Multilateral 1
Americas & Caribbean 17
Europe 27
Asia & Middle East 32
Multilateral -2

Total: 125

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 The changing global environment impacts the
execution of DIRCOs mandate
Shifting political ideological implications- The emergence of
nationalistic and conservative governments reduced
development aid to developing countries (0.4% drop in 2012)
New trend in trade and economic patterns Asia and the
Middle-East surpassed Europe as SA number one trading
partner
- In two decades, trade with Asia and the Middle-East increased
19-fold from R40.2 billion in 1994 to R760.2 billion in 2013
- In the same period, trade with Africa increased 35-fold from
R11.6 billion to R385 billion
- Europe remains SAs main strategic trading block while it
continues to recover from the impact of the global financial crisis

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 The Changing Global Environment
Growing influence of new formations and regional groupings:
Brazil, Russia, India, China, South Arica (BRICS), GROUP
OF 20,(G20) ,Colombia, Indonesia, Egypt, Turkey, South
Africa (CIVETS ), Indian Ocean Rim Association (IORA)
SA attaches importance to its membership of BRICS
- China is the second biggest economy in the world after the
USA, while Brazil and Russia and India are placed 7th, 8th
and 10th respectively
- BRICS countries share a common vision to be pursued
through economic cooperation, sharing of technical expertise,
knowledge and experience to address their own domestic and
international challenges

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 The Changing Global Environment
Growing impact of non-state actors and social movements:
growing social disparities, economic and financial volatility,
insecurity and scarce resources
New global opportunities and frontiers: The New Economies
- the Blue Economy, the Green Economy and the Knowledge
economy; exploration and utilisation of outer space (SKA
project, satellites for communication, defence and
environmental surveying) and advances in technologies
Operation Phakisa seeks to harness and leverage some of
these sectors as part of NDP implementation

8
 Global Trends that Impact on SAs Influence

Economic migration: More than half of global population is

urbanised ( as compared globally, Africa accounts for only 40%)
- There is an increased number of mega-cities in developing
countries
- However, infrastructure and the provision of service is lagging
behind and has socio-economic and political implications.
Regionalism: economies of scale, eroding sovereignty,
protectionism vs cooperation for mutual benefit
- This occurs while developing economies are moving, steadfastly,
towards consumer-oriented economies

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 Global Trends that Impact on SAs Influence
The future role of global governance institutions (UNSC, BWI):
Reform or Replace.
- The impact of the global financial crisis led to increased voices for
reform of international financial architecture

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 Overview of the MTEF allocation
1. In terms of government priorities of doing more with less, the allocation to
the department over the medium term include Cabinet approved reductions
of R335.3 million in 2015/16, R467.1 million in 2016/17, and R168.5 million
in 2017/18, which the department has to effect on compensation of
employees due to vacant posts, goods and services and the transfer to the
African Renaissance and International Cooperation Fund.

2. The Department has proposed additional cost saving measures to unlock its
fixed cost overhead expenditure items and mitigate the budget shortfall
envisaged, including to accommodate some of the new priorities identified
for implementation.

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 Overview of the MTEF allocation
3. In response to the budget reduction the department is implementing
the following additional cost containment measures:

a) Review of the organisational functional assessment for both Head

Office and missions abroad

b) Review of the provision of support services for the missions

operations.

c) Enhancing information and communications technology through

modernising and implementation of an enterprise resource planning
system.

d) Implementation of property management strategy

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 Overview of the MTEF allocation
4. The 2015 MTEF allocation does not cater for the foreign exchange
fluctuations as a result the department remains vulnerable to foreign
exchange rate losses, which necessitates a review of how the foreign
operations are supported. The department will address the shortfall
through the adjustment estimates budget process.

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 Programme 1: Administration
Purpose Strategic objectives

Provide strategic To manage resources efficiently and effectively through

leadership, sound administration and good governance
management and To implement effective HR management to ensure that
support services to adequate and sufficiently skilled resources are in place and
the department that performance is monitored
To provide effective training and research in support of
departmental strategic objectives
To establish an adequate, effective and efficient system of
internal controls and corporate governance
To establish a culture of risk management, governance and
ethical behavior to ensure improved internal control
environment and performance

