Defence materiel division Armscor falls under the Department of Defence (DoD) and as such receives about 5% of the DoD budget. It received an allocation of R2.83 billion in 2024/25, which will rise to R2.86 billion in 2025/26, and R3 billion in 2026/27.
Armscor’s mandate is to ensure that the South African National Defence Force (SANDF) is equipped with high-quality, reliable and technologically advanced defence matériel. To this end, it is seeing an increase in its budget, which according to May’s Estimates of National Expenditure, will increase by nearly 4% a year from R2.8 billion in 2024/25 to R3.2 billion in 2027/28.
Goods and services will account for an estimated 52 (R4.7 billion) of the corporation’s total budget over the three-year medium term. “The corporation expects to derive 50.9% (R4.6 billion) of its revenue over the period ahead through transfers from the department and the remainder through commercial revenue and interest on investments. Revenue is set to increase at an average annual rate of 4.9%, from R2.7 billion in 2024/25 to R3.2 billion in 2027/28,” May’s budget document read.
“The corporation aims to ensure that it maintains the technological requirements to meet 95% of its contractual milestones over the medium term. For this purpose, an estimated R1.8 billion over the period ahead is set aside for managing strategic research facilities.
“The corporation plans to continue ensuring that the procurement of capital assets for the defence force over the next three years is cost efficient and meets its operational needs. To this end, the corporation aims to convert 95% of the department’s capital requirements into placed orders, which entails acquiring defence matériel, each year over the medium term. R808.6 million over the period ahead is allocated for this purpose.”
Providing support to the South African defence industry involves facilitating its participation in international defence exhibitions and events, and managing requests from the private sector to use the South African National Defence Force’s equipment, personnel and facilities for marketing purposes. R56 million over the next three years is allocated to carry out these activities.
In terms of audited outcomes, Armscor in 2023/24 spent R247 million turning “capital requirements from the Department of Defence” into orders placed, and R95 million on “technology requirements executed.”
