Procurement is set to play a more strategic role in growing the economy of the Western Cape, the Smart Procurement World conference has heard.
“Procurement needs to be recognised and redefined as a strategic activity. Our policy initiatives focus on maximising the economic impact of public procurement in the Western Cape,” Western Cape Treasury chief director of public policy Marcia Korsten told delegates attending the conference, in Cape Town.
Procurement makes up a huge slice of gross domestic product (GDP) in South Africa and should be used as a lever for improving service delivery, believes Korsten.
“The key is to ensure value for money in terms of prices, cost savings and quality.”
According to a policy brief by the Government Technical Advisory Centre (GTAC), public sector procurement spending in South Africa constitutes almost 30% of South Africa’s GDP.
The Western Cape’s provincial budget is around R67-billion, with the Cape Town metro making up about R46-billion of that amount. Procurement in the education and health sectors make up the largest slice of procurement.
Some 16 500 suppliers are registered on the Western Cape supplier database, with the province procuring everything from cleaning services and food to learner transport and textbooks through its procurement system.
“Without procurement, we would not be able to build houses and roads, supply medicines and ensure textbooks are in the schools,” Korsten told the conference which has attracted hundreds of people involved in procurement in the public and private sector in South Africa and further afield.
“There’s a strong case to be made for using procurement as a strategic enabler in the economy. The way we view procurement assists in creating opportunities for growth and jobs, in embedding good governance and integrated service delivery.”
The Western Cape province has prioritised agroprocessing, tourism and oil and gas as key sectors to grow the economy, while the rising contribution by the services sectors is expected to continue. Procurement professionals are expected to step up in this space too.
“Youth unemployment is high and we have a relatively small informal sector. There’s an increasing recognition both globally and locally that procurement professionals play an increasing role in their organisations.”
Korsten suggested that people involved in procurement should be working directly with strategists, CFOs and CEOs in their organisations and companies.
The conference has been looking at ways in which procurement professionals can play a more strategic role in their organisations and become more influential.
With flat economic growth in South Africa coupled with high unemployment, departments and companies are needing to work smarter to try to boost growth.
“We need to become much more efficient and effective in service delivery…and procurement plays a strategic role,” said Korsten.
The City of Cape Town has also used the accompanying Enterprise & Supplier Expo to encourage people to consider registering on its community-based supplier base, set up in a bid to create employment and boost community-based projects.
The base is aimed at smaller companies and individuals who provide services below R30 000. These include services such as waste removal, cleaning of parks, catering, laundry and hygiene, area cleaning and general maintenance. The suppliers live and operate within their communities.