Durban - KwaZulu-Natal government departments have been slammed for their failure to drive economic transformation by ensuring that emerging and local contractors benefit from the state’s procurement system.
The failure by the departments to advance transformation was one of the main points raised by the Standing Committee on Public Accounts (Scopa), in a report presented at the KZN legislature last week.
The report came after Scopa held meetings with government departments and entities in October to determine whether they were following the guidelines on the use of public money.
“Scopa is concerned about the regression by some departments in not following the local content regulations when awarding tenders,” read the report.
The departments were also said to be ignoring the provisions for three bids to be received before awarding contracts.
Committee chairperson Maggie Govender noted that failure by departments to give work to local contractors and businesses was thwarting the government’s economic transformation efforts.
“This is a legitimate way of ensuring that local entrepreneurs get to participate in economic activity and it is non-negotiable for this government,” said Govender yesterday.
She warned that such an oversight from government departments had the potential of creating room for the emergence and growth of formations that demanded contracts without following legislation. She was referring to the emergence of business forums that have been stopping construction work and demanding a percentage of the projects.
Govender said they were not calling for the appointment of inadequately skilled contractors, but wanted to see the drive by departments towards empowering local entrepreneurs.
With a multi-billion-rand annual budget, the government buys a large amount of goods and services, and has often stressed that it would use its buying power to ensure that more businesses become participants in the country’s economic activities.
The chairperson, who indicated that they had not quantified how much had been lost by locals because of this oversight, said they wanted to get a proper explanation for the failure by the departments when they appear before the committee in February next year.
EFF KZN leader Mongezi Thwala said Scopa’s findings did not come as a shock, but merely confirmed their suspicion that emerging businesses were pushed to the economic periphery both in KZN and the rest of the country.
“There is no targeted approach to ensure that local businesses benefit, and in fact what you have is a system governed by technocrats that are serving their masters,” said Thwala.
He said the departments and the officials responsible should account for their failure to play a positive role in economic transformation.
Economist from the University of Zululand, Dr Sheunesu Zhou, said the findings by the committee should be a warning signal to the government’s efforts to drive inclusive economic growth. He pointed out that because the government had formulated such a policy, it was important for departments and entities that were not following it to provide reasons for this.
“The government has been talking about inclusive growth, with an aim of helping to develop local entrepreneurs. When there are instances of departments not following such a policy, it is not good for development,” said Zhou.
Zhou noted that when properly implemented, the procurement policy had the potential to yield benefits including the employment of youth and it could help provide skills to locals.
“Accountability is one of the values of the government, so the departments should be held accountable for their failure to implement the policy.”
Prominent businessman and former Black Business Council president Sandile Zungu said it was a shame that some departments were not implementing public policy, saying that they should be called to order, especially those at the helm.
The Amazulu Football Club owner also commended the committee for spotting the misstep by the departments.
“My thinking is that Scopa is correct in expressing its concern and rebuking the departments that are not following the law, because black economic empowerment is the law. There is no excuse for failing to implement the policy by the departments in this day and age” said Zungu, speaking from London last night.
He also called on black business formations to stand up so that they could take their rightful place in the country’s economic activities.
“Those in power must make sure that the people that are responsible for the implementation of this policy are held accountable for failing to do so.” He said that black economic empowerment was an important part of ensuring transformation and government should be at the forefront of the efforts.
Attempts to get comment from the National African Federated Chamber of Commerce and Industry were unsuccessful.