Mon séjour en Afrique du Sud (Cape Town)

1) The main guidelines for defence procurement in the Republic of South Africa are primarily embodied in three documents, ie. the "White Paper on Defence", the "Defence Review" and the "White Paper on Defence Related Industries".

The new defence policy of the post-1994 Government of National Unity was embodied in the "White Paper on Defence", which was approved by Parliament in May 1996. This document addresses, amongst others topics, the external and internal strategic environment and the importance of promoting regional security, the primary and secondary functions of the South African National Defence Force (SANDF), budgetary considerations, and arms control and the defence industry. The "White Paper" made provision for a "Defence Review" (completed in 1998), aimed at elaborating on this policy framework through comprehensive long-term planning on such matters as posture, doctrine, force design, force levels, logistic support, armaments, equipment, human resources, and funding.

As stated, the "Defence Review" encompasses the prioritisation of the roles of the SANDF, which ultimately determines the force design which has a direct bearing on the procurement activities needed to equip the defences force for their respective roles.

In addition to the strategic guidelines provided by the "White Paper on Defence" and the "Defence Review", the "White Paper on Defence Related Industries" deals amongst others with issues such as critical defence industrial capabilities and technologies which need to be sustained, acquisition and technology management structures, industrial policy and defence related matters and governance of the industries.

2) The percentage of the defence budget normally invested in materiel, first needs to be qualified in order to put the percentages into perspective. Presently included in the capital acquisition portfolio, is the so-called Strategic Defence Armaments Acquisition programme. A significant portion of the funds for this programme was obtained from outside of the normal defence budget, but added to the defence budget as a book entry for purposes of management and reporting. In order to properly evaluate the typical percentage of the defence budget that is normally invested in material procurement, one would thus need to exclude the cost of acquisition of the Strategic Defence Package (SDP) Programme from the material procurement budget.

At present, the materiel procurement budget inclusive of the investment in the SDP represents approximately 38% of the defence budget, while it only represents 10.9% of the budget when investment in the SDP is excluded. It is interesting to note that the capital budget allocation decreased from approximately 44% of the defence budget in 1989 to an all-time low of approximately 8% in 1989 after which it again increased to the present allocation of 10.9%. This percentage certainly isn't adequate to service all the SANDF requirements for new and replacement materiel and is far less than the normal depreciation of the current inventory. The desired capital allocation would be in the order of 30% of the total defence budget and this is also the long-term target that was set as part of the restructuring on the Department of Defence.

With respect to whether defence strategy drives the procurement budget or the other way around, I would say that in principle defence strategy drives the procurement budget. The capital budget is however at present totally insufficient to properly meet the acquisition requirements of the defence force. The capital budget allocation is to a great extent dictated by what is available after the fixed commitments in terms of personnel and operating costs of the defence force have been serviced. The force design which is amongst others derived from the military strategy, has proven to be unaffordable with the present budget ratios, resulting in severe cuts in investment in planned materiel acquisition programmes.

3) The South African Government's policy regarding the national defence industry as spelt out in the "Defence Review" is one of limited self-sufficiency in key areas, combined with drawing the maximum economic and social advantage out of necessary defence expenditure.

The "Defence Review" clearly indicates that local industrial development will be promoted only where practical and economically justifiable. The "Defence Review" furthermore acknowledges that it is neither affordable nor necessary to strive for complete self-sufficiency in armaments production. Our policy is thus to procure from overseas in certain areas, on a competitive basis from both local and foreign suppliers in other areas, and to then maintain limited self-sufficiency only in certain strategic areas.

The "Defence Review" furthermore justifies the local retention of appropriate capabilities at the appropriate level, based on both the military-strategic and military-operational importance of a local defence industry. These aspects are taken into consideration by ARMSCOR and the DoD during the formal analysis process which determines the required local industrial capabilities.

4) The increased level of technological sophistication of defence systems presently in many cases precludes any single company, or even a single country, from having the total capability to develop and manufacture such systems. With the procurement of modern and sophisticated weapons systems, it has become common to find multi-national consortia bidding for the supply of such systems.

South Africa does not have very much experience with multi-national programmes by virtue of the fact that the RSA was isolated by means of a UN arms embargo until quite recently and this precluded any joint multinational acquisition programmes. The advent of the Strategic Defence Package acquisition has however brought South Africa one step closer to multi-national programmes in the sense that there is an involvement by the South African defence industry in these programmes by virtue of the Direct Defence Industrial Participation obligation of the foreign suppliers on each of the projects.

In spite of the industry cooperation on the SDP programmes, I do not foresee us participating in any true multi-national programmes in the near future. Currently planned acquisition programmes are not of such a nature that they can not either be performed by local industry or by some foreign main contractor.

South Africa is also not in the league where joint development would foreseeably be done with any other European country to meet a joint requirement for some major system, let alone with the USA. The absence of any significant or competitive defence industry in the Southern African region also precludes any multinational programme with any country in this region.

5b) The establishment of joint or coordinated procurement structures within the Southern African region certainly is a goal worth pursuing, and a great deal of effort has already been expended towards establishing such structures within the SADC community. Countries within the SADC region are not only potential procurement partners, but also potential clients for the South African domestic defence industry.

The potential for either marketing South African defence products to countries within the SADC region or joint procurement with countries in the region is significant, especially since the unique environment within which defence products and systems would need to operate is the same for most countries within the region. Further benefits like economy of scale when procuring and maintaining similar systems within the region are all indicative that such a goal should be pursued. The achievement of this goal is however hampered by factors such as legacy issues (different technical standards affecting compatibility and standardisation on different types of equipments and systems) and differences in acquisition priorities which makes it very difficult to synchronise acquisition programmes within the region in order to achieve the benefits of joint acquisition.

6) The most significant current procurement programme is the Strategic Defence Package (SDP) project which entails the simultaneous acquisition of Corvettes, Submarines, Light Utility Helicopters, Lead-in Fighter Trainer and Advanced Light Fighter Aircraft for the SANDF. This programme, for which contracts were signed during December 1999, will run for 15 years and represents the largest defence acquisition effort in the history of the South African DoD.

In addition to the SDP, other significant present programmes are the acquisition of the ROOIVALK combat support helicopter, the upgrade and modernisation of twelve C130 transport aircraft and the local development of various missile and guided bomb systems.

The most significant foreign, non-SDP, programme recently initiated, entails the acquisition of a Ground Based Air Defence System (GBADS) for the SA Army. The first phase of this programme covers the procurement of VSHORAD missiles together with the first phase of an integrated Command and Control system. Other new Army programmes include the acquisition of new ICVs, APCs and a light vehicle replacement programme as well as the "African Warrior" programme. "African Warrior" entails a group of projects focussed on the dismounted soldier system with the aim of acquiring new equipment for the individual soldier as a matched system of items.