Secretary for Defence Dr Sam Gulube has set ambitious targets for the South African defence industry, and hopes to double direct employment to 30 000 by 2023 as well as improve export turnover and investment.
Gulube made the comments as he was delivering the keynote address at the sixth annual Aerospace, Maritime and Defence (AMD) Conference at the CSIR International Convention Centre in Pretoria last week. The conference was hosted by Creative Space Media, and once again attracted hundreds of local and international delegates and speakers, including UN procurement officials.
Gulube noted that the downturn of the South African economy has resulted in reduced funding being allocated towards defence (less than 1% of GDP), which not only impacts the Department of Defence but also the South African defence industry, which is now more than ever dependent on exports to survive.
“It is our hope there will be a turnaround with light at the end of the tunnel and the South African economy will recover so it is able to support the South African National Defence Force and capabilities it requires,” he said. Gulube added that loss-making Denel is on the road to recovery, which is good not just for the National Defence Force but the industry as a whole.
Gulube said the Department of Defence is providing support to the industry where it can, such as through the National Defence Industry Council and Defence Industry Fund, amongst others. Another bonus is that United Nations reimbursements for South African participation in peacekeeping operations are no longer returning to National Treasury, but are ring-fenced for servicing South African National Defence Force equipment.
Gulube said the incumbent government is finalising a new approach to growing the economy, with the defence industry able to assist in this regard. “As the sixth administration of government identifies new approaches, the defence industry is put as one of the priorities.” Aerospace and defence are key areas that fall under the high-technology priority area. Gulube said the defence industry needs to participate in developing a master plan for the industry. This involves establishing a baseline of where the industry is at the moment, developing performance indicators and targets to be met over the next five years.
Gulube said the defence sector contributes 0.47% to the GPP and employs 15 000 people. He said the industry should target a contribution of 1% of GDP by 2023. “The direct foreign investment is expected to double form R12 billion today to R24 billion in the next five years. By 2023 we hope to increase that to 30 000 direct jobs as well as 120 000 indirect jobs. So those are the targets we as a government are setting ourselves. We hope through public private partnership…those targets will be achieved if not exceeded by 2023.”
Gulube added that “the South African defence industry needs to be re-imagined. Gone are the days when the industry could rely on the South African National Defence Force as a loyal and steady primary customer. The industry needs to sell itself – both locally and abroad and as the Department of Defence we will be there to support the industry in this endeavour.”
Gulube urged the industry to target the government to focus on growing the defence industry, promote industry capabilities such as border control solutions, highlight its job and skills creation, establish creative financing models such as bartering and work together under the Team South Africa banner.
“In spite of the many challenges facing the South African defence industry, there are many opportunities as well. South Africa remains a leader in many technological areas, as we have stated in artillery, missiles and others. It can use its non-aligned status as a drawcard. By re-imagining the way the defence industry operates and by taking a fresh perspective we can move the industry towards a successful future.”