1. 1 Presentation to the Select Committee on Trade and International Relations on the The African Renaissance and International Co-operation Fund Presented by DDG Moodley 21 November 2012 1

2. 1.INTRODUCTION  Established under Section 2(1) of the African Renaissance and International Co-operation Fund, Act No.51 of 2000.  Replaced the previous Fund established under Section 2 of the Economic Co-operation Promotion Loan Fund, Act No.68 of 1968. (as amended) 2.PURPOSE OF THE FUND  Enhance co-operation between the RSA and other countries, in particular African countries;  The promotion of democracy and good governance;  The prevention and resolution of conflicts;  Socio-economic development and integration; and  Humanitarian assistance and human resource development. 2

3. 3.UTILISATION OF THE FUND 3.1The Minister of International Relations and Cooperation, in consultation with the Minister of Finance, must establish an Advisory Committee consisting of the following members:  The Director-General of DIRCO or the delegate of the Director-General;  Three officers of the Department appointed by the Minister;  Two officers of the Department of Finance appointed by the Minister of Finance. 3.2The Advisory Committee makes recommendations to the Minister and the Minister of Finance on the disbursement of funds.  The funds are disbursed upon the approval by the Minister in consultation with the Minister of Finance (Concurrence Letters)  Loans or other financial assistance are granted in accordance with Agreements/Service Level Agreements between the relevant parties. 3.3The Director-General is the Accounting Officer of the Fund (PFMA Act)  The Director-General must establish a Secretariat to assist with the disbursement of the funds and monitoring and administration of the projects related to the Fund.  3

4. 4.GENERAL REVIEW OF THE STATE OF FINANCIAL AFFAIRS 4.1Income: R527,547 million  R450, 370 million transfers and subsidies received for the Fund for the 2011/2012 financial year (Appropriation by Parliament)  R77,177 million interest received from investments on the amount deposited with the Corporation for Public Deposits in the SARB. 4.2Expenditure: R280,162 million  R270,663, million was approved to fund various ARF projects during the 2011/2012 financial year.  R9,526 million provision for impairment of trade receivables 4.3 Surplus for the year: R247,385 million 4

5. 5.PROJECTS FUNDED IN THE 2011/2012 FINANCIAL YEAR (a)Technical assistance to the mandate of the United Nations Independent Expert on Human Rights and Extreme Poverty of the UN Human Rights Commission - R1,2 million (b)Improvement of veterinary laboratory capacities in Sub-Saharan countries; International Atomic Energy Agency (IAEA) - R15 million (c) South Africa’s International Diplomatic Training Programme – R13,6 million (d) Cuba Economic Aid Package – R100 million (e) Participation in African Union/ Southern African Development Community Observer Missions – R5 million (f)Humanitarian assistance to Somalia – R10,636,420.00 (g)Electoral assistance to the Democratic Republic of Congo – R125,2 million 5

6. 6.ADVISORY COMMITTEE RECOMMENDATIONS  Over and above the projects mentioned in Paragraph 5 above during the 2011/2012 financial year, the Advisory Committee further recommended projects to the amount of R141 million for approval by the Minister and concurrence by the Minister of Finance.  It must be noted that as at the end of the 2011/2012 financial year, Concurrence Letters were awaited from the Minister of Finance for these projects.  In compliance with accrual accounting, these projects have not been recognised as expenditure against the Fund for the financial year in question.  The expenditure will be recognised once Concurrence Letters have beensigned by the Minister of Finance and the funds disbursed for the projects in question. 6

7. 7. WAY FORWARD Based on recommendations received during the audit process on the Fund, a number of issues are being addressed, namely:  Work is in progress on developing an operational policy and guidelines for the Fund.  Work is in progress to develop a capacity for the Fund to be able to properly deal with urgent cases of humanitarian/emergency assistance.  Addressing concerns around the question of Supply Chain Management and procurement, including finalising a database of approved service providers. 7

8. WAY FORWARD (cont)  Addressing concerns around monitoring and review of the implementation of projects, including increasing visits to projects in the countries concerned, and utilising the DIRCO bilateral Desks more in the implementation of projects and the respective Missions in the monitoring and follow-up process.  Addressing delays in the process to disbursement, including the finalisation of the concurrence process. 8