Localisation and Preferential Procurement: Stimulating Economic Growth through Government Buying Power
This Duja Consulting paper explores how the South African government can use its immense buying power to drive inclusive economic growth. It delves into how localising procurement and favouring small, black-owned businesses in public tenders can boost industrial capacity and create jobs.
Here are a few key takeaways from the paper:
- Government Buying Power: South Africa’s public procurement (worth hundreds of billions of rands) can be a game-changer for economic development. By choosing to buy local and from SMEs, the government can stimulate industries and reduce unemployment.
- Localisation Benefits: Prioritising locally made products (from steel and PPE to textiles) strengthens domestic manufacturing. For example, industry master plans have already generated R82.5 billion in investments and 6,500 jobs through local procurement.
- SME Empowerment: Preferential procurement policies give small and Black-owned businesses a bigger slice of the pie. This not only broadens economic inclusion but also taps into SMEs as engines of job creation – research shows SMEs contribute up to 60% of new jobs in emerging economies.
- Challenges & Solutions: The paper doesn’t shy away from challenges like supplier capacity and potential cost trade-offs. It highlights the need for skills development, anti-corruption measures, and timely payment to suppliers to make the system work.
We urge policymakers, corporates, and consultants to collaborate, enforce the new procurement rules, invest in local supplier development, and embrace a “buy local” ethos. Every Rand spent by the government should build a more inclusive and resilient economy.
Read the full paper to understand how smart procurement policies can power South Africa’s economic renewal.
Executive Summary
South Africa’s government wields immense buying power that can be harnessed to drive inclusive economic growth. By adopting localisation (boosting local production and content) and preferential procurement policies (prioritising disadvantaged and small businesses in public contracts), the state can stimulate industrial development, support small and medium enterprises (SMEs), and create much-needed jobs. These strategies turn government procurement into a strategic lever for economic empowerment – strengthening domestic industries, reducing reliance on imports, and broadening participation in the economy. South Africa has already launched initiatives such as designating dozens of products for local procurement, industry master plans, and an ambitious new Public Procurement Act to unify and modernise purchasing frameworks. Early results show increased investments and new jobs in sectors like automotive and poultry manufacturing.
However, challenges persist. Implementation gaps, limited capacity of some local suppliers, and risks of corruption or “tenderpreneurship” could impede progress. Ensuring SMEs can meet quality and volume demands, providing skills and financing, and strictly enforcing transparency are vital. Despite these hurdles, the opportunities are substantial. By fully committing to localisation and preferential procurement, South Africa can build a resilient industrial base, foster entrepreneurship among historically disadvantaged groups, and alleviate its high unemployment (around 32% in late 2024). This paper explores the policies and their impact, highlighting how smart government buying can become a catalyst for inclusive growth. It concludes with recommendations and a call to action for policymakers, business leaders and consultants to collaborate in maximising the impact of these initiatives.
Introduction
South Africa faces the dual imperatives of reigniting economic growth and ensuring that growth is inclusive. Decades after apartheid, the country still grapples with stark inequality, high unemployment, and concentrated markets. In this context, the government’s role as a major buyer of goods and services becomes a powerful policy tool. Public procurement constitutes a significant share of the economy, running into hundreds of billions of rand annually. Each rand the state spends can be leveraged not just to obtain value for money, but also to advance social and economic objectives. Section 217 of South Africa’s Constitution explicitly allows for procurement policies that provide preference to historically disadvantaged groups, so long as the process remains fair, equitable, transparent, competitive, and cost-effective. This constitutional mandate underpins the country’s framework for preferential procurement.
Localisation and preferential procurement policies seek to align government spending with development goals. Localisation means steering demand towards locally produced goods and services, thereby building domestic industrial capacity and reducing dependency on imports. Preferential procurement involves using criteria in tender awards to favour certain suppliers – for example, small businesses, companies with high Black ownership, or local manufacturers – in order to promote broad-based economic empowerment. Together, these approaches position the state as a “developmental buyer”: one that not only acquires goods at the best price, but also deliberately supports local industries and communities. The South African government, through various policies and charters, has increasingly embraced this role, aiming to channel public spend into inclusive growth. Recent years have seen renewed emphasis on these strategies as part of economic recovery and transformation efforts.
