The value of a functioning M&E System for Military Procurement: South Africa as a case study Gwendolyn Wellmann, PhD Research Associate Nelson Mandela Metropolitan University, South Africa

Background South Africa’s changing policy and legislation over past 17 years: Mandatory industrial participation (‘offsets’) for any government purchase equaling or exceeding US$10 million as of 01 September 1996

Industrial Participation Common practice internationally, although World Trade Organization frowns on it. Particularly used in developing countries under clause that allows for it due to country’s developing status. Most countries use it for military purchases under the veil of socio-economic development.

Aims & Objectives of Industrial Participation: Foreign investment into SA Sustainable economic growth Establishment of new international trading partners Exports of SA “value-added” goods and services Job creation Human resource development Technology transfer Upliftment of previously disadvantaged communities

SA 1998 arms deal 1998 – SA entered agreements to purchase military equipment valued at an estimated US$30 billion 10 April 2011 – reported to be US$70 billion due to finance charges

Evaluation of military IP projects Very few independent evaluations of offsets done (primarily Struys in Belgium). Those evaluations that have been published, not independent, mainly governments: e.g.. Finland & Sweden Offsets are a non-homogenous group and difficult to evaluate as a group. Must evaluate specific projects on their own. Lack of available data. Information deemed “commercially sensitive” – because of this, information needs to be gathered through interviews with industry and government representatives, who all have vested interests

Evaluation of offsets in South Africa claim of transparency, claim of good M&E, yet no M&E system for offsets, have commissioned macro-economic study, but uses computer model and a Social Accounting Matrix – great findings, but includes failed or projects that never got off the ground – ‘garbage in, garbage out’

Evaluation of specific projects to date Three case studies of beneficiation projects: two gold jewellery factories one platinum jewellery factory

Evaluation of specific projects to date Type of Evaluation: - Outcomes (Posavac and Carey, 1992) - What are intended and unintended outcomes? - Aim is to establish the relative success or failure of an initiative. - Effectiveness and efficiency (Rossi and Friedman, 1993) - Cost measured against the benefits accrued to the target population. - Did the programme achieve its success at a reasonable cost? Purpose of this evaluation = increase knowledge level

Methodology Four methods used: Document analysis Observation Key-informant Interviews (semi-structured) Focus group discussions (with workers, jewellery-manufacturing sector, government officials)

Evaluation of specific projects to date One (greenfield, gold jewellery) project failed within few months – received the most funding, “created” the most jobs, yet workers only got paid for one month’s work and received no training

Evaluation of specific projects to date Two others are brownfield projects – Foreign investment Foreign markets Created minimal jobs, but retained original jobs Enabled to grow through the IP investment

The deal with offsets Required by law Here to stay Can be used for a lot of good

The problem with SA offsets No real strategic national plan to target offsets Also appears to have no legal oversight No M&E: – No mechanisms to monitor – Inadequate oversight – No mechanisms to evaluate what is really working – No adequate M&E skills in the DTI.

Conclusion If the NIPP had an M&E plan in place, and each project had an M&E plan in place, the SARM disaster would have been picked up from the start and averted.

Recommendation Requires an M&E system at programme and project level Requires a post implementation audit of each project to assess what the real impact was and how sustainable.

Thank you for your kind attention.