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Future of the Afghanistan Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022

Future of the Afghanistan Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022

  • June 2017
  • 87 pages
  • ID: 4949883
  • Format: PDF
  • By GlobalData

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Future of the Afghanistan Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022

Summary

Afghanistan is emerging as one of the most interesting defense markets in Central and South Asia. The US invasion of Afghanistan after the September 2001 attacks led to the formation of a democratic government which is now putting significant emphasis on the total revamp of its national infrastructure and defense industry. Its main objective is to have a strong, efficient and well-equipped armed force that can counter the Taliban insurgency and provide strong public security. These are the prime drivers of the Afghan government’s investment in the defense sector.

Afghan defense expenditure decreased at a negative CAGR of -8.82% during the historic period from US$1.4 Billion in 2013 to US$1 Billion in 2017. Around 34% of the national budget was allocated to security expenditures in 2017; however, the negative CAGR was caused by a decrease in foreign aid which previously benefitted the security sector. The Afghan defense budget is forecast to increase at a CAGR of 1.69% over 2018–2022 from US$1 Billion in 2017 to US$1.1 Billion in 2022.
Since 2002, the US government has consistently extended aid to Afghanistan to help fulfill their military requirements. The last five years showed a declining trend in aid, from US$5.3 Billion in 2013 to US$4.3 Billion in 2017. Over the forecast period, aid is projected to continue to decrease gradually, due to the withdrawal of the US armed forces from Afghanistan, and is expected to reach US$3.1 Billion in 2022.

Afghan homeland security expenditure between 2013 and 2017 cumulatively valued US$5.3 Billion. The majority was used to combat human trafficking and drug smuggling issues; a trend expected to continue over the forecast period. The country’s expenditure on homeland security is estimated to be US$4.5 Billion cumulatively during 2018-2022. Over the forecast period, the country’s budget for homeland security is expected to increase at a CAGR of 2.08% to value US$933.5 million in 2022.

Withdrawal of the International Security Assistance Force (ISAF) from Afghanistan in 2014 necessitated the need for strong and efficient Afghan National Defense Security Forces (ANDSF). As a result, the Afghan government is expected to assign an average of 5.1% of its GDP to defense purposes over 2018-2022. Afghanistan’s defense budget is projected to show marginal growth at a CAGR of 1.69% from US$1 Billion in 2017 to US$1.1 Billion in 2022.

The report “Future of the Afghanistan Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022” offers insights into market opportunities and entry strategies adopted by foreign OEMs (Original Equipment Manufacturers) to gain a market share in the Afghanistan defense industry.

In particular, it offers in-depth analysis of the following -
- Market opportunity and attractiveness: Detailed analysis of the current industry size and growth expectations during 2018–2022, including highlights of the key growth stimulators. It also benchmarks the industry against key global markets and provides detailed understanding of emerging opportunities in specific areas.
- Procurement Dynamics: Trend analysis of imports and exports, together with their implications and impact on the Afghanistan defense industry.
- Industry Structure: Five forces analysis to identify various power centers in the industry and how these are expected to develop in the future.
- Market Entry Strategy: Analysis of possible ways to enter the market, together with detailed descriptions of how existing companies have entered the market, including key contracts, alliances, and strategic initiatives.
- Competitive landscape and strategic insights: Analysis of the competitive landscape of the defense industry in Afghanistan, providing an overview of key defense companies (both domestic and foreign), together with insights such as key alliances, strategic initiatives, and a brief financial analysis.
- Business environment and country risk: A range of drivers at country level, assessing business environment and country risk. It covers historical and forecast values for a range of indicators, evaluating business confidence, economic performance, infrastructure quality and availability, labor force, demographics, and political and social risk.

Companies mentioned in this report: General Dynamics Corporation, Sierra Nevada Corporation (SNC), Lockheed Martin, and MD Helicopters.

Scope

- After the NATO-led International Security Assistance Force (ISAF) left the country in 2014, Afghan security forces were made responsible for protecting the country. Afghan defense expenditure decreased at a negative CAGR of -8.82% during the historic period from US$1.4 billion in 2013 to US$1 billion in 2017. Around 34% of the national budget was allocated to security expenditures in 2017, however, the negative CAGR was caused by a decrease in foreign aid which previously benefitted the security sector.
- expenditure allocation decreased from 21.6% in 2013 to 5.8% in 2017. Over the forecast period, the procurement of weapons, construction of infrastructure, and acquisition of assets are expected to drive capital expenditure. The average share of revenue expenditure is expected to be 93.6% over the forecast period, higher than the average share of 86.8% during 2013-2017. Increased focus on Afghan armed forces training sessions and better military personnel pay has resulted in a higher share of the defense budget being allocated to revenue expenditure, a trend expected to continue over 2018-2022.
- The MoD is expected to invest in multi-role light atack aircraft, attack helicopters, personnel weapon systyems for infantry and artillery systems.

Reasons to buy

- This report will give the user confidence to make the correct business decisions based on a detailed analysis of Afghanistan defense industry market trends for the coming five years
- The market opportunity section will inform the user about the various military requirements that are expected to generate revenues during the forecast period. The description includes technical specifications, recent orders, and the expected investment pattern by the country during the forecast period
- Detailed profiles of the top domestic and foreign defense manufacturers with information about their products, alliances, recent contract wins, and financial analysis wherever available. This will provide the user with a total competitive landscape of the sector
- A deep qualitative analysis of Afghanistan defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts

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