Local artisans and workers in South Africa producing handmade goods. Government localisation initiatives support such small manufacturers to create jobs and preserve skills.
In the sections that follow, we examine how localisation and preferential procurement are being implemented in South Africa, their impact on SMEs and industrial development, and the opportunities and challenges that arise. We also discuss recent policy developments – including the new Public Procurement Act – and draw insights into how government buying power can be optimally used to boost economic activity and employment. An engaging, action-oriented tone is maintained to inform policymakers, business leaders, and consultants on harnessing these levers for the country’s benefit.
1. Government Procurement as an Engine for Growth
Public procurement is not merely a procedural exercise – it is an engine for economic strategy. In South Africa, government procurement accounts for a large portion of public expenditure and significantly contributes to GDP. By redirecting this vast buying power towards local and previously excluded suppliers, the state can stimulate demand in the domestic economy and shape market outcomes. The recently signed Public Procurement Act 28 of 2024 is a landmark step in this direction. It establishes a comprehensive framework for all organs of state, aiming to promote economic development through preferential procurement practices. Among the Act’s key objectives are advancing industrialisation and transformation, and supporting goods produced in the Republic to stimulate development. In essence, it formalises the idea that procurement should not only seek cost-efficiency but also maximize socio-economic returns.
Crucially, the Act and related policies align with the constitutional principles in Section 217, balancing value for money with equity. This means tenders can be evaluated not just on price, but also on criteria that further Broad-Based Black Economic Empowerment (B-BBEE) and local content. In practice, South Africa’s preferential procurement framework has long utilised a points system (such as 80/20 or 90/10 splits) where a portion of evaluation points reward involvement of targeted groups or local value-add. The new unified law strengthens this approach by providing one national system and a Public Procurement Office for oversight. It also introduces measures to enhance transparency and combat corruption – a critical factor if public buying is to genuinely benefit the many and not the few.
Government buying power can thus be a catalyst for inclusive growth. By deliberately sourcing from SMEs, township enterprises, cooperative businesses, and manufacturers based in South Africa, the state injects capital into those segments, enabling them to expand production and hire more workers. For instance, it is estimated that SMEs contribute up to 60% of new jobs in emerging economies, and South Africa’s own unemployment rate of ~32% underscores the need to tap into this job engine. Preferential procurement policies directly address this by opening up market opportunities that small firms and historically disadvantaged entrepreneurs would struggle to access in open competition with large, established companies. The government, as a big customer, can take on some of the risk of developing new suppliers – knowing that the broader payoff is a more vibrant, diversified economy. In short, aligning procurement with development means every government contract is seen not only as a cost, but as an investment in the country’s economic future.
2. Localisation: Building Industrial Capacity at Home
Localisation refers to policies that prioritise locally produced goods and services in procurement. The rationale is straightforward: when government (and other large buyers) source their needs from domestic manufacturers and providers, they help build local industries, retain wealth within the country, and create jobs. President Cyril Ramaphosa’s Economic Reconstruction and Recovery Plan included a commitment to reduce South Africa’s reliance on imports by 20% over five years, precisely by growing local output to meet demand. This target is being pursued through a social compact with business and labour, and through concrete measures like product designations for local procurement. In fact, a NEDLAC (National Economic Development and Labour Council) Localisation Working Group identified 42 products ranging from edible oils to furniture and personal protective equipment that could be sourced locally, aiming to localise up to R200 billion of additional production in five years. These efforts signal a robust political will to use procurement as a tool for import substitution and industrial development.
