The endurance of the global financial crisis has meant the economies of the Europe and North America have continued to struggle with slow export growth and significant fiscal challenges. As traditional Western defence markets fail to recover, new opportunities are being sought in territories previously viewed as unviable. Senior Analysts from IHS Jane’s Defence Budgets examine one of these potential markets – Sub-Saharan Africa – to determine the significance of the market.

1. IHS Jane’s
Analysis: Defence Budget Trends
in Sub-Saharan Africa
Craig Caffrey & Fenella McGerty, Senior Budget Analysts
December 2012 ihs.com/jdb
Introduction Furthermore, such growth should be taken in the context
on an overall GDP of USD930bn in 2012, accounting for
The endurance of the global financial crisis has meant the
just 1.72% of world GDP.
economies of the Europe and North America have
continued to struggle with slow export growth and South Africa aside, from a defence perspective the region
significant fiscal challenges. As traditional Western remains relatively under-developed. Armed forces in the
defence markets fail to recover, new opportunities are region are generally equipped with aging inventories of
being sought in territories previously viewed as unviable. outdated equipment, largely as a result of the lack of
Senior analysts from IHS Jane’s Defence Budgets have funding available for procurement activities with defence
examined one of these potential markets – Sub-Saharan spending generally dominated by personnel expenditure.
Africa – to determine its significance. As of 2012 only two sub-Saharan states – Angola and
South Africa – are among the top 50 defence spenders.
From an economic standpoint, interest in the region is
However, as the continent’s economies grow and mature,
understandable; IHS finds that 13 of the world’s 30
the defence sector is expected to experience corollary
fastest-growing economies in 2012 are situated in the
development.
region. Over the next decade, real GDP growth is
expected to average 4.9% compared to the world average This report identifies defence budget trends for three
of 3.6%. While growth is higher than some prospective countries in sub-Saharan Africa – Angola, Botswana and
markets (Eastern Europe, South America), it still lags Cameroon – on a state-by-state basis and provides
significantly behind South Asian growth of 7.4%. analysis on likely future direction and level of spending.
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2. IHS Analysis: Sub-Saharan Africa Defence Budget Trends
Data has been taken from official government sources Angola is Sub-Saharan Africa’s second biggest oil
wherever possible, and covers formal allocations for producer (after Nigeria) and one of the world’s fastest
defence as part of annual state budgets. expanding oil producers. The country produced 1.6 – 1.7
million barrels per day in March 2011, according to the
Angola Angolan Ministry of Oil. Planned expansion of deepwater
oil production through the first decade of the 21st century
Economic Outlook
is expected to increase production to over two million
Angola’s national economy was wrecked by the 27-year barrels per day by 2014. Huge investments are also being
civil war that began in 1975. However, the presence of a made in liquefied natural gas and oil refinery complexes at
thriving offshore oil sector beyond the zone of conflict Soyo and Lobito respectively. Diamond mining is another
always ensured that the government had an uninterrupted dynamic sector.
supply of revenue. As such, the economy has appeared to
be more prosperous than the African average, although
this disguises a high level of income inequality. Oil and
diamond mining were the only sectors that really
functioned in the aftermath of the war, although
agricultural production is slowly being revived. Fisheries,
the coffee industry and other cash crops virtually
collapsed during the war, and their rehabilitation has been
hindered by issues such as transport and infrastructure
challenges.
Economic growth in Angola is still determined largely by
the performance of the offshore oil sector. With the end of
the civil war in 2002 and the pre-Iraq rise in global oil Security Outlook
prices, GDP growth in 2002 boomed to over 15%. Real Angola’s primary peacetime challenge has been to
GDP growth remained buoyant in the years to follow, but organize the disarmament, demobilization and
registered moderations in 2008 and a further fall in 2009 reintegration of 100,000 designated União Nacional para a
and 2010 due to the spill-over effect of the global Independência Total de Angola (UNITA) combatants and
slowdown. over half a million of their dependants; a task performed
largely without foreign involvement. One of the remaining
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3. IHS Analysis: Sub-Saharan Africa Defence Budget Trends
legacies of war is the extensive presence of landmines. GDP. Rapid growth in recent years has meant the
There is also the need for huge investment in the Angola’s budget is comparable with Egypt’s and only
reconstruction of physical infrastructure shattered by the slightly lower than South Africa’s.
civil war (a rehabilitation program is underway).
