State Pays Lip Service to Local Content
A Johannesburg businessman has accused government of paying "lip service" to the use of local products in tendered government projects .
Bennie Coetzer, MD of electronic engineering and manufacturing company Thales Advanced Engineering, said yesterday that while empowerment companies were winning government contracts, there was no incentive to promote use of locally manufactured products.
"The result is that subcontracts are frequently awarded to local companies or organisations that are supplying imported products, often not suited to local conditions," said Coetzer.
"This is a contradictory situation. If South African-made products are not supported wherever possible, the capability to manufacture locally will be lost." Preferential procurement is one the cornerstones of government's strategic approach to promoting black economic empowerment.
Tenders from government departments, municipalities and parastatals have become a major source of business for many newly formed empowerment companies.
Coetzer called for government to boost local manufacturers by stipulating use of local products in tenders.
BusinessMap Foundation executive director Reg Rumney said yesterday there was no general across-the-board requirement for companies which had won government tenders to use local products.
Rumney warned, however, that such a requirement was not as easy as thought. "It is a matter that has to be treated carefully."
For instance, he said, the "national treatment" clause of the World Trade Organisation did not allow its members to discriminate against imports from other member countries. " There are no easy answers to this," he said .
Proudly SA spokesman Zweli Mnisi said yesterday the organisation continued to lobby government departments and related bodies to consider local content when awarding tenders.
"In the information communications and technology sector, for example, we have compiled a directory of companies meeting our (local content) requirements," said Mnisi.
"Unfortunately we cannot prescribe with regard to where companies must get their products."
Proudly SA's efforts to encourage use of local products and content was supported by the Congress of South African Trade Unions.
With acknowledgements to Siseko Njobeni and the Business Day.