South Africa’s experience shows that localisation can boost specific industries. The government, in partnership with stakeholders, has developed Master Plans for key sectors – such as automotive, clothing & textiles, poultry, sugar, steel, furniture, and others – which include commitments on local procurement. As of 2025, eight industry master plans have been finalized, resulting in R82.5 billion in investment commitments and the creation of about 6,500 jobs. For example, the Automotive Master Plan involves local assembly and content requirements for vehicles purchased by the state (like police vans or buses), which helps sustain assembly plants and component suppliers in-country. Similarly, the Poultry Master Plan has seen retailers and government institutions increasing their uptake of domestically farmed chicken, leading to new investments and jobs in feed supply and processing. These sector-focused initiatives illustrate how localisation policy directly ties into industrial capacity building – coordinating demand (through procurement and retail commitments) with supply-side support (investment and skills development) to grow industries.
Critically, localisation is not about autarky or closing off trade. As the Department of Trade, Industry and Competition (DTIC) emphasises, “Local procurement is not about shutting out foreign markets, rather, it is about creating a foundation for sustainable economic growth that benefits all”. The goal is to ensure a strong domestic base that can compete globally and withstand external shocks. This became evident during recent global supply chain disruptions – from geopolitical conflicts to pandemics – which underscored the value of local productive capacity. When South Africa can manufacture essentials (foods, medical supplies, steel products, renewable energy components, etc.) at home, it enhances economic resilience. As Dr. Malebo Mabitje-Thompson, Acting DG of the DTIC, noted at the 2025 Proudly South African Buy Local Summit, local procurement “bolsters our economy and enhances its resilience” in the face of uncertain global supply chains. Indeed, a resilient domestic industrial base is part of being a “capable and developmental state.”
Localisation policy also creates opportunities for innovation and value addition. By stimulating local demand, it encourages firms to invest in new technologies and processes to meet that demand competitively. For instance, if the public sector designates renewable energy equipment or rail rolling stock for local sourcing, companies will establish production facilities domestically (often in partnership with international firms transferring know-how). Over time, this can enable South African-made products not only to serve local needs but also to export to regional markets, leveraging platforms like the African Continental Free Trade Area. In short, government procurement can help local firms reach economies of scale and learn-by-doing, ultimately improving their global competitiveness. The challenge is to manage this in a way that doesn’t excessively raise costs for the state in the short run – a balance achieved through gradual localisation targets and partnership with the private sector to ensure quality and price remain reasonable.
3. Preferential Procurement: Empowering SMEs and Inclusive Business
Preferential procurement in South Africa is fundamentally about inclusion – making sure that the composition of those who benefit from government contracts reflects the broader society, especially those who were disadvantaged in the past. In practical terms, this has meant creating set-asides and scoring advantages for certain categories of suppliers: notably Black-owned businesses, SMEs, women- and youth-owned enterprises, and suppliers from economically marginalized areas. Under the B-BBEE framework, enterprise and supplier development is a major pillar, and companies (including government contractors) earn higher B-BBEE scores by buying from Black-owned and small suppliers. This aligns the incentives of even private companies with the national goal of growing emerging businesses. Preferential procurement in the public sector, through regulations (like the now-repealed PPPFA regulations of 2017 and forthcoming new ones under the 2024 Act), similarly allows organs of state to award tenders not just on lowest price, but on a combination of price and empowerment criteria. For example, an SME or a bidder with a high percentage of local content or black ownership might win a contract even if their price is slightly higher, within defined thresholds – on the premise that the developmental impact justifies the slight premium.
This approach has opened up market access for many small and mid-sized firms. Government has also used procurement to directly support SMEs through guaranteed offtake. A recent SMME-focused Localisation Policy Framework led to partnerships with the private sector to put small businesses into big supply chains, and 289 products manufactured by small businesses have been successfully linked to private sector retail shelves and value chains through these efforts. On the public procurement side, initiatives like set-asides for youth- or women-owned businesses in certain tenders, or the requirement that large contractors subcontract a portion of work to local SMMEs, are lowering barriers to entry for these companies. Preferential procurement thus acts as a market creator for entrepreneurs who lack capital and networks – the state essentially becomes their first big client, helping them build a track record.
