* *Comrades This certainly one of the most progressive steps towards the creation of enabling conditions favourable to bolster employment opportunities because, until 1994 the government procurement system in South Africa favoured large and established white owned businesses and it was very difficult for newly established black businesses to enter the procurement system. With the democratic government coming in 1994 the government procurement was granted constitutional status and was recognised as means of addressing the past discriminatory practices and policies.
Its implementation is left to all organs of state within the guidelines of the acceptable tender document to give effect to 217 (3) of the Constitution of the Republic of South Africa (Act 108 of 1996) which establishes the primary and broad secondary procurement objectives in South Africa. It stipulates the primary level of procurement system* *is to be fair, equitable, transparent, competitive and cost effective, and at secondary level procurement policy* *may provide for categories of preference in the allocation of contracts; and the protection or advancement of persons, or categories of persons, disadvantaged by unfair discrimination. The core values of this policy (PPPFA) and aspiration was to change the procurement policy to favour the blacks (the previously disadvantaged) in particular small businesses to get preferential treatment when it came to government tenders. So, the construct of this policy was largely drawn from racial lines to redress the social disparities and sort to iron out structural imbalances in South Africa’s procurement system by enforcing the PPPFA. Prior to the global economic crisis of the 2008 and 2009, South Africa achieved relatively high growth rates, particularly over the 2005 – 2007 periods. However, these growth rates mask key structural challenges in the South African economy. First, South Africa’s rates have been lower than the average growth rates of our peers among medium- and low-income countries. Second, growth has been driven by unsustainable increases in credit extension and consumption that are not sufficiently underpinned by growth of the production sectors in the economy. Thus, consumption- driven sectors (finance and insurance, real estate, transport and storage, communication, wholesale and retail, catering and accommodation) grew by 107% between 1994 and 2008 (7.7 % annually). By contrast, production sectors (agriculture, mining, manufacturing, electricity and water, and construction) grew by only 41% (2.9 % annually). This has lead to large and unsustainable imbalances in the economy, particularly a large current account deficit (the difference between what we export against what we import). Third, even at the peak of recent average annual growth of 5.1% between 2005 and 2007, unemployment did not fall below 22, 8% (using the narrow definition of unemployment figures). Now, the problem comes when the so-called policy-makers seek to use part of the solution to solve a multifaceted problem. That is apartheid was institutionalised not only on racial lines but also on socio-economic conditions, as well as gender in related matters, let alone that the predominantly Black emerged from a deeply patriarchal society as well which is the first problem. The second problem with the incapacity of the state to regulate transformation legislation like Black Economic Empowerment there was an unintended consequence in the resultant of the policy which came in the form of fronting. Lastly, the sub-sectors which are at the heart of employment creation (* theDTI*’s mandate) were hampered by the get rich quick from the emerging middle class that was in access of these government tenders. How this happens is, instead of buying local goods and services the business people would get the ready made goods and services from abroad and import them to do the tender locally while in the process destroying the local job markets and the skills sectors. So, within the PPPFA there are simply no parameters to enforce designated local content on all government tenders. An example was the 2010 World Cup stadia where more cement was bought from China, as opposed to a local producer Pretoria Portland Cement or AfriSam. The policy as it stands it need refinement at sub-sector level. In the private sector an example can be made in the retail sector where the like of Pick n Pay, Spar and Shoprite when they move into townships don’t but from the local producers or have a preferential procurement with them. This in turn kills all the small business in the localities and defeats the aspirations of section 217 of the constitution. The government, Labour and Business need to sit and jointly formulate a proper and inclusive procurement regime. No government department should develop policy for other government departments without overarching elements and consultation. There is a dire need for leveraging the PPPFA for industrial development and job creation. The New Growth Path and IPAP identify the need to leverage public procurement in combination with other policy instruments, especially in value added, tradable and labour intensive industries. Coupled to the above there should be designated sectors where by the line function ministries can enforce the level of local content on specific tenders with the goal of having hundred percent local production on tender issued from the public purse. Sikhumbuzo Thomo An activist from afar -- You are subscribed. This footer can help you. Please POST your comments to [email protected] or reply to this message. You can visit the group WEB SITE at http://groups.google.com/group/yclsa-eom-forum for different delivery options, pages, files and membership. To UNSUBSCRIBE, please email [email protected] . You don't have to put anything in the "Subject:" field. You don't have to put anything in the message part. All you have to do is to send an e-mail to this address (repeat): [email protected] .
