South Africa

The South African defence budget for financial year (FY) 2016/2017 was expected to reach some 47.2 billion South African Rand -ZAR- (approximately 3.6 billion US dollars) equivalent to around 1.05% of the country’s Gross Domestic Product (GDP), significantly increased compared to FY 2015/2016, when the country spent some ZAR 45 billion (approximately 3.4 billion US dollars). According to South Africa’s authorities, the defence budget was to be further increased in FY 2017-18 and FY 2018-2019 to 48.7 (3.7 billion US dollars) and 50.7 billion ZAR (3.84 billion US dollars) respectively. In the foreseeable future, according to recommendations from various sides defence spending should aim to reach 2% of the country’s GDP.

The South African defence budget for financial year (FY) 2016/2017 was expected to reach some 47.2 billion South African Rand -ZAR- (approximately 3.6 billion US dollars) equivalent to around 1.05% of the country’s Gross Domestic Product (GDP), significantly increased compared to FY 2015/2016, when the country spent some ZAR 45 billion (approximately 3.4 billion US dollars). According to South Africa’s authorities, the defence budget was to be further increased in FY 2017-18 and FY 2018-2019 to 48.7 (3.7 billion US dollars) and 50.7 billion ZAR (3.84 billion US dollars) respectively. In the foreseeable future, according to recommendations from various sides defence spending should aim to reach 2% of the country’s GDP.

South Africa’s defence spending has fluctuated considerably over the last three decades. In 1989, the Country ranked 13th in the world in terms of military expenditure and 44th in terms of military spending as a percentage of Gross Domestic Product (GDP). In mid-1990s, South African defence spending had been reduced to less than 3% of the GDP and less than 10% of total government spending. The total Defence Budget further decreased over the coming years, reaching 1.54% of the GDP in 2004/05.

In the FY 2016-2017 compensation of employees was expected to consume the largest amount of the country’s defence budget, amounting to some ZAR 26.9 billion (2.04 billion US dollars) and is expected to further increase reaching 27.1 billion (2.05 billion US dollars) in FY 2018/19.
 
Historically, the Land Forces receive the biggest portion of the defence budget, when compared to the other two branches of the Armed Forces. This is reflected in the fact that for FY 2016/17 a total of 15.7 billion ZAR (1.19 billion US dollars) was to be allocated to the “Landward Defence Programme”, an amount that is expected to further increase in the FY 2018/19, reaching 17.7 billion ZAR (1.34 billion US dollars). With this amount, the South African Land Forces were to replace the Ratel infantry combat vehicles (ongoing), develop a mobile water provisioning system, as well as a field feeding system, procure new personal equipment for soldiers and establish a new Ground Based Air Defence System (GBADS). By the beginning of 2016, twenty one infantry combat vehicles were delivered by the Finnish company Patria Land and Armament. Denel Land Systems (DLS) and its subcontractors, were to manufacture the remaining 217 vehicles. The turret and weapon systems of the vehicle would also be locally developed and manufactured by DLS. Furthermore, the first phase of the GBADS program is already successfully completed, while the second phase is currently ongoing.
 
On the other hand the “Air Defence programme” was to account for some ZAR 6.88 billion (518 million US dollars) in FY2016/17, and is expected to increase by approximately ZAR 360 million (27.1 million US dollars), reaching 7.2 billion by FY 2018/19 (542 million US dollars). Among the related procurements, South Africa is planning to carry out with this amount, are the replacement of the medium distance 3 dimensional (3D) radars, and the development of the A-Darter Short Range Air-to-Air Missile system for the Air Force, a program that is co-funded by the Brazilian Air Force (FAB).

Finally, the “Maritime Defence programme” was to receive about ZAR 4.35 billion (328 million US dollars) in FY 2016/17, and is expected to reach some 4.4 billion in FY 2018/19 (332 million US dollars). With these amounts, the Navy is gradually planning over the period up to FY 2024/25 to acquire new hydrographic and offshore patrol vessels, to upgrade its static communication and heavyweight torpedo capabilities. The new hydrographic vessel will replace the SAS Protea, currently in service with South Africa’s Navy. A related Request for Proposals was published in July 2014. The total costs of the offers received, exceeded the available budget and thus the Department of Defence and the Navy were in the process of reviewing the total budget before a final decision was reached. In the same manner, the responses to the Request for Proposals for the three Offshore Patrol Vessels (OPVs) and three Inshore Patrol Vessels (IPVs) the Navy was planning to procure (tender launched in November 2014), also superseded the available budget and the Department of Defence, in conjunction with the Navy, were in the process of re-estimating the available budget for this tender too.

Armscor is the acquisition agency responsible for defence procurement in South Africa. During the FY 2015/16, Armscor managed contracts relating to capital equipment acquisition projects, totalling some ZAR 6.3 billion (475 million US dollars), representing approximately 52.86% of the total acquisition and procurement portfolio managed and executed for the Department of Defence.  

Since 2009, South Africa procured a variety of defence equipment. Sweden had the leading role in supplying the African country with such equipment, over the related period (2009-2016). The defence collaboration between Sweden and South Africa dates back to the beginning of 1999, when the African country procured 26 Gripen fighting aircraft, manufactured by SAAB.

Since then, several steps have been taken. The bond between the county and SAAB was further reinforced, with the formation of Saab Grintek Defence (SGD), a defence and security company, co-owned by local South African interests and with the parent company SAAB AB being the major shareholder (70%), through its local subsidiary SAAB South Africa. Currently, the company provides solutions to a wide range of sectors, ranging from conservation, mining and health support services, to peace-keeping, air traffic control and weather forecasting.