Reading between the lines of #UgandanLivesMatter and the effects of poor governance

Media Release: 

Ugandan musician turned politician Robert Kyagulanyi, also known as Bobi Wine, lays flowers during a prayer for the victims of the protest against his arrest at the headquarters of his opposition party, the National Unity Platform (NUP), in Kampala, Uganda, on November 21, 2020. – A Ugandan court on November 20 charged opposition leader Bobi Wine over an election rally which allegedly flouted Covid-19 rules, then freed him on bail, after his detention sparked violence that left 37 dead. (Photo by STRINGER / AFP)

Our continent has had its share of despots in the post-colonial era. There was a time when it looked like they were on their way out. Sadly, for the citizens of Uganda and a handful of other African countries, despotism is again on the ascendancy. Despotism and autocratic consolidation invariably destroy good governance. At Good Governance Africa, we contend that this governance deficit not only leads to reckless (if calculated) brutality, but ultimately to insecurity for the despot himself.  

Harrowing scenes from Uganda shared across social media platforms show the human carnage behind the bland statistics that at least 28 people have been killed and 557 arrested, with scores more beaten, shot or maimed in protest action against the state over the weekend. Uganda goes to the polls in 2021. As the graph below clearly demonstrates, history is simply repeating itself. The cycle of electoral violence is mirroring, almost to a tee, the 2005 eradication of presidential term limits followed by extensive intimidation and repression of any form of opposition or protest in 2006. The 2016 elections were relatively peaceful by contrast.  

Museveni came to power in 1987 and is fast approaching the record for the longest-standing autocrat on the continent. Like Robert Mugabe of Zimbabwe, and Jose Eduardo Dos Santos of Angola, who ruled for 37 and 38 years respectively, Museveni has followed the careful script of eradicating internal opposition to his rule. External opposition has been a mere irritation in Museveni’s political calculus. At every opportunity, he has accumulated more power to himself and, in the process, minimised the probability of an internal coup being launched.

Each power-grab eroded the integrity of the internal power-sharing mechanism, reducing the probability that remaining members of the ruling coalition would band together and oust him from office. With increased personal access to power and rents, Museveni could calculate just how large he required his patronage network to be to avoid disrupting the equilibrium. The prospect of impending oil wealth simply deepens this scourge and intensifies the probability of ‘successful’ autocratic consolidation.  

Given this analysis, why do we contend that the resultant governance deficit is ultimately risky for the apparently ‘successful’ autocrat? Because Mugabe and dos Santos were both removed from their perch by bloodless coups launched by their own ruling coalitions, a relatively novel occurrence in our more recent context. Moreover, even though the Arab Spring did not produce lasting governance gains, autocrats do risk widespread popular grievance against their rule. This risk is increasingly concomitant with a rising risk of organised crime and terrorism proliferation.  

Extremist insurgents take advantage of local grievances. Local grievances are almost always a direct function of poor governance. In the absence of governance, public goods cannot be delivered, and broad-based economic growth cannot occur. In resource-wealthy contexts, unscrupulous extractive industry companies are often willing to pay short-term rents to politically connected gatekeepers to gain access to the relevant resource. This exacerbates local grievances. This matching of short-term politics and short-term business thinking is an explosive cocktail that destroys the long-term prospects for both.

Museveni will rue the day he neglected good governance (even before he destroyed presidential term limits) when terrorists start blowing up Uganda’s oil fields. That oil companies off the coast of Mozambique have started to employ private military companies to prevent terror attacks is just one example of the growing trend. Only a few weeks ago, the Islamic State Central Africa Province, mounted an attack on Mtwara in southern Tanzania.  

The best empirical evidence we have about the resource curse shows that natural resource wealth correlates with under-development in the absence of institutions that ensure good governance. What we don’t have evidence for yet, but that we strongly predict on the basis of the trends unfolding, is that the resource curse will no longer benefit elite insiders at the expense of the majority (the traditional resource curse), but instead destroy the prospects for the very autocrat who destroyed those governance institutions.  

In Uganda alone, the governance deficit is clearly on display in the graph below. The country has not scored above 0 (where -2.5 is the worst possible estimate and 2.5 the best) since 1995, according to the World Bank’s Worldwide Governance Indicators. 

According to the Fragile States Index (powered by The Fund for Peace), Uganda has seen a near continuous improvement since its 2016 low (but with a preceding average deterioration from 2006 to 2016). In this instance, the past decade is a poor predictor of the future. 

