With the Presidency announcing a raft of measures aimed at attracting foreign direct investment, unlocking local investment, improving capacity-building, and creating new jobs, work is underway to repair some of the damage caused by COVID-19 and to rebuild the economy.

While these are essential interventions in a struggling economy, one often-overlooked aspect requires closer inspection: the state鈥檚 procurement capacity and competitiveness.

In South Africa, the government is the single largest buyer in the country, per year through more than 1000 procuring entities. However, the quality of procurement outcomes depend on how readily the state can access the best suppliers in the market to deliver the highest-quality goods and services.

As a strategic pillar of the country鈥檚 economy, public procurement can be used strategically to fast-track the state鈥檚 development agenda and ensure essential goods, services and economic opportunities reach those that need it most.

Procurement enables development capacity

The OECD lists public procurement as the cornerstone of strategic governance, and highlights its role as a crucial pillar of service delivery.

In South Africa, this rings especially true. The government plays a key developmental role across nearly all industries, mobilising its purchasing power and leverage over the economy to create employment opportunities and drive growth.

Through its vast procurement system, the SA government delivers essential services, builds and maintains critical infrastructure such as road networks, ports and the rail system, funds schools and public health facilities. In addition, the vast purchasing power of the state means it plays a vital supporting role to many entrepreneurs and small businesses who design and develop services that benefit key economic sectors or assist government in its delivery of essential services to marginalised or poor communities.

However, when such procurement processes are slow, inefficient or overly administrative, it can have a dire effect. Service delivery may stall due to delays in procuring the required goods or services, critical infrastructure may deteriorate due to delays in repairs or maintenance, and small businesses may face financial ruin due to delays in getting projects approved, suppliers loaded to the national procurement system, or simply due to issues with payment.

Efficiency key to state鈥檚 mandate

The Office of the Chief Procurement Officer, which is tasked with overseeing and modernising the country’s procurement system, .

The OECD recommends to ensure public procurement activities are efficient and deliver on the state’s mandate, including:

• Streamlining the public procurement system and its institutional frameworks, starting with the development of a service-oriented public procurement system that reduces red tape and administrative costs;
• Implementing sound technical processes to meet customer needs, with a focus on ensuring adequate technical expertise among evaluators and allocating sufficient resources and expertise for contract management once the contract has been awarded; and
• Developing tools to improve procurement procedures, reduce duplication and drive greater value for money, with aspects such as centralised purchasing, framework agreements, e-auctions and contracts with options coming to the fore.

Considering the scope and breadth of public procurement activities, achieving this level of efficiency is impossible without the use of digital technologies.

Digital technologies hold key

Technology has a guiding role to play in improving the state’s procurement efficiency and ensuring procurement activities deliver the greatest possible benefit to citizens and the broader economy.

Implementing an efficient, transparent digital procurement system can give government decision-makers access to real-time insights into how each sector of the economy is operating. When government departments and state-owned entities work from a reliable single source of accurate procurement data, it can reduce costs, improve decision-making and enhance the overall efficiency of the state.

Leveraging international best practices through partnering with global technology providers can also lend useful insights to the procurement process, helping government avoid costly mistakes and ensuring systems and processes are built on best practices.

The use of best-practice templates for key procurement functions can also help drive down costs and ensure procurement activities are built on the most efficient and transparent modern processes, helping build trust between the state and its suppliers. This efficiency can also enhance the state’s competitiveness with the private sector and improve access to best-of-breed solutions and suppliers.

As public procurement becomes more efficient and the state enhances its ability to source market-leading goods and services, the outcomes for citizens will also improve. This can mean better schools, more reliable infrastructure, improved healthcare, greater economic participation, job creation and economic growth.

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I recently visited the province of my birth, KwaZulu-Natal following the devastating floods. 聽The desperation of the people and scale of the disaster has seen tens of thousands of displaced citizens turning to government to provide a broad range of relief measures, while damage to critical infrastructure including water supplies has prompted the President to declare a national state of disaster.

while damage to roads and schools have seen over 270 000 learners affected, in addition to 66 public healthcare facilities.

