Business

January 15, 2014

Forecast International views emerging African arms market favorable for both international, African defense companies

Over the next decade, the gross domestic product among African countries is expected to rise by an average of 6 percent a year, according to Forecast International.

This concrete and sustainable growth will allow for ample economic opportunities on the continent. For defense companies, this means that Africa is starting to evolve into an attractive customer in the international arms market.

Traditionally, Africa’s overall arms market has been driven primarily by a small handful of key players with more established economic environments. However, smaller market countries are increasingly taking positive steps toward democracy, human rights and overall stability, allowing governments to focus more on creating strong economies. Given this bright outlook, Forecast International is projecting that defense spending among African nations will surpass $46 billion by 2018.

“As optimism about the continent’s prospects increase, global defense firms have started to eye the African market more closely,” says Nicole Auger, author of FI’s “The Military Market for Africa” report. “It has ignited an intense competition between non-African defense companies while opening up an array of possible joint ventures and technology transfer agreements with African defense firms,” she said.

Another important factor is that nation-on-nation war among African countries has been on the decline. Although conflicts still flare up from time to time, tensions rarely escalate to extreme levels. If the trend continues, decade-long sanctions and arms embargos would be lifted, further expanding opportunities for global defense firms.

As external tensions weaken, weapons that aid in internal security are being more sought out. “Key arms purchases will likely be state-of-the-art surveillance equipment such as unmanned aerial vehicles (UAVs) and electronics,” predicts Auger. This equipment will be essential, especially at a time when the threat of Islamic fundamentalism is on the rise in Africa. Porous borders, illegal arms trafficking, and challenging socioeconomic situations have thus far made it difficult for nations to control this escalating problem.

North African nations have already experienced firsthand how the lack of proper military surveillance equipment can handicap militaries. Mali, for example, fell victim to a rebel uprising in late 2011 when its military was easily defeated by Islamic organizations suspected to have ties with al-Qaeda. The groups effortlessly gained control of virtually all of northern Mali, leaving the nation to ask for international assistance to counter the problem. Meanwhile, Libya, with its dilapidated military state following the 2011 uprising, has found it nearly impossible to control the rebel-run southern portion of the nation. Furthermore, the chaos has allowed for increased weapon smuggling, which threatens regional security.

Although the Islamist terrorist situation in northern Africa has been the focus of the past two years, the problems present in Africa are not limited to any single region. In East Africa, the Somali terrorist group Al-Shabaab has been showing signs of evolving into a transnational terror group. Meanwhile, in the continent’s mid-region, the South Sudanese government was able to counter a coup from local rebel groups but has been unable to stop the group from seizing control of key towns in the oil-producing region. Farther west, Nigeria has been battling Boko Haram, an Islamic militant group that has been to blame for nearly every act of violence recently occurring in Nigeria.

Globally, there is concern that terrorism in Africa could spread, affecting the stability of non-African countries.  A number of Western nations are therefore eager to help equip African militaries, which remain open to practically all weapons suppliers.




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