Denel, Egypt in Talks on Umkhonto Deal

Umkhonto Missiles. Source: Flash 285/Wikimedia Commons

The Egyptian military is seeking to move forward with an acquisition of South African firm Denel’s Umkhonto, a surface-to-air missile.

Mail & Guardian, a South African newspaper, reported last week that Denel is working on a ZAR4.5 billion ($294 million) sale of missiles to the Egyptian Navy. According to the report, Egypt is seeking to procure the Umkhonto-R, a radar-guided variant of the Umkhonto missile. The newspaper reported that Denel and Egypt are discussing the supply of 96 Umkhonto-Rs. Its report added, “The state arms company also intends to sell 32 units of an infrared variant of the Umkhonto-R.”

The proposed missile contract comes with a ZAR1.5 billion advance, which would provide crucial support to cash-strapped Denel.

According to the report, Denel said the Umkhonto contract is related to ThyssenKrupp Marine Systems vessels, a possible reference to the Meko 200. Earlier this year, Germany’s government approved an export license for at least three Meko 200s, as well as three other unspecified frigates, to the Egyptian Navy.

It had previously been assumed that Egypt would arm its frigates with surface-to-air missiles from the Aster family.

Darren Olivier, an expert on African militaries who is the director of the website African Defence Review, noted  the Umkhonto-R is still in development and has not yet made a test flight, meaning  the proposed contract between Denel and Egypt involves funding for development purposes. It is not clear when the missile will be ready for serial production, but external financing from Egypt could speed the process along.

South Africa’s National Conventional Arms Control Commission (NCACC), a regulatory body, must approve the sale before it can move forward. The NCACC is obligated to consider the importing state’s human rights record when determining whether to approve a sale.

Egypt has recently faced several weeks of popular demonstrations amid discontent with President Abdel Fatteh el-Sisi’s rule. Government forces “have time and again used brutal force to crush peaceful protests,” Human Rights Watch’s deputy Middle East and North Africa director, Michael Page, said last month.

A South African government source expressed confidence to Mail & Guardian that the deal would be approved despite Egypt’s human rights record, given that the missiles are for surface-to-air purposes and  therefore unlikely to facilitate human rights abuses. The source said, “You must remember Egypt is not under any arms embargo, so the financial benefits far outweigh the possibility of us finding ourselves on the wrong side of history.”

State-owned Denel has struggled to remain profitable amid declining orders from the South African military. The company is jettisoning loss-making businesses and looking to boost exports abroad to shore up its portfolio. The sale to Egypt would be the largest export contract in Denel’s history, underscoring the importance of the proposed deal.

About Derek Bisaccio

Military markets analyst, covering Eurasia, Middle East, and Africa.

View all posts by Derek Bisaccio →