South Africa Defence and Security Report 2017
BMI View: South Africa's defence budget will remain limited over the next few years, given adverseeconomic conditions and a continued government focus on spending on much-needed service deliveryimprovements rather than military development. Over the longer term, as the economy improves, defencespending will register gradual growth amid rising regional terrorist threats and domestic risks linked tocrime and social unrest, necessitating investment into maintaining and improving the SANDF's capabilities.We expect exports from the well-developed South African defence industry to grow steadily over the nextdecade, as foreign engagement with local companies strengthens.
Defence Industry Risk Reward Index
South Africa possesses the largest defence sector in Africa, and domestic companies export a range ofmilitary products to countries across the world. Relatively high levels of economic and investment opennessfacilitate market entry for foreign firms, and Pretoria's wide variety of defence collaboration agreements andstrategic international alliances offer substantial trade opportunities. That said, while elevated risks of crimeand social instability - in addition to participation in regional missions - continue to drive domestic demandfor military equipment, the country's overall defence expenditure remains limited. As a result, South Africaperforms slightly better for Risks than for Rewards in our Index. South Africa's aggregate score in the Risk/Reward Index stands at 58 out of 100, ranking it eighth in the Middle East and Africa region.
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