The implementation of local content policy in 2011 has, to date, assisted in directing R76-billion worth of public contracts to South African manufacturers, the Department of Trade, Industry and Competition (DTIC) has reported.

In a briefing to the Portfolio Committee on Trade and Industry, in Cape Town, on Thursday, DTIC industrial procurement chief director Dr Tebogo Makube said the absence of this policy could have seen public money used to procure imported products thus externalising the South African fiscus and supporting foreign economies and jobs.

Makube explained that local content was one of the public procurement and industrial policy instruments used by the government to leverage public expenditure to support industrial development and economic growth in the country.

He also emphasised that the local content policy should not be viewed in isolation from other industrial instruments that are being used by the government to support industrial development in the country.

“The challenges encountered in the implementation of this policy are multifaceted and they range from the advertisement of designated tenders without local content requirements, a lack of proper evaluation of bids/tenders in line with the local content requirements by some organs of State, the manipulation of the bid price to meet local content requirements and illicit importation of products which are supposed to be manufactured in South African in line with the local content policy,” he said.

“The lengthy time it takes to adjudicate tenders and place orders, sometimes negatively affect the operation and profitability of local manufacturers,” Makube added.

He also informed that complaints had been raised by non-manufacturing bidders that they were being given inflated prices by manufacturers who also bid for the same tenders.

“This practice is both anticompetitive and anti-transformation. That is an area we intend looking at together with the Competition Commission in particular and other organs of State such as the National Treasury,” noted Makube.

On the way-forward, Makube reported that the DTIC had availed R20-million over the medium term to the South African Bureau of Standards to continue with the local content verification.

The government is also looking at other options to strengthen local content verification processes.

The department is also working with Proudly South African through the tender monitoring system to monitor tenders in line with the local content requirements. This includes working with the office of the Auditor-General to ensure that tenders which are designated for local content and production are audited and audit opinions issued by the latter.