On the Political Indicator Trends, similarly, the apparent improvement of public service delivery is undermined by a poor human rights record and a poor state legitimacy score. The country’s failure to improve its governance scores, combined with Museveni’s iron grip on power, has not only led to despair for millions of citizens but will increase the fragility of Museveni’s own position within his ruling coalition. Junior members of the coalition, with longer time horizons (and therefore lower discount rates) will possess increasingly stronger incentives to overcome their collective action problem and overthrow the ruler.

 This is especially likely to be the case if the risk of extremist activity proliferates. Given the current expression of citizen grievance, and brutal state response, over poor governance, this risk is evidently growing 

The bottom line is that abrogating good governance, while apparently a useful short-term bet for personal power acquisition, is likely to lead to longer-term insecurity for the autocrat. This is a lesson that all leaders across the continent should heed. It should also lead to stronger condemnation and action from regional bodies that seem impotently intent on allowing the status quo to continue ad nauseum.   

Lessons from Trump’s dethronement for Africa

PHILADELPHIA, PENNSYLVANIA – NOVEMBER 05: A man participating in a protest in support of counting all votes watches U.S. President Donald Trump hold a news conference as the election in the state is still unresolved on November 5, 2020 in Philadelphia, Pennsylvania. With no winner yet declared in the presidential election, all eyes are on the outcome of a few remaining swing states. Chris McGrath/Getty Images/AFP

In a historic US election, President Donald Trump was ousted from office by Joe Biden. Biden won 50.8% of the popular vote, while Trump still managed 47.5% in the largest voter turnout since 1908. The presidency of Donald Trump is widely viewed as anomalous, a monstrous blip in an otherwise healthy and deeply consolidated democracy. This would be a mistake. A deeper analysis reveals that populism can take root even in societies with relatively broad-based access to political and economic opportunities.

Globalisation, accelerating apace since the end of the Cold War in 1989, has resulted in a highly uneven distribution of the gains from trade and volatility from easy flight of capital. While global GDP has ballooned, inequalities have widened, with real income growth among the top quintile rapidly outpacing middle class wage growth. Local displacement has intensified. Outsourcing or automating jobs in the name of economic efficiency has created political ruptures in historically strong democracies. These dynamics have ploughed the soil for populism to take root. The populist playbook is to exploit the fears and disappointments of the economically marginalised and subvert democratic institutions in the process.

Trump’s tantrums over alleged vote-rigging and repeated court threats are simply part of the script. The phenomenon of democratic backsliding has so arrested the attention of scholars that between 2011 and 2018 alone, 1,700 academic articles were published on the subject. In the 40 years prior, a total of 1,500 articles covering threats to democracy appeared. The fact that Biden has won out against Trump may provide some reprieve for friends of democracy across the globe, but complacency is unwarranted. Otherwise strong democratic equilibria tend to be disrupted by socio-economic inequality, financial shocks, the exploitation of extreme political views by technological interference (read Cambridge Analytica) and the resultant perpetuation of echo-chamber social-media politics.

None of these trends show any sign of abating. Worryingly, they are also mutually reinforcing, which can create path-dependent trajectories away from democracy. As scholar Daron Acemoglu has pointed out, the global factors that have contributed to growing domestic inequality in the US have not been addressed, and policymakers are far from a consensus on how this can be done. Biden’s work is cut out for him to forge bi-partisan agreement that, for instance, higher federal minimum wages and a more redistributive tax system may be desirable. Even with that in place, though, the global trend towards distrusting scientific facts and resenting elites is strengthening. Populism thrives in such contexts.

Perhaps the most concerning element of Trump’s ascendancy was the willingness of Abraham Lincoln’s 150-year-old party to acquiesce to Trump’s proposition to ride on a Republican ticket. And, typical of populist incoherence, most of what he stood for and campaigned on were diametrically opposed to orthodox republican positions such as free trade. Nonetheless, as one commentator put it, Biden has ‘sleep-walked’ into the White House and the embers of democracy are still alive in the US. Notwithstanding the warning to avoid complacency, it remains good news because, on average, democracy causes economic growth. Why? Because its ability to remove leaders like Trump is one of its enduring attractions.

