Well; this is interesting.

For years, stakeholders in the South African commercial drone space have been trying all the courtship methods it could conjure up, to get the South African Civil Aviation Authority (SACAA) – the country’s regulating authority on all things aviation – to play ball when it comes to friendly drone regulations and expedited issuance of operator’s licence.

Nearly a decade later, its seems there is still no love lost between the two. Despite the strenuous efforts of the Commercial Unmanned Aviation Association of Southern Africa (CUAASA) and other industry players, acquiring a remote operator’s certificate (ROC) is still akin to finding gold dust in the country; with the industry also not happy that the regulating authority has not been helpful in formulating friendly drone policies, regulations and legislation that would promote, not hinder, the growth of the industry.

As of today, only about 106 entities have their application for an ROC being successful, from the thousands of applications that SACAA has received over the years.

This is despite some enterprising start-ups cashing in on the drone hype by training thousands of young people to fly drones, with promises of jobs that are not easily fulfilled.

Up front, we have to say that we do understand the need for the regulators to be cautious; their first responsibility of course is to the millions of ordinary people whose safety has to be guaranteed. After all, drones are a powerful data collection tool that can be easily abused to invade privacy, or can be saddled with deadly payload that can cause harm for people on the ground.

Having said that though: come on. It is 2025, and the good works of drone technology in saving people’s lives, making jobs safer and speeding up industrial operations is there for all to see. You’d think that by now, a regulation authority would have a set of solid guidelines on how drone technology can be safely integrated into the low altitude economy.

Yet, here we still ate today, with industry players bitterly unhappy on how they have been treated by the local aviation authority – to the extent that one economic expert has seen the need to write a think-piece about it.

In the article below, Cape Town-based economist John Stuart, an associate at the Trade Law Centre, decries this impasse between the industry players and the regulator for killing the early gains the country had made, literally describing it as de-industrialising the drone sector before it has even has a chance to prosper.

Read for yourselves.

De-industrialisation is the process by which, over time, the relative size of manufacturing industry in an economy goes into decline.

This phenomenon is known and expected in tertiary economies: those developed economies that have transitioned from being primarily manufacturers to being services driven.

These developed, service-oriented economies export high value-added services such as those related to technology and business services and import part of their requirement of manufactured items from other countries.

Where the de-industrialisation process is not expected is in developing economies: if they follow the pattern of developed countries before them, these countries are expected to reach more than 30 percent of their economies being made up of manufacturing industry.

Indeed, this is the pattern observed in many East and South-East Asian countries, from the original industrialised East Asian countries such as Japan and South Korea, to the currently industrialising countries such as Cambodia, Thailand, Viet Nam, Indonesia and the Philippines.

De-industrialisation of developing countries does occur, however; and – since it departs from the expected development pattern – is termed premature de-industrialisation by economists.

The component of manufacturing output is replaced by primary industry (mining and quarrying), agriculture, forestry and fishing, as well as low value services such as small and micro retail, small and micro transport services and certain personal services (petty services).

There are a variety of drivers of premature de-industrialisation, but declining competitiveness looms large among the main causes. While there are innate differences between countries and across the great variety of the global community, often competitive deficits are not inherent but rather created or worsened by poor regulations and governance.

A particularly regrettable pattern is where regulators operate in a vacuum, without adequate (or any) consultation with industry, without experience of industry and business, and unaware that their decisions will entail a compliance burden and a markup on unit cost for businesses.

This mark-up obviously has a direct bearing on the competitiveness of the industry.

This situation played out between 2014 and 2015 in South Africa, when the regulations governing unmanned aerial vehicles (UAVS, termed Remotely Piloted Aircraft Systems (RPAS) by the South African regulator) were developed and implemented.

South Africa is often cited as a good example of a middle-income developing country that has begun prematurely de-industrialising and also fallen into a middle-income technology trap: This refers to the dual problems of a declining share of manufacturing industry and a stagnancy in technological development in industry.

The latter also contributes to declining competitiveness, relative to other countries in a similar industrial and trade space.

Countries facing declining competitiveness and a stagnation in the development of manufacturing technology need to embrace new and sometimes ‘disruptive’ technology.

This is done through supporting entrepreneurs, inventors, innovators, venture capitalists and angel investors. Various approaches can be used:

• Industrial and tax policy that offers direct support or waives taxes and surcharges
• Trade policy that removes tariff and non-tariff barriers on imported technology products.
• Industry-friendly regulations that streamline compliance to what should be a regulatory framework developed through broad consultation with the industry and other stakeholders (industry clients for example).

