State battles to buy local products
NEARLY two years after new government procurement regulations were passed, challenges remain to ensure local manufacturers of clothing, and textiles in particular, benefit from state spending.
The regulations were designed to complement the Department of Trade and Industry’s (DTI) industrial policy action plan to support local sectors like transport equipment, vehicles, pharmaceuticals, office and school furniture and renewable energy.
The procurement rules require national, provincial and local government and a number of other government entities, including major groups such as SAA, Eskom, SABC, Denel and Transnet, to ensure purchases comply with certain local content requirements, ranging from 30% for set-top boxes for digital migration to 100% for school furniture.
In the clothing, textiles, footwear and leather sector, where tens of thousands of jobs have been lost over the past decade due to cheaper imports, the rules state that 100% of state spending must be allocated to local content.
But local clothing manufacturers and other role players in the industry say many tenders are still awarded to companies that manufacture in neighbouring countries or to local middlemen who simply import the products from overseas.
Simon Eppel, trade union Sactwu researcher, said: “At this stage, there does appear to be non-compliance, particularly among municipalities and within the public healthcare sector.”
The South African Bureau of Standards has been appointed by the DTI to audit tender winners to ensure local content rules are complied with. LOCALITY, LOCALITY: In the textile sector, 100% of state spending must go to local content