JOHANNESBURG — Business, the government and labour signed an accord on local procurement on Monday, pledging to increase their purchasing of goods and services from South African producers to an “aspirational target” of 75% in a bid to boost industrialisation and to create employment.
The accord reflects a new will by business and the government to work together after difficult relations between them, most recently because of the government’s challenge to the Walmart-Massmart deal and talk of nationalisation in the ruling African National Congress.
The New Growth Path Local Procurement Accord, which emerged from talks on the government’s economic revitalisation plan, seeks to “lay a foundation for a localisation programme,” Economic Development minister Ebrahim Patel said.
He said the government was reaching out to help rebuild SA’s manufacturing sector and the commitment to the accord signalled what co-operation could achieve.
“The accord brings together the efforts of the public and private sectors and will direct billions of rands to local manufacturers,” he said at the signing in Pretoria yesterday.
“It must go together with other efforts to improve competitiveness, skills development and better economic infrastructure, to achieve our goal of five million jobs by 2020.”
Departments involved in the drafting of the accord included finance, trade and industry, labour, energy, public enterprises, and rural development.
Patel said 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.
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.”
Business Leadership SA (BLSA) CEO Nomaxabiso Majokweni, said the accord was a platform for business to contribute to the economic transformation of SA. “We are beyond talking about some of these things and we are at a point of injecting action,” she said.
The 84 top companies represented by BLSA — including Absa, Anglo American and General Motors SA — will analyse their procurement to determine the proportion of imports.
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.