The demise of Denel is a sovereign risk for SA

The downward spiral of Denel has reached such proportions that it has become part of the new normal: another failing state-owned enterprise.

2021-11-29 01:01:00 PM

The downward spiral of Denel has reached such proportions that it has become part of the new normal: another failing state-owned enterprise.

The downward spiral of Denel has reached such proportions that it has become part of the new normal: another failing state-owned enterprise.

For every innovation in this sector, there is invariably a spin-off to a vital civilian application.The technology innovations developed by Denel and the Defence Industry in South Africa were tried and tested under harsh African conditions and found to be some of the most reliable and robust in the world. This led to a massive demand for South African defence technologies enabling an international market access disproportionate to our geopolitical influence.

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But it is not solely about making weapons and munitions locally, that are internationally competitive and, in some cases, class leaders; it’s actually about the role of the defence and aerospace sector as a ground breaking technology based apex ecosystem in our economy. For every innovation in this sector, there is invariably a spin-off to a vital civilian application; The Global Positioning System (GPS) and the internet are two obvious examples that exist today with origin in the defence sector.

GPS was a vital military technology originally developed to track a submarine and its missiles remotely. That was as long ago as 1960. Today we used GPS on our smartphones to let us know what the fastest route is on the way to work, as this technology is able to mesh data from other users to provide real time information on traffic congestion.

The internet began as a military capability experiment that would enable the US Military Headquarters to communicate with units and members under command in the wake of a devastating thermonuclear attack. Today, we use the internet on our smartphones for everything from doing our banking transactions, checking our voter registration to booking a COVID-19 vaccination or checking in for an aircraft flight – or we might just use it to gossip on Twitter.

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None of these innovations, which have radically transformed our lives in the 21st century, would have been possible without the Defence and Aerospace sector which first breathed life into them. There are many other examples of where swords were beaten into ploughshares, as the Good Book exhorts us.

Lest we forget the array of smaller businesses that depend upon Denel. These businesses will not be able to survive should Denel collapse. This holds true for the incredible galaxy of innovators; scientists and engineers and technicians that once called Denel home. After one-too-many missed pay checks, much of that intellectual elite has now gone, forced to seek greener pastures in the interest of survival. Their opportunities, due to the nature of the industry, are more often than not in foreign countries which now benefit from the investment South Africa made into its people and its skills and hard sciences.

Six years ago, Denel was the poster child for how state-owned enterprises could and should be run. Now sadly it has become the poster child for catastrophic failure. Shame on us for not intervening a long time ago.The 2020 Aerospace and Defence Masterplan lists almost a dozen projects that would be beneficial to the defence industry if they were to continue. The biggest of these is the production of the long-awaited Badger Infantry Combat Vehicles for the SA Army. Mismanagement coupled to defence budget cuts have had a fatal effect on the delivery and timelines assigned to this project.

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Numerous other projects that are critically important from both the SANDF and Denel’s perspectives: the creation of a brand new locally designed and produced truck family to replace the Samil trucks that have been with us since the 1970’s and the production of a new set of armoured mine protected personnel carriers to replace the aging Casspir and Mamba fleets. These projects were intended for allocation to our private sector manufacturers in a long-term through-life-cycle industrial participation initiative.

The loss of Denel will grievously impinge on our sovereignty, because we will be dependent on foreign defence manufacturers and countries. The whole point of developing a very strong defence industry was to avoid being dependent upon the goodwill of another country.

South Africa’s defence and aerospace industry should be a national imperative – along with a commitment to adequately fund the SANDF. But of the two, perhaps the most pressing is the plight of Denel. Its failure will have dire consequences on the ability of the SANDF to carry out its constitutional mandate – safeguarding the sovereignty and territorial integrity of the RSA.  

It is not in our interest as a country to let it fail.

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