South Africa Wants to Resuscitate Its Arms Industry
Apartheid-era manufacturers desperate for investment
It’s the most advanced defense industry you’ve probably never heard of. South Africa’s arms manufacturers produce high-tech weapons and vehicles that have little to do with crude Soviet-era weaponry common throughout the rest of the continent.
Formed under the Apartheid regime, South Africa’s arms industry produces some of the best mine-resistant vehicles, modern guided weapons, secure communication technologies, aerospace components and its own attack helicopters.
“The South African defense industry was almost a direct and deliberate creation by the Apartheid government, to create an almost self-sufficient yet technically sophisticated defense industry,” explains John Stupart, editor of the online African Defense Review.
But Pretoria’s arms industry is recovering from more than 20 years of relative decline, beginning during Apartheid and continuing over the following decades.
When the autarkic and repressive Apartheid regime gave way to a multi-racial democracy in 1994, South Africa’s military changed, too. It’s now one of the most heavily-armed contributors to United Nations peacekeeping missions in Sub-Saharan Africa.
The United Nations imposed an arms embargo on racist South Africa in 1977. At the same time, the South African military was heavily involved in the Angolan Bush War, a decades-long conflict that ended in 1989.
South Africa intervened militarily in several other countries in the region, and provided aid to the white-ruled Rhodesian regime in what is today Zimbabwe.
“In the process of developing its arms industry, it actually took the South African economy from being basically a mining and farming economy, to being an industrialized economy, including precision engineering and computer technology,” explains Helmoed Heitman, an independent South African defense analyst.
During the ’60s and ’70s, South Africa’s military industry became largely self-sufficient. Successful developments from this period include the Casspir armored personnel carrier and the Ratel infantry fighting vehicle.
“During the Angolan Bush War, our Ratel infantry fighting vehicles were engaging T-55 tanks,” Stupart recalls.
The Ratel’s high mobility and versatility made up for its comparably high price and lack of armor. Because of white-ruled South Africa’s experience fighting insurgencies, vehicles like the Casspir and the Ratel incorporated anti-landmine features, including v-shaped hulls.
The Apartheid regime also produced a lot of hardware in the 1970s and early 1980s. Later in the decade, it pulled troops from Namibia and engaged in peace talks with the ANC. South Africa ratcheted down defense spending.
The end of Apartheid in 1994 marked a turning point for South Africa’s defense industry. Nelson Mandela, the head of the African National Congress and the country’s first black president, pushed to demilitarize the country’s foreign policy.
Many South Africans questioned whether it was worth supporting a huge military, which had for decades repressed national liberation movements at home and elsewhere in Africa. Government spending moved away from internal security and the military—and toward economic development and social policies.
In effect, South Africa inherited a surplus of aging equipment from the ’70s—without enough money pay for upkeep and replacements. And in the 1990s, acquisition and research spending froze almost completely, Stupart and Heitman tell War Is Boring.
“The government hasn’t done much to further the industry,” Heitman says. “They don’t really go out and push [for South African products].”
Case in point—the Rooivalk attack helicopter.
Originally developed as an answer to the increasingly conventional nature of the Angolan Bush War in the 1980s, the Rooivalk finally entered production in 1990, one year after the end of that conflict.
Despite being “on paper the best helicopter you could buy in the late 1990s and early 2000s,” according to Stupart, the state-owned firm Denel Aerostructures produced a mere 12 of the machines for the South African National Defense Force.
Without any combat deployments and lacking a government actively pushing the product, the expensive Rooivalk was beat to the market by cheaper and more marketable Russian gunships.
But the fortunes of the embattled industry began to change toward the end of the 1990s with the South African Arms Deal.
Officially known as the Strategic Defense Package, the Arms Deal was a $4.8-billion acquisition of warships, fighter aircraft and main battle tanks. To this day, it’s marred by corruption allegations, with current president Jacob Zuma allegedly playing a key role in the violations.
An important component of the Arms Deal was a mandate that foreign bidders must cooperate with local defense companies. “They came and looked and they were surprised actually at what they found in terms of capability and capacity,” Heitman recalls. “That led to several companies buying into local companies.”
Aerospace companies did especially well, with Saab setting up shop to produce parts for the Gripen fighter in cooperation with Denel. There was another influx of cash when Airbus contracted Denel and other companies to contribute to the A400M military transport aircraft.
“The most sophisticated sector in the South African defense industry now would be aerospace,” Stupart says.
“They do a Hell of a lot for the A400M. And it’s a lot of sophisticated stuff. They are not just like mechanics, bolting shit together, they are actually designing the pieces.”
But the South Africa military industry “is not in terribly good shape,” Heitman points out. “The armored vehicle industry did well out of the Iraq and Afghanistan wars. And the guided missile people did well, because they make guided missiles that actually work and cost less than anybody else’s.”
“But without an uptick in R&D funding and an uptake by the SANDF, it is going to run out of new products and then it will fold,” he adds.
In the long run, no defense industry can survive without at least some local procurement, and the SANDF hasn’t spent any serious money in almost a decade.
But this likely to change—and soon. Much of South Africa’s military hardware is getting old. At the same time, Pretoria’s military is more active than ever, contributing heavily to peacekeeping operations, including in the Democratic Republic of the Congo.
The 2014 Defense Review, an independent report on the state of South Africa’s armed forces, asked the government to step up military spending considerably, or accept that the SANDF won’t be able to fulfill its core duties within a few years.
At the moment, parliament has held up the Defense Review, but neither Heitman nor Stupart doubt its recommendations will make it into law.
The level of actual funding that will follow is unclear, but “if it is just 50 percent of what they recommended, there will be quite a flow of capital into the industry,” Heitman says.
The South African government won’t attempt to rebuild an arms industry that will make the country completely self-sufficient like in the ’70s and ’80s, he predicts. But even if parts of the new military spending go toward foreign companies, these firms will have to invest in South Africa, as well.
“The overall impact, if it is implemented, is going to be pretty positive,” he says.
A new wave of locally designed or produced material in the hands of an active South African military could also make the country’s firms more competitive on the international market. But these companies sell niche products—such as mine-resistant vehicles—and won’t be able to play on the same level as the United States, Russia or China.
There’s another reason why South Africa will struggle. The country has strict export regulations that make it impossible to enter the mass market, Heitman says.
There are good reasons for this. For one, there are relatively few buyers of expensive military hardware globally.
Deals can be worth hundreds of billions of dollars. This concentrates decision-making about what to buy into the hands of the few, or even a single person … like a president. This quite inevitably makes the arms trade one of the most corrupt industries in the world.
The South African defense industry “is unwilling to pay bribes,” Heitman explains. “That makes it difficult in many countries, were it is the only way to get an order.”
To be sure, if South Africa paid bribes to corrupt regimes, it could increase its short-term profits. But long-term fortunes are better served by not doing this, and focusing on sophisticated products that target niche markets—while convincing buyers with capabilities and not kick-backs.