Angola spent 17% of its annual GDP in 1999 in a boost to
Angola will have to grapple with issues of job creation and win the final phase of its war with UNITA. As the Civil War
wealth distribution at a time when civil society and a ended, the focus for government spending switched to
number of youth movements are indicating discontent with public investment projects and social economic
the pace of economic reform. There were pre-poll protests development and consequently, defence spending fell to
in favor of reforms from early 2011, with potential for an average of 4.5% of GDP between 2002 and 2006. A
further sporadic demonstrations during the course of the strong economic performance since then has meant that
next term of the ruling Movimento Popular de Libertação large defence budget increases have been possible
de Angola (MPLA). Recurring protests could lead to fresh without increasing the defence budget as a percentage of
confrontations with the security forces, who have GDP.
previously been accused by Human Rights Watch of using
unnecessary or excessive force against demonstrators. Despite the end of the civil war and the now negligible
strength of the insurgency in the Angolan exclave of
Angola enjoys defence co-operation with a number of Cabinda, the defence budget is likely to continue to rise. A
regional states and international partners and benefits number of new priorities stipulated by government and
mainly from practical aid of training and equipment military officials aim at instituting greater professionalism
donations rather than financial assistance. Under an within the military, and include elevating combat
agreement in December 2000, training is provided by readiness, increasing literacy rates among the ranks, and
Russia both domestically and in Russia itself. Portugal improving living standards of troops by reconstructing
and Angola have signed a technical-military co-operation army barracks throughout the country.
program for 2011 to 2014 which will also cover funding for
military healthcare programs. Furthermore, over the next five years Angola is expected
to initiate a major modernization program for its combat
Defence Budget Trends aircraft fleet in order to replace a number of aging Soviet
era aircraft types and to consolidate around a smaller
Angola releases a top level defence budget annually; in
number of aircraft types. The program is expected to be
2012 this was AOA395bn (USD4.22bn), which accounted
pursued as a phased multi-contract effort taking place
for 8.79% of total government spending and 4.74% of
over a number of years. Chinese and Russian platforms
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4. IHS Analysis: Sub-Saharan Africa Defence Budget Trends
are expected to be favored for the requirement, with at ‘Hind’ attack helicopters following from Russia and
least 12 aircraft expected to be acquired. Ukraine. From 1998, Tucano and Czech L-39
trainer/counter-insurgency aircraft were acquired from
secondary stocks from Brazil and the Czech Republic
respectively. Since 2009, the Navy has seen an influx of
new patrol vessels from Spain and China, previously
relying on Soviet Zhuk patrol vessels.
With over 90% of total personnel, the Angolan Army is
forecast to continue receiving the majority of annual
defence funding; accounting for approximately 75% of the
2012 defence budget. The Air Force budget should
increase proportionally from 22% of the total budget to
24% by 2017 due to the major modernization program of
their combat aircraft fleet. The Navy, with only 700-800
Defence Budget by Service
personnel, is estimated to only receive 3% of the entire
The Angolan Armed Forces (Forcas Armada Angolanas: defence budget.
FAA) were created from the communist-backed MPLA
forces in the long-running civil war and were originally
known as the Forças Armadas Populares de Libertação
de Angola (FAPLA). The current force is dominated by the
army, whose 30 regiments and over 100,000 members
make it one of the largest standing forces in central or
southern Africa. The air force is also one of the largest in
sub-Saharan Africa, and has benefited from the
introduction of some relatively modern equipment since
the late 1990s.
Large numbers of MiG-23 fighter-bombers and additional
Su-22 attack aircraft were procured from Slovakian and
Belarusian surplus stocks in 1999-2001, with about 12
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5. IHS Analysis: Sub-Saharan Africa Defence Budget Trends
Defence Budget by Function RDT&E is negligible as Angola has no military production
facilities and does not undertake any military research and
With such a substantial Army, the majority of funding is
development programs. However, some R&D funding is
expected to fall into the military personnel budget which
expected to be spent on the acquisition of a Mobile Radio
JDB estimate to account for almost 70% of the total
Communication Network using TETRA standards called
defence budget.
DigiM@x. The network will be a complete system from the
radio base stations to the network systems. Four Angolan
Procurement is estimated to account for approximately
agencies will share the network which will be managed by
10% of the defence budget in 2012. However, as
the Armed Forces.
modernization efforts in the air force begin, the
procurement proportion should increase to 14% by 2017.
