Market concentration in the South African defence industry was a matter of concern, defence minister Lindiwe Sisulu says. Seventy percent of government spending was concentrated in “the top five companies”, she said in a speech delivered on her behalf at a defence stakeholders’ breakfast in Cape Town.
The South African Press Association reports the speech was read on her behalf by acting Secretary for Defence Lieutenant General Themba Matanzima, as Sisulu was delayed in a Cabinet meeting. “Competition within industry is encouraged, especially since economic redistribution is part of the government developmental agenda,” she said.
Sisulu said the defence industry was a significant roleplayer in the South African economy. One of the challenges it faced was its low level of transformation. This would have to be addressed in line with government’s transformation objectives. She said the defence department had recommitted itself to broad-based black economic empowerment (BEE).
It had not only ensured the alignment of Armscor’s BEE policies with those of the department, but had also provided for the inclusion of an official at a director level to advance this. Despite “all the delays” the department was still committed to creating an organisation to support the defence industry both in South Africa and in export markets. The organisation would “reside” in Armscor and would be overseen by the department. Funding for the initiative would be ring-fenced and adequate, Sisulu said.