Whether you have a job or not may be one of the consequences of the government's adherence to the Preferential Procurement Policy Framework Act (PPPFA) which designates certain sectors and products for mandatory local procurement.
The 21 designated items have been selected among those which the government procures most to be able to deliver services to the public. These include rail rolling stock, bus fleets, furniture, clothing, textiles, leather and footwear.
In her State of the Nation debate speech in February, chairperson of the portfolio committee on trade and industry Joan Fubbs said: “One of South Africa’s greatest resources is its buying power through government expenditure. The local procurement policy aims to capitalise on the large buying power of the government and state-owned entities, in particular public infrastructure investment, and use it to stimulate economic growth. The government's spending on locally produced goods will increase local demand and significantly expand local suppliers, leading to economic growth.”
One of my favourite examples of successful government procurement, which I often mention on localisation and designations that exist in the public sector, is the procurement of locally assembled buses for the City of Johannesburg Rea Vaya project, which, of course, has been rolled out here on my own doorstep.
While time constraints in the first phase of the Rea Vaya roll-out meant that the first buses in the fleet were wholly imported from Marco Polo’s Brazil base, from 2012, in Phase IB, 134 bus bodies were built and assembled in Marco Polo’s Germiston facility, with 300 direct jobs created following the designation of the bus industry as one for local procurement.
Between 2012 and 2013, 220 buses were made locally in the country's two largest metros, Ekurhuleni and the Western Cape. The value of these tenders was then R624million.
The greater impact of Rea Vaya, which incidentally is the country's most advanced transport system, was felt during the construction phase, when almost 10000 jobs were created, and it now sustains many jobs for drivers and station staff. But I digress.
The flip side of this coin is, of course, the massive loss of job creation opportunities when government entities do not follow the rules and go outside the country to procure items in the stipulated sectors.
Part of our biggest achievements has been the establishment of a tender monitoring system which picks up tenders and requests for quotations from 730 government departments, entities and agencies and checks them against local procurement legislation.
In cases where strict local procurement is not stipulated, we alert the Department of Trade and Industry and measures are taken to have the tender withdrawn, amended or even cancelled for non-compliance. Current legislation only requires the SA Bureau of Standards to verify these local procurement levels after a tender has been awarded and so our system pre-empts any transgressions.
Our system, which was developed with the assistance of SA Clothing and Textile Workers Union, also allows us to alert member companies who qualify to tender by virtue of their localisation credentials and notifications are sent out weekly in this regard, enhancing our membership value proposition.
But while the government is a massive procurer of everything from buses to linen for hospitals, uniforms for public servants, furniture for offices and schools, electrical and telecom cables - among many other items - and can legislate on public sector procurement, it cannot oblige the private sector to do the same.
It is often cited that while the government can create an enabling environment for job creation, it's companies that actually create work. In the case of local procurement, it should be seen as a joint effort.
And that puts me in mind of my song for this week - Uzoyithola Kanjani - by the late Mandoza. It talks about the need for people to rise up and start doing it themselves, not to wait for handouts. What these resilient and brave entrepreneurs who have started their own businesses need from the government are not handouts, but support from public sector procurement officers, and through compliance with the legislation.
Each of the three tiers of government, all its agencies as well as state-owned entities can contribute significantly to job creation, simply by applying its own rules.
By procuring every single one of the designated items locally, and even by voluntarily extending this list to include others, we offer local companies the chance to be the direct creators of jobs when they come to meet those orders - or not, if the government is allowed to flout the law.
We are asking the government to play by its own rules and for companies to be vigilant and to hold them accountable if they see a tender that does not meet the PPPFA requirements. At the same time, we call on each private sector entity to self-regulate and contribute to the economic growth we so desperately need.
Be Proudly South African! Procure locally and create jobs!
Eustace Mashimbye is Proudly South African chief executive.
The views expressed here are not necessarily those of Independent Media.
- BUSINESS REPORT