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The South African government has stepped up its efforts to use purchasing as a lever for economic growth by launching a local procurement verification service.
The Local Content Verification Office, part of the South African Bureau of Standards (SABS), was this month handed powers by the Department of Trade and Industry to examine whether businesses are complying with local procurement regulations.
Under the Preferential Procurement Policy Framework Act, introduced in December 2011, businesses operating in a number of sectors - including rail rolling stock and power pylons - are required to source from local suppliers.
Speaking at the launch this month, minister of trade and industry Rob Davies, said: “Through local procurement, a policy lever is provided, among others, to minimise import leakages which represent an outflow of funds while at the same time attempting to increase both aggregate demand and supply in the South African economy.”
During the verification process SABS officials will conduct site visits at factories of companies operating in the designated sectors, which also include set-top boxes for televisions and footwear, two times a year. The verification process is intended to boost compliance with local procurement regulations that have been designed to boost economic growth and create jobs in the South African supply chain.