South African defence spending is predicted to record a CAGR of 1.83% during 2017-21, according to a report by Strategic Defence Intelligence (SDI).
Entitled ‘Future of the South African Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2021‘, the report estimates the nation’s defence expenditure to reach $4.6bn by 2021. This is in contrast with the previous five years, which recorded a negative CAGR of 2.56%.
The majority of five-year spending is anticipated to be on replacing old military equipment, procurement of naval vessels and transport aircraft, and enhancing border security and surveillance.
High crime rates in the nation and growing threats of global terrorism will drive the homeland security expenditure, which is expected to reach $13.3bn by 2021. Furthermore, active participation in international stability and peacekeeping missions are anticipated to result in higher expenditure on the defence sector.
South Africa exported armoured vehicles, aircraft, vessels, sensors and missiles during 2011-15, whereas the defence imports are expected to increase over next five years. Major import partners include Sweden, Russia, France, Israel, the US and the UK.
The small, yet attractive South African defence market allows the foreign manufacturers to enter the country through joint ventures and technology transfers.