The South African Defense Sector – Market Opportunities and Entry Strategies, Analyses and Forecasts to 201513 Dec 2010 • by Natalie Aster
London – “South Africa is expected to spend US$27.2 billion during 2010–15 on its growing defense market, in which the armed forces are primarily deployed for homeland security and peacekeeping missions.”
The report “The South African Defense Sector – Market Opportunities and Entry Strategies, Analyses and Forecasts to 2015” by iCD Research offers insights into the market opportunities and entry strategies adopted by foreign OEMs (original equipment manufacturers) to gain a market share in the South African defense industry.
During the review period, the South African army has made few large investments in upgrading its weaponry systems and has not made any major procurement. However, although no large investments are expected in the next two to three years, the forecast growth in army capital expenditure during 2010–11 may mean an increase in the number of small-scale equipment procurements to replace obsolete weaponry. Post-2011, capital expenditure is expected to decline until 2014 as a greater emphasis on revenue expenditure emerges. During 2010–15, the capital expenditure budget allocated for the army is projected to grow at a CAGR of 1.34%.
Published: April 2010
Price: USD 1,250.00
Report Sample Abstract:
Market Attractiveness and Emerging Opportunities
Despite its challenges, South Africa remains one of the most attractive defense markets in the African region, with a defense spending capability that is expected to increase in the next five years. In 2009, 32.3% of the country‘s defense expenditure was allocated towards the acquisition of military equipment. Moreover, even though the value of the budget allocation for military procurement decreased over the last five years, it is expected to grow at a CAGR of 9.06 % during 2010–15 due to an increase in demand for the replacement of old equipment with new. Furthermore, South Africa‘s participation in various peacekeeping operations in the region increases the attractiveness of the defense market to investors. Ultimately, it is expected that the majority of the defense budget will be spent on developing the army and air force during the forecast period.
South Africa’s annual defense expenditure to reach US$5.6 billion by 2015
South Africa has the second largest arms market on the African continent. The nation‘s total defense expenditure, which stood at US$3.6 billion in 2009, grew at a CAGR of 2.80% from 2004–09. It is expected to record an increased CAGR of 9.06% during 2010–15, to reach US$5.6 billion by 2015. It is forecast that the country will spend a total of US$27.2 billion on defense during 2010–2015, with spending on the acquisition of military hardware and technology estimated at US$0.79 billion in 2010 alone.
Army and air force to share the majority of the defense budget
It is estimated that of the total capital expenditure budget for 2010, the army will receive a majority allocation of 36%. This is due to a strong focus on renewing its obsolete equipment and undertaking new procurement to modernize its weaponry. On the whole, capital expenditure is expected to grow continuously during the forecast period, to reach US$1.2 billion by 2015, with the majority allocated for hardware and technology procurement for the army and air force.
More information can be found in the report “The South African Defense Sector – Market Opportunities and Entry Strategies, Analyses and Forecasts to 2015” by iCD Research.
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