COSATU is deeply shocked by Treasury’s latest move regarding government’s Preferential Procurement Regulations
9 November 2022
The Congress of South African Trade Unions (COSATU) is deeply shocked by Treasury’s gutting decision regarding government’s Preferential Procurement Regulation, which will abolish any measures to support local procurement and Broad Based Black Economic Empowerment (BBBEE). This is an unmitigated disaster and a giant step backwards for South Africa’s painstaking efforts to support localisation and BBBEE since 1994.
All properly adjusted persons can see South Africa remains scarred by nearly 350 years of colonialism and apartheid. The majority of wealth and companies remain in white male hands. South Africa is the world’s most unequal society. We cannot sustain a nation where poverty and race are symbiotic at all levels. It is a time bomb waiting to explode.
Local procurement is key to sustaining and creating badly needed local jobs, from manufacturing to agriculture. BBBEE is key to shifting ownership to reflect our demographic diversity and to empowering the disadvantaged.
The 2011 and 2017 Preferential Procurement Regulations were explicit in the need for all national and provincial government departments, municipalities, entities and State-Owned Enterprises to support locally produced goods and BBBEE. The Constitution compels government at all levels to pursue legal, social and economic measures to address the legacies and inequities of the past and present. The BBBEE Act follows suit. The sectoral master plans are premised on supporting local procurement and BBBEE. The Public Procurement Bill that will soon be tabled at Parliament, compels all state organs to do likewise.
Public procurement at R1 trillion per annum is the largest source of stimulus in the economy. It has a huge role to play in supporting local companies and BBBEE. Countless successful industrial economies around the world have effectively supported similar measures aimed at creating and sustaining local jobs and businesses, and towards empowering historically disadvantaged communities.
It boggles the mind why Treasury has now wilted at the hands of Sakeliga, an obscure right wing organisation, and abandoned the very principles of transformation and localisation that the majority of the nation has embraced and voted for since 1994.
By removing any requirements for state organs to support local procurement or BBBEE, government will be powerless to intervene when these state organs simply choose to import goods that can be locally produced or refuse to support emerging entrepreneurs.
The Presidency needs to intervene and instruct Treasury to withdraw this inexplicable gutting of the Preferential Procurement Regulations and to reinsert the previous commitments to support local procurement and BBBEE. COSATU will be seeking an urgent meeting with the Ministers for Finance and Trade, Industry and Competition to ensure that sanity prevails.
Issued by Matthew Parks, COSATU Parliamentary Coordinator, 9 November 2022
