Wednesday 21 August 2013, Amsterdam
Although post-apartheid South Africa has witnessed a significant decline in its defense budget – due to the lack of military aggression from neighboring countries, and very low terrorist activity levels – the country’s defense expenditure is set to continue the growth exhibited over the past five years, albeit at the slightly smaller CAGR of 7.3%, according to the new report: Future of the South African Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2018.
KEY DEFENSE DRIVERS
There are a number of key factors that will drive the expansion of the South African Defense Industry over the next five years, a proper understanding of which is key to making the most of the opportunities offered by this healthy market.
South Africa is considered the regional superpower of Sub-Saharan Africa, and the government has recently embarked on a modernization plan. This includes border security, anti-piracy and maritime security, peacekeeping missions (with the United Nations and African Union), and the protection of South Africa’s people and resources. One key acquisition in this regard is the procurement of 268 new infantry fighting vehicles.
High Violent Crime Rates
Although the South African Police Service (SAPS) has authority over counter-criminal activities, the military often supports the police in its operations as a result of the exceptionally high levels of serious crime in South Africa, which have led to the country having both the second highest number of criminal activities and the second highest number of murders in the world, at 0.5 per 1000 people. As a result, the government is taking measures to improve its surveillance and monitoring infrastructure, which is set to be a key driver of defense expenditure over the next five years.
The nation is an active participant in stability and peacekeeping operations with a number of groups. Consequently, the country is recognized as a peace enabler, and receives foreign funding assistance to adequately equip its forces to carry out these peacekeeping missions. This is expected to have positive impact on the growth of South Africa’s defense expenditure to 2018.
Border Security Challenges
South Africa shares its border with four other countries: Namibia, Zimbabwe, Botswana, and Mozambique, while a further two countries – Swaziland and Lesotho – are situated within its borders. This 4,750 kilometer border is unsecure, difficult to control, and poses a significant threat to the country’s security.
As the country’s tight defense budget does not allow for dedicated border guards however, the control exerted by the police force is inefficient given the length of the border and the lack of sophistication in the surveillance equipment used. Therefore, part of the responsibility for border security was transferred to the military in early 2010, and is expected to drive defense spending over the next five years.
The South African homeland security market is expected to continue growth, driven by its efforts to improve border security and combat cross-border crime, which includes stock theft, illegal grazing, and rhino poaching.
Rising Threat of Terrorism
With no known separatist movement or hostile nations, South Africa is at low risk of terrorism. However, even though the threat of external aggression is minimal, organized crime and increasing Islamic and white right-wing extremism poses challenges to internal security. Furthermore, with the spread of terrorism across the world, and the occasional occurrence of indiscriminate terror activities, the nation is conscious of its vulnerability and is expected to give increased attention to protecting the country from any possible terror attacks.
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