The Strategic Defence Procurement Package (SDPP), commonly known as the "Arms Deal," was approved by the South African Cabinet on 18 November 1998 (in principle) and finalised on 3 December 1999. It was the largest single procurement decision in the history of democratic South Africa, involving the acquisition of:
- 4 MEKO A200 corvettes from German Frigate Consortium (ThyssenKrupp/Blohm+Voss) — approximately R6.9 billion - 3 Type 209 submarines from German Submarine Consortium (Ferrostaal/HDW) — approximately R4.7 billion - 26 Gripen fighter aircraft from BAE Systems/Saab (Sweden/UK) — approximately R10.9 billion - 24 Hawk Lead-In Fighter Trainers from BAE Systems (UK) — approximately R5.0 billion - 30 Agusta A109 Light Utility Helicopters from Agusta (Italy) — approximately R2.4 billion
The acquisition was justified as necessary to replace ageing apartheid-era equipment and maintain South Africa's defence capability. However, from the outset, the process was corrupted.
THE EVALUATION PROCESS WAS MANIPULATED. The original evaluation by the Department of Defence recommended the Hawker Siddeley/SAAB Gripen and the Italian Aermacchi trainer over the BAE Hawk. A team involving Defence Minister Joe Modise, then-Deputy President Thabo Mbeki, and other senior officials overruled the technical evaluations. The Auditor-General's 2000 Special Review identified "material deviations" from procurement procedures. SCOPA (Standing Committee on Public Accounts), under ANC MP Andrew Feinstein, attempted to investigate but was shut down by the ANC parliamentary leadership.
BRIBES WERE PAID TO KEY DECISION-MAKERS. The Schabir Shaik trial (2004-2005) established in law that Thomson-CSF (now Thales) paid bribes channelled through Shaik's company Nkobi Holdings to then-Deputy President Jacob Zuma. Judge Hilary Squires found a "corrupt relationship" between Shaik and Zuma. Tony Yengeni, ANC Chief Whip, received a discounted Mercedes-Benz from European Defence & Systems Company (EADS, associated with the German Frigate Consortium), was convicted of fraud in 2003, and served a short prison sentence. Former Defence Minister Joe Modise allegedly received benefits from BAE Systems and others, though he died in 2001 before any prosecution. Fana Hlongwane, a consultant and ANC-connected figure, received at least R200 million in commission payments from BAE Systems according to UK Serious Fraud Office (SFO) investigations.
INVESTIGATIONS WERE SYSTEMATICALLY OBSTRUCTED. The original Joint Investigating Team (JIT) comprising the Public Protector, Auditor-General, and National Director of Public Prosecutions produced a report in 2001 that identified irregularities but was watered down under political pressure — later confirmed by evidence that then-President Mbeki's office intervened in the report. SCOPA's investigation was shut down when the ANC replaced Andrew Feinstein (who subsequently resigned from Parliament in protest) and other critical members. The Scorpions (Directorate of Special Operations) investigated the deal and built a case against Zuma, but the Scorpions themselves were ultimately dissolved in 2008 — widely seen as politically motivated. The Serious Fraud Office in the UK investigated BAE Systems and reached a plea bargain in 2010 (BAE paid a $400 million fine globally, with part to Tanzania, but critically no admission of bribery and no payment to South Africa). Germany's courts convicted Ferrostaal executives in 2011 for bribing officials in connection with the submarine deal.
THE SERITI COMMISSION WAS A WHITEWASH. In 2011, President Zuma (himself an accused in the Arms Deal) appointed the Seriti Commission of Inquiry into the Arms Deal, led by Judge Willie Seriti. The Commission was widely criticised for failing to subpoena key witnesses, not pursuing evidence of corruption, and producing a 2015 report that found "no evidence" of corruption or undue influence — contradicting multiple court judgments and the findings of foreign courts. Terry Crawford-Browne, the activist who had brought the Constitutional Court application compelling the commission's establishment, and civil society organisations challenged the report. In August 2019, the North Gauteng High Court set aside the Seriti Commission's findings as "irrational" (confirmed on appeal), finding that the Commission had failed to fulfil its mandate.
THE ZUMA PROSECUTION HAS BEEN AN EPIC SAGA OF DELAY. Zuma was charged with corruption, fraud, money laundering, and racketeering in connection with the Arms Deal in 2005 (after the Shaik conviction). The charges were controversially dropped by Acting NPA head Mokotedi Mpshe in April 2009 — weeks before the general election that brought Zuma to power — based on "spy tapes" suggesting political interference in the timing of the prosecution. The DA challenged this decision, and in 2016 the Supreme Court of Appeal ruled the decision to drop charges was "irrational" and ordered reinstatement. Zuma has used every legal avenue to delay the trial, which was formally reinstituted. Thales (as the corporate co-accused) has been charged alongside Zuma. As of 2025, the trial has still not concluded, more than 25 years after the deal was signed.