Local procurement accord to reverse deindustrialisation

The local procurement accord would go a long way in building the capacity to reindustrialise the economy, said speakers at the South African Supplier Diversity Council (SASDC) conference in late June.

South Africa’s heavy reliance on imports has over the last ten years led to de-industrialisation and the weakening of the manufacturing sector, said policy adviser to the Minister of Public Enterprises Phelisa Nkomo.

Under the local procurement accord, signed last year by business, government and the private sector, the main economic groupings in the country have committed to work together to increase the levels of goods and services bought from local producers.

The accord sets a target of 75% local procurement.

“The idea is to create immediate opportunities and leverage public procurement, but we must also look at downstream opportunities. Also, we would need to move away from a one-size-fits-all concept to grow businesses in the country. Each sector has its own challenges and we need to look at ways to support local manufacturing. This demands a paradigm shift,” said Nkomo.

Furthermore, it is important to work collectively and the government’s social partners should mobilise supply. “You are the critical economic agents and we need to take a handholding approach… it is important for concerted efforts to also create black industrialists,” she noted.

Congress of South African Trade Unions president Sidumo Dlamini said the union believed that local procurement was one of the country’s main job drivers, which would contribute to reindustrialisation. “We expect to see about 75% accumulative local procurement in the country, and each year we will check up on [councils such as] SASDC… we will be monitoring you.

“It is critical that local procurement is seen as a main driver of our economic growth. For the New Growth Path to have a meaning, we need to implement this,” he said.

Business Unity South Africa CEO Nomaxabiso Majokweni shared the same sentiment. “When we signed the local procurement accord, we never intended to go for a tick-box exercise. This is one economic transformation intervention that business can contribute to… we are not just talking about [local procurement], but are really getting closer to operationalising the local procurement accord,” she concluded.

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