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BL Premium reports that Department of 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). Its budget allocations have been declining in real terms, a situation that is not helped by rising military personnel costs and poor financial controls. The department’s budget stands at about R46bn for the financial year, with a decrease by R15bn over the medium-term expenditure framework (MTEF). “While we are fully aware of the fiscal challenges that SA has, the reduction to our allocation has a devastating effect, not only on the defence force, but also our defence industry and the many SMMEs in the supply chain,” Mapisa-Nqakula said in her budget vote speech in parliament on Tuesday. The SANDF partly relies on small, medium and 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 warned. Arms manufacturer 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.
- Read the full original of the report in the above regard by Bekezela Phakathi at BusinessLive (paywall access only)
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