The empowerment aspect cannot be overstated. By directing spend towards Black-owned suppliers, the government helps to redistribute economic opportunities in a society where capital ownership and business control are still largely in the hands of a few (often along racial lines due to historical injustices). Preferential procurement has been the cornerstone of how B-BBEE targets are practically met in many industries: it’s a “no cost” element in that it does not require spending extra money, only spending differently on existing budgets. In other words, departments can meet empowerment goals simply by being deliberate in who they buy from. When done strategically, this can have transformative effects. A small black-owned manufacturing firm, for instance, might supply uniforms or furniture to a government department; the revenue from that contract can fuel its growth, allow it to hire local staff, and eventually position it to win business from other clients as well. Over time, this contributes to a more diverse and competitive economy.
It is also worth noting the link between preferential procurement and capacity-building. Many procurement programs tie preferences with requirements or incentives for skills transfer and supplier development. For example, large multinationals winning infrastructure projects may be required to partner with local small contractors and help upskill them. The government, through its procurement conditions, can insist on local training programs, internships, or mentorship for SMMEs as part of contract deliverables. All this means that preferential procurement, when leveraged fully, not only channels money to target groups but also builds their capabilities for the long run. It enhances what economists call the “multiplier effect” of government spending – each rand spent generates more employment and income in local communities than it would if sent abroad or kept in established corporate supply chains with little local linkages.
4. Driving Inclusive Growth and Job Creation
At its heart, the push for localisation and preferential procurement is about inclusive growth – growth that is broad-based and job-rich. South Africa urgently needs such growth. The official unemployment rate remains stubbornly high (around 31.9% at the end of 2024), and youth unemployment is even more acute. Economic growth that only benefits big corporations or imports-intensive sectors does little to solve this crisis. By contrast, growth anchored in local production and small business development tends to be more labour-intensive and widely distributed. When a local garment factory gets a government order for uniforms, it hires local workers and sources material from local textile mills; when a township-based construction cooperative wins a municipal project, it employs people in that community and builds local skills. These are concrete ways in which government spending can translate into new jobs on the ground, rather than just profits in distant hands.
Evidence of job creation through local procurement is already emerging. According to government reports, public and private sector localization initiatives have led to thousands of new jobs – for example, the industry master plans mentioned earlier yielded 6,500 jobs in a short period. The Proudly South African campaign often highlights success stories where local manufacturers expanded their workforce after receiving support and exposure through Buy Local exhibitions. Moreover, small businesses are proven engines of employment. South Africa has an estimated 2.4 to 3.5 million SMMEs, and in recent years over 20,000 small businesses have been directly supported by government programmes, contributing to more than 30,000 jobs created or sustained. Each enterprise that grows via a public contract adds a few more jobs – which collectively can make a significant dent in joblessness, especially in townships and rural areas where big corporates seldom invest. By empowering community-level businesses and cooperatives (e.g. in agriculture processing, local road maintenance, or school nutrition programs), preferential procurement spreads economic activity to places that need it most.
Inclusive growth also implies greater participation of marginalized groups in the economy’s mainstream. Preferential procurement policies explicitly promote this by earmarking opportunities for Black people, women, youth, and people with disabilities. The new Public Procurement Act is expected to allow set-asides that guarantee a share of business to such groups – something hailed by organizations like the Black Business Council as “the most important legislation… to set aside procurement opportunities for blacks, women, youth and people with disabilities”. The ripple effect is not only income for those entrepreneurs, but also inspiring others and breaking the glass ceiling in industries where such groups have been underrepresented. A woman-owned engineering firm winning government tenders, for instance, can blaze a trail for more women in that field. Inclusive procurement thereby acts as a lever for social transformation, changing the very face of the supplier community over time.
