The Butterfly will not fly without defence and aerospace - DefenceWeb

Ricardo Teixeira

South Africa’s newly unveiled Butterfly strategy aims to reposition the country’s trade posture for a changing global order. Its intent is clear: diversify away from over-reliance on a few traditional markets, deepen African economic ties under the African Continental Free Trade Agreement (ACFTA), and build east–west commercial “wings” that reach across the Indian and Atlantic oceans.

The symbolism is elegant. Yet the strategy will fail if it continues to treat the defence and aerospace sector as a peripheral or uncomfortable partner. Without the inclusion of this industry, and without deliberate support for public–private joint ventures to stabilise Denel and rebuild its ecosystem, the Butterfly will remain flightless.

A strategic industry hiding in plain sight

Defence manufacturing has long been one of South Africa’s few globally competitive, high-technology industries. It survived sanctions, outlived the collapse of apartheid procurement, and evolved through the hard economics of export competition. From artillery systems to armoured vehicles, precision optics, avionics, and secure communication networks, South African firms have repeatedly proven that they can deliver to international customers who demand quality, reliability, and after-sales support. Recent figures reveal that 92% of the local industry’s output is exported.

The country’s capabilities are not theoretical. Rheinmetall Denel Munition’s record-breaking export contracts to European buyers underscore the point. South African-made 155 mm ammunition is currently serving several NATO customers under tight compliance rules. Paramount Group ships armoured vehicles across Africa and the Middle East. Hensoldt South Africa and Reutech provide radar, electro-optical, and surveillance systems that compete with the best in Europe or Asia. These are industries that generate high-skill employment, sustain engineering supply chains, and embed a culture of systems-design and quality-assurance that spills over into civilian manufacturing.

Yet, despite this track record, the defence industry is too often omitted from national growth narratives. It sits awkwardly between economic diplomacy and political caution, treated as if it were a relic rather than a lever. The Butterfly strategy risks repeating that mistake by championing value-added exports and industrial diversification without naming the sector that already exemplifies both.

Dual-use potential and national resilience

The conventional view of defence production as narrowly military is obsolete. The technologies underpinning modern defence manufacturing, composites, sensor fusion, artificial intelligence, satellite navigation, cybersecurity, and robotics are intrinsically dual-use. The same software that guides a drone for surveillance can support agricultural mapping or disaster response. The same composite materials used in armoured hulls can reinforce electric-vehicle components. The same radar systems that track aircraft can monitor coastlines against illegal fishing.

This dual-use logic is central to every advanced economy’s industrial strategy. The Butterfly strategy, if it is to be credible, must embrace the dual-use nature of defence innovation as a pillar of resilience. It is precisely these capabilities, engineering depth, systems integration, and export-grade manufacturing, that enable countries to adapt to crises, from pandemics to cyber-attacks to maritime insecurity.

Denel: symbol and test case

Denel remains the bellwether of the wider industry. After years of mismanagement, corruption, and underinvestment, its recent return to profit marks an important, if fragile, turning point. The company still holds intellectual property that cannot easily be replicated: artillery systems, precision guided weapons, UAV platforms, and complex integration know-how built over decades. But Denel alone cannot sustain the sector. Its balance sheet is thin, its workforce diminished, and its supply chains eroded.

The realistic path forward is not a return to state-led monopoly, nor a fire sale of assets. It lies in structured joint ventures that pair Denel’s technology base with private capital, managerial discipline, and market access. This is not privatisation by stealth. It is the modern model of national capability, shared risk, shared reward, and shared governance.

South Africa already has examples. Rheinmetall’s partnership with Denel turned a struggling ammunition plant into a global export hub. Similar structures could stabilise Denel’s remaining divisions, ensuring that intellectual property stays in South Africa while production scales up to meet international demand. A joint-venture approach would also anchor Denel’s rehabilitation in commercial reality, insulating it from political cycles and public-sector procurement paralysis.

Critics will argue that if the sector is commercially viable, it should not need government backing. That argument misses the point. Defence and aerospace operate in markets where the customer is almost always a government and where national reputation, financing, and regulatory approval are inseparable from industrial capability. Every serious exporting country, whether Germany, Turkey, South Korea, or Brazil, treats its defence sector as a strategic instrument of foreign policy and industrial development.

Government involvement does not mean open-ended subsidies. It means coherent policy alignment. Defence exports require export-control approval, financing instruments, and diplomatic support. Without government acting as facilitator and guarantor, South African companies lose contracts, not because they are uncompetitive, but because their foreign counterparts can offer state-backed terms.

