“As government, we thought the decision was very rational,” he told the commission, which is sitting in Pretoria.
“The affordability report [on the deal] was provided…. The decision was rational.”
Mbeki was being cross-examined by Lawyers for Human Rights advocate Anne-Marie de Vos, representing author Paul Holden and former African National Congress MP Andrew Feinstein.
According to the defence review, 30 percent of the budget was set aside for capital costs of the SA National Defence Force (SANDF), yet that money was spent on the arms deal. This left no capital for other SANDF services.
De Vos asked Mbeki how the government could have accepted this.
“I can’t recall any of these services [being short of capital],” he said.
“There was never an issue raised that other SANDF services were short of the capital it needed.”
De Vos also asked Mbeki why the government went ahead with the arms deal when an affordability report had outlined a number of risks. The report showed that the GDP would reduce, the budget deficit would increase and only 1000 jobs would be created.
“The decision was taken in spite of the negative indicators and makes it difficult to understand why the decision was taken,” De Vos said.
Mbeki said the inter-ministerial committee on the arms deal and the Cabinet had canvassed the report.
“Government thought it could manage the risk,” he said.
The commission, which is chaired by Judge Willie Seriti, was appointed by President Jacob Zuma three years ago to investigate alleged corruption in the country’s multi-billion-rand arms procurement deal in 1999.
Mbeki was president of the country at the time and Zuma was his deputy.
Former finance minister Trevor Manuel, former defence minister Mosiuoa Lekota and former public enterprises minister Alec Erwin attended the commission on Friday.
Mbeki’s wife Zanele was also present.