Furthermore, localisation drives inclusive growth by stimulating regional development. When production is localised, it often occurs outside the traditional economic hubs. For example, enforcing local content in renewable energy may lead to solar panel assembly plants in smaller towns; procuring food from local farmers boosts rural economies. The government’s Township and Rural Entrepreneurship Programme (TREP) is aligned with this, supporting SMMEs in outlying areas to become part of supply chains. Every region that develops a niche (be it furniture manufacturing in a particular province or agro-processing in another) adds to the overall growth of the country while reducing geographic inequalities. In summary, localisation and preferential procurement policies have a multiplier impact: they create jobs, diversify who benefits from the economy, and uplift different regions, all of which contribute to a more inclusive and stable society.
5. Challenges in Implementation
While the vision is powerful, implementing localisation and preferential procurement is not without challenges. One major hurdle is the capacity of local suppliers. Not all South African manufacturers or small businesses can immediately meet the large volume and strict quality requirements of government contracts. Cases have shown that although many local suppliers are eager to compete, only a few might deliver the necessary consistency and scale. In one localisation initiative, a company found that vetting local suppliers was extensive and time-consuming, as “few could deliver the quality, consistency and volumes required” and local firms needed to invest in equipment and skills to meet global standards. This points to a need for supplier development and incubation – government and larger partners may need to mentor and support smaller suppliers so they can eventually fulfil big orders. Without this, there’s a risk that well-intended tenders either fail (due to non-performance) or revert to established players (defeating the purpose).
Another challenge is balancing cost-effectiveness with development goals. Localisation and empowerment criteria can sometimes lead to higher prices or less immediate efficiency in procurement. Critics from some business lobbies argue that restricting bids to a smaller pool of local or designated suppliers “increases expenses and diminishes service quality”. They warn of potential price premiums when competition is limited. Indeed, if not properly managed, preferential procurement could mean the state pays more for certain goods, straining budgets. The counter-argument is that the long-term benefits (jobs, taxes, local industrial base) outweigh short-term costs, but public finance constraints are real. It requires careful policy design – e.g. choosing sectors for localisation where local firms can become competitive, setting gradual targets, and monitoring price impacts. If policies are too heavy-handed or applied without flexibility, they could hinder service delivery (a concern voiced by some provincial authorities). Thus, achieving the right calibration is key: the framework should be neither so relaxed that it changes nothing nor so rigid that it becomes impractical.
Corruption and governance issues present another serious challenge. The empowerment aspect of procurement has unfortunately sometimes been misused through practices like fronting (where a company pretends to be Black-owned to win a tender) or nepotism in awarding contracts. South Africa’s era of “state capture” revealed how procurement can be the locus of grand corruption. If preferential rules are not transparently applied, there is a danger that they become a cover for patronage – enriching connected elites instead of genuine entrepreneurs. The new Public Procurement Act attempts to address this with stringent anti-corruption provisions and a Procurement Tribunal to enforce compliance. Still, execution will be critical. The integrity of tender processes must be upheld through digital systems (e-procurement platforms reducing human discretion), clear evaluation criteria, and open contracting data that allows public scrutiny. Policymakers must ensure that “tenderpreneurship” (informal term for those who exploit tenders for quick gain without adding value) is curtailed, or else the credibility of preferential procurement will suffer.
Administrative capacity and policy coherence also pose challenges. Implementing localisation requires coordination across departments, as well as up-to-date product specifications and standards to define what counts as “local”. There have been instances of non-compliance or confusion with previous local content rules – e.g. departments not meeting the required minimum local content on designated items, sometimes due to lack of awareness or monitoring. Proudly South African’s leadership has urged that all government entities “fully comply with the provisions” of the new procurement rules to avoid the high levels of noncompliance seen previously. This suggests that enforcement mechanisms and perhaps training of procurement officers will be needed to uniformly implement the policy. Additionally, bureaucratic delays in procurement processes can especially hurt SMEs (who have limited cash flow to endure long tender award cycles). Late payment of invoices is another perennial problem – many small suppliers struggle because government departments take more than the stipulated 30 days to pay, affecting their liquidity. Addressing such operational issues (for example, through better financial management and accountability for 30-day payment rules) is part and parcel of making preferential procurement work as intended.
