Offset agreements have become a common practice in the international arms trade,
and are a reality in today’s defence market. Globally, military expenditure has
grown, and offset strategies and policies for defence acquisitions are increasingly
used. Currently, most countries insist on offsets for defence sector purchases.
South Africa, a country with vast and urgent social needs, regards using offset
agreements in military procurements as a strategy to enhance national development
through foreign investment, job creation and growth of the national economy in
general, and of the local defence-related industry in particular. This article focuses
on South Africa’s experience in concluding offset agreements, with the aim of
gaining a deeper understanding of the policies and legislation that allow South
Africa to conclude such agreements in the global context of offset agreements.
The discussion concludes that South Africa is in line with the rest of the world
in creating its own offset policy. However, South African policy and legislation on
offset agreements could be improved to contribute to the country’s actual economic
and national development. South Africa’s offset policy goals are too broad – goals
should be narrower, better defi ned, and more specifi c for the country to benefi t
fully from offset projects.