How SA can position itself in the peacekeeping market
SA has the expertise, currency environment and value chains to capitalise on the continental peacekeeping and development aid markets. What it lacks is proximity
Beating some of his swords into ploughshares, Armscor CEO Kevin Wakeford has argued that SA should establish an industrial park in the eastern Democratic Republic of Congo (DRC) to service the multibillion-dollar aid and peacekeeping industry in Africa.
Wakeford was speaking to defence chiefs from across Africa at the recent annual Aerospace, Maritime & Defence Conference, held prior to the Africa Aerospace & Defence Exhibition at Air Force Base Waterkloof.
Armsdealers came from as far afield as Russia, China, Turkey, the US, UK and Sudan to display their wares, offering the usual showcase of large weapons systems — from submarines and warships to torpedoes and cargo aircraft. But this year there was a notable shift towards civil defence, emergency and medical services, firefighting, urban safety and other civilian technologies.
This is in part because SA, with its defence expenditure at just 1% of GDP, has no big defence contracts looming. But it’s also because of the lighter military requirements and expanding civilian demands of the African security sector.
Former Africa correspondent Alex Perry noted in his 2017 book The Rift: A New Africa Breaks Free that the $57.1bn aid industry is "the biggest business on the continent". And Wakeford tells the FM that the peacekeeping component of that alone is R100bn a year.
But SA is losing out on that market: the country’s only return is the UN reimbursements it gets for deploying soldiers in the DRC and elsewhere — and then only if its accounting is compliant with UN regulations.
We don’t go to war any more … The military’s mandate now is expeditionary: it’s peacekeeping, it’s disaster relief, it’s border controlKevin Wakeford
"Europe has found a way to do it: they fly everything into Entebbe [Uganda], they have distribution channels and then they get anything to where they need it," says Wakeford.
"We’re right here, our economy offers a softer currency environment, we have better defence engineers, we have every value chain they’ve got — but we can’t do it because our supply lines are too expensive, we don’t have proximity.
"Build another Centurion — that’s where the defence sector is — in the eastern DRC and put in the logistical capabilities and we’ll eat that market up. We’ll eat it for breakfast, because the UN is going to go to the most competitive seller for whatever solution it is purchasing. Whether catering, security or infrastructure solutions — it doesn’t matter — as long as you are within spitting distance, a few hundred kilometres away.
"At some stage we are going to need more proximity, we are going to need a servicing capability to follow the SANDF [SA National Defence Force] into a position where it can access a particular theatre of battle."
Wakeford uses the term "theatre of battle" loosely — "it may be disaster relief", he says.
And the potential to tap into such alternative markets — including development aid and peacekeeping — is huge; they embrace everything from wet goods to civil engineering. But the SA defence industry has, for now, restricted itself to supporting SANDF forces in their various African deployments.
Foreign-financed industrial enclaves are not new to Africa. But Wakeford says industry will invest in such a scheme only if "there is a forward-base mentality in the SANDF — and the SANDF has huge financial constraints".
The peacetime mandate of the SANDF should encourage this shift in thinking, Wakeford told delegates: "The theatre of battle has changed … The military no longer has a war mandate. The military’s mandate now is expeditionary: it’s peacekeeping, disaster relief, border control on a smart basis."
Despite the sector’s fourth industrial revolution edge, there is still a pressing need for defence research & development to generate viable downstream commercial applications of defence technologies.
However, defence minister Nosiviwe Mapisa-Nqakula told the conference that despite its high skills level, the sector is steadily losing expertise to the Middle East and Southeast Asia.
The sector now accounts for 15,000-20,000 jobs in SA, according to Wakeford — about half the number of two decades ago, when the SANDF first embarked on peacekeeping operations.
Despite the exodus of skills and budgetary constraints, SA’s peacekeeping days are not yet numbered. With "terrorist attacks" in Mozambique and renewed instability in the Central African Republic, the SANDF still has a role to play, said Mapisa-Nqakula.