Public Procurement in the South African Economy: Addressing the Systemic Issues

Abstract

Public procurement fulfils an important role in the economy and public expenditure of a country and can be regarded as a critical indicator of the effectiveness of a government, because it is a central aspect of public service delivery. Notwithstanding various reforms made to date to public sector procurement in South Africa and the application of Supply Chain Management as a strategic policy strategic instrument, the South African public procurement system still faces several challenges and has been strongly criticised. This paper aims to understand the current public procurement environment in South Africa, its dilemmas and challenges, and to propose that public procurement be refocused towards a strategically placed business process, implemented by well-trained and competent procurement officials. The purpose is to provide a theoretical foundation as well as practical guidance regarding the role of public procurement in the South African public sector. The methodology involved an intensive literature study and document analysis to evaluate various official policy documents and official publications to determine the status of South African public procurement. The study found that the majority of challenges faced by public procurement in South Africa can probably be attributed to the implementation of the system, rather than to the system itself. In the shorter and longer term, the public procurement system in South Africa will have no choice but to emerge as a stronger, more resilient, streamlined and efficient provider of goods and services for the greater good of all.

Contribution of procurement capacity of public agencies to attainment of procurement objectives in infrastructure procurement

“…management of the procurement process) has the greatest impact on the attainment of seven out of the 10 procurement objectives. In countries where the principle of equity, fairness and transparency has been the key political concern, the use of a regulatory framework to manage public procurement has been the status quo (Fourie and Malan, 2020). This arrangement echoes a conventional attitude to public procurement by depending on regulation as the fundamental way of checking management process and implementation of policy.…”

Technological Approach to Ensure Ethical Procurement Management

“…The primary function of public procurement is "procuring goods and providing services and infrastructure on the best possible terms" [11]. The definition can be broadened by distinguishing between procurement and public procurement.…”

“…In general, principles of a sound procurement system include accountability, competitive supply, and consistency, which when viewed together with ethics and good governance, become the corners stones of an effective, efficient, transparent and reliable procurement system [11].…”

“…Non-compliance with Supply Chain Management (SCM) policy and regulations is identified by Fourie and Malan as challenges in Public Procurement [11], with Possible risks per procurement phase [16].…”

“…The current modus operandi of the procurement function within and between countries, in both the private and public procurement environments is being challenged to adapt accordingly, to be able to align procurement to aspects such as transactional automation, proactivity of supplier relationship management and predictability [10]. In addition, e-procurement has become a powerful tool to curb fraud, corruption, and unethical behaviour in public procurement as it reinforces the ethics of transparency, accountability, and integrity in procurement functions [11].…”