Procurement of locally manufactured products is one of the levers identified by government to support Industrial Development. This is according to the Minister of Trade and Industry, Dr Rob Davies, who spoke during the launch of the South African Bureau of Standards (SABS) Local Content Verification Office, at Gallagher Convention Centre, Midrand, on Friday.
Minister Davies said that the amended regulations to the Preferential Procurement Policy Framework Act (PPPFA) in 2011 empower the Department of Trade and Industry (the dti) to designate industries, sectors and sub-sectors for local production at a specified level of local content. About ten sectors have been designated for local procurement with stipulated minimum thresholds of local content.
The regulations require all organs of state to purchase only locally produced services, works or goods from the designated sectors.
“The designated sectors are: rail rolling stock; steel power pylons; bus bodies; canned/processed vegetables; textiles, clothing, leather and footwear; pharmaceutical products; set top boxes for television digital migration, office and school furniture products; components of the solar water heaters; power and telecommunication cables. Other sectors and products are undergoing research for further designation” said Minister Davies.
According to Minister Davies, local content and production leverage public expenditure and respond to a myriad of economic challenges facing South Africa.
“Through local procurement, a policy lever is provided, amongst others, to minimise import leakages which represent an outflow of funds whilst at the same time attempting to increase both aggregate demand and supply in the South African economy,” he added
Companies in the identified sectors which want to tender for government work will have to meet the stipulated thresholds.
It is for this reason that the dti has given the mandate of local content verification to the SABS, the national standardisation, quality assurance and verification body.
The Chief Executive Officer of the SABS, Dr Boni Mehlomakulu, said the SABS is honoured to have been appointed as the local content verification body in South Africa. She said South Africa needed to create an economy that provided jobs for locals, particularly the youth.
Dr Mehlomakulu said as part the verification of local content; the SABS will also visit factories in the designated sectors, at least two times a year.
“Once the SABS is satisfied that a supplier has met the requirements for local content, that supplier would be issued with a Local Content Verification Certificate”, said Dr Mehlomakulu.
Businesses affected by the new regulations will have to comply with the South African Technical Specification (SATS 1286), which has been developed by the SABS to measure and verify local content.
The Launch of the Local Content Verification Office will create the platform to entrench the requirements stipulated in the regulations from all spheres of policy.
Representatives of the three tiers of government and the private sector attended the launch.
Caption: General Manager-Local Content Verification Office (SABS)-Desmond Govender; CEO SABS- Dr Boni Mehlomakulu, Minister of Trade and Industry, Dr Rob Davies and the Chief Director-Industrial Procurement (the dti) Dr Tebogo Makube.