Newscenter Media News With the fiscal framework for South Africa’s 2025/26 national budget approved – by a small majority in Parliament this week – the military component of government in the form of the SA National Defence Force (SANDF) should have at least two immediate focus points, according to National Treasury.
One is the compensation of employees (CoE), an ongoing headache for the bean counters at the Department of Defence (DoD), with the other wrapping up Operation Thiba, the South African commitment to the Southern African Development Community (SADC) mission to the eastern Democratic Republic of Congo (DRC).
Both were on the agenda when a senior National Treasury (NT) staffer updated Parliament’s Portfolio Committee on Defence and Military Veterans (PCDMV) on 2 April this week. Acting Chief Director Public Finance Mashudu Bidzha told PCDMV members he would outline engagements between the holders of the national purse strings and the defenders of South Africa’s territorial integrity on rejuvenation of the national defence force, the mobility exit mechanism (MEM) and early retirement (ER) as well as additional funding and withdrawal of SAMIDRC (SADC Mission in DRC) and associated financial implications.
The long term rejuvenation strategy for the SANDF is, he said, a work in progress with National Treasury continuing to engage Minister Angie Motshekga’s DoD to ensure finalisation for the coming financial term (2025/26). Rejuvenation strategy meetings were held in November, January, and March, focussing on the CoE shortfall, government-wide early retirement plans, and sustainability of the proposed increase in Military Skills Development System (MSDS) intakes.
According to Bidzha’s presentation to parliament, accepting the military’s long term rejuvenation strategy – with a R21 billion price tag between 2024/24 and 2028/29 – is not affordable, and the DoD has to come up with alternatives.
Another must-do is clarifying how the DoD intends funding a 10 000 MSDS intake given no funding has been allocated (the DoD has proposed recruiting 10 000 personnel in 2024/25 and 5 000 a year after that).
“Current realities” facing the DoD include a “constrained fiscal environment” as well as government “policy choices” impacting the defence budget. “Dealing with pressure on compensation of employees remains a priority for the National Treasury over the medium term,” Bidzha’s presentation stated.
His presentation has it Mobility Exit Mechanism exits totalled 2 540 in the 2022 medium term expenditure framework (MTEF) with NT “of the view this should have formed the basis for force rejuvenation going forward”. The three-year Medium Term Expenditure Framework allocation for MEM is R1.8 billion on condition it remains in the CoE ceiling by the end of the 2025/26 financial term.
The two thousand plus exits, according to Bidzha, do not “seem to have lowered the age profile of the SANDF in any significant way” and unit cost remains high, notwithstanding the personnel number decrease.
The Department of Defence incurred unauthorised expenditure of R2.9 billion in 2022/23 and R3.5 billion in 2023/24, despite the R1.8 billion investment over this period to implement MEM for SANDF personnel. Most unauthorised and irregular expenditure is related to the CoE.
To assist the department with force rejuvenation and to lower the CoE cost, the defence department is expected to participate in the government-wide early retirement (ER) programme, which does not penalise pension benefits, in 2025/26 and 2026/27. National Treasury has allocated R11 billion over the next two years for early retirement and Defence is one of the departments targeted for this initiative given its CoE budget pressure.
“Effective implementation of ER within Defence will establish a solid foundation for a long-term force rejuvenation strategy and the modernisation of the SANDF,” according to Bidzha.
A series of presentations took place nationally last month to inform those in the 50 to 55 age group of what the ER option is.
“In the long run, the rejuvenation strategy will ensure that the unit cost of the department is sustainable by balancing the recruitment of new personnel with exits of older members,” National Treasury said. The DoD was told to implement a sustainable long-term rejuvenation strategy “that aligns with current fiscal constraints, including reconsidering its plan to recruit 10 000 MSDS personnel,” must cooperate with Treasury on spending reviews, and encourage eligible SANDF personnel to retire early.
SAMIDRC
On South Africa’s involvement in the regional bloc mission to the eastern DRC and its termination, made public on 13 March, the NT staffer noted no withdrawal communique and detailed withdrawal has yet been issued by SADC. This means the “financial implications” cannot yet be estimated. These include logistics, transport and operational requirements and must be “carefully managed,” the PCDMV heard.
This was echoed by long-time South African defence watcher and military aviation authority Dean Wingrin. He said funds will be required to cover SANDF expenses until all troops and equipment are repatriated to South Africa, with chartering logistic flights a significant expense.
“Any unspent funds could be reclaimed by NT and the DoD risks losing the remaining unspent R5 billion allocation [for the SAMIDRC deployment]. These funds could be used for critical maintenance and equipment acquisition for the SA Air Force (SAAF) and SA Navy (SAN). The DoD and the defence industry should actively lobby for the retention of these funds,” he said.
Bidzha concluded by stating that National Treasury is actively working to address the historical baseline erosion of the DoD’s budget to “ensure a more sustainable and balanced allocation of resources over the medium term.” National Treasury, he stated, will continue working with Defence on ways to change the composition of expenditure to achieve the benchmark 40:30:30 ratio (personnel:operations:capital investment) to modernise the Defence Force.
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