OPTIMISING INDUSTRIAL GROWTH AND MILITARY MODERNISATION IN SOUTH AFRICA
23 Jul 14. During a budget address to Parliament on Wednesday 23rd
July, Defence and Military Veterans Minister Nosiviwe Mapisa-Nqakula relayed the progress of the creation of the National Defence Industry
Council (NDIC), an initiative to tighter integrate the defence industry with the development of the South African National Defence Force.
Defence Minister Mapisa-Nqakula said that “plans for the establishment of the National Defence Industry Council are at an advanced stage. The launching of the Council will usher a new dispensation for the management of our relations with the Defence Industry and also allow for direct support in this regard. The hosting of this year’s edition of the Africa Aerospace and Defence Show in September will also give South
African Industry another opportunity for marketing and expansion.” Comprising representatives from the defence industry, the Chief of the SANDF, the Secretary for Defence and the CEO of Armscor, the NDIC is intended to facilitate high-level consultation between the Department of Defence and the defence industry on issues including armaments acquisition, planning, policy and compliance. Details about what the high-level consultations would involve have not been disclosed. They are likely to be aimed at improving needs assessment of the South African
National Defence Force (SANDF), facilitate offset negotiations, and streamline procurement processes. Increased collaboration with the
MoD would also help the industry to access new markets, establish new trading partners and technology transfers.
AMD (South Africa Aerospace, Maritime and Defence Industries Association) executive director Simphiwe Hamilton says the NDIC will play a vital part in the development of the SA defence sector through “deliberately addressing key policy issues at the highest level and ensuring co-ordination of the activities of government departments whose mandates impact on the defence industry,” reports DefenceWeb. The concept of the NDIC was officially announced at the annual Defence Industry Day in Pretoria on 22 March 2012 by then-Minister of Defence and Military Veterans Lindiwe Sisulu, who was quoted by local news at the time as saying that “this day marks the day when the Department of Defence commits to partner with the defence industry.”
Critical Shortfalls
The NDIC announcement was preceded by multiple references to the findings and implications of the damning 2014 Defence Review and the Strategic Defence Packages Performance Review Report that was released in January. The 2014 Defence Review was published in March, after three years of composition. It described the SANDF’s state of decline as “critical”, with an “inability to meet current standing defence commitments”, a “lack of critical mobility” and a “balance of expenditure between personnel, operating and capital [that] is both severely disjointed and institutionally crippling.” Other core challenges that it identified were related to the uneven distribution of capability between the three services, ageing equipment, and high operating costs of some key equipment. In addition to the capability gaps highlighted by the Defence
Review, the Strategic Defence Packages Performance Review Report highlighted failures in arms deal offsets. The report audited 40 of 121 arms deal offset projects and found that some companies obtained more credits compared to investments and sales created or caused by them.
Need for Recapitalisation
The capability of the South Africa defence forces has been in significant decline since the 1990 transition, which over the next decade produced deep defence cuts, job losses and a substantial reduction in the South African defence industry-related skilled workforce. The defence forces and industry have not yet fully recovered from this degradation – despite some promising improvements since the early 2000s – and the