The South African Civil Aviation Authority (SACAA) did the exact opposite.

On multiple occasions, they refused to meet with industry representatives prior to the release of the regulations.

They ignored in toto the recommendations and feedback of the industry representative organisation, the Commercial Unmanned Aviation Association of Southern Africa (CUAASA) (a division of the Commercial Aviation Association of Southern Africa: CAASA).

They even refused to meet representatives of the South African film industry, who were alarmed that the rapid uptake in the use of drones for cinematic use would be curtailed.

What resulted (in July 2015) was a set of regulations – termed Part 101 – that effectively killed off the burgeoning South African drone industry and reduced it to a few players that were prepared to bear the high compliance burden in return for the benefits of a smaller, oligopolised industry.

Many of these were supported by, or branches of existing commercial aviation ventures, which had the capital to cover the compliance costs and also to cross-subsidise the initial growth phases. Many of the early adopters and innovators of the industry prior to 2015 left the industry, and some that had gone through the expensive compliance phase failed subsequently: a result of not being able to recoup costs from the market.

A good example of the impact of the Part 101 regulations on the industry is the Cape Town startup Aerobotics. The company started as a drone manufacturer and services business – selling drone systems to farmers and agronomists and also collecting imagery using drone systems.

When the regulations were introduced, the company pivoted cleverly in several ways:

• Repurposed as a data analysis business, generating machine-learning validated insights using imagery uploaded by clients
• Stopped selling drone systems and instead referred customers to other sources
• Stopped in-house drone flying and invited clients and external drone pilots to collect and upload their own imagery
• Expanded into alternative markets (services only) and marketed their services in 17 other countries.

Not every drone player that had existed before 2015 was able to pivot, and the industry lost many valuable innovators. Use cases such as mining, quarrying, agriculture (remote sensing and crop spraying), conservation, land management, environmental protection, security, cinematics and entertainment, real estate and land surveying all forewent the benefits of dramatically cheaper form of aerial services thanks to the regulations.

The broader economic picture is important – when it comes to technology in business, ‘if you are standing still, you are going backwards’.

Unit costs were supposed to fall in these industries, as they did in other countries where the regulations were more reasonable. South Africa therefore lost competitiveness in multiple industries in the space of a few years.

Today, in 2025, this situation endures and despite numerous representations by the industry associations (CAASA and CUAASA), no rationalising of the regulations has taken place.

Among the few ‘advances’ by the regulator has been the creation of new police charge codes so that drone offenders can be correctly charged and prosecuted.

No better evidence of the decline of the South African drone industry could exist than the announcement in late 2024 that South Africa is set to begin importing drones from Nigeria.

South Africa is supposedly a tech hub and innovator on the African continent and would normally show a strong trade surplus in technology-intense goods vis à vis Africa. Its strengths in STEM education and training, its numerous university engineering schools and its technology hubs in the Western Cape are all evidence of this.

For this pattern to be reversed is quite unexpected, but in the context of the differences in drone regulatory structures, it is understandable.

Nigeria’s regulations do not require the operator certificate (UASOC), an Air Services License (ASL) or Letter of Authority (RLA, per drone) that the South African regulations require. Their licensing processes are also viewed as more streamlined and efficient, as opposed to the South African process where a UASOC and ASL can take up to two years, and hundreds of thousands of Rand to obtain.

Regulatory overkill is essentially an abuse of the power of the state and harmful to both consumers and producers. Economists have long proposed regulation of industries to protect citizens and balance market power in monopolistic and oligopolistic industries.

They are required to prevent price distortions and the efficiency losses these impose on the economy. Of course, transport agencies such as the SACAA are also tasked with protecting the public from injury and loss. However, in the lead-up to the development of the Part 101 regulations, not a single significant accident involving drones was reported, let alone injuries or deaths consequent of drone operations.

The extent of the regulations, which were essentially copied over from full-size aviation is therefore difficult to understand.

It would therefore be reasonable to conclude that in the case of the South African drone industry, which now has to resort to importing drones from Nigeria, regulatory overkill has caused the drone industry to deindustrialise.

In fact, the very impetus the authorities should have been encouraging has been effectively stifled and many industry players that made losses and exited will never return.

This is a powerful lesson for African countries on the importance of developing appropriate regulatory structures, using rational concepts and correct data, consulting with all stakeholders, comparing with international norms and standards and also taking into account the bigger picture: the impacts on the industrial base and the developmental potential of the economy.