In one of the most astonishing deals in the world, South Africa's Ministry of Defence has put together a package which will allow it to upgrade its ageing military hardware and yet end up earning the country three times the value spent on defence. Tom Nevin explains.

You can't really expect to spend nearly R30 billion on military hardware and not take the flak from all sides - especially when your country can't house its people, is cutting budgets in hospitals and schools and is in its most parlous economic pickle ever. All you can do is bite the bullet. Or you can cut a deal that is too good to walk away from.

The latter is the remarkable trade the South African Ministry of Defence pulled off, one that allows it to embark upon a multi-billion rand arms-buying spree - stocking up with submarines, corvettes, jet fighters, jet trainers and helicopters - and end up better off than it was at the outset. The names of the preferred bidders were announced by Deputy President Thabo Mbeki in late November last year. A government subcommittee has been created to finalise details before signing contracts.

South Africans, weary of the previous government's open chequebook arms policy, needed a lot of convincing that the country couldn't make do with what it had, even though its defences comprised ancient patrol boats, mine-sweepers, a supply ship and four 1970s vintage French built Daphne class submarines so run down that only one is serviceable at any one time. The airforce's French Mirage clones and Impala jet fighters are well past their sell-by date. Only the on-land equipment is anywhere near adequate: light tanks, armoured personnel carriers and artillery pieces researched and developed by South Africa's own Armscor in response to the desert warfare waged in southwest Africa and Angola through the late 1980s and early 1990s. However, South Africa's 250 Olifant battle tanks are showing their age and will need replacing soon

South Africans themselves emerged from a kind of war zone of their own, both armed and economic, as the battle against apartheid intensified in the late 1980s and early 1990s. When it ended with the non-racial elections of 1994, the new 'rainbow nation' let out a collective sigh of relief and set about turning swords into ploughshares, houses, hospitals and schools.

Suddenly wars, anywhere in the region, seemed distant. South Africa was on the mend, Mozambique was at peace and there seemed a real prospect that Angola would finally end its civil strife. So why should we blow all that money on weapons we'll never use? The liberal majority in parliament asked the defence establishment this question every time the issue of a military capability upgrade was raised.

Well, countered Defence Minister Joe Modise and his deputy Ronnie Kasrils, a prepared military was necessary to protect itself in the region. Fishing grounds, for example, had to be safeguarded. But that argument, under the circumstances, was never going to be enough to win the day for the procurement of arms.

Budgets came and budgets went, and the defence department's allocation grew slimmer by the year. Until finally, the men from the Defence Ministry came up with a winner that (possibly along with security related developments elsewhere in the region) made sense to enough people to see the sale through. What if, they asked, we were able to attract R100bn in reverse sales, direct foreign investment and industrial participation for the R30bn we spend?

Here was a gunboat of a totally different colour. They probably could have got away with a rand for a rand quid pro quo, but really big arms deals are rare these days and frenetic world-wide bidding for the lucrative contract spiralled ever upwards until it reached over three rands to one. It was too good a deal to refuse, especially since the much vaunted Reconstruction and Development Programme (RDP) and the Growth, Employment And Redistribution (GEAR) plan lay in shreds at the government's feet; something the ANC would have to try and explain away in the run-up to the elections mid next year.

The defence deal spinoff turns everything around and provides thousands upon thousands of jobs in the regions where they are desperately needed. At the same time it will cement strategic partnerships with the five nations (two of them from G7) the defence department is doing business with.

It is anticipated that investment stimulated by the deal would be used to decentralise new industrial projects away from traditional areas such as Gauteng, and targeted where employment opportunities are most needed. Themba Rubushe of the department of Trade and Industry says all provinces will benefit, but "some more than others."

There were whoops of delight and groans of dismay when the South African Cabinet announced the names of the preferred suppliers for the defence force's R29.7bn arms package in mid-November. Saab of Sweden and its partner British Aerospace took the lion's share and will supply 28 advanced Gripen fighters with a price tag of R10.9bn. The light fighter is designed for offensive, defensive and peacekeeping purposes. British Aerospace was successful with its bid to provide 24 Hawk jet trainers at R4.7bn. The trainer assists in bridging the gap between propeller-driven aircraft and fighter jets.

