The South African defence industry has experienced notable growth in recent years, with 2022 being a particularly significant year for the sector. This growth can be attributed to various factors, including increased defence spending, enhanced local manufacturing capabilities, and a focus on innovation and technology. The expansion of the defence industry in South Africa has not only had economic benefits but has also contributed to the country’s national security and defence capabilities.
Ezra Jele the National Conventional Arms Control Committee (NCACC) Secretariat Head briefed South Africa’s Parliament’s Joint Standing Committee on Defence (JSCD) late last month on its quarterly reports for 2022, stating that for the 2022 calendar year, South Africa exported R4.679 billion worth of military hardware and munitions, up from R3.353 billion the year before.
In 2022, the NCACC approved 161 export permits to the value of R2.458 billion. This compares with 152 permits valued at R818 million for the third quarter; 146 permits valued at R570 million for the second quarter; and 127 export permits valued at R833 million for the first quarter of the year.
Rheinmetall Denel Munition (RDM) in particular netted multiple contracts last year for 155 mm artillery ammunition and 40 mm grenade launcher ammunition, and according to the Stockholm International Peace Research Institute, last year South Africa exported approximately 200 armoured vehicles. Moreso, Paramount Group also secured large contracts too.
A lack of strong government support has had a negative impact on South Africa’s once-strong domestic defence industry for a long time, and this situation continues to fuel export sales to its international customers which include Germany, Turkey, Kuwait, the Philippines, UAE, and Zambia.
Arms sales bureaucracy is a major cause that delays the export of South Africa’s weaponry pending when export permits are issued. For instance, the delays to approve Turkey and Poland’s export permits may be linked to fears that the weaponry and components will be diverted to Ukraine. This has put R2.85 billion in weapons sales on hold.
This development highlights the damaging effects of the slow pace of export permit processing on the floundering South African defence industry. The National Conventional Arms Control Committee (NCACC) which handles these process have been criticized by industry practitioners for being slow in their operating procedures.
One of the key drivers of the defence industry’s growth in South Africa in 2022 is the increased defence spending by the government. With a commitment to modernizing its defence capabilities and addressing security challenges, the South African government has allocated a larger budget for defence expenditure. This increased funding has allowed for the procurement of advanced defence equipment, upgrades to existing platforms, and investments in research and development. The higher defence budget has provided a boost to the local defence industry, creating opportunities for local companies to participate in defence contracts and projects, and driving overall growth in the sector.
In 2020, arms exports for South Africa were 37 million US dollars. Though South Africa’s arms exports fluctuated substantially in recent years, they tended to increase through the 1960 – 2020 period ending at 37 million US dollars in 2020.
Also, in 2021, the South African defence industry exported R3.3 billion worth of weapons, ammunition and military equipment to 67 countries around the world.
While in 2022, there has been a renewed focus on strengthening the local manufacturing capabilities of the defence industry through initiatives such as localization and indigenization efforts. These efforts aim to promote the domestic production of defence equipment and reduce dependency on foreign imports. This has led to increased demand for local defence products, resulting in growth in manufacturing activities, job creation, and skills development within the defence industry.
The integration of technology and innovation into defence products and solutions has not only enhanced the capabilities of the South African defence industry but has also positioned it as a competitive player in the global defence market. This has opened up opportunities for the export of defence products and services, contributing to the overall growth of the industry.
The growth of South Africa’s defence industry in 2022 has had several positive impacts. Firstly, it has contributed to the country’s national security and defence capabilities. With enhanced defence equipment and technologies, the South African Defense Force has been able to modernize its capabilities, improve operational readiness, and effectively respond to evolving security threats. This has helped to safeguard the country’s sovereignty, protect its borders, and maintain stability and peace within the region.
Secondly, the growth of the defence industry has had significant economic benefits. The increased defence spending, local manufacturing activities, and exports of defence products have contributed to economic growth and development in South Africa. The defence industry has created job opportunities, stimulated innovation, and fostered technological advancements, contributing to the growth of the country’s economy and supporting socio-economic development.
Furthermore, the growth of the defence industry has also spurred technological advancements and innovation in other sectors. The defence industry’s demand for advanced technologies and solutions has driven research and development activities, leading to spin-off technologies that have applications in other industries, such as aerospace, electronics, and communications. This has helped to foster a culture of innovation and technological advancement in the country, positioning South Africa as a hub for technological expertise and capabilities.
However, there are also challenges and considerations that need to be addressed for the sustainable growth of the defence industry in South Africa. These include issues such as the need for continued investment in research and development, skills development, and infrastructure. Additionally, effective management of defence contracts, procurement processes, and export controls will be critical to ensure that the growth of the defence industry is sustainable and aligned with national security objectives.
Another challenge is the need to strike a balance between local manufacturing and international partnerships. While localization efforts are important for promoting domestic production and reducing dependency on foreign imports, it is also important to maintain strategic partnerships with international defence companies for access to advanced technologies, expertise, and global markets. Collaborative efforts, joint ventures, and technology transfer agreements can be explored to leverage international partnerships while promoting local capabilities and economic growth.
Another consideration is the need for continuous skills development and capacity building within the defence industry. Investing in education and training programs, fostering a skilled workforce, and promoting research and development activities are essential for sustaining the growth of the defence industry. This includes not only technical skills but also leadership, management, and innovation skills to drive the industry forward.
In conclusion, the growth of South Africa’s defence industry in 2022 has been significant, driven by increased defence spending, enhanced local manufacturing capabilities, and a focus on innovation and technology. This growth has contributed to the country’s national security, economic development, and technological advancements. However, challenges such as continued investment in research and development, skills development, and ethical considerations need to be addressed for sustained growth. With the right strategies, partnerships, and policies in place, the South African defence industry has the potential to continue its growth trajectory and play a pivotal role in the country’s defence and economic landscape in the coming years.