Consolidated democracy, for all its inefficiencies, respects the rule of law, insists on the separation of powers, punishes corruption, and gives the citizenry a voice that produces proper accountability from the elite. This institutional strength, in turn, results in economic dynamism, as contracts are honoured and businesses can flourish. Responsible players are crowded in while irresponsible players are either crowded out or deterred from engaging in corrupt activities. In a nutshell, good governance is more likely to take root in the context of robust political competition where the opposition has a fair and credible chance of winning elections.

While the world breathes a momentary sigh of relief, African countries continue to fight for democracy to take root at all, never mind worrying about whether it will consolidate. While the evidence suggests that democratisation across the continent is advancing, on average, a number of important red flags punctuate the trend. Tanzania, soon to be among the most populous countries on the continent, held its general elections on 28 October 2020. Incumbent President John Magufuli successfully rigged the process to secure for himself an incredible 84% of the vote while the main opposition managed to eke out 13%. According to the Polity V dataset, the country’s democratic score improved from 2 (out of a possible 10) to 4 from 2014 to 2015 (the year in which Magufuli came to power).

We expect that figure to move below zero once the next set of figures is released. Not only did Magufuli rig the elections, he has ruled with an iron fist of fear, initially rooting out some petty corruption – his populist ticket – but he has since crushed civil liberties and shut down opportunities for opposition parties to engage in politics. Post-election, Tundu Lissu, chief opposition leader who survived an assassination attempt in 2017, has had to flee the country after calling for protests against the election results; this in the midst of reports that at least 150 opposition leaders and members have been arrested since 27 October, with at least 18 remaining in custody. The frequency of abductions and/or forced disappearances has ticked up significantly since Magufuli came to power.

 

Economic growth has been sclerotic under Magufuli’s rule as he continues to be suspicious of the private sector and insists on white elephant megaprojects such as the Stiegler’s Gorge hydropower project that the country cannot afford. GDP per capita growth initially fell to 3% in 2015 (from 3.6% the year before) before recovering to 3.7% the following year. It has since fallen to 2.7%.

Magufuli came to the presidency from a weak base within the CCM – the liberation movement of Julius Nyerere – and is working hard to purge elites from within his ruling coalition who would otherwise ensure some degree of power-sharing. There is every reason to expect that Magufuli will attempt to clinch a third term in office, which would violate the constitution. He would join a long list of those who long ago eschewed term limits, a fundamental governance limit on executive power. A fundamental problem is not only that autocratic rule tends to result in misery and squalor for the majority, but that governance-dismantling autocrats seem to spur each other on across borders.

Zambia’s elections are set for 2021, and President Edgar Lungu appears to be taking a leaf out of the Magufuli playbook but with some variety to spice up the mix, drawing on Emmerson Mnangagwa’s Zimbabwean script too. It appears that his strategy for rigging the elections is to amend the constitution to allow coalition formation (instead of a runoff second ballot between the top two candidates) in the case of no candidate winning more than 50% of the vote. He brought this infamous “Bill 10” to parliament at the end of October but it failed (though by a margin of only 6 votes). At least this strategy indicates that Lungu is scared of losing the popular vote and does not have Magufuli-like power to simply rig the election to an arbitrary winning proportion of his pre-selected choice.

The opposition has a strong likelihood of winning the election, though Hakainde Hichilema – the leader of the opposition – is undoubtedly keen to avoid more jail time at the hands of Lungu’s trumped-up charges (as has happened before). Analysts expect that Lungu, on failing to win Bill 10, will now simply abolish the current voters’ register and create a new one more favourable to his prospects. The graph below indicates a surge of violence around the 2016 elections that saw Lungu gain a second term in office. As Natasha Chilundika has written over at Democracy in Africa, we really need to avoid a repetition of this come 2021.

 

Slightly further afield in Uganda, President Yoweri Museveni has been in power since 1986. Still going strong, according to scholar Moses Khisa, Museveni has “run roughshod over important constitutional and institutional safeguards, checks and balances that were enshrined in what was a relatively progressive and liberal [1995] constitution”. Museveni is edging in on the 38-year rule exercised by Jose Eduardo dos Santos of Angola, and the 37-year reign by Robert Mugabe of Zimbabwe (both upended by their own ruling coalitions in 2017). Museveni’s assault on democracy began in 2003 with an eradication of constitutional term limits.

In addition to subverting apparently democratic institutions to advance authoritarian ends (by co-opting and corrupting the judiciary, for instance), he has also used external security threats as a cover under which to criminalise otherwise legitimate political activities. Museveni has had Kizza Besigye, his main opposition, arrested more than 1,000 times. A period of relative calm prevailed between 2007 and 2013, but violence against citizens has been on the rise, with incidents this year alone matching the 2006 data. The prospect of commercial oil revenues will further embolden Museveni’s autocratic stranglehold through enabling him to distribute patronage to a carefully selected circle of insiders and repress outsiders.

