The Black Business Council (BBC), which advocates for the interests of black entrepreneurs, has come out guns blazing against Finance Minister Enoch Godongwana for “abdicating his constitutional responsibility” when it comes to transformation, particularly state procurement.
BBC CEO Kganki Matabane said the preferential procurement policy framework published in the government gazette on Friday removes localisation and broad-based black economic empowerment (B-BBEE) requirements and rather puts an emphasis on “specific goals”.
“This means that the already low 20 or 10% points allocated for economic transformation when evaluating government tenders are done away with … the BBC is of the view that the minister is passing the buck by leaving everything to the organs of state to determine their own transformation targets with the new procurement regulations, as most state organs will choose to do nothing on economic transformation and localisation,” Matabane said.
The previous regulations specified that organs of state could disqualify bidding companies if they were not 100% black-owned.
In February, business interest group Sakeliga successfully challenged the constitutionality of the regulations. The Constitutional Court ruled that the 2017 public procurement regulations, which disqualified companies from tendering based on the race of their owners, were unlawful and should be set aside.
The court then ordered Godongwana to publish revised regulations within a year.
At the time, Sakeliga’s Piet le Roux described the court judgment as “the first significant roll back of a BEE-type law in South Africa in the Constitutional Court”.
Another contested terrain is expected to be the Draft Public Procurement Bill that is currently under discussion at the National Economic Development and Labour Council.
The draft bill was published for comment in February 2020 and aims to regulate public procurement and prescribe the framework for the procurement policy as envisaged in section 217 of the constitution.
Matabane said: “BBC warns government that the majority of the people can’t be perpetual spectators in the economic sphere of their own country, and therefore calls on the minister to seriously consider withdrawing the bill in its current form.”
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