MTEF allocation (R 2015/16 2016/17 2017/18

million) 1 418 521 1 468 670 1 535 289

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 Programme 1 MTEF targets
Key Result Area MTEF Target
ICT Financial, HR and administration systems integrated
Financial Management Procurement 100% aligned to Demand Management
Plan
100 % compliance with 30-day payment
Security 252 fieldwork investigations for vetting per annum
36 security inspections, 36 security awareness
sessions, 36 security audits
Property Management Two construction and 17 renovation projects
completed
Human Resource Improve turnaround times to meet the DPSA
Management standards, 4 months to fill vacancies, grievances
handled within 30 days and disciplinary cases
finalized within 90 days
Skills Development 282 training programmes (94 per annum)
Six training programmes to international participants

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 Programme 2: International Relations
MTSF sub- Strategic objectives Purpose
outcome
SAs national To strengthen and consolidate To promote relations
priorities SAs political, economic and social with foreign
advanced in relations through the outcomes of countries
bilateral structured bilateral mechanisms
engagements and high-level engagements
reflecting national priorities, the
African Agenda and the Agenda of
the South

MTEF allocation 2015/16 2016/17 2017/18

(R million) 2 931 657 3 131 439 3 303 979

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 Programme 2: International Relations
Bilateral engagements are the basis for strengthening political and
economic relations and provide the platform to advance national
priorities and to lobby for support for multilateral engagements and
common positions
The performance indicator on political work is predicated on the
implementation of Structured Bilateral Mechanisms (BNCs, JCCs,
JNCs and others) and reciprocal High-Level visits
The performance indicator on economic diplomacy measures the
work that missions undertake to increase value added exports;
attract Foreign Direct Investment to priority sectors (NGP and
IPAP); promote tourism; promote the removal of non tariff barriers
through:
Hosting or participating in trade seminars and tourism promotion,
Engagements with chambers of commerce, high level investors,
relevant government ministries
 Programme 2
Key Result Area Annual target MTEF Target
Political engagements 34 BNC 102 BNC
through structured bilateral 58 high-level 174 high-level
mechanisms and high level engagements engagements
engagements
112 trade and investment 336 trade and investment
seminars seminars
126 engagements with 378 engagements with
Chambers of commerce Chambers of commerce
Economic diplomacy
initiatives 64 engagements with 192 engagements with
targeted government targeted government
ministries ministries
86 high-level potential 258 high-level potential
investors investors
67 tourism promotion 201 tourism promotion
events events

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 Programme 3: International Cooperation
MTSF sub-outcome Strategic objectives Purpose

An equitable and To enhance international Participate in international

just System of responsiveness to the needs of organisations and
Global Governance developing countries and Africa institutions in line with SAs
through negotiations and national values and foreign
influencing processes in the policy objectives
Global Governance System
towards a reformed,
strengthened and equitable
rules-based multilateral system

MTEF allocation (R 2015/16 2016/17 2017/18

million)

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 Programme 3: International Cooperation
Sub-programme 3.1: Global Governance
South Africa is committed to multilateralism and a rules-based
international order and to this end participates and plays an
active role in all for a of the United Nations system and its
specialised agencies, funds and programmes
With particular focus on peace and security, sustainable
development (social, economic and environmental) protection
and promotion of human rights and humanitarian affairs,
international crime and international law
- Advocate for UNSC reform to curb unilateral actions taken
outside the United Nations peace and security mechanisms in
various regions
 Programme 3: International Cooperation
Sub-programme 3.1: Global Governance
Ensure South Africas compliance with international law
- the provision of legal advise and opinions on issues relating to
international law, e.g. extending the continental shelf to
significantly increase South Africas territory, International
Criminal Court, International Court of Justice, Law of the Sea
etc
 Sub-programme 3.2: Continental & Regional
Cooperation
MTSF sub-outcome Strategic objectives Purpose
An economically integrated To enhance the African To participate and play
Southern Africa; Agenda active role in continental
Political cohesion within and regional structures to
Southern Africa to ensure a To strengthen political contribute and enhance
peaceful, secure and stable and economic integration efforts for sustainable
Southern African region; and development of development and peace
A Peaceful, secure and SADC and security
stable Africa;
A sustainable developed
and economically integrated
Africa

2015/16 2016/17 2017/18

MTEF allocation (R million)

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 Sub -programme 3.2
Continental & Regional Cooperation
South Africa will align its foreign policy engagements with Africas
Vision 2063 to contribute to the socio-economic development of
the African continent.
South Africa will continue to focus on implementation of the
continental integration agenda, regional economic integration and
finding African Solutions to African problems through:
- Strengthening the AU and its structures
- Contribution towards entrenchment of democracy (election
observations)
- Participating in peace missions, and (Peace, Conflict, Reconstruction
and Development (PCRD) initiatives
- Promotion of Good Governance (APRM) & protection of Human Rights
- Contributing to Socio-economic development ( implementation of the
New Partnership for Africas Development (NEPAD)
 Sub-programmes 3.3 & 3.4
South-South & North South Cooperation
MTSF sub-
outcome Strategic objectives Purpose

