A case for the growth of the South African Defence Industry

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Never has the time been so ripe and conducive for the growth of the local South African Defence Industry (SADI). Reading the 427-page-long Consultative Draft of the Defence Review, one senses that there is a general agreement that the South African National Defence Force needs re-equipping to fulfil its mandate.

In fact Mr Roelf Meyer, the Chairperson of the Review Committee said “I would hope we would be able to give this document to the Minister [of defence] for her to put forward the argument, which I don’t think is any secret: the defence force is underfunded.”

The Aerospace, Maritime and Defence (AMD), the SADI’s mandated representative association has given their input to the Defence Review Committee. It is hoped that SADI will be able to work together with Government for Government to realise its aspirations of having `a valuable measure of strategic independence`. The defence review says that that the defence industry should be able to do the following:

Meet the critical needs of the Defence Force

Add substance to South Africa’s deterrent posture

Add substance to South Africa’s standing as a country

Provide the ability to employ defence equipment sales as a tool of foreign policy.

One has a sense that once approved, the Defence Review will help change the landscape of the defence environment from what it currently is. The Review continues to say that `the objective here must be to develop a healthy partnership between the Defence Force and its supporting industry, with the local industry in principle enjoying preference where it can practicably and cost-effectively meet requirements`. This means that the procurement policy and possibly the Armscor Act will have to be altered.

There is nothing that compels Armscor, the acquisition organisation for the DOD, to favour a local company from a foreign one. All that the Armscor Act says is that equipment must be procured `cost effectively, efficiently and economically`. This is what local industry has been lobbying for. The argument here has always been that equipment procured locally is cheaper in the long run because with military equipment one is looking at a 30 year cycle. So the maintenance and upgrades will be done locally. One is hopeful that industry will be equal to the task.

In its submission to the Defence Review Committee, AMD agreed that `without the effective supply and support from industry, the defence capabilities of the SANDF are incomplete and unsustainable and as such the DOD can never be in a position to ensure the contribution to the economic, political and defence sovereignty for the Republic`. This necessitates a solid partnership between Industry, Armscor and the DOD. There is going to have to be a serious paradigm shift in the way equipment is procured – `South Africa first` will be the procurement mantra. One may ask how this is going to be implemented as South Africa is part of the global village. The following is extracted from the AMD submssion and it qualifies as a response,

At the onset, it must be clearly stated that SA is not seeking complete and absolute defence industrial independence but that it recognises the need to deliberately formulate an approach that will ensure adequate and appropriate self-sufficiency and self-reliance aimed at protecting her economic, political and defence sovereignty. In this context, there will always be equipment that will – for various reasons – be sourced from abroad. However, the founding principle of the envisaged partnership between the SANDF and the local / SA defence industry must be that of considered preference for sourcing defence requirements locally i.e. from and through the local defence industry. In the case where the equipment is sourced from abroad, the principle should be that of ensuring that the equipment can be supported locally.

With all the mergers and take-overs taking place there will be a need to define what a South African company is. The envisaged Defence Industry Strategy will hopefully take care of this. The definition will encompass both legal compliance and socio-economic contribution.

The old way that was used within the defence environment of developing technologies for their sake is the thing of the past. The Defence Force will have to define to SADI which capabilities are strategic from their point of view. Capabilities will be classified as strategically essential, economically essential and non-essential. This classification will help direct research and development and will direct industry on where to concentrate resources.

Of course time will tell as to how this new era will pan out. From what I read in the consultative draft review about the industry, it tells of a bright future ahead.
**Minah Sindane-Bloem is Communication Consultant for AMD. She worked eleven years as a senior manager corporate communication for Armscor, the acquisition organisation for the South African National Defence Force.