As part of this modernization effort, the Angolan
government also signed arms deals worth USD1 billion
with Israel in February 2012, with commitments to
purchase combat helicopters, unmanned aerial vehicles,
and other hi-tech equipment.
O&M costs are not expected to be high given that the
Angolan Army continues to carry out duties and functions
traditionally reserved for police rather than contributing to
more expensive international and regional peacekeeping
operations. These duties include roadblocks, escort
duties, providing physical security and assisting in
electoral processes.
Botswana
The Angolan Air Force appears to receive relatively little Economic Outlook
training and mounts few exercises. The ability of its pilots
Since independence in 1966, Botswana has enjoyed
in combat is difficult to assess as their main role has been
social and political stability, as well as solid economic
to support the army.
progress. The small population enjoys relative
homogeneity, a stable democracy has endured, the
military has performed professionally and is subordinate to
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6. IHS Analysis: Sub-Saharan Africa Defence Budget Trends
civilian control, and there has been no major incidence of
civil strife or domestic insurgency. As a result the
economy, which is underpinned by its diamond trade, has
seen four decades of economic growth and currently
stands as the 12th largest of Sub-Saharan Africa’s 47
economies.
Botswana’s economy remains heavily dependent on its
diamond exports, prompting a need for further economic
diversification to help reduce unemployment. Since 2010,
the Government has sought to rein in spending while
prioritizing programs with ‘high rates of return’ such as
Security Outlook
maintenance and expansion of national infrastructure.
Under current official projections, 2012-2013 is expected Over the past two decades Botswana has sought to
to see the culmination of the deficit reduction work of the improve its military capabilities to guard the country’s large
past three years and produce a budget surplus equivalent mineral reserves and population centers against internal
to 0.9% of GDP. unrest. As longstanding tensions with Namibia have eased
over recent years, the country’s security apparatus has
In terms of economic growth rates, Botswana has been become increasingly focused on the Zimbabwe border
one of the fastest developing countries in recent years, and the ongoing crisis within its neighbor.
having recorded seven% average real annual GDP growth
between 1966 and 2005. Growth in recent years was Relations between Botswana and Zimbabwe became
impacted by the global financial crisis and is again increasingly strained during 2008, as Botswana became a
expected to slow to around four% in 2012 due to more vocal critic of the ongoing Zimbabwe political crisis.
continuing weakness in the global economy. The situation has improved following the inauguration of
Nevertheless, growth is expected to return to a rate of 4.5- the government of national unity in Zimbabwe in February
5.0% annually between 2013 and 2016. 2009; however, ongoing instability and an influx of
Zimbabweans into Botswana remain a source of concern.
Since 1994, neighboring South Africa has been
Botswana’s most obvious security partner with the
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7. IHS Analysis: Sub-Saharan Africa Defence Budget Trends
Botswana Defence Force (BDF) seeking greater co- and 17.3% in 2007 and 2008, the defence budget grew by
operation with the South African National Defence Force just 6.2% over the following four years combined.
(SANDF).
Despite the fluctuations in the defence budget over recent
On an international, strategic level, Botswana’s national years, development expenditure has been maintained at a
security must be considered within the context of its level of between 19.5 and 22.9% since 2007. This
strengthening friendship with the US. Both the US and UK suggests that capital investment in the BDF is likely to be
see Botswana as a bastion of political and economic maintained at a relatively consistent rate in the future.
stability within the wider region and have made assistance
available. With specific regards to security, the US
provides funding through both its International Military
Education and Training (IMET) and Foreign Military
Financing (FMF) programs amounting to USD0.9 million in
2012.
Defence Budget Trends
Military expenditure increased significantly during the
1990s in response to a number of specific security
concerns. The BDF was expanded to provide parity with
Namibia’s experienced military, while significant funding
was provided for new equipment – such as fixed wing With the government projecting a surplus in 2012-13, it
combat aircraft – and training to develop a qualitative appears distinctly possible that defence expenditure will
advantage over the large but decaying Zimbabwe Defence accelerate in 2013. However, even with an estimated 7%
Force. nominal increase, the budget is expected to fall by around
1.5% in real terms largely as a result of inflation of 8.5%.