 

On the subject of Mugabe and dos Santos, their removal tells an important story. Autocrats who successfully consolidate power are almost always only removed by an internal coup or death in office. Very few in contemporary history have been upended by democratic forces. The risk of further autocratic consolidation is, therefore, immediately at hand. In Russia, Joseph Stalin’s death did not suddenly usher in democratic rule. Vladimir Putin’s stranglehold over the ruling coalition in Russia today is evidence enough to show that new autocrats are likely to gain ascendancy and the fight for democracy to take root requires far more than the removal of one autocrat. It requires the slow, hard work of establishing governance institutions that respect the rule of the people by the people.

In both Zimbabwe and Angola, new autocrats have arisen. Mnangagwa and Lourenco respectively came to power through removing their long-standing leaders who had placed family members ahead of party loyalists, threatening their access to power and rents. One may have expected that some kind of power-sharing mechanism would be re-established in both Zanu-PF and the MPLA respectively, but there is little cause for optimism on the basis of the current evidence. Both incumbents enjoy vast access to resource wealth, again enabling the distribution of rents to a select circle of loyalists and careful elimination of internal and external threats to their rule.

Citizen attempts to protest against grand corruption in Zimbabwe around July this year resulted in a rapid rise in disappearances, abductions, torture and arrests – these have not yet been captured in the data below, but the graph still paints a terrifying picture of the militarised regime’s willingness to exercise repression to prevent any accountability. With elections set for 2023, we can either expect to see further violence escalation or an indefinite postponement of elections altogether.

 

A similar pattern emerges from Angola, with violence against citizens increasing again in the aftermath of the 2017 elections that saw Lourenco come to power through a rigged election. Unlike Magufuli’s CCM, though, the MPLA chose a winning figure of nearer to 60% than 80%.

 

For all one might say about the Trumpian episode in US politics and its dangerous flirtation with autocracy, the fact is that the vote matters in the US and Trump is out (or at least probably will be with Republicans now also losing patience with his intransigence). Americans have exercised their voice. Moreover, no matter whether one resonates with Kamala Harris’s political views, it is a significant feat that an African-American woman has ascended to the White House (and the first woman vice-president in US history) despite so much underlying racial tension in the country.

It is easy to be despondent about the deep structural divides that threaten to disrupt the US democratic equilibrium, but the fact that it has stood firm should encourage us to war against the proliferating autocratic threats to democracy in many African countries. Of course, the continent is not without hope, and the general trend is arguably positive. But it would be amiss of us to ignore the warning signs in Tanzania, Uganda, Zambia and Zimbabwe, not to mention Ethiopia (in which the risk of a full-blown civil war escalates daily), the DRC, Nigeria and Mozambique. Mozambique, in the context of poor governance, deep local grievances and a poverty trap, is fertile soil for the rise of violent extremism. It’s an explosive cocktail that risks spilling over into neighbouring countries.

 

One recent light in these otherwise dark trajectories, though, is Malawi. Small and poor, for sure, the country is wracked by a history of corruption and extensive poverty. Nonetheless, when Lazarus Chakwera came to power earlier in 2020, in the midst of a global Covid-19 pandemic, he showed that it is possible for the judiciary to stand firm against an incumbent executive bent on staying in power and for the people to vote that president out in an election re-run. This should be celebrated loudly, if cautiously, and remind us that it all starts with governance.

As Dr Grieve Chelwa has quipped, SCOTUS might do well to cite the Malawian court case should Trump successfully get to the Supreme Court over his allegation that the US election results were rigged. We should never give up in our quest to build governance institutions that prevent the abuse of power and give the people a voice.

 

Dr Ross Harvey is Director of Research & Programmes at GGA. Ross is a natural resource economist and policy analyst, and he has been dealing with governance issues in various forms across this sector since 2007. He has a PhD in economics from the University of Cape Town, and his thesis research focused on the political economy of oil and institutional development in Angola and Nigeria.

