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This report provides performance and financial information on the Department of International Relations and Cooperation for the third and fourth quarters of 2016/17. It highlights achievements, compliance issues, and expenditure for each programme. The report focuses on international relations, cooperation, and economic diplomacy initiatives.
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2016/17 Third & Fourth Quarter reports to the Portfolio Committee on International Relations and Cooperation 14 June 2017
Contents • DIRCO reports on: • 1.1 Performance information • 1.2 Financial information
Introduction • The performance information part of the report will highlight some compliance issues on Programme 1 while focusing mainly on Programmes 2 – 4 • The financial report provides the summary of the report for the same period Q3 and Q4
Programme 2: International Relations • National interests are pursued through bilateral engagements such as the structured bilateral mechanisms, the high level visit and the various economic diplomacy initiatives undertaken at the Missions. • The department continues to accelerate its economic diplomacy through our diligent work in this area we are growing our regional, continental and global trade and investment. • An increased sales of manufactured value-added exports by R 61.9 million which brings the cumulative total for the year to R4,167 billion. • Foreign Direct Investment (FDI) inflows pipeline represents potential FDI of R15,3 billion particularly in the energy and chemicals sector. This brings the total potential FDI to R50,232 billion. • A total of 10 044 163 international tourist arrivals excluding transits were achieved during the reporting period. • A total of about R75.6. billion tourist foreign direct spend was achieved during the period January to December 2016.
Programme 3: International Cooperation Sub Programme: Continental Cooperation • Q2 Achievements
Programme 3: International Cooperation Sub Programme: Continental Cooperation • Q2 Achievements
Quarter 3: Vote Expenditure continued… • Total expenditure for the Department as at the end of the third quarter amounts to R1,407billion or 20.6% of the appropriation. • This expenditure is 2.4% higher than the projected expenditure for the period. • The higher than projected expenditure was mainly under Programme 2 and 4. • The details of the variances are discussed under each Programme.
Programme 1 – Cont. • Total expenditure for the Programme of the third quarter amounts to R301.0 million or 20.6% of the programme’s total appropriation. This expenditure is 16.6 lower than what had been projected for the period. • Reasons for the lower spending was mainly due to outstanding payments for Storage and insurance costs for official transferred abroad as well as
Programme 2 continued…. • Total expenditure for the Programme as at the end of the third quarter amounts to R879,9 million or 23% of the programme’s total appropriation. • This expenditure is 14.9% higher than projected expenditure for the period. • The higher than projected expenditure was mainly due to the depreciation of Rand against major foreign currencies.
Programme 3 continued…. • Total expenditure for the Programme as at the end of the third quarter amounts to R129.7 million or 25.2% of the programme’s total appropriation. • This expenditure is 14.8% lower than projected expenditure for the period. • Cost containment measures that the department has implemented in missions abroad in relations to rentals where the department managed to negotiate zero increase in some leases abroad.
Programme 4 continued…. • Total expenditure for the Programme as at the end of the third quarter amounts to R78.8 million or 31.3% of the programme’s total appropriation. • Expenditure for this programme is 25,5% higher than what had been projected for the period. • Higher expenditure is attributable to international State visit that were undertaken during the third quarter of financial year.
Programme 5 continued…. • Total expenditure for the Programme as at the end of the third quarter amounts to R17,6.1 million or 2% of the Programme’s total appropriation. This expenditure is 45.4% lower than what had been projected for the period mainly due to membership fees to be paid in the last quarter of the financial year.
Quarter 4: Vote Expenditure continued… • Total expenditure for the Department of the fourth quarter amounts to R2.287 billion or 33.4% of the appropriation. • This expenditure is 11.4% higher than the projected expenditure for the period. • The details of the variances are discussed under each Programme. • Construction of chancery and 3 staff houses in Lilongwe and Dar es Salaam • The department received occupational certificates of the properties in Lilongwe and Dar es Salaam for occupation in the forth quarter.
Programme 1 continued…. • Total expenditure for the Programme of the fourth quarter amounts to R625.4 million or 40.5% of the programme’s total appropriation. This expenditure is 71.4% higher than what had been projected for the period. • Reasons for the high spending: • ICT migration project expenditure • Storage and insurance costs for official transferred abroad as well as • New York project was paid in the fourth quarter of 2016/17 financial year instead of first quarter on 2017/18 financial year.
Programme 2 continued…. • Total expenditure for the Programme of the fourth quarter amounts to R902,0 million or 24.1% of the programme’s total appropriation. • This expenditure is 2.5% lower than projected expenditure for the period. • The lower than projected expenditure was due to the cost saving measures that the department implemented for Missions and Head Office in relation to operating leases where the department has revised the rental norms for accommodation abroad in line with budgetary constraints as well as re-negotiated contracts and number of lease contracts were concluded with no escalation for the tenure of 4 year-term, but where it was not feasible only one digit percentage escalations were approved
Programme 3 continued…. • Total expenditure for the Programme for the fourth quarter amounts to R103.3 million or 21,2% of the programme’s total appropriation. • This expenditure is 7.2% lower than projected expenditure for the period. • Cost containment measures that the department has implemented in missions abroad in relations to rentals where the department managed to negotiate zero increase in some leases abroad.
Programme 4 continued…. • Total expenditure for the Programme for the fourth quarter amounts to R72.5 million or 27.1% of the programme’s total appropriation. • Expenditure for this programme is 18,7% higher than what had been projected for the period. • Higher expenditure is attributable to international State visit that were undertaken during the fourth quarter of financial year.
Programme 5 continued…. • Total expenditure for the Programme of the fourth quarter amounts to R583 million or 99% of the Programme’s total appropriation.
Expenditure as at 31 March 2017 The department has spent R6,845 billion(100,1%) against a final appropriation of R6,838 billion which represent a net overspending of R6,4 million. The overspending is due to the adoption of a new scale of assessment, during the 25th African Union Assembly of Heads of State or Government hosted in Sandton, South Africa on June 2015. The Resolution on self-financing/reliance necessitated that the South African assessed contribution was in arrears for 2015/16 financial year amounting to R75 million as well as the fluctuation of Rand against major foreign currencies. The department also recorded overspending on compensation of employees due to the payment of severance packages to Locally Recruited Personnel that were laid.
