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Procurement Issues in South Africa that Affect Growth and Development

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  • Steven Kelman

Abstract

This report discusses four issues with regard to government procurement in South Africa. These are: (1) contracting for municipal infrastructure delivery, (2) public-private partnerships (PPP’s), (3) large capex procurements in Transnet and Eskom, and (4) the DPE “Competitive Supplier Development Program.” Recommendations are made in each area. For example, for municipal infrastructure delivery, the report recommends that municipalities rated by National Treasury as “poor” in terms of capacity would continue to receive municipal funding from national government, and to determine priorities for local infrastructure spending, but they would no longer be allowed to contract for delivery of these services. Instead, they would be required to use either a sector-specific national organization or another national organization willing to provide the services in question. Regarding PPP’s, the report suggests that, although there are reasons for concern about this approach, on balance South Africa should consider expanding use of PPP’s, which often provide better quality, a pre-commitment to maintenance spending, and another remedy against corruption. Recommendations in other areas involving procurement are made as well.

Suggested Citation

  • Steven Kelman, 2008. "Procurement Issues in South Africa that Affect Growth and Development," CID Working Papers 171, Center for International Development at Harvard University.
    • Handle: RePEc:cid:wpfacu:171
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    File URL: https://www.hks.harvard.edu/sites/default/files/centers/cid/files/publications/faculty-working-papers/171.pdf
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    References listed on IDEAS

    as
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    2. Michael Pollitt, 2005. "Learning from UK Private Finance Initiative experience," Chapters, in: Graeme A. Hodge & Carsten Greve (ed.), The Challenge of Public–Private Partnerships, chapter 11, Edward Elgar Publishing.
    3. Baker, George P, 1992. "Incentive Contracts and Performance Measurement," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 598-614, June.
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    More about this item

    Keywords

    South Africa; Structure; Scope; and Performance of Government; Public Administration; Intergovernmental Relations;
    All these keywords.

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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