As these external security concerns have dissipated, and Real growth is expected to return to the budget in 2014
the global financial crisis has switched the government’s and remain for the duration of the forecast period, as
focus towards economic and social development, growth defence expenditure settles into a pattern of steady and
in defence spending has become relatively constrained. sustainable year-on-year real increases as part of a
Following pre-crisis nominal annual increases of 16.3% balanced national budget. Defence expenditure is
expected to reach a level of around USD378 million a year
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8. IHS Analysis: Sub-Saharan Africa Defence Budget Trends
by 2016, someway short of the USD441 million investment in smaller fields due to weak global growth. On
appropriated in 2009 when adjusted for inflation. the upside, the Cameroonian government is initiating new
licensing rounds in the Rio del Rey basins, and positive
Cameroon results are expected on the Douala/Kribi-Campo and
Longone-Birni basins. New discoveries on these
Economic Outlook concessions will probably allow Cameroon to contain
Cameroon has one of the more diverse economies in the declines in oil production.
region, with a relatively developed manufacturing sector,
and is a more active trading nation than many of its
neighbors. It has never relied on oil income to the extent
of Gabon and Congo-Brazzaville, for example, but a fall in
oil production will affect export revenues. High oil prices
from 2004 enabled the government to maximize revenues
from production, while Cameroon hopes to discover new
oilfields in the Bakassi peninsula, over which it officially
gained sovereignty from Nigeria in 2008.
Yaoundé has made further economic diversification one of
its priorities but continued economic stability, as well as
improved terms of investment, is key if the country is to Security Outlook
make the most of its strategic location on the Gulf of
Guinea. GDP Growth has dropped from the levels of 4.2 In spite of ethnic, religious and linguistic diversity,
to 5.3% recorded between 1999 and 2003, with growth of Cameroon has been one of Africa’s more stable polities
just over three% in 2006 and 2007. With the impact of the since independence from France in 1960. Although large
global financial crisis, GDP growth slowed further to 2.0% sections of the Anglophone minority have campaigned for
in 2009, with decreased demand for export commodities a greater linguistic and cultural rights, these protests have
key factor. remained overwhelmingly peaceful.
Near-term real economic activity in Cameroon will remain While the country has neither been ruled by the military
subdued. The underlying reasons are a combination of nor suffered a significant insurgency since the 1960s, it
declining oil production from mature fields and delayed has also only had two presidents, with current leader Paul
Biya first coming to power in 1982.
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9. IHS Analysis: Sub-Saharan Africa Defence Budget Trends
Despite a formal multiparty transition in 1991-1992, Detailed figures for 2011 were not available, but press
political stability in Cameroon is again characterized by reports indicated that the defence budget had dropped
authoritarian rule which holds potential for increased and the overall focus of the state budget was to increase
domestic protest and unrest. The most recent presidential infrastructure and social projects. The 2012 budget was
election took place on 9 October 2011 and set the stage XZF180 billion, which is a substantial increase from the
for another seven-year term for the 78-year-old president estimated 2011 budget, but still just 1.4% of GDP.
and likely heralding an eventual spike in civil unrest and Moderate growth is forecast in the defence budget,
opposition agitation. Moreover, without a clear successor, although as a percentage of GDP the defence budget will
should Biya suddenly depart from the political stage, continue to decline.
Cameroon’s stability could be tested.
Defence Budget Trends This analysis is abridged; the full report, covering ten Sub-
According to government budget figures, defence Saharan countries, is available in IHS Jane’s Defence
expenditure fell sharply in FY2000-01, from 1.5 to 1.0% of Budgets.
GDP. Whilst reliable figures following this were not made
available, details from the World Bank indicate that
defence expenditure averaged 1.39% between 2001 and
2008.
The Cameroon government published its consolidated
budget appropriations for 2009, which included XAF162
billion (USD357 million) for the Ministry of Defense,
representing just over 7% of the total budget and 1.5% of
GDP. However, as the government does not release a
year-end report, comparisons cannot be made between
what was budgeted and actual expenditure. Despite a rise
of 11.6% in the total state budget for 2010, the defence
allocation dropped slightly to 6.7%. However, with a rise in
defence spending from XAF162 billion to XAF171 billion,
the amount per member of the armed forces rose by
USD2,249 to USD27,300.
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10. IHS Analysis: Sub-Saharan Africa Defence Budget Trends
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