Leading from the front

Youth: their time is now

Young people are playing a crucial role in advancing climate action and climate justice

Elizabeth Wathuti
Photo: Raphael Obonyo

Climate change continues to threaten human existence, economic growth and the livelihoods of vulnerable populations, and experts predict that Africa will be struck more severely than most by the impact. Across the continent, young people are enraged about the lack of action on climate change and are demanding action and taking action. As United Nations Secretary-General Antonio Guterres summed up in his speech at the G-7 Summit in August last year, 2015 to 2019 were the five hottest years on record. At the same time, according to the World Meteorological Organization, the level of CO2 in the atmosphere is the highest in human history.

The recent Special Report on 1.5°C (the impacts of 1.5°C global warming above pre-industrial levels) from the Intergovernmental Panel on Climate Change summarised the scientific evidence. The report is in its findings: limiting unequivocal warming to 1.5°C requires major and immediate transformation across all sectors of society. There is a need to reduce annual emissions by half of their current level by 2030 if we are to have a chance of limiting warming to 1.5°C. According to Doug Ragan, UN Habitat’s Child and Youth specialist, “Climate change also threatens human security because it undermines the environment, livelihoods, communities and the ability of states to provide the conditions necessary for sustainable peace.

Young people’s voice, agency, and leadership have played a crucial role in advancing climate action and climate justice.” Indeed, young people in Africa are leading the way in the fight against climate change and stepping up to help their communities because they know the future depends on their actions. Adjany Costa, a 29-year-old environmentalist agrees that youth innovation and energies are essential in the fight against climate change. She has been at the forefront in demanding conservation of precious water and biodiversity hotspots in Angola. Her efforts have not gone unnoticed; in 2019 she received the young Champion of the Earth award from the UN Environment Programme.

In Ghana, Kwabena Danso, young entrepreneur and founder of Boomers International Ltd, is working with other young people on a project that encourages bamboo farming. Currently they work with more than 200 rural farmers to get them into bamboo agroforestry, which will empower them economically, protect the environment (bamboo improves soil fertility and absorbs more carbon than any other plant) and at the same time, provide the company with a sustainable supply of raw materials for making bicycles. Bamboo can therefore support a healthy, non-polluting form of alternative transport, meeting growing mobility needs while addressing climate change, environmental degradation, poverty, and high unemployment among young people.

Adjany Costa Photo: Raphael Obonyo

As Danso says, all we have is one world and we have no option than to protect it – this is the mandate of the youth of our time. Young Africans are making change happen, through their activism and also through their jobs and livelihoods. Another example is Alhaji Siraj Bah, a 20-year-old activist from Sierra Leone, who has set up an enterprise making biodegradable paper bags from banana fibres. He started his company with just $20, with the aim of combating plastic pollution, deforestation, air pollution, improper waste management and youth unemployment. His company, Rugsal, also produces smokeless, long-lasting and affordable briquettes from coconut waste.

There is no doubt that young people in Africa are charting the future as they help their communities adapt to the climate changes already happening. In Kenya, young people like Elizabeth Wathuti are mobilising to create a positive environmental impact. Wathuti, 24, founded the Green Generation Initiative in 2016 to address global environmental challenges such as deforestation, pollution and environmental injustices. She has organised a number of tree planting activities, including clean-ups and environmental education activities, all the while increasing awareness of the environmental challenges created by climate change.

Growing up in Nyeri county, a Kenyan region known for its beautiful forests, in a village where  planting  trees and drinking from clean streams was the norm, she connected with nature at a young age. Her first act as an environmental activist was planting her a tree when she was seven years old, inspired by the late Nobel Laureate Professor Wangari Maathai, who at that time was the Member of Parliament in her home region, Tetu. “Many people say that Africa will be the hardest hit by the impacts of the climate crisis, but the reality is that Africa has already had to go through a lot of challenges as the reality of the climate crisis has already hit home,” she says.

Kwabena Danso Photo: Raphael Obonyo

“It is not a future concern; it is about now, and things will only get worse for us if global action is not taken.” Through her organisation, Wathuti gives children and young people practical environmental education, greening and So far, she has trained and nurtured more than 20,000 children in different schools across Kenya, encouraging them to love nature and be conscious of the environment at a young age and their role in addressing the ongoing climate crisis. The adopt-a-tree campaign has helped inculcate a tree growing culture among people, especially children. Out of the more than 30,000 trees they have planted in schools, including fruit trees, thus far, 99% have survived.

