State-business accord sets buy-local target of 75%

Local buying.jpgBusiness, government and labour pledged on Monday to increase their expenditure on goods and services from South African producers to 75%. The move is a bid to boost industrialisation and create employment in the country.

The New Growth Path Local Procurement Accord seeks to “lay a foundation for a localisation programme,” said Economic Development Minister Ebrahim Patel.

Patel said that in some business sectors more than half of the goods consumed were imported, while sectors of the government involved in infrastructure development also imported the bulk of their goods.

He said the government is reaching out to help rebuild South Africa’s manufacturing sector and the commitment to the accord signalled what co-operation could achieve.

“It must go together with other efforts to improve competitiveness, skills development and better economic infrastructure, to achieve our goal of 5-million jobs by 2020.”

Departments involved in the drafting of the accord included finance, trade and industry, labour, energy, public enterprises, and rural development.

New regulations on state procurement will come into effect on December 7, aimed at significantly expanding the value of goods and services the government procures from local producers, said Patel. “We have begun to do an analysis product by product, and government will soon release a designated list indicating where we see the biggest problems.”

By the end of the month the first list of products designated for local procurement will be forwarded to companies party to the accord. The first annual report on the attainment of their procurement targets is due next June.

Adapted from an article in BusinessDay November 1, 2011

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