Procurement's role in Africa's rise

Will Green is news editor of Supply Management
4 August 2014

5 August 2014 | Will Green

Will GreenProcurement can be a force for good in the world. That was the central message of the CIPS Pan African Conference, held in Lusaka, Zambia last week.

The continent faces huge challenges around development and poverty, but procurement offers a way out. By choosing to buy from local suppliers, governments and businesses have the power to generate jobs and incomes. But it goes further than that. The conference was told buyers were expected to help grow those local businesses and help them develop the technology so they are in a position to bid for contracts.

This is what Transnet, the South African state-owned freight and infrastructure company does. And it means business. Edward Thomas, executive manager of integrated supply chain management at the firm, said the penalties they had in place for tier one suppliers who did not use local firms in tiers two and three were so punitive as to make the difference between profit and loss on a contract.

Lillian Karuri-Magero, head of sourcing professional services at ABSA, said SMEs were the “back bone” of Africa’s growth and she called on buyers to club together to support their growth. She said 97 per cent of businesses in Nigeria employ less than 100 people and SMEs represented more than 50 per cent of GDP in South Africa.

Karuri-Magero said African discretionary spending power was predicted to grow, and the large population offered opportunities. “Africa’s rising,” she said.

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