SA defence industry lekgotla on hold


The South African defence industry (SADI) lekgotla planned for last month did not happen with the industry and others involved from the ministers of defence, public enterprises and trade, industry and commerce all waiting on a new date from Secretary for Defence Gladys Kudjoe.

Wearing her National Defence Industry Council (NDIC) chair hat, she is “liaising with relevant stakeholders” according to NDIC co-ordinator Dr Moses Khanyile.

In March he told the Joint Standing Committee on Defence (JSCD) the SADI lekgotla would address “some challenges” the local defence industry faced.

The primary aim of the lekgotla, defined as “a meeting to decide what to do, especially one that involves public officials” by one dictionary, is to come up with a coherent national view on how to deal with challenges.

Indications were that up to 200 participants would be part of the lekgotla. Included were the Defence and Military Veterans Minister and Deputy (Thandi Modise and Thabang Makwetla) and Public Enterprises Minister Pravin Gordhan along with both Parliamentary defence oversight committees, policymakers, academics and industry representatives.

The delay is put at the door of “key principals being tied up”. This is because mandatory Parliamentary sessions were scheduled making ministerial presence a non-event.

At the March JSCD meeting, Kudjoe said the thinking behind the lekgotla is to have all the “brains” come together to investigate solutions to defence sector problems.

Research undertaken by the SA Aerospace, Maritime and Defence Industries Association (AMD) shows industry revenue declined from R19.5 billion in 2016 to R12.5 billion in 2020; exports dropped by almost half from R12 billion to R6.5 billion and research and development spend went from R1.7 billion to R500 million over the same period. Additionally, the number of people directly employed in the defence industry dropped from 15 000 in 2016 to 12 500 in 2020.

Exports grew from R873 million in the mid-1990s to R6.5 billion in 2019/20, but declined since 2016 after peaking at the height of the Iraq War. This is of concern to a sector of industry more reliant on exports than others in the overall South African economy, especially when the shrinking local defence market is taken into account. AMD warns if exports continue to be constrained the industry faces a 40% reduction in workforce, the loss of 25 000 jobs along the supply chain, reputational damage to the South African brand, a reduction in tax revenues and a decline in technology investments. Tellingly, the industry representative organisation has it if current trends continue the local defence industry will be almost redundant in five years.