Coordinating the ongoing response will require close cooperation between multiple government and private sector entities as well as the active involvement of NGOs who play a vital role in supporting affected communities.

However, while the immediate task is to support those most vulnerable following the floods, there is a broader imperative to ensure public services are accessible and provide sufficient support to vulnerable communities across the country.

SA population has large share of vulnerable communities

Vulnerable groups include people living in poverty, those living with disabilities or dread disease, the elderly, youth and women, indigenous communities, rural and urban informal communities and displaced persons and migrants.

The pandemic has disproportionately affected vulnerable groups as they struggle with a variety of conditions and several barriers which have been exacerbated by the pandemic.

Ensuring essential public services are accessible and effective for vulnerable groups is a vital component of achieving the UN Sustainable Development Goals, especially as it relates to SDG 16, which strives for just, peaceful, and inclusive societies that are supported by strong institutions.

A recent report by the Bureau for Economic Research has found South Africa is not making sufficient progress toward achieving its development objectives. For a country where the official unemployment rate is over 35%, and millions depend on social grants and other measures to survive, this lack of progress is putting citizens – and especially vulnerable communities – at risk.

Stakes higher for public sector digital transformation

Public sector entities are arguably under greater pressure to ensure digital transformation efforts are designed with vulnerable communities in mind. Those depending on social grants or public healthcare facilities need such services to be easily accessible, especially in underdeveloped areas such as informal settlements and rural towns and villages.

UN Secretary-General Ant贸nio Guterres recently called for a 鈥榥ew social contract鈥� as part of post-pandemic recovery, based on inclusivity and sustainability, and highlighted the need for governments to prioritise investment in digital literacy and digital infrastructure to build social cohesion.

Many governments have heeded the call and have made services available in the format of 鈥渄igital by default鈥�. However, this approach often excludes those who need the services most, for example older people and those in lower income groups who are not able to access online information and services as easily as those in the higher income groups generally.

Increasingly governments are deploying cutting-edge technology to deliver public services.聽 The most effective approaches often rely on big data analytics and employ the latest technologies such as Artificial Intelligence (AI), robotics, and blockchain to ensure effective outreach and provision of services.聽 Consequently, the trend of adopting cutting-edge technologies in the government sector has intensified, which heralds an irreversible shift towards digital transformation. But these services may fail to improve the lives of citizens if there is a lack of trust between society and government.

Fostering trust between citizens and government

The most recent highlights increasing wariness of government and media. This is fuelling a cycle of distrust and demonstrates that government is not seen as able to solve societal problems.

The COVID pandemic and disasters like the KZN floods have highlighted the need for agile government. However, a recent study found that nearly one in ten South Africans consider corruption as the biggest problem that government needs to address.

Reports of mishandled relief funds during the early stages of the COVID-19 pandemic has sowed distrust among the electorate, which has extended to the relief efforts for flood-affected communities in KwaZulu-Natal, where local NGOs are instead being entrusted with providing essential relief measures.

This distrust does serious damage to government鈥檚 agility in the face of crises. An agile government is able to respond to crises as they emerge and can help anticipate an appropriate response. Predictive analytics and the advancement of complex systems analysis with cutting-edge technology can help governments develop agility and anticipation and improve their response to future scenarios.

Technology can also improve management of precious public sector finances, which is fundamental to the state’s efforts at supporting citizens during times of crisis and essential to the ongoing delivery of vital services.

Spend management tools such as Concur can provide system-based automated compliance and the option to embed financial policies in the software to align with regulations such as the Public Finance Management Act. This can help restore a culture of accountability that ensures scarce financial resources are spent responsibly and reach the communities that most need it.

As we hurtle into the 21st century, it will become increasingly important for the emergence of more anticipatory digital transformation functions in government than we have today, allowing us to build better, more inclusive, and more resilient societies.

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