Declining defence budget hurting defence industry – Parliamentary report

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According to a report of Parliament’s Joint Standing Committee on Defence (JSCD), one of the biggest challenges facing the South African defence industry is the declining defence budget and its impact on this industrial and manufacturing sector of the national economy.

“The defence budget shortfall means the South African National Defence Force (SANDF) cannot modernise through the acquisition of equipment and systems while maintenance, repair and overhaul (MRO) also falls behind. That the Special Defence Account (SDA), designed for SANDF weapons acquisition and long-term research and development (R&D) projects, is being phased out is one of the main reasons for this situation.

“The 2015 Defence Review expressed itself strongly on this situation and derived milestones to address this decline, with the intention of Milestone One to arrest the decline in critical capabilities through immediate and directed interventions. Against the background that implementation of the 2015 Defence Review cannot be funded and only non-cost interventions can be implemented to arrest the decline, South Africa will have to agree to a significantly reduced level of defence ambition for the future.

“If these factors are taken together with the view of the Secretary for Defence that without urgent proper support, the industry will implode and even lose MRO capabilities, it underscores the perilous situation facing South Africa.”

The JSCD report on engagements with a number of defence industry roleplayers over as six-month period ends with a “way forward”. This will see a further programme of engagement with the defence industry as well as other Parliamentary portfolio committees and selected political leaders to facilitate the type of “support and assistance such a crucial contributor to the national economy and defence capability deserves”.



Included in the list of those the JSCD interacted with for the report are Armscor, Denel, the National Conventional Arms Control Committee (NCACC), the National Defence Industry Council (NDIC), the Defence Industry Fund (DIF), the Denel task team set up by the NDIC and AMD (Aerospace, Maritime and Defence Industries Association of SA).