President Cyril Ramaphosa has stated that government is looking at reducing the dependence of the South African National Defence Force (SANDF) on direct funding by the State.
He was delivering the opening address at the Africa Aerospace and Defence 2018 exhibition at Air Force Base Waterkloof, in Pretoria. “Several ideas are being explored to modernise the funding model of defence and reduce its dependence on the fiscus,” he said. “The leveraging of the economic value of many types of assets of the defence force is under development, alongside improvements in the efficiency of the defence force and the rejuvenation of the defence human resources component.”
This was necessary because government had to prioritise socioeconomic objectives, especially those which would provide the country’s young people with the “best possible future”. He pointed out that the national economy was “under pressure” and that the fiscus possessed only finite resources. “The SANDF acknowledges [and] is adapting to this economic reality,” he pointed out. “Prioritisation within the implementation of our Defence Review focuses on the core roles of the defence force.”
Regarding the country’s defence industry, the President assured that “South Africa is looking after” it. This was for both security and developmental requirements. “It is a national asset that has value for many departments and agencies of government.
“It innovates products for the greater economy, such as systems that improve the safety of railway lines or improve the efficiency of shark nets,” he highlighted. “The common TV decoder in widespread use in South Africa is based on the intellectual property from a military technology project.”
He noted that the local defence industry comprised about 120 companies, directly employing some 15 000 people. It exported to 88 countries around the world.
“It is an incubator of our scarce skills in science, technology, engineering and mathematics.” Ramaphosa also observed that engineers in the local defence Industry were also exposed to the production systems and management procedures of major global industry role-players. This resulted in these engineers becoming assets for the wider South African economy.
He stated that there were numerous initiatives to increase the value of the country’s defence industry. “A Defence Industry Strategy was developed by the National Defence Industry Council, taken through public consultation and adopted by the Minister of Defence,” he cited. “A Defence Sector Charter was developed to open space for private participation by small and medium black enterprises. The charter, which is currently being finalised by the Department of Trade and Industry, will also regulate broad-based black economic empowerment. A defence industry fund was launched in June this year as a funding mechanism for industry.”
He further affirmed that government desired to help the industry to become export driven, through international investment, by adopting policies supportive of joint ventures (JVs) between local and international partners. The President noted that many countries, from across the globe, had recently shown interest in setting up JVs with South African defence companies. The exchange rate between the rand and the major international currencies made it very cost effective to develop intellectual property and construct technology demonstrators in South Africa.