Tito Mboweni’s focus on local procurement is most welcome
Opinion / 4 September 2019, 10:30am / Eustace Mashimbye
JOHANNESBURG – Last week, Finance Minister Tito Mboweni published his blueprint for economic transformation, inclusive growth and competitiveness – his vision to kickstart the South African economy in the short term and to ensure sustained growth in the long term.
While it seems that it is neither a policy document nor a government paper, having been published without the inputs of the usual social partners of which Nedlac is comprised (labour, business and civil society), we as the country's buy local advocacy campaign nevertheless would like our voices to be heard and will be making a submission and comments, as invited, by September 15.
Should Mboweni’s draft strategy eventually be adopted, we want to have contributed.
Insofar as it drills down into some detail, with achievable goals, (provided there is united political will behind it) we support the minister's strategy. Combined with Department of Trade and Industry (dti) Minister Ebrahim Patel’s own policy, which he outlined in his Budget speech in July, and which refers to the president's re-imagined industrial strategy, we believe that South Africa will soon start to recover.
Patel and Mboweni’s plans both speak about local procurement and reclaiming the domestic market space lost to imports.
The dti has chosen to focus on five sectors for which it will develop trading master plans.
The automotive sector has already forged ahead and has set itself goals, including increasing local content from 39 to 60 percent by 2035 and through various strategies to double its annual car production, in turn creating many new jobs.
The clothing, textile, footwear and leather sector's retail master plan is also at an advanced stage, and includes measures to combat illegal imports, which have been a massive contributing factor to job losses in the sector. This is an industry into which we have also put a lot of work, together with Southern African Clothing and Textile Workers’ Union and a number of the major retailers.
The agricultural and agri-processing sector, which includes the struggling poultry industry, is the third area of attention for intervention by the dti. Minister Patel recently convened a meeting of poultry sector stakeholders to discuss alternatives to tariff adjustments, looking for consensus on how to protect a domestic industry which is the source of many jobs, with the potential for many more.
Proudly SA counts among its member companies of most of the large poultry processors, with whom it works closely to find solutions to their current crisis.
The steel manufacturing sector is one that we have as Proudly SA looked into specifically as a component of furniture manufacturing. The furniture value chain has massive potential for growth and job creation and is one on which Proudly SA has recently put the spotlight.
The chemicals value chain is also enormous, and is the fifth sector in which a master plan will be drawn up. Particularly in plastics, the government has expressed its intention to partner with local manufacturers to identify opportunities for import replacement, and the latest designation by the government of plastic pipes for local procurement is testament to this.
Proudly SA is well positioned to assist in this regard, as we are also working on identifying top imports for replacement with locally manufactured equivalents.
Mboweni’s plan refers to many of the elements included in the dti budget presentation, but we want to look specifically at his measures to leverage public procurement to support industrialisation.
He speaks about how best to identify those items that can be added to the current list of now 24 designated products for compulsory local procurement by government and all its agencies.
He also speaks about the capacity of SABS to verify local content and of the government itself to monitor and indeed enforce compliance with local procurement legislation.
Proudly South African is extremely proactive in this sphere and its work aligns with the strategies set out in Mboweni’s document.
We already work with SABS, and they have spoken at a number of our business and public sector procurement forums outlining their role in local content verification.
Our public sector forums speak to supply chain managers from all tiers of the government, educating them on their specific roles and responsibilities in respect of local procurement, as contained in the public sector procurement legislation, as well as the benefits of extending local content conditions to tenders outside of designated items.
Proudly SA also has its own tender monitoring system, which flags tenders issued by all spheres of government for designated items.
Where local content is not a stipulation for qualification to bid, Proudly SA refers the document to the dti to take up with the issuing department, in order to ensure early intervention before the tender is awarded.
We applaud Mboweni’s focus on local procurement as a driver of economic recovery and, although he puts the emphasis on government procurement in his economic strategy, we also call on business to play their part in increasing their levels of local procurement and in so doing contributing to the upturn in our economy and to job creation.
My song for this week is a no-brainer. It’s Cassper Nyovest’s Tito Mboweni… sha sha!
Eustace Mashimbye is the chief executive of Proudly SA.