On November 18, South African Deputy President Thabo Mbeki announced arms purchases totaling $5.1 billion, despite complaints from within the government, reportedly including Finance Minister Trevor Manuel, that the funds would be better spent on basic services. The South African defense budget for 1998 was $2.3 billion, according to The Military Balance 1998/99.
Pretoria selected companies in Britain, Germany, Italy and Sweden to supply four navy corvettes, three submarines, four maritime helicopters, 40 light utility helicopters, 28 fighter aircraft and 24 jet trainer aircraft. Mbeki claimed that offsets—side deals that can include coproduction, countertrade or economic investment—would create 65,000 South African jobs, although the final contracts must still be negotiated.
In February the United States ended its debarment of Armscor, Pretoria's military procurement company, and two other South African companies, thereby opening up the South African arms trade to U.S. companies for the first time in 35 years. Competition for the contracts, however, was too far advanced for American arms producers to tender offers.
As its fighter choice, South Africa opted for the joint British-Swedish JAS-39 Gripen. Because the Gripen contains a significant number of American components, the State Department had to approve a marketing license, which it did on August 18, for the sale to go forward.