Strong, To strengthen and consolidate To pursue cooperation among

mutually South-South relations by utilising countries and groupings of the South
beneficial membership and engagements and the development of common
South-South with groupings of the South to positions on political, economic,
cooperation & advance South Africas foreign social and human rights issues and
Beneficial policy To advance and leverage to harness emerging collective
relations with national priorities, the African political and economic influence of
strategic Agenda, and the Development countries of the South in pursuit of
formations of Agenda of the South with the the Development Agenda.
the North formations of the North To pursue a developmental agenda
approach with strategic formations of
the North
Focus: BRICS; IBSA; EU; TICAD

MTEF allocation 2015/16 2016/17 2017/18

(R million) 466 945 483 470 512 165

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Key Result Areas
Multilateral structures and
process engaged in to
enhance the responsiveness
of the multilateral system to
SAs needs and needs of
developing countries
AU structures and process
SADC structures and process
Programme 3
Annual Target MTEF Target
21 multilateral 80% resolutions, decisions,
meetings outcomes reflecting SAs
100% approved national interests
requests for
humanitarian
assistance disbursed
100% of Legal
Services rendered
Six AU structures 16 AU structures
Two PAP sessions Six PAP sessions
Two APRM Summits Six APRM Summits
100% election 100% election observer
observer Missions Missions
11 SADC structures 33 SADC structures
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 Programme 3
Key Result Areas Annual Target MTEF Target
South South 2 strategies Five strategies for SAs
18 meetings and engagement with identified
processes of formations
organisations of the 56 meetings and processes
South of organisations of the
South
North -South Eight meetings and 24 meetings and processes
processes of of formations of the North
formations of the
North

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 Programme 4
Sub-programme 4.1: Public Diplomacy

Strategic objectives Purpose Focus

To create a better Advance a positive Media briefings,
understanding and projection of South statements and opinion
awareness of South Africas image through pieces
Africas foreign policy communication Publications (Statutory
through targeted strategies on South publications as well as
public diplomacy Africas foreign policy internal electronic
partnerships and positions and publications
platforms programmes nationally Public participation
and internationally programmes (PPP)

MTEF allocation (R 2015/16 2016/17 2017/18

million) 246 280 256 439 270 713

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 Programme 4
Sub-programme 4.2: State Protocol

Strategic objectives Purpose Focus

To provide Provide a professional Protocol services for state
professional State State Protocol service to and ceremonial events,
Protocol services heads of state and incoming and outgoing
through the government and state visits
facilitation of state designated dignitaries Immunities and privileges
events, visits and and render advisory provided for the
diplomatic services to various Diplomatic Corps
accreditation stakeholders

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 Programme 4
Key Result area Annual target MTEF target

Media briefings, media 18 Media briefings 54 Media briefings

statements, public participation 160 media statements 480 media
programmes (PPP), publications 12 PPPs statements
67 publications 36 PPPs
201 publications

Protocol Services & diplomatic 100% as per request 100% as per request
immunities and privileges,
diplomatic passports and
appointment of foreign and SA
heads of mission

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 Vote Expenditure as at 31 March 2015
FINAL
APPOPRIATION EXPENDITURE VARIANCE %SPENT
PROGRAMMES R000 R000 R000

ADMINISTRATION 1,346,780 1,238,370 108,410 92%

INTERNATIONAL RELATIONS 3,122,923 3,122,565 358 100%

INTERNATIONAL COOPERATION 485,327 485,154 173 100%

PUBLIC DIPLOMAC&PROTCOL
SERVICES 286,580 275901 10,679 96%

INTERNATIONAL TRANSFERS 862 712 862 712 0 100%

TOTAL 6,104,324 5,984,704 119,620 98%

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 Vote Expenditure as at 31 March 2015
FINAL
%
STANDARD ITEMS APPOPRIATION EXPENDITURE VARIANCE
SPENT
R000 R000 R000
COMPENSATION OF EMPLOYEES 2 713 335 2 712 842 493 100%
GOODS AND SERVICES 2 211 747 2 199 656 12 091 99%
INTEREST AND RENT ON LAND 46 598 46 594 4 100%
TRANSFERS AND SUBSIDIES 868 976 868 962 14 100%
DEPARTMENTAL AGENCIES 277 560 277 560 - 100%
FOREIGN GOV & INTER ORG 585 152 585 152 - 100%
HOUSEHOLS (H/H) 6 264 6 250 14 100%
PAYMENT OF CAPITAL ASSETS 263 984 156 651 107 333 59%
BUILDINGS & OTHER STRUCTURES 227 167 120 569 106 598 53%
MACHINERY & EQUIPMENT 36 817 36 082 735 98%
PAYMENTS 6 104 640 5 984 705 119 935 98%

