{"id":143843,"date":"2022-09-14T05:09:45","date_gmt":"2022-09-14T05:09:45","guid":{"rendered":"https:\/\/news.sap.com\/africa\/?p=143843"},"modified":"2023-09-27T19:11:25","modified_gmt":"2023-09-27T19:11:25","slug":"states-developmental-role-puts-procurement-at-centre-of-economy","status":"publish","type":"post","link":"https:\/\/news.sap.com\/africa\/2022\/09\/states-developmental-role-puts-procurement-at-centre-of-economy\/","title":{"rendered":"State’s Developmental Role Puts Procurement at Centre of Economy"},"content":{"rendered":"

\"\"Following years of economic hardship caused largely by the pandemic and exacerbated by the ripple effects of a constrained global supply chain, the South African government’s role in driving economic growth and job creation has been put back into the spotlight.<\/p>\n

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.<\/p>\n

While these are essential interventions in a struggling economy, one often-overlooked aspect requires closer inspection: the state\u2019s procurement capacity and competitiveness.<\/p>\n

In South Africa, the government is the single largest buyer in the country, spending more than R500-billion on goods, services and construction works<\/a> 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.<\/p>\n

As a strategic pillar of the country\u2019s economy, public procurement can be used strategically to fast-track the state\u2019s development agenda and ensure essential goods, services and economic opportunities reach those that need it most.<\/p>\n

Procurement enables development capacity<\/strong><\/h2>\n

The OECD lists public procurement as the cornerstone of strategic governance, and highlights its role as a crucial pillar of service delivery.<\/p>\n

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.<\/p>\n

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.<\/p>\n

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.<\/p>\n

Efficiency key to state\u2019s mandate<\/strong><\/h2>\n

The Office of the Chief Procurement Officer, which is tasked with overseeing and modernising the country’s procurement system, plays a vital role in ensuring our public procurement system is fit for purpose<\/a>.<\/p>\n

The OECD recommends several guiding principles<\/a> to ensure public procurement activities are efficient and deliver on the state’s mandate, including:<\/p>\n