South Africa pushes for 75 per cent local purchasing

3 November 2011

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3 November 2011 | Angeline Albert

Billions of rand will be directed to South Africa’s manufacturers after public sector buyers and a large number of businesses agreed to ensure 75 per cent of their purchasing is local.

The Local Procurement Accord, signed on 31 October, commits businesses, public organisations, community groups and trade unions that signed up to it to work towards this medium to long-term goal. A committee of representatives from these groups will meet every six months to review progress.

Economic development minister, Ebrahim Patel, who was present at the signing, said: “The accord brings together the efforts of the public and private sectors and will direct billions of rand to local manufacturers.”

Businesses, unions and community groups agreed to develop purchasing strategies and analyse their supply chains to identify where they can buy more from local suppliers. The 84 largest companies agreed to drive localisation for the private sector and will report annually on their targets. The companies also agreed to eliminate collusive and unethical pricing practices in public tenders and promote competitive pricing policies.

Meanwhile, as reported by SM, the South African government has committed to increase its local procurement using regulations that come into effect on 7 December. The regulations will empower Department of Trade and Industry (DTI) to rule that some products must be locally sourced. The government said this would include buses, power pylons, railway rolling stock, pharmaceuticals, television set-top boxes, uniforms and furniture.

DTI minister Rob Davies told SM: “We have a broad target of increasing the amount of suppliers of locally made goods from the current 30 per cent to 40 per cent. We say to foreign companies: ‘You come here and manufacture and you will be eligible for public sector contracts. You come here and bring your goods by boat, you won’t.’”            

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