New Market Study Published: South Africa Defence & Security Report Q1 2014

In terms of the country's defence budget, questions remain as to whether it allocates sufficient funding for the military to perform the tasks required by the government. In Q413, BMI reported that defence spending was expected to be set at US$3.9bn for 2013, but the reality remains that the funding allocated to the Defence Forces (SANDF) remains insufficient. Should spending cuts continue over the long run, the SANDF will inevitably have to decide which capabilities and programmes it will have to downsize or eliminate, and also if it wants to trim personnel numbers further. Defence cuts have been a reality in South Africa since the end of apartheid in the early-1990s, the corresponding end of the Cold War and South Africa's many 'Bush Wars' in the south of the continent. The first major cut occurred in 1990, and was then followed up by a further budget reduction in 1997.

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Overall, the size of the South African National Defence Force is expected to decline over time. This is due to a number of factors: Firstly, the end of the Cold War and the end of apartheid brought an end to military conscription. South Africa now maintains an all-professional armed force and it is difficult to see why any future government would reintroduce conscription. Another issue which the SANDF must face is high rates of HIV/AIDS infection in its armed forces. Over the long term, this will seriously affect the ability of the SANDF to recruit physically fit personnel who will be able to complete a full military career.

Readiness and training levels are an increasing area of concern for the SANDF. Shortages of skilled personnel and a lack of funds for maintenance have also been blamed for placing South Africa's military services at a poor state of readiness. Some voices have criticised the military for purchasing expensive hardware but not then having the systems, infrastructure and personnel in place to ensure their adequate maintenance, repair and overhaul.

Over the past year, the South African National Defence Force has performed little in the way of procurement activities. That said, in September 2013, Denel received a contract worth US$900mn as a production contract for five separate variants of the Project Hoefyster New Generation Infantry Combat System Vehicle, which is known locally as the 'Badger' armoured vehicle.

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