Wathuti believes that the impact the campaign will have is not the number of trees planted so much as the number that will reach maturity. “We have a critical role to play as young people – and we must do all we can to tackle climate change,” says Charlot Magayi, the founder and Chief Executive Officer of Kenyan-based Mukuru Clean Stoves, a social enterprise that recycles waste metal to produce improved, efficient cooking stoves. Magayi partners with local women business owners to distribute to the last mile. “The stove’s ventilation is improved to ensure toxic smoke emissions are reduced by 70%,” she says.

In Uganda, Leah Namugerwa, a 15-year-old climate activist and student has been striking every Friday for greater action on climate change, plastic pollution and more. Also, she’s started the Birthday Trees initiative, encouraging people to celebrate their birthdays by planting trees. At the UN Habitat’s World Urban Forum in Abu Dhabi in February this year, Namugerwa led young people gathered at the Youth Assembly to demand urgent and substantive action on the climate crisis. “Adults are not willing to offer leadership,” Namugerwa told the gathering, “so I offer myself.”

As Ovais Sarmad, the Deputy Executive Secretary of UN Climate Change, has remarked, young people have brought a breath of fresh air to the ongoing conversation about climate change: they continue to remind leaders of the need for urgency the world faces and of the imperative to work towards a cleaner and greener future.

 

Raphael Obonyo is a public policy analyst. He’s served as a consultant with the UN Department of Economic and Social Affairs (UN DESA). An alumnus of Duke University, he has authored and co-authored numerous books, including Conversations about the Youth in Kenya (2015). He is a TEDx fellow and has won various awards.

Press Release

Good Governance Africa (GGA) takes great pleasure in announcing that natural resource economist and policy analyst Dr Ross Harvey will be joining the organisation from 1 May, 2020.

GGA is a research and advocacy non-profit organisation dedicated to improving governance across Africa with a focus on several core areas: natural resources, peace and security, democratic governance and political processes, improving the economic environment, and youth and marginalised/vulnerable groups.

With offices across Africa, GGA’s work is based on exploring and advancing the key governance principles of democracy, accountability and transparency, and combining these with upholding the rule of law and respecting human, civil and property rights.

Ross’s task at GGA is to establish a non-renewable natural resources project (extractive industries) to ensure that the industry becomes genuinely sustainable and contributes to Africa achieving the Sustainable Development Goals (SDGs).

Mindful that the priority for most Africans is to find meaningful and sustainable employment, his key objective will be to concentrate on development-orientated governance improvements that connect the extractive industries to green industrialisation, land tenure, clean water, and renewable energy and transport systems.

Ross has been dealing with governance issues in various forms across this sector since 2007. He has a PhD in economics from the University of Cape Town, and his thesis research focused on the political economy of oil and institutional development in Angola and Nigeria.

While completing his PhD, Ross worked as a senior researcher on extractive industries and wildlife governance at the South African Institute of International Affairs (SAIIA), and in May 2019 became an independent conservation consultant.

GGA looks forward to working with Ross and believes he represents a valuable addition to our team.

For more information and interviews, please contact Chris Maroleng on chrism@gga.org

Distress and deep uncertainty

South Africa: tough at the top

Much of the country’s private defence sector has enjoyed strong growth since 1994, but the state-owned flagship, Denel, is in serious trouble

A Russian air force Tupolev Tu-160 makes a brief stopover at Waterkloof air base near Pretoria in South Africa on October 23 last year. The aircraft’s brief visit to the country was timed to coincide with President Vladimir Putin’s Africa Summit in Sochi, where African leaders concluded several billion dollars worth of arms deals with his government. Photo: EMMANUEL CROSET / AFP

Since sanctions were lifted with the 1994 political settlement, South Africa’s defence exports have surged. In the five years to the end of 2018, South Africa was the world’s 20th largest weapons exporter, according to the Stockholm International Peace Research Institute, SIPRI. That position is well above its GDP per capita ranking and shows SA punches well above its weight in this field. In the face of a border war, extensive internal unrest, and international arms sanctions, the apartheid government built a sizeable and technologically advanced defence industry to ensure the greatest possible self-sufficiency in its supply of weapons. Today, however, South Africa’s defence industry is a fraction of the size it was in the dying days of apartheid in the early 1990s. The industry faces tougher international competition, as technological capabilities are now far more widely spread.

