The South African Defense Force (SADF) began planning to replace the Olifant Mk1B main battle tank (MBT) in the late 1980's. Foreign designs such as the French Leclerc and British Challenger 2 were studied and it was planned that the new MBT was to have an entirely new hull from the Olifant Mk1B. But, due to a greater need of the budget for the navy and air force, a new tank was scratched from plans in 1988. Instead, an upgrade of the Olifant Mk1B would have to suffice.

The main areas that were upgraded on the Olifant Mk2 were the mobility, crew ergonomics, and fire control system (FCS).