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 2014/15 Expenditure Preliminary Outcome
Programme 1: Administration

The underspending is as a results of the following:

1.The Hague project was delayed due to the following:

the request from the contractor to increase the contract cost by more
than 30 per cent as allegedly attributable to the fact that they have
under quoted the adjudicated bid.

the uncovering of asbestos during the demolition phase, which the

contractor declared a dispute and subsequently served notice to
cancelled the contract with cost

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 2014/15 Expenditure Preliminary Outcome
2. Dar es Salaam was delayed due to:

a dispute with the service provider on payment of the advance payment

(deposit) by the department which led to the suspension of the project
by the services

3. Lilongwe was delayed due to:

Unexpected flooding that took place over a period of 22 days of which

the construction was called off during that period.

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 2014/15 Expenditure Preliminary Outcome

4. Slow spending was also as a result of the insufficient cash flow

available to meet the department's operational needs due to the impact
of the foreign exchange rate fluctuation. The unspent operational
budget has been shifted to cover overspending in Programme 2 and 5.

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 2014/15 Expenditure Preliminary Outcome
Programme 2: International Relations

The programme reported an expenditure of R3.1billion. The programme

had recorded an overspending as a result of depreciation of the Rand
against other major currency. As a consequence the expenditure for
programme 2 has exceeded the budget.

The overspending was covered from the unspent funds of Programme 1

due to insufficient cash flow available to meet the department's
operational needs due to the impact of the foreign exchange rate
fluctuation.

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 2014/15 Expenditure Preliminary Outcome
Programme 3: International Cooperation

The expenditure for the programme was R 485 million. The

underspending is as a result of the office accommodation for
PAP that has not be concluded.

Programme 4: Public Diplomacy and Protocol

The underspending is as a result of late claims received from

partner department for the 2014 Presidential Inauguration
activities. The amount has been requested for roll over.

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 2014/15 Expenditure Preliminary Outcome
Programme 5: International Transfers

Programme 5 had an overspending as well resulting from

foreign exchange rates losses in relations to the payment of
membership fees and South Africa's compulsory assessment
contribution to the international organisations.

The overspending was also covered from unspent funds of

programme 1 and 4 resulting from insufficient cash flow
available to meet the department's operational needs due to
the impact of the foreign exchange rate fluctuation.

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 2015 Budget allocation per programme

2015/16 2016/17 2017/18 2014/15 2017/18

Average % of
Programmes MTEF annual expendit
growth ure
R 000 % %
Administration 1 418 521 1 468 670 1 535 289 2.4% 24.1%
International 51.1%
Relations 2 931 657 3 131 439 3 303 979 2.6%
International
Cooperation 466 945 483 470 512 165 1.8% 8.0%
Public Diplomacy
and State Protocol 246 280 256 439 270 713 -4.3% 4.5%
International
Transfers 635 231 603 538 921 105 3.7% 12.3%
Total 5 698 634 5 943 556 6 543 251 2.3% 100.0%

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 2014 Budget allocation per Economic
Classification

2015/16 2016/17 2017/18

2014/15
Econ. Classification
OUTCOME
MTEF % OF 2015
BUDGET
R 000
Compensation of
Employees 2 701 642 2 526 213 2 624 889 2 784 205 43.4%

Goods and Services 2 220 279 2 247 271 2 422 749 2 541 408 39.5%
Transfers and
Subsidies 872 276 641 187 609 970 927 957 12.4%

Payments for Capital 152 411 283 963 285 948 289 681 4.7%
100.0%
Total 5 946 610 5 698 634 5 943 556 6 543 251

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 2014 ACTUAL EXP. & 2015 MTEF
ALLOCATIONS
3,000,000

2,500,000

2,000,000

1,500,000

1,000,000

500,000

0
COMPENSATION OF EMPLOYEES GOODS AND SERVICES TRANSFER PAYMENTS CAPITAL EXPENDITURE

2014/15 ACTUAL EXP. 2015/16 BUDGET 2016/17 BUDGET 2017/18 BUDGET

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 2015 MTEF Baseline assessment
2015/16 2016/17 2017/18
Approved baseline 5 698 634 5 943 506 6 543 251