It also now threatened by an own goal in the form of mismanagement of the government-owned defence giant, Denel, which is in distress. Denel is the core of the industry and it has historically been innovative. The company has immense expertise, employs highly-experienced engineers, and draws on many local suppliers. Now, thanks to mismanagement, it is most unlikely that it will survive in its current form or size, despite government’s bailout. Sell-offs and re-organisations are likely to be key to a turnaround, impacting its work force and suppliers. South Africa has a diversified and high technology defence sector, manufacturing various types of ammunition, assault and sniper rifles, fuses, armoured vehicles, radars, sophisticated optics, aircraft parts, unmanned aerial vehicles, sophisticated missiles, and much else.

The sector consists of the giant, Denel, but also a number of medium-sized companies such as Paramount, Tellumat, Reunert, and a large number of small companies, many of them entirely reliant on exports. Its companies are dependent on imports for parts and sub-systems, but it contributes significant added value and export revenue to the economy through design, integration and manufacturing. Much of the country’s private defence sector has enjoyed strong growth since 1994, despite the limited domestic market. The smaller technology firms have few overheads but need to export to survive. As they do no or little business with the South African government, they do not need to meet black economic empowerment requirements, allowing owners to retain greater control.

Paramount, with 3,000 employees, sells protected vehicles, aviation products, and security services across the world and manufactures in a number of countries. Milkor, formed in 1980, makes a 40 mm Multiple Grenade Launcher, which, it says, is used in 67 countries. It is also involved in armoured vehicle production, unmanned aerial vehicle (UAV) development, naval systems, and cyber security. RapidM is a small Pretoria-based company that designs and manufactures high-end military radios. Among the bigger defence companies is Reutech, a stock exchange listed company, which develops and manufactures radars, remote control weapon systems, and electronic fuses. Tellumat is also a diversified defence and security company with a large variety of solutions, including unmanned aerial vehicles. South Africa’s defence industry came off its peak in the early 1990s, soon after the 1994 settlement.

According to a survey conducted two years ago by the South African Aerospace Maritime and Defence Industries Association (AMD), there were about 15,000 people employed in the industry, compared to 130,000 in the early 1990s. The purchase in the mid 90s of new naval corvettes and frigates, Saab Gripen fighters, BAE Hawk lead-in jet trainers, flight trainers and helicopters gave local industry a boost. But spending to re-equip the navy and air force was mainly offshore. Local offset agreements with German, British, Swedish and other suppliers – which would have seen some manufacturing and supply contracts going to local firms – were not as large or as long-lasting as promised. Since the post-1994 arms deals, there have been no acquisition projects on that scale, forcing companies to look offshore for business. Even full delivery on a Denel project for new Patria Infantry Fighting Vehicles, for which there was a budget, has been delayed by many years.

At little above 1% of GDP, which is low by international standards, and low economic growth, the defence budget is constrained. In real 2017 US dollar terms, the defence budget grew only 7.5% from 1994 to 2018, according to SIPRI. This has left little in the budget for much beyond limited operations and salaries. Without new domestic acquisition projects, there is little chance of a return to the sector’s heyday. However, the industry still has the capabilities to generate new technologies. Having developed its own version of a military-industrial complex, South Africa’s defence industry became a world technology leader in some areas. This was based on tight cooperation between the military; its procurement agency, Armscor (which did research and development, production, and procurement); the government’s technology think tank, the Council for Scientific and Industrial Research (CSIR); various parastatals; private industry and university engineering departments.

During the 1970s and 1980s, the apartheid government’s war with insurgency movements based in Angola made necessity the mother of invention. In the fight against the South West African People’s Liberation Organisation (SWAPO) and the Popular Movement for the Liberation of Angola (MPLA), military personnel carriers with V-shaped hulls capable of dispersing mine explosions were developed, for example. South Africa became an early leader in the design and production of protected military vehicles. The G5 and G6 long-range 155 mm artillery systems were developed in response to the South African Air Force’s loss of air superiority over Angola. Its inability to fly missions deep into Angola due to the presence of sophisticated Soviet and Cuban anti-aircraft systems generated a requirement for long-range artillery. Local industry also developed an early expertise in UAVs, electronic warfare and military radios with frequency hopping to avoid interception.

With external help, the government also produced nuclear weapons, which it gave up on the eve of the handover to the ANC government. The Rooivalk attack helicopter showed considerable expertise in both project management and technology development, but was never a commercial success due to the limited local market for the product and the market advantages of the Boeing-made Apache within NATO. Since 1994, the country has continued to build on these developments. Notable has been the international success of the RG- 31 Nyala and other South African-designed and built protected troop carriers. In the 25 years since 1994, the US has been South Africa’s largest defence product export market, with its purchase of the RG-31 and other protected troop carriers for use in the wars in Iraq and Afghanistan. Denel Dynamics has developed a fifth-generation wing-tip mounted air-to-air missile, the A-Darter, which locks onto a target after launch, and which has been bought by the South African and Brazilian air forces.

