SA’s flagging defence industry needs ammunition to remain a force

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A capable domestic defence industry is arguably as important to a country as its defence force writes Dr Mthobisi Zondi for Independent Online (IOL). This is mainly because the core function of the defence force is to protect the state’s sovereignty, territorial integrity and well-being of its citizenry.

“To achieve this, the country’s defence force should have appropriate defence capabilities, that is, sound doctrine and practices, capable and trained soldiers and operational and effective military equipment.

“The equipment is designed, developed and manufactured by a capable defence industry.

“The SA Defence Industry (Sadi) consists of entities that focus or have capabilities in design, development, manufacture, testing, evaluation and maintenance of military equipment and systems.

“The mandate of defence is to ‘defend and protect the republic, its territorial integrity and its people, in accordance with the constitution and the principles of international law regulating the use of force’.

“Whereas ordinary South Africans may think the SA National Defence Force (SANDF) only needs to occupy itself with preparing for conventional war and assisting in multilateral peacekeeping missions, there are many other functions the national defence force occupies itself with while complying with its constitutional mandate.

“These include:

* Peacekeeping functions in the region. In the past decade, the SANDF has been deployed in various countries in Africa for peacekeeping missions.

* Border protection. The SANDF ensures the integrity of the country’s 4 471 km land borders.

* Maritime patrols to curb human trafficking and piracy activities.

* Protection of marine life, undersea minerals and the exclusive economic zone.

* Disaster relief and emergency aid.

* Search and rescue activities.

* Aid to civil society.

All these require support from a capable defence industry.

“In the 1980s, Sadi had 130 000 employees (9% of total manufacturing jobs in the country) in 3 000 companies (10% of the manufacturing sector). The industry employed 10% of all engineers and scientists and went on to establish a reputation across the world with products such as long-range artillery (Denel’s G5 and G6), mine protected vehicles, mine detection vehicles (Husky used by Mechem), combat support helicopter (Rooivalk), short-range missiles and guided munitions and advanced electro-optical sensors.

“Today, the industry comprises 120 companies employing 15 000 people and generating annual revenues of R19 billion.

“Defence force acquisition from local industry dropped from R26,2 billion in 1989/90 to R7 billion in 2017 and commensurately Sadi turnover dropped from R31,6 to R19 billion in 2017.

“Sadi exports grew from R873 million in the mid-1990s to R11 billion in 2017. This means the Sadi has become less dependent on the defence budget and largely sustained by exports over the last few years.

“Due to the arms embargo during the apartheid era, the country had no choice but to develop its own defence industry capability.

“Hence, it was no surprise when Sadi became exposed to the global defence market after 1994, it quickly made significant strides in exports built in South Africa.

“While the growth in exports demonstrates Sadi is become less dependent on defence spending, it should be noted any vibrant defence industry is anchored by innovation (R&D activity), and reduced spending on R&D (both public and private) will eventually result in reduced exportability of defence products.

“Also, defence products are usually traded through government-to-government contractual arrangements, which are, in turn, dependent on diplomatic relations between the countries involved.

“The government, therefore, has a major role to play in promoting the country’s defence products through its diplomatic policy machinery.

“Most countries are reluctant to procure defence products from countries whose domestic security forces do not have the same products in operation.

“Hence one of the most effective marketing tools is to see products being used by the forces in the country of origin.

“Lower national defence spending still affects sustainability of the local industry, even if the latter is export-centric.

“The local defence industry is as a result on the brink of collapse due to reduced domestic defence spending, but can still be saved if government takes a more supportive approach toward the industry. Alternative funding for defence projects should be looked at, especially from sources other than the fiscus. Government should relax the stringent regulatory framework to allow such initiatives.

“The defence sector should be in the forefront of trade promotion efforts by the state, instead of receiving the ‘stepchild’ treatment.

“Planning within government should be more transparent to allow the industry to build capacity in anticipation of future projects. Countries such as India, Canada, Taiwan and others issue five to 10 year defence procurement plans in advance to allow the industry locally to ready itself.

“This ensures an integrated effort towards growing and sustaining the defence sector. In the period of tough economic climates, such as is current, government could launch an extensive equipment refurbishment programme with limited elements of modernisation where industry would be encouraged to participate in line with its capabilities.

“It is required in this case that Department of Defence and Armscor contract at lower levels (at sub-assembly and component levels) as opposed to ‘product system’ level since the latter approach has a tendency to exclude smaller, yet critical industry players.

“These initiatives would be enabled by a collaborative approach between industry and government based on transparency and inclusive planning, and anchored on “putting the country first” principle.”

Zondi is chief of defence materiel at the Department of Defence and this piece is used with attribution to IOL.