Scrap quotas for SMMEs, use set-asides instead
Minister Khumbudzo Ntshavheni says public procurement system is not working
THE GOVERNMENT’S public procurement system with quotas for small, medium and micro enterprises (SMMEs) was not working and needed to be scrapped, Small Business Development Minister Khumbudzo Ntshavheni said yesterday.
Ntshavheni said the department was now pushing for the amendment of the public procurement bill that would allow the country to have setasides for SMMEs instead.
“The quota system does not work, because, say for instance we want to put aside 30 percent of government procurement spending. What constitutes 30 percent in a catering business, infrastructure business, textile clothing like with police uniforms and others, vehicle maintenance, consulting services (legal, management, engineering)? This means nothing,” said Ntshavheni.
The minister was speaking at the University of Johannesburg’s Business School webinar series.
She said what was proposed was rather than saying that SMMEs should receive 30 percent in the government’s infrastructure build programme, which goes up to R1 trillion, that either brickwork or steel-works should be set aside for SMMEs.
“In that case, you can go back to say to the Presidency’s Investment and Infrastructure Office or Public Works and Infrastructure Patricia de Lille your brickwork/steelwork is being done by a big company and not an SMME. On the 30 percent, people can always swing it this way or that way. We want it to be done away with. We want setasides,” she said.
The minister said she hoped the police would come to the SMME party in the next financial year.
“Police have a fleet of 50 000 vehicles. Why can’t those vehicles be serviced and repaired by young mechanics, panel-beater and fitment centres owned by young people in our townships and rural areas? I said it is possible.”
Ntshavheni said the elimination of quota systems and their replacement with “set-asides” would help the country to build a niche. “If you go to other countries, where I am sitting I know that Mozambicans are good with brickworks and motor mechanics. Zimbabweans are good with electrics and plumbing. What are South Africans good at? We can only be good at something if we put a particular sector and category to be done by a particular SMME to build technical skills.”
UJ Centre for Entrepreneurship director Machaka Mosehana said many South African SMMEs were stuck in the start-up phase because of a lack of specialisation. “We are talking about the access to market opportunities that are available for the SMMEs as the country embarks upon the economic recovery and reconstruction journey,” Mosehana said.