Boston, MA -- (SBWIRE) -- 02/06/2013 -- BMI's latest South Africa Defence and Security Report examines the country's strategic position in Africa and the wider world. It provides an overview of the contemporary geopolitical challenges facing the country, and the challenges it may face in the future in the context of South Africa's ongoing assumption of a regional leadership role and security challenges, including piracy and poaching.

The deaths of 34 miners at the Marikana platinum mine northwest of Johannesburg in August during a protest over pay highlighted the risk to South African stability posed by such socio-economic issues as income inequality, not to mention the ability of the security services to deal proportionately with mass unrest. For the time being, the ruling ANC appears capable of keeping a lid on these national tensions. However, this cannot be taken for granted in the long term.

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In the short term, factional strife within the party could become a serious issue. In BMI's view, President Jacob Zuma can no longer be considered a certainty for the ANC leadership nomination in December 2012. If he is challenged by a serious contender, South Africa could see further unrest. Indeed, it is now thought that ANC Deputy President Kgalema Motlanthe may run against Zuma.

Socio-economic priorities mean that the government is unlikely to deliver large funding increases to the South African National Defence Force (SANDF). However, alarming news reports in Q3 suggested that the SANDF may be on the verge of collapse if its funding shortfalls are not urgently addressed. The government has already revealed defence spending plans for the next three years which envisage some growth in the defence budget. However, these increases are not nearly enough, analysts are warning.

The government's Defence Review, delivered in April and currently subject to parliamentary consultation, presents a timely opportunity for South Africa to think seriously about its defence posture. Essentially, it either needs to properly fund the ambitious regional involvements that the government has currently committed the SANDF to. Or, it needs to scale back the military's commitments so that they match existing funding levels. The drain on skilled personnel within the SANDF has also been identified as a mounting crisis.

Over the last quarter BMI has revised the following forecasts/views:

- The security implications of the 'Marikana Massacre' are discussed in detail, as well as likelihood of civil strife stemming from a leadership struggle within the ANC.
- Developments within the South African defence industry are reviewed. The Denel Group, the country's biggest defence firm, has updated its strategy to place more of a focus on increasing exports to other African countries. Denel also announced that it has set up a new joint venture (JV) in the UAE that will develop guided munitions for the Middle East market.

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