6. Opportunities and the Way Forward
Despite the challenges, the opportunities unlocked by localisation and preferential procurement are immense – and with the right strategies, they can be fully realised. One opportunity lies in innovation and sustainable development. The government’s buying power can be steered not only towards local products, but also towards cutting-edge and green technologies produced locally. For instance, incorporating environmental criteria (often termed green procurement) alongside localisation could stimulate domestic industries in renewables, electric vehicles, or recycling. The new procurement framework explicitly lists promoting innovation and sustainable development among its objectives. This means South Africa can kill two birds with one stone: build local capacity and transition to a greener economy by preferentially procuring eco-friendly goods from local firms. Such an approach would attract impact investors and technological partnerships, further boosting growth.
Another opportunity is to leverage public-private partnerships to amplify the impact of localisation. Government alone cannot fix supply side weaknesses, but in partnership with large private companies (which themselves benefit from local supplier bases) it can create a powerful ecosystem. We are already seeing collaborative efforts: the NEDLAC localisation initiative where 30 CEO champions from the private sector are driving localisation in their value chains, or the Proudly SA Buy Local Expo which brings corporates and SMMEs together. Consultants and industry experts can also play a role by helping identify viable local suppliers and improving their capabilities. In the consulting arena, there’s growing demand for advising both public sector and businesses on how to meet localisation targets effectively – whether through value chain analysis, supplier development programs, or cost-benefit models that justify local procurement decisions. For business leaders, an opportunity exists to align corporate strategies with the government’s localisation thrust, perhaps through voluntary compacts or by taking advantage of incentives for local production.
Crucially, expanding localisation does not mean isolating South Africa’s economy – rather it can be a step towards becoming a regional manufacturing hub. By strengthening domestic industries, South Africa is better positioned to export to its neighbours and across Africa. Preferential procurement policies could be synergised with the African Continental Free Trade Agreement by, for example, developing local industries that can competitively supply regional infrastructure projects. South Africa’s relatively advanced industrial base means it can capture economies of scale if it first secures robust home market demand via government procurement, then gradually expands outward. This vision turns a local strategy into an African growth strategy, where “Made in South Africa” goods also support development beyond the country’s borders, enhancing South Africa’s economic leadership in the region.
To move forward, a few key strategies should be pursued:
- Capacity Building for SMEs: Invest in training, mentoring, and financing for small suppliers so they can meet procurement requirements. This might include technical upskilling, quality certification assistance, and better access to working capital (perhaps through government-backed loan guarantees). As noted in government programs, providing technical skills, product testing, and quality assurance support has been part of helping SMMEs integrate into manufacturing value chains.
- Smart Localisation Criteria: Apply localisation in areas with high potential. Policymakers should continue using data to identify products where local supply is feasible and globally competitive. Regularly update the list of designated sectors, and involve industry bodies like the Steel and Engineering Industries Federation (SEIFSA), which has called local content provisions “critical for driving industrialisation”, to understand industry readiness.
- Transparency and Monitoring: Use technology (e-procurement systems) to ensure open competition among eligible local suppliers and to track compliance with localisation targets. Real-time monitoring can flag if departments are meeting their procurement commitments to SMEs and local content. Public dashboards could even be introduced, creating positive pressure and highlighting success stories.
- Stakeholder Engagement: Maintain dialogue with both supporters and sceptics of these policies. Concerns from business groups about efficiency need to be addressed, perhaps by sharing evidence of successes and refining policies where genuine issues arise. On the other hand, encourage advocacy groups and trade unions that champion localisation to continue holding government accountable to its promises. This dynamic engagement ensures the policy is continually improved and rooted in consensus.
In essence, the way forward is to treat localisation and preferential procurement as dynamic, evolving strategies – not static rules. As the economy changes, so should the approach: learn from what works (e.g. sectors where local procurement led to thriving firms), and adjust where needed (e.g. providing exemptions or support in areas where capacity is lacking). With strong leadership and collaboration, government buying power can unlock unprecedented industrial growth and social development.
