Denel is a shadow of its former self and if it fails, it will paralyse South Africa’s entire defence ecosystem, Chairperson of the Joint Standing Committee on Defence (JSCD), Malusi Gigaba, has warned.
Speaking during a justice and security cluster media briefing in Parliament on Thursday 10 April, Gigaba devoted significant attention to the state of Denel, the state-owned defence manufacturer which has experienced years of financial turmoil. Once a cornerstone of the country’s defence capability and a major employer, Denel has been hollowed out and is struggling to fulfil its strategic role in the defence value chain, he said.
“Denel remains a shadow of its former self. Government interventions must now begin to show measurable results,” said Gigaba. “If Denel fails, it paralyses the entire defence ecosystem.”
He pointed specifically to the long-stalled Project Hoefyster, launched in May 2007 to replace ageing SA Army Ratel infantry fighting vehicles, which remains incomplete. The lack of progress, coupled with deteriorating air and maritime defence capabilities, including limited availability of platforms such as the Rooivalk attack helicopter and Gripen fighter jets, has raised serious concerns about the SANDF’s ability to defend South Africa’s territorial integrity.
Gigaba also highlighted the critical role of Denel in the availability of serviceable prime mission equipment – he said the success of the defence force’s turnaround strategy hinges on Denel’s recovery, as it is the original equipment manufacturer (OEM) for aircraft like the Oryx and Rooivalk, and the committee intends to keep a close watch on the implementation of Denel’s rejuvenation plan.
Gigaba’s comments came days after Chris Hattingh, Democratic Alliance (DA) Spokesperson on Defence & Military Veterans urged for an overhaul of Denel. “Denel must urgently adopt a sustainable funding model that drives operational efficiency and restores stakeholder confidence. To achieve this, the Department of Defence and National Treasury must prioritise robust oversight of Denel’s turnaround strategy, ensuring effective implementation,” he urged.
Denel was the responsibility of the then Department of Public Enterprises until its dissolution post South Africa’s national and provincial elections in June last year. Effective 1 April 2025, Denel falls under the Ministry of Defence and Military Veterans. Although Denel is suffering from liquidity constraints, operational inefficiencies, and a shrinking market share, the company says it is pursuing R36 billion in order opportunities.
Defence industry potential
In the face of global increases in defence spending, particularly among countries reacting to shifting geopolitical dynamics, Gigaba sees potential for South Africa’s defence industry to expand its footprint in global markets. He welcomed reports of steady growth in defence exports and stressed the need for continued facilitation by the National Conventional Arms Control Committee (NCACC). The Committee’s 2023 annual report showed a massive rise in South African defence exports, which totalled R7.1 billion for that calendar year, up from R4.6 billion in 2022.
The Joint Standing Committee on Defence said it has been encouraged by reports that the NCACC is now meeting weekly to expedite the processing of export applications. Gigaba noted that a digitised system could help further reduce bottlenecks and improve industry competitiveness.
“Exports can stimulate economic growth. But to truly unlock this potential, we must also increase domestic defence spending, which will in turn sustain local manufacturing and technological innovation,” he said.
