STELLENBOSCH, Western Cape — The revitalization of the South Africa defence industry must be positioned as a strategic driver of national industrialisation and economic growth, rather than being treated as a niche manufacturing sector, according to Trade and Industry Minister Parks Tau and Stellenbosch University Centre for Military Studies director Dr Moses Khanyile.
Speaking on the urgent need for a coordinated strategy to revive the sector, Dr Khanyile highlighted the stark reality of the industry’s financial trajectory. Defence research and development (R&D) spending has plummeted from approximately 6 billion rand in 1990 to roughly 1 billion rand today. This sharp decline followed the post-1994 democratic transition, where government priorities rightfully shifted toward pressing socioeconomic needs such as housing, education, and healthcare. Concurrently, the industry experienced natural consolidation as external players entered the market and operated independently of government frameworks.
Dr Khanyile also dispelled the notion that South Africa’s shift toward international peacekeeping missions contributed to this resource decline. As a signatory to the United Nations, African Union, and SADC, South Africa’s defence force inherently participates in global stability efforts. However, Dr Khanyile noted that troop-contributing countries are typically reimbursed by these organizations for equipment usage, which should theoretically have an opposite, stabilizing effect on maintaining up-to-date military hardware.
The conversation also addressed the rapid evolution of modern warfare. Pointing to recent conflicts in Ukraine and the Middle East, Dr Khanyile emphasized that low-cost drones operated by non-traditional actors have become undeniable game-changers, often outmaneuvering conventional armored brigades. While South Africa has been involved in drone manufacturing for many years, the country regrettably failed to escalate production and associated R&D for unmanned vehicles. The nation is now playing catch-up, forced to restart drone production and rebuild skills in a space it should never have let slip.
This deterioration is further reflected in domestic procurement figures, which have dropped to under 5 billion rand annually. In contrast, the broader defence industry generates a turnover of approximately 25 billion rand, driven largely by exports. Consequently, the South African National Defence Force (SANDF) has effectively become a marginal customer of its own globally competitive, advanced defence sector. Dr Khanyile attributed this paradox to affordability constraints, an over-reliance on foreign suppliers, and a failure to adequately communicate local needs to domestic manufacturers.
Compounding the issue is the national defence budget, which currently hovers at just over 0.5% of GDP, a fraction of the 2% norm for countries of comparable size. This chronic defunding restricts capital investment and R&D, forcing the department to focus merely on staying afloat and paying personnel. The downstream effect is a severe brain drain, with engineering and science graduates increasingly emigrating due to a lack of local industrial opportunities to absorb their skills.
To reverse this trend, experts are calling for a decisive “whole-of-government approach” to dismantle siloed procurement practices. Dr Khanyile pointed out that the defence industry is not exclusively defence-related; it produces dual-use technologies essential to national security, including equipment utilized by law enforcement, border management agencies, and intelligence services. Centralizing and consolidating procurement capabilities across these sectors would sustain the local industrial base, preserve critical skills, and maintain export viability.
A key mechanism for this transformation is the National Defence Industry Council. Established in 2017, the council comprises 11 directors-general, police commissioners, and senior industry players. An ongoing defence industry gathering, scheduled from Tuesday to Wednesday, aims to leverage this high-level platform to identify and clear regulatory bottlenecks, facilitate targeted industrial investment in key niches, and ensure that South Africa’s defence manufacturing sector serves as a robust pillar of the national economy.