A German consortium will supply four corvettes at a cost of R6bn and three submarines at R5bn. The corvettes' primary use is coastal surveillance and deep-water reconnaissance, while the subs will be used for coastal patrols and as a force multiplier covering both surface and underwater environments. Britain's GKN Westland won a R787m bid to provide four maritime helicopters. Their primary use will be to give the patrol corvettes wider range and mobility. Augusta of Italy is to supply 40 utility helicopters at a price of R2.2bn. The aircraft will add mobility in transporting troops and during strikes against the enemy. They are technically highly advanced.

Perhaps the war in the Democratic Republic of Congo (DRC) had something to do with the government suddenly making up its mind to re-arm. Not that anyone expects President Laurent Kabila to launch an attack on South Africa in reprisal for President Nelson Mandela's refusal to send in troops to prop him up. But when you look at who's supporting Kabila and who isn't you get an uncomfortable feeling that alliances (dare we call them defence blocs and recall the days of Nato and the Warsaw Pact?) are being created between Africa's hawks and doves. Pro-Kabila nations in the south and southwest are led by Zimbabwe's Robert Mugabe and include Zimbabwe itself, Namibia and Angola; in the north his allies are Rwanda, Uganda, Sudan and Chad.

Lined up against the belligerents are the proponents of a peaceful DRC solution: South Africa, Botswana, Zambia, Tanzania, Kenya and Nigeria. But for how long they'll be prepared or able to maintain the role of non-combatants will be seen as events unfold, probably sooner rather than later.

None of the adversaries in the affected region (which constitutes well over half of Africa's landmass and three quarters of its peoples) has a military capability worth shaking a stick at, with the exception of South Africa. And even that was questionable with its ageing squadrons of attack aircraft, virtually decommissioned fleets of warships and questionable overland capabilities. If there was ever a need for a strong regional policeman, that time appears to be fast approaching.

Less dramatically but no less urgent to those entrusted with South Africa's security is the question of overborder insurrection and how to contain it before it spills into South Africa. Lesotho provided a curtain raiser when mobs rioted and virtually destroyed the capital of Maseru and other towns. South African armed forces moved in and put down the rebellion in an operation that some described as 'a bungle' and others as an 'efficient and clinically clean' expedition. Whatever it was, it raised questions about South Africa's military readiness, or the lack thereof.

It's also possible that an even more serious situation could be developing in neighbouring economically strapped Zimbabwe. Over the past year, the Zimbabwe dollar has lost nearly 80% of its value. Unrest, including riots and strikes, has increased as the economy grinds down; unemployment is soaring along with food and fuel prices and an increasingly restive population is kept in check only by armed forces still loyal to the Mugabe government. But cracks could be showing in this last line of defence.

The Zimbabwe government was the first in southern Africa to respond to Laurent Kabila's appeal for troops to help him repulse the rebel invasion. What began as a small force has now grown to a Zimbabwean armed presence of 9,000 troops. Zimbabwe's intervention on distant soil has added fuel to the flames of dissent at home, and possibly also on the battlefield itself. In mid-November, the Zimbabwe government urgently dispatched 1,500 military police to the DRC, apparently to put down a mutiny amongst Zimbabwe soldiers unhappy fighting someone else's war. The Zimbabwe government denies its troops are rebelling, and insists the provosts are needed to guard prisoners of war.

Africa seems to be more prone to outbreaks of war than most other countries. They happen with ferocious suddenness and usually endure until both sides are so bloodied, exhausted and diminished that neither can continue. There is seldom an outright victor - witness Angola and Mozambique, Rwanda and Sudan.

Although no-one actually came out and said it, there's little doubt that in the South African government's inner sanctum, the tacit fears were there. And in the end, it was decided it would be better to be prepared. The saving grace was the desperation amongst the bidders to get a slice of the action. That pushed the deal from being a money spender to a money spinner and ended up being one of the most astonishing arms trades ever entered into anywhere.