Conclusion
Localisation and preferential procurement represent a vision of economic growth that benefits all South Africans. By consciously directing the vast spending of the public sector towards local industries and previously disadvantaged business owners, the government can stimulate new industries, expand the SME sector, and create sustainable jobs. This approach turns procurement into a form of economic policy – a way to shape markets and outcomes in line with the country’s development goals. South Africa’s experience so far, from the implementation of sector master plans to the successes of the Buy Local campaign, demonstrates both the promise of these policies and the importance of diligent implementation. When executed well, they lead to factories humming with activity, entrepreneurs getting their first big break, and workers earning livelihoods from locally anchored jobs. They also help build a more resilient economy, one less prone to external shocks and more invested in its own human capital.
However, the journey is just beginning. The challenges encountered – supplier capacity constraints, balancing costs, and ensuring good governance – are not reasons to retreat, but rather issues to tackle head-on. By strengthening support systems for suppliers, refining policy tools, and insisting on transparency, South Africa can overcome these hurdles. The new Public Procurement Act provides a refreshed framework; now the real work lies in effective rollout and compliance. Inclusive growth via government buying will not happen by decree alone – it will require perseverance, innovation, and partnership across the public and private sectors.
Ultimately, the pursuit of localisation and preferential procurement is about economic empowerment: giving South Africans a greater stake in their economy. It is about a future where government contracts help a township bakery expand, a local tech start-up supply software for public services, or a cooperative of artisans furnish state offices – all while delivering quality and value. That future is within reach if stakeholders commit to the principles and fine-tune the practice. South Africa can thus use the power of the public purse to build an economy that is not only growing, but growing together with all its people.
Policymakers, business leaders, and consultants are called upon to step up and turn these ideas into reality:
- Policymakers: Strengthen enforcement of localisation and preferential procurement regulations. Set clear annual targets (e.g. percentage of spend on local goods or SME suppliers) and publicly report progress. Champion prompt payment to suppliers and penalise non-compliance with the 30-day payment rule to build supplier trust. Consider tax or other incentives for private companies that mirror government’s buy-local efforts.
- Government Departments & SOEs: Proactively identify upcoming procurement needs that can be fulfilled by local industries, and engage with industry forums to ensure suppliers are aware and prepared. Share procurement plans in advance to give SMEs time to gear up. Create helpdesks or hotlines for small businesses navigating the tender process, simplifying their entry.
- Business Leaders: Align your corporate procurement with the localisation drive – join initiatives like Proudly South African and pledge to increase local sourcing in your supply chain. Large companies can mentor smaller ones: if you’re a main contractor, invest in developing your sub-contractors’ capabilities. Embrace B-BBEE not as a compliance chore but as a growth strategy, seeking out innovative SME suppliers who can bring agility and new ideas.
- Consultants and Industry Experts: Provide expertise to optimize these policies. This could mean conducting value chain studies to find localisation opportunities, advising government on best-practice tender design that includes SMEs without compromising quality, or helping SMEs with business development and tender readiness. Thought leadership and knowledge sharing (like this paper) should continue – keep the conversation alive with data and case studies to guide decision-making.
- All Stakeholders: Foster a culture that celebrates local success. When a local supplier delivers a good product or service, give them public recognition. Encourage a mindset where “buying local” is seen as a contribution to nation-building. Similarly, call out and rectify problems (like corruption or fronting) to ensure the system rewards the deserving. By working together – government providing the opportunities, businesses delivering competitively, and civil society monitoring fairness – we can ensure that government’s buying power truly becomes a force for inclusive economic prosperity.
The time to act is now. South Africa’s challenges of unemployment and inequality are urgent, but so is the opportunity at hand. Let us use every rand of public spending to not only procure services, but to procure a better future for South Africans. By localising and empowering through procurement, we can stimulate an engine of growth that uplifts everyone. The call to action is clear: collaborate, innovate, and commit to buying into South Africa’s growth story.