Moreover, a domestic defence base is not just about export revenue. It is about sovereignty. A country that cannot maintain, upgrade, or produce its own critical equipment is perpetually dependent on others for its security and its technology trajectory. The Butterfly strategy speaks of resilience. True resilience includes the ability to sustain and innovate in core strategic industries without foreign dependency.

The reputational question

There is no denying the sensitivities around arms exports. South Africa’s National Conventional Arms Control Committee (NCACC) has faced scrutiny over end-user monitoring and the ethics of supplying conflict zones. These concerns are valid and must be managed transparently. But they are not a reason to retreat from the sector. They are a reason to regulate it better.

Pretending that South Africa can have a foreign policy of neutrality while ignoring the realities of the defence trade is naïve. The real question is whether the country wants to be an ethical, well-regulated supplier that insists on compliance and human-rights safeguards, or an absent player watching others fill the vacuum. With modern data analytics and post-shipment verification, end-use monitoring is entirely feasible. What is missing is political will and bureaucratic efficiency, not moral clarity.

The timing could hardly be more favourable. Worldwide, defence spending is rising at the fastest rate in decades. Ammunition plants in Europe and North America are running at capacity. Emerging powers are seeking suppliers who are reliable, politically neutral, and geographically diversified. South Africa fits that profile. It occupies a unique geopolitical position: non-aligned, respected within the Global South, and equipped with a proven industrial base.

Ignoring this moment would be self-defeating. The global defence supply chain is reorganising around regions rather than single superpowers. Countries that can offer quality production outside traditional blocs are suddenly valuable. The Butterfly strategy’s call for “Africa at the centre” aligns neatly with this shift. African states are modernising their forces, investing in maritime security, and building disaster-response capabilities. They need cost-effective, maintainable equipment that can be delivered within the continent. South Africa can provide it, but only if its government treats the sector as an export priority rather than a political embarrassment.

Joint ventures as industrial diplomacy

Joint ventures are more than corporate restructuring tools; they are instruments of diplomacy. Partnering Denel with private investors and foreign OEMs embeds South Africa in global value chains while control of intellectual property is retained. Each joint venture becomes a node of industrial cooperation, transferring skills, creating jobs, and signalling that the country is open for high-tech business.

This model also bridges the trust gap between the state and the private sector. For too long, industrial policy has been framed as a contest between public stewardship and private profit. In practice, innovation thrives where both collaborate under clear governance. The defence sector, with its long development cycles and complex supply chains, is ideally suited to this partnership approach. It requires stable public commitment and agile private execution.

A revitalised Denel at the centre of such partnerships could anchor a broader industrial revival. Suppliers in machining, electronics, composites, and systems integration would find renewed demand. Skills training programmes could be rebuilt around real production schedules, not wishful planning. Exports would bring in foreign currency while signalling to young engineers that South Africa still values advanced manufacturing.

The political courage to include

Ultimately, the Butterfly strategy will be judged not by its metaphors but by its inclusions. It will work only if it confronts uncomfortable truths: that one of South Africa’s most sophisticated manufacturing clusters happens to wear camouflage paint, and that pretending otherwise is self-sabotage. The government cannot talk about “value-added exports” while neglecting the sector that already delivers them.

Inclusion does not mean glorifying weapons or abandoning ethics. It means acknowledging that the defence industry is part of the national industrial fabric. It employs thousands of engineers, sustains complex ecosystems of subcontractors, and holds technologies with spillover potential far beyond the battlefield. Excluding it from strategic planning because it is politically awkward is an act of self-imposed constraint.

Towards a credible industrial vision

A credible Butterfly strategy must recognise that economic sovereignty, technological capability, and security autonomy are interdependent. Denel’s recovery through joint ventures should be framed as a test of whether South Africa can still combine state direction with market realism. The choice is between revitalising a strategic asset or letting it wither into irrelevance.

South Africa has the expertise, the geographic leverage, and the diplomatic networks to turn defence and aerospace into engines of trade diversification. What it lacks is the confidence to say so aloud. Until it does, the Butterfly will remain beautiful on paper but grounded in practice.

The time for half-measures and rhetorical caution has passed. The world is rearming, supply chains are shifting, and industrial capacity is power. If South Africa wants to matter in that world, it must back its own strengths. The defence industry is one of them. Give it air to breathe, partners to grow with, and a place in the national strategy. Only then will the Butterfly truly take flight.

Ricardo Teixeira is Associated Editor at the Daily Friend

https://defenceweb.co.za/industry/industry-industry/the-butterfly-will-not-fly-without-defence-and-aerospace/

This article was first published on the Daily Friend.