South Africa’s beleaguered defence industry will, according to Defence and Military Veterans Minister Nosiviwe Mapisa-Nqakula, continue to be supported by the national defence force and its managing arm, the Department of Defence (DoD).
This assurance comes in the wake of ongoing turmoil at State-owned Denel, the single largest manufacturer of defence and related equipment in the country, and a halt in production of the first locally designed military aircraft since the late 1980s. AHRLAC is currently at the centre of a possible business rescue exercise with indications it could be a protracted affair.
Armscor has broken into the United Nations acquisition system but to date any submissions made by the State-owned defence acquisition agency on behalf of South African companies and/or joint ventures have not been reported as successful.
With major capital expenditure in the SA National Defence Force (SANDF) centred in the new infantry combat vehicle under Project Hoefyster and the acquisition of four new hulls for the SA Navy under projects Biro and Hotel, the local defence industry will, to all intents and purposes, make do with the crumbs of maintenance for the foreseeable future.
This seemingly does not deter Mapisa-Nqakula who said during her budget vote address: “Defence will continue to strive to support the defence industry”. This would be done through “meaningful participation in the President’s Public-Private Growth Initiative, which seeks to harness the potential of the private sector in contributing to renewal, investment and growth in the country”.
She told the National Assembly the local defence industry now had its own BBBEE Charter. Defence spend on capital projects, she said, would be focussed domestically and “continually seek spin-off technology benefits to the mainstream economy of the country”.
Another plus, according to her, is DoD/SA Defence Industry collaboration in producing a Defence Industry Business Plan 2019/2024. The plan has at its heart job creation, growing export earnings and attracting foreign direct investment (FDI).
As far as increasing export earnings is concerned Mapisa-Nqakula sees increased administrative efficiency in the national arms control system as essential. She also envisions the removal of cross-cutting inhibitors to doing business in all South African economic sectors.
Armscor expertise is being utilised in developing models to optimise industry value in a diminishing capital budget climate, with particular emphasis on development of win-win DoD expenditure plans to ensure “survival of high-risk/ high value” companies in the local defence industry.