Billions to boost EC economy: Daily Dispatch

‘Local is lekker’ now official policy

THE Eastern Cape economy is set for an R18-billion boost from Bhisho over the next three years. Government has committed to strictly buy goods manufactured in the province in a step to accelerate industrial development and job creation.

This is according to a policy framework, also known as the “buy local initiative”, adopted by premier Phumulo Masualle’s executive last week.

The spend, beginning in the current financial year, will go directly to small, medium and micro enterprises (SMMEs) and co-operatives in the province.

One political analyst told the Daily Dispatch yesterday that the government’s hand could have been forced by growing public discontent at lack of work opportunities.

The provincial government last year spent R5.4-billion procuring goods and services from local companies, but there were no evidence the products had been locally manufactured.

For the policy to work, provincial treasury and the department of economic development will provide and maintain a list of suppliers and the goods they produce.

The goods range from toilet paper, medical supplies, linen and agricultural produce to stationery, security services, travel services, cleaning material and learner support material.

Provincial government spokesman Sizwe Kupelo said the new policy strictly stipulated that 50% of the annual government expenditure on goods and services should go directly to products manufactured in the Eastern Cape.

“The new policy framework compels all government departments, municipalities and public entities to source their products from local SMMEs and co-operatives. Most importantly the products must have been manufactured inside the Eastern Cape,” said Kupelo.

Kupelo said goods manufactured outside the province would be allowed provided local SMMEs were subcontracted for the packaging and distribution.

“In case of infrastructure projects, the principal contractor must enlist the services [of] a nominated local supplier at a rate of 25% of the contract value. The infrastructure department will establish and maintain a database of emerging contractors for this purpose,” said Kupelo, adding that R4.6-billion had been set aside for local contractors this year.

Border-Kei Chamber of Business executive director Les Holbrook said the move would be good for the economy.

“It is exciting. The bottom line is the more we can support local enterprise, the better. One of the things that business struggles with, though, is lack of payment of goods and services supplied to the government.

“So if the government is committing themselves to doing more business with businesses inside the Eastern Cape, it has to be good news for us,” Holbrook said.

“R6-billion [a year] is a lot of money and obviously we would like to see it spread across all levels of business – small, medium and big business. It is going to make a humungous difference for those business people,” he said.

Holbrook said as a business association, they were prepared to put their membership forward for preferred services and goods from a “legitimate and guaranteed point of view”.

Douglas Stern, president of Agri EC, which represents the interests of more than 3 000 commercial farmers in the province, asked: “Can it be trusted? Will it materialise?

“Is this another attempt by politicians to try and hoodwink us into making us believe they are on track in providing services,” he asked.

Political analyst Dr Mcebisi Ndletyana said in principle the move was a good thing.

“It is very good move, which will eliminate local discontent because these days there is always a source of dispute and unhappiness within communities. The unhappiness and complaints come from people looking for opportunities that they cannot get,” Ndletyana said.

Leader of the official opposition DA Athol Trollip said: “This is a commendable initiative but my experience is that years ago in the legislature, the same decision was taken.

“The department was going to buy tea from Magwa and Majola tea estates and they never did that, and those tea estates are completely defunct now.

“My experience in the Eastern Cape is that ‘the road to hell is paved with good intentions’. Even if they want to implement this thing my experience is that they never succeed in what they set out to achieve.”— zwangam@dispatch.co.za