A Diagnosis of the Post-Apartheid Public Procurement Regime in South Africa

Bongani Mwale

doi:10.7176/ejbm/12-29-02

Abstract

The purpose of this study is to analyse the progress that the post-Apartheid public procurement regime has made in South Africa in achieving its mandate of addressing socio-economic imbalances created by Apartheid. Based on the desktop literature review and research design, this study explores, through a conceptual analytical approach, the pros and cons that have characterized the South African public procurement regime to date. The study appreciate and acknowledge tremendous progress made to date in ensuring that the South African public procurement regime meets the international standards governing supply chain management processes. Nevertheless, research findings have shown some shortcomings in that the current procurement regime as it recycle enterprises without really creating sustenance. This has resulted in most SMEs benefitting from the government procurement, struggling to survive outside public procurement. The current B-BBEE framework have shown fundamental gaps, and consequently created of more black business managers than black industrialists who are sustainable entrepreneurs. Big companies with the capacity to respond to the seven elements of the scorecards hire black executives and pay them salaries while they share dividends and profits. Thus, the Public Procurement in South Africa needs to be constantly evaluated, monitored and adjusted accordingly, considering the highly dynamic contemporary business environment. This is in the ambit of: lack of proper knowledge, skills and capacity; non-compliance with SCM policy and regulations; inadequate planning and the linking of demand to the budget; Accountability, fraud and corruption; inadequate monitoring and evaluation of SCM; unethical behaviour; decentralization of the procurement system without proper regulated mechanism and Irresponsiveness of the B-BBEE policy. The study concludes by recommending a revamp of the B-BBEE framework in its current form in order to make it more responsive and effective. Keywords: Public Procurement, Preferential Procurement Policy Framework, Broad-Based Black Economic Empowerment, Supply Chain Management DOI: 10.7176/EJBM/12-29-02 Publication date: October 31 st 2020

Highlights

Conclusion & Recommendations Evidence suggest that the procurement regime enacted by the SA democratic government is marked by unclear red tape, which make the cost of entrance to business high and unaffordable to persons starting new businesses
The policy makers should look at the bureaucratic processes and simplify the processes to start and maintain a business by considering establishing a one-stop process, which may see new businesses coming out with all compliance requirements
Public procurement in South Africa should be viewed as the answer to sustainable socio-economic development to addressing past imbalances perpetrated by the apartheid that excluded Africans and black people from the economic mainstream

Summary

Introduction

Bakar, Peszynski, Azizan, Pandiyan and Sundram (2016) assert that the procurement profession involves sourcing the correct goods and services that entities and individual end-users require from the right suppliers in the market at the right price. Nijaki and Worrel (2012) affirm that procurement is a practice that involves acquiring goods and services from a supplier on behalf of an end-user. Bakar (2016) echoed the same sentiment in that the procurement process is a business venture whose goal is to bridge the gap between the individual user and the supplier by means of providing required goods and services. Loosemore (2016) and Tuomela-Pyykkönen, Aaltonen and Haapasalo (2015), in their respective studies, concede that procurement involves the provision of goods and services to the end user in a way that will enhance socio-economic and environmental development and sustenance respectively Bakar (2016) echoed the same sentiment in that the procurement process is a business venture whose goal is to bridge the gap between the individual user and the supplier by means of providing required goods and services. Loosemore (2016) and Tuomela-Pyykkönen, Aaltonen and Haapasalo (2015), in their respective studies, concede that procurement involves the provision of goods and services to the end user in a way that will enhance socio-economic and environmental development and sustenance respectively

Objectives

Methods

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Conclusion