Opinion: Economic recovery and the defence industry – defenceWeb

In his statement in early September after the Statistician General, Risenga Maluleke, released quarterly GDP statistics wherein South Africa’s GDP shrunk by 51%, President Cyril Ramaphosa said: “Now is the time to act quickly and boldly to place South Africa on a rapid growth trajectory. We cannot continue with business as usual. We will use this moment of crisis to build a new economy, and unleash South Africa’s true potential”.

It is no wonder therefore that the nation is waiting with bated breath as the President is due to table the draft “economic reconstruction and recovery plan” to parliament on Thursday 15 October 2020. In the meantime, at least 2.2 million people have lost their jobs, and the economy is projected to shrink by at least 8% in 2020. For the defence industry however, the wait is even more agonising since, given historical treatment as the step-child of the economy, it is very probable that the sector will not even feature in such a recovery plan.

It has been a difficult time for local defence companies during the COVID-19 pandemic. The industry was already in ICU even before the pandemic in 2019. The shrinking domestic defence budget, the increase in competing products in the international markets, the collapsing Denel and the unreasonable (anti-business) arms control regime have collectively battered the industry quite badly in the last five years. COVID-19 was therefore the proverbial last straw.