Transcript PURCO2015 Laymanx

The SA Economic Highway:
Congestion and Tolls or Freeway
Andrew Layman
PURCO Conference, 2015
Overview
“As a major part of the economy and public spending, public
procurement can demonstrate government efficiency.
In an era of fiscal austerity, ensuring efficiency and integrity in
public procurement is essential to ensure sound public service
delivery and maintain citizens’ trust in government.
Governments are recognising the potential of procurement to
improve public sector productivity through savings and
economies of scale.
In addition, governments are tapping into the potential of
procurement as a strategic policy lever to advance socioeconomic and environmental objectives.”
Angel Gurría: Secretary-General, OECD
SA Business Roadway
Congestion
• Delays
– Decision-making
– Contestation
– Labour disputes
– Inefficiency
– Non-compliance
– Legislation
Costs
• High cost of doing business
– Unrealistic wage increases
– Annual compliance reports
– Red tape
– High transport costs
Conditions of Constraint
• Socio-political agendas
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Employment equity
BBBEE
Immigation
Anti-capital sentiment
Why capital is hoarded
“Corporate South Africa appears to be
on an investment strike …… long-term
cash-hoarding is unpatriotic and
counter-intuitive and is directly linked
to slow economic growth.”
Bongani Mbindwane: Daily Maverick, 1 October 2015
Freeway
• Procurement
– Administrative function, not strategic
– More professionalism required
– Assessment of risks and opportunity costs
– Fragmentation
Procurement (OECD)
• More managerial in pursuit of value for money,
instead of strict compliance
• Strategic position for government
• Sound stewardship of public funds
• Monitoring and evaluation
• Potential of consolidation and integration
• Community of practice
• Strict control of exceptions
• Sufficient flexibility for different situations
SME Development
• What are these SMMEs?
– Emerging start-ups?
– Co-operatives?
– Functioning small businesses?
– Capacity for survival and growth
8 ‘Big Ideas’ in Mexico
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Smarter use of free trade agreements
Dedicated access to SMEs through government fairs
Centralised e-procurement platform
National credit guarantee system
Lower interest rates
Public procurement contracts as collateral
Financing of innovation
Preferential purchasing programmes with SOEs