Mon séjour en Afrique du Sud (Cape Town)

The South African military market is likely to continue to sustain strong growth prospects as a rapidly growing defense budget and force-restructuring efforts afford new procurement opportunities to the South African National Defense Forces (SANDF). These opportunities will be aligned with the planned modernization of land forces and improved training, operations, maintenance, and logistic support. The confluence of an expanded defense budget, declining military personnel costs, and downturn in the procurement payment cycle is the primary factor driving the modernization of the South African military market.

In early July, South African Finance Minister Trevor Manuel announced that defense spending would continue to grow over the next several years. Manuel's proposal suggested that FY2008-2009 would increase by 9 percent. The positive outlook for the defense sector follows a considerable expansion in defense spending over previous years; the FY2007-2008 budget represents a 6 percent increases over that of FY2006-2007 and a 9 percent increase in defense expenditures compared with FY2005-2006. Economic growth averaging 4.6 percent in recent years and favorable exchange rates have enabled the South African government to allocate funds needed to modernize its aging military.

Concurrently, the proportion of the defense budget devoted to military personnel-related expenditures is gradually declining. In FY2007-2008, approximately 35 percent of the defense budget was allocated to personnel costs compared with over 38 percent in FY2006-2007. The South African Defense Ministry has set a nominal goal of only 30 percent of the budget to be dedicated to personnel costs. Savings from military personnel costs are directed back to procurement accounts and ongoing modernization programs.

SANDF procurement payment cycle has also begun to decline, freeing up additional funds for the next round of acquisitions and modernizations. The Strategic Defense Account (SDA), which accounts for approximately 35 percent of the total defense budget, is responsible for funding long-term procurements. Under the current 12-year Strategic Defense Procurement Program (SDPP), the SDA has been geared toward modernizing the air and naval sectors. With the current SDPP winding down and procurement funds beginning to accumulate, the SANDF is planning to implement the next SDPP with an emphasis on modernizing the land forces.