Namibia forced to cancel Chinese arms contract


The Namibian Defence Force (NDF) was forced to cancel a N$156 million transaction with Chinese defence equipment manufacturer Poly Technologies under pressure from the US Treasury Department, which blocked the payment citing sanctions against the Chinese company.

In 2013, Poly Technologies was placed under US sanctions for allegedly selling banned weapons to Iran, North Korea and Syria, which are all considered as hostile to US interests. Poly Technologies is a global arms dealing subsidiary of the state-owned China Poly Group Corporation.

The US alleged that its weapons sales violated international agreements aimed at curbing the spread, development and proliferation of weapons of mass destruction, including chemical and nuclear weapons systems. China denied the allegations and rejected the sanctions as unfounded.

Two weeks ago Namibian defence minister Penda Ya Ndakolo told Namibia’s National Assembly that the N$156 million payment to Poly Technologies through the Bank of New York was returned to the Bank of Namibia (BON) in December last year, reports The Namibian, which said the money was for arms, ammunition and aircraft spares for the NDF.

Although the minister said the money was returned because the payment was made ‘at the end of the financial year’, sources said the US Treasury pressured the Bank of Namibia and the Ministry of Finance to recall the payment in line with the sanctions imposed on Poly Technologies in 2013.

The Bank of Namibia is responsible for making all payments and money transfers out of the country on behalf of the government. It is obliged to honour international restrictions against illicit financial transactions.

Meanwhile, Ya Ndakolo said the defence ministry needed much more than the current N$5.6 billion budget allocation if it is to achieve the goal of completing the military modernisation programme in 2018.
“Defence equipment, such as aircraft and warships are expensive take many years to manufacture. All these contracts are in foreign currency. The cost of acquiring navy assets, the training of the crews and maintenance of the assets and personnel and supplies to keep them operational is therefore high,” he said.

Further, he said air force needed to acquire new fighter jets, transport aircraft and helicopters. The NDF also needs funding to train new pilots and aircraft technicians and meet aircraft maintenance and repair costs.

The NDF modernisation programme is focused on the upgrading of air defence systems, the acquisition of new military vehicles, equipment and the upgrade of training facilities. It also involves the setting up new elite units such as the Special Forces, artillery and marine units.

Ya Ndakolo said due to budgetary constraints, the NDF was facing delays in the delivery of military camouflage ordered from Brazil, the procurement of spares parts for navy vessels and day-to-day payments to suppliers.

Most of the vessels and operational equipment used by the Namibian Navy were acquired from China through Poly Technologies. Some of the old vessels were sourced from Brazil, which has also provided training for navy officers. Namibia imports all uniforms for the navy and air force from Brazil because it has no local manufacturing capacity.

Equipment acquired from China includes a dozen F-7NM/TF-7NM fighter jets, a dozen K-8 jet trainers, several Z-9 utility helicopters and the NS Elephant offshore patrol vessel.