Compensation of employees 2 526 213 2 624 889 2 784 205

RSA salaries 1,218,236 1,285,239 1,362,354

Foreign allowance 671,821 694,551 744,497

Locally Recruited Personnel Salaries and
benefits 636,156 645,099 677,354
Compulsory goods and services 1 745 042 1 930 249 2 029 793

Transfers and Subsidies 481 194 506 707 448 097

Capital Expenditure: Building 233 109 286 116 289 865

Recapitalisation 154 037 96 831 431 483

Operational expenditure 559 039 498 714 559 808

Total Allocated 5 698 634 5 943 506 6 543 251

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 2015 MTEF Compulsory Goods & Services
2015/16 2016/17 2017/18

a)Lease payments 898,858 1,036,332 1,099,727

b)- Schooling fees 89,648 96,457 99,878
c)-Special Travelling Privileges 42,890 48,799 57,230
d)- PPP payments 210,640 221,061 236,834
e)- Municipality fees 85,998 88,560 95,173
f)- Computer services ( Bandwidth) 130,816 124,622 105,800
g)-Security contracts at missions 28,353 36,915 39,800
h)- Medical services 28,500 32,300 37,468
i)- Municipal charges for diplomatic
missions in South Africa 28,900 32,400 37,900
j)-Transfer costs including insurance 94,303 94,303 94,303
l)-Other Computer services(Transversal
systems and applications) 106,136 118,500 125,680

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African Renaissance and
International Cooperation
Fund
 STRUCTURE OF THE PRESENTATION

1. Introduction

2. The utilisation

3. Programme performance plan

4. MTEF Allocation

5. Conclusion
 1. Introduction

1) The African Renaissance and International Co-operation

Fund was established in terms of Section 2(1) of the African
Renaissance and International Co-operation Fund Act, 2000
(Act No. 51 of 2000) and subject to direction of the Minister
under the control of the Director-General (DG).

45
 2. The Utilisation Of Fund
The Minister must, in consultation with the Minister of Finance,
establish an Advisory Committee consisting of the following
members:
the Director-General or the delegate of the Director-General;
three officers of the Department appointed by the Minister;
and
two officers of the Department of Finance appointed by the
Minister of Finance.
The Advisory Committee must make recommendations to the
Minister and the Minister of Finance on the disbursement of
funds through loans or other financial assistance.

46
 2. The Utilisation Of Fund

Loans or other financial assistance are granted in accordance

with an agreement entered into by the country in question and
the Minister of International Relations and Cooperation
(hereafter referred to as the Minister). Assistance granted is
subject to such terms and conditions as may be agreed upon
by that country and the Minister, acting in each case in
consultation with the Minister of Finance.

47
 3. Programme Performance Indicators
STRATEGIC OBJECTIVE OBJECTIVE TARGET
STATEMENT

To promote democracy and Support the holding of 100% of approved disbursement

good governance democratic elections in to support democracy and good
identified countries on governance processed timeously
the continent

To contribute to human Develop and provide 100% of approved disbursement

resource development identified training to support capacity-building
programmes processed timeously

To support socio-economic Support the 100% of approved disbursement

development and integration implementation of socio- to support socio-economic
economic development development and integration
and integration projects processed timeously
 3. Programme Performance Indicators

STRATEGIC OBJECTIVE OBJECTIVE TARGET

STATEMENT

To provide humanitarian Assist countries that are 100% of approved disbursement

assistance and disaster in need of humanitarian for humanitarian assistance
relief assistance and disaster processed timeously
relief

To support cooperation Implement bilateral and 100% of approved disbursement

between South Africa and trilateral cooperation for cooperation processed
other countries agreements timeously

To contribute to PCRD Support PCRD efforts on 100% of approved disbursement

the continent for PCRD processed timeously
 4. MTEF Allocation

2015/16 2016/17 2017/18

R000 R000 R000

Indicative
baseline 366 750 412 478 433 102

Reduction -212 713 -315 647 -1 619

Appropriated
funds 154 037 96 831 431 483
 5. Conclusion

During 2014/15 the Fund implemented the following:

a)Appointed full time secretariat for a period of six months as

part of the transitional arrangements.
b)Adopted terms of reference for Advisory Committee as well as
Secretariat.
c)The Accounting Officer appointed the audit and risk
committees.
d)Developed an operational framework and adopted DIRCO
policies and procedures relevant to ARF.
Thank you