DICON upgrades to tap into Africa arms market

The Defence Industries Corporation of Nigeria (DICON) is moving to join the group of global arms and ammunition manufacturers, with a view to becoming an African regional supplier of light arms and attaining a measure of self-sufficiency for the country.
This follows an on-going restructuring in DICON, BusinessDay investigations have shown. The new model emphasises collaboration with investors in the private sector, local and foreign, while there will also be a focus on meeting Nigeria’s security needs.

Established in 1964, DICON’s vision is to meet the material requirements of the Nigerian Armed Forces and other security agencies, as well as foreign policy needs, through improved production, collaboration and commitment to international best practices.

The corporation flourished during the Nigerian Civil War which occurred between 1967 and 1970 when it produced BM 59 Rifles, SMG 12, and millions of rounds of 7.62mm x 51 and 9 mm x 19 ammunition. However, successive military regimes abandoned the corporation. Some sources say that successive military regimes feared that DICON could present a storehouse of arms and ammunition for coup makers. As a result, the only product that comes out of the corporation now is ammunition (bullets).

Major Emmanuel Adeniyi (rtd) chief public relations officer, DICON, attributed the near collapse of the establishment to ambiguous national interest. “What happened in the case of Nigeria was that we had an ambiguous national interest. Successive leaders came and thought keeping DICON vibrant would affect their regimes. Some of them deliberately made it a policy to give priority to importation, rather than emphasising on local production. This is bound to change, due to the resuscitation programmes of Major General Ogunkale-led team at DICON”, Major Adeniyi said.

While DICON was abandoned in Nigeria, the defence industries of countries regarded as emerging markets, which were established about the same time, have become giants in the world. Interestingly, some of these firms are now ranked among the Top 100 arms exporters by the Stockholm International Peace Research Institute (SIPRI) with billions of dollars in revenue accruing to their economies.

In 2015, the Czech Republic defence industries exported millions of dollars worth of arms to different countries. The breakdown shows 30 percent went to the European Union; 27 percent to the Middle East, 14 percent to Asia, 10 percent to Africa (Algeria) and 8 percent to the United States.

China’s arms and ammunition exporters sold most of their products to Pakistan, Bangladesh, Myanmar and 18 countries in Africa. Similarly, Hanwha Techwin and Daewoo Shipping and Marine Engineering (DSME), founded in 1978 and 2000 respectively, in South Korea exported $2.08 billion worth of arms in 2015, an increase of 55 percent over $1.34 billion revenue made from exports in 2014. Brazilian firearms manufacturer, Taurus, sold $109 million worth of arms and ammunition in 2016 and majority of the clients are African countries.

In 2015, the defence budgets of African countries rose by 59 percent to $37 billion from $23.3 billion in 2006. Sub Saharan African (SSA)countries accounted for $19.1 billion or 52 percent of the 2015 military spend. Algeria, Angola, South Africa, Morocco, Nigeria and South Sudan are the largest spenders on their armed forces. The light arms needs of Sub Saharan Africa present a huge opportunity for DICON.

It should be noted that the absence of a vibrant arms and ammunition producing firm in Nigeria has subjected Nigeria’s domestic security policies to a high level of interference from big arms suppliers in the world. For instance, it took some time for the US State Department to approve the sale of $593 million A-29 Super Tucano attack planes to Nigeria, following renewed onslaught on the Nigerian armed forces by Boko Haram.

The seriousness attached to the revamp of DICON has begun to attract interest from domestic and international investors from South Africa and the European , while heads of militaries of some African countries have visited for patronage.

“There will be end users’ certificate given to the private sector players from the National Security Adviser’s office. Once the certificate is given, they are no longer seen as purely civilian. The private investors are partners in progress, as long as the vision to make our country self-sufficient in (light) arms production is concerned.
The same model operates in other countries, especially Brazil, whose defence industry was established about the same time as DICON. This is the progress Major General Ogunkale has made in recent times”, Major Adeniyi (rtd) added.

To successfully transform the corporation, the amendment of the DICON Act is presently being handled by the National Assembly. Apart from that, a memorandum of understanding has been signed with Proforce Limited, a private company in the country , which currently produces armoured personnel carriers (APC).

In 2015, the top global 100 arms and ammunition producing firms realised $371 billion as revenue, compared to $401 billion these firms made in 2014, SIPRI publication shows. Collectively, the top 100 arms exporters made $39 billion profit in 2015, down 39 percent from $70 billion realised in 2014. In addition, they also created 3.5 million jobs in 2015 as against 4.1 million jobs created in 2014.

“The reason no company based in Africa is ranked in the top 100 is because even though there are arms production activities on the continent, the arms sales for each individual company is not large enough to rank them into the Top 100.
“The numbers and levels of sophistication and complexity may also be a factor, as most recent and advanced military capabilities (new generation combat aircraft, submarines, etc.), which are also the most costly, are not produced in Africa”, said Aude-E Fleurant, director, arms and military expenditure programme (AMEX), SIPRI, in an email response to BusinessDay.

 

TELIAT SULE