Zuma to use buying as tool to boost the economy

27 January 2011
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27 January 2011 | Nick Martindale

South African president Jacob Zuma has pledged to use government procurement as a tool to develop the economy and reduce the country’s unemployment problem.

Speaking at the 99th birthday celebrations of the African National Congress (ANC) in January, he said the government would build on the experiences of the 2010 World Cup infrastructure investment programmes by developing projects in housing and other social areas, with a strong emphasis on using local suppliers of goods and services.

“We will make sure these projects lead to more inclusive growth by meeting the needs of new industries and historically excluded communities,” he said.

“The ANC-led government will make sure public procurement is used to support domestic manufacturing, which should lead to more jobs.

“We cannot afford to deindustrialise and become simply a provider of raw materials to other nations,” he added. “Instead we must build a strong and diversified regional economy with a modern manufacturing base.”

International procurement consultant Andrew Muhimbise said the move could lead to the strengthening of national reservation and preference schemes, along similar lines to the broad-based black economic empowerment policy that has been operating since 2007.

“Public procurement’s core responsibility is to necessitate service delivery, unlike the fully profit-motivated private sector,” he said.

The move would not necessarily lead to higher prices, but local suppliers could run into capacity issues if they won lucrative government contracts, he warned.

The pledge by Zuma follows the launch of the ANC’s “new growth plan”, which was announced by economic development minister Ebrahim Patel in November last year.

The scheme aims to create five million jobs over the next 10 years, and to cut unemployment to 15 per cent.

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