In a major coup, Denel sold its Umkhonto vertical launch surface-to-air missile to the Finnish navy. Another product shows that the South African industry remains highly capable in product development: three years ago a new locally developed and manufactured widearea surveillance system was launched in the Kruger National Park. Known as Meerkat, the device uses a radar system developed by Reunert, and an electro-optical system to detect, classify and monitor humans in the park with the aim of fighting poaching. But Denel’s current problems are similar in nature to those of other South African public enterprises. As with other state owned enterprises (SOEs), its failings are due to bad management, poor procurement controls and alleged fraud linked to the activities of the Gupta family – a family of immigrants from India who are said to have enjoyed unparalleled influence over the Zuma administration.

The Auditor General, a government office with credibility, has given a “disclaimer of opinion” for two successive years on Denel’s annual financial statements, saying they do not include enough information to conduct a proper audit. Corruption involving the Guptas may have played a large role in Denel’s demise. City Press newspaper has reported that Denel could have lost about R30 billion in business, including deals with Saudi Arabia, Turkey, and Kuwait, after an executive allegedly insisted that kickback contracts be signed with a Gupta associate. Denel has also lost contracts, such as one with Chad to supply 250 protected troop carriers, and has had to give up others, including one linked to the Airbus A400M military transporter. Liquidity problems have meant delays in paying suppliers and an inability to fully meet its payroll on time. This has damaged morale and meant the loss of engineering skills.

Meanwhile, technology capabilities have proliferated, and today there are more manufacturers of protected vehicles and long-range artillery systems around the world. Government has provided a R1.8 billion bailout, which is slightly in excess of Denel’s loss in the company’s last financial year, and is committed to providing an additional R1 billion. But the government is bailing out other failing SOEs, such as Eskom, the national power utility, and national carrier South African Airways. Large cash injections to SOEs are unsustainable in the face of a growing fiscal deficit. The most likely course will be to downsize Denel and find a “strategic equity partner” for either the whole or parts of the business. Finding a partner will be tricky, as political acceptability will be paramount. A Saudi offer was rejected.

Given the rhetoric of the ruling ANC, meanwhile, companies from western countries would be an unlikely choice. At the recent Russia-Africa Summit in Sochi, a defence official said his country signalled a keenness to enter into a weapons production deal with South Africa. Closer ties between the two countries were also demonstrated by a brief visit in October of two Russian Air Force TU-160 long-range bombers, which landed at Waterkloof air force base. But a Russian or Chinese partner could compromise South Africa’s position as a weapons supplier that is independent of the major powers and alliances. South Africa lacks the muscle to put together deals that are part of larger political and aid packages that could greatly open the African market. Such financial packages have long been a big part of global weapon sales. Another hurdle is that the country is not part of any military alliance, which could help open markets.

Unlike major powers, South Africa rarely restricts the use of its equipment, but there is still tough competition. As the sector seeks to export more, there will be mounting pressure to relocate manufacturing and other activities to client countries, which could in time shrink South Africa’s domestic defence manufacturing base. Other international defence contractors, including some in the United Arab Emirates and Saudi Arabia, have employed some of SA’s experienced engineering talent in this area. In recent months, South African defence exports have suffered a heavy blow in a dispute over the country’s right to inspect foreign military facilities as part of an enduser certification process to ensure weapons are not transferred to third parties.

Large sales by Denel and Rheinmetall Denel Munition to Saudi Arabia and the UAE have been blocked by the South African government’s National Conventional Arms Control Committee, the agency which approves defence exports, because these countries were not prepared to sign end-user certificates, which allow for inspection. But it is Denel’s problems – the absence of large domestic military acquisition projects, the current low confidence levels in the local business environment, and the loss of engineering talent – that are hurting the sector the most. All in all, longer-term growth for the sector could now be difficult.

Jonathan Katzenellenbogen is a freelance journalist specialising in defence issues. He has written extensively for DefenceWeb, a South African defence news site and was International Affairs Editor and Economics Editor at Business Day. He holds an MA in law and diplomacy from the Fletcher School at Tufts University and an MBA from the MIT Sloan School of Management. Jonathan has also worked as a management consultant and for the World Bank.