South Africa’s arms industry is losing billions of rand and even faces possible collapse.
This is according to a report in the City Press, which claims that the reason for this issue is government inaction over regulatory issues.
According to the report, a current provision requires that any country that wishes to purchase weapons from a South African arms dealer must agree to an inspection by South African officials.
Failure to agree to such a check results in local authorities being unwilling to offer an end-user certificate, which ultimately means that the deal can’t take place.
Several countries that are big buyers of South African-made weapons – including Saudi Arabia and the UAE – are unwilling to agree to such inspections.
According to Simphiwe Hamilton, executive director of the SA Aerospace, Maritime and Defence Industries Association, this provision has been in effect for a long time, but only recently has it been enforced strictly.
Hamilton told Rapport that the enforcing of this provision is also hurting government’s plan to turn around state weapons company Denel, and many other local arms companies are also facing big financial issues.
According to Rapport, Hamilton wrote a letter to Minister in the Presidency Jackson Mthembu asking for assistance with this matter.
In the letter, Hamilton said that 7,600 jobs could be lost by the end of March as a result of the enforcement of the inspection provision.
The industry could also lose up to R25 billion in income from existing contracts, said Hamilton, while future contracts are also at severe risk.
Alleged theft of weapons technology
The City Press also reports that the Special Investigating Unit (SIU) is looking into allegations that classified information about Denel’s missile capabilities has been stolen from the arms company.
According to the report, intellectual property pertaining to Denel’s missiles was stolen by employees – both former and current.
The report also suggests that this information was given to Saudi Arabian Military Industries (Sami) – which now employs former Denel executives and engineers.