The South African defence industry is working to address challenges in exporting defence equipment with the National Conventional Arms Control Committee (NCACC), including R3.7 billion in backlogged exports to Saudi Arabia and the United Arab Emirates.
Sandile Ndlovu, Executive Director of the Aerospace, Maritime and Defence Industries Association of South Africa (AMD), said the local defence industry appreciates the impact of export delays. “We are concerned, we are making noise, but we have not been communicating what has been happening behind the scenes.”
He told defenceWeb there has been lots of engagement with the NCACC and Directorate Conventional Arms Control (DCAC) and by September 2020 the industry had already established an NCACC task team. “We have worked hard to make sure they understand the impact on the industry,” he said. AMD has also written to new defence minister Thandi Modise on the matter of speeding up exports.
Ndlovu said AMD and the industry are working closely with the NCACC and in engagements with the NCACC secretariat, AMD is comfortable that issues are being addressed, although not as swiftly as the industry would like.
The NCACC plays a crucial role in the South African arms industry in that it ensures that South Africa conforms to its international mandates and responsibilities of being a responsible weapons exporter. However, challenges exist and, according to a recent Parliamentary report by the Joint Standing Committee on Defence on engagements with the South African defence industry, these include an outdated IT applications system; delays in processing applications; and End User Certificate (EUC) restrictions.
The NCACC has acknowledged its IT shortcomings and had hoped to migrate to a new system by early 2021. The EUC matter was attended to through amended regulations that addressed receiving countries’ concerns about inspections, amongst others. The NCACC said it has also addressed the issue of the regularity and predictability of meetings, which were negatively affected by the COVID-19 pandemic.
Ndlovu said the big push is now to get exports to the Middle East, particularly the UAE, Saudi Arabia and Turkey, moving, and ensure regular NCACC meetings. Exports to Saudi Arabia and the UAE – two of South Africa’s biggest defence clients – were stalled due to concerns over human rights abuses in Yemen. The decision to export weapons and munitions to those countries now lies with Cabinet.
“Our belief is exports will be approved,” Ndlovu told defenceWeb.
AMD and the industry are also pushing for the NCACC Act to the reviewed and brought up to speed.
“The NCACC is an enabler,” he said. “Without them we cannot export or sign contracts. If there’s an institution you depend on completely, not just for regulation, it’s the NCACC. They need to be more reliable, more predictable. Without its decisions, nothing would move within its domain.”
In spite of challenges within the industry, Ndlovu is upbeat about its prospects. “The good news is that international customers are still interested in what we produce. As an industry, we still have a lot to offer.”
He believes there is light at the end of the tunnel and it is possible to turn the sector into an R80-100 billion annual industry in three to five years, although this could easily reach R200 billion per year in the next decade.
Various efforts are underway to revive the sector, including the establishment of the Defence Industry Fund, the National Defence Industry Council, creation of a R350 million enterprise and supplier development fund, moving the Aerospace & Defence Masterplan forward, and commercialising intellectual property. Progress is being made on an alternative funding model (commodities for equipment) and a test case is being sought.