1 November 2011
The phrase “local is lekker” was given a new meaning on Monday when the South African government, business and labour signed a deal to increase procurement of locally manufactured goods to 75 percent.
In a landmark agreement signed in Pretoria, the three social partners further committed to identifying steps to ensure that South Africa increases the speed of job creation and regains the jobs lost during the global financial crisis of 2008-09.
“The significance of this accord is that decisions will now be taken on buying local goods, and this in the end will go a long way in raising our competitiveness and development of local producers,” Economic Development Minister Ebrahim Patel told reporters.
While it is not clear how this would affect foreign investors, Patel said the initiative had the potential to direct billions of rands to local producers.
“This accord is one of a series of agreements in which the social partners commit to work together to achieve the goals of the New Growth Path.” The government’s New Growth Path has targeted the creation of five-million new jobs by 2020.
Products made in South Africa
Trade and Industry Minister Rob Davies said the government had committed to “significantly” expanding the value of goods and services it procured from local producers, using new regulations that are set to come into effect in December.
Davies emphasised that only locally produced goods would be targeted, adding that company ownership would not necessarily qualify individuals for procurement.
“The fact that ownership of the company is held by South Africans will not count; we are targeting proudly South African products, meaning products must have been produced in South Africa.”
Several products and services will be identified to allow only local manufacturers to produce these. They include railway equipment, clothing and textile and food products.
Government departments will adopt an SABS standard to identify and define local content in various categories.
SA’s 84 biggest companies
Business said it would drive the effort in the private sector to improve local buying by the country’s 84 largest companies.
“As business we see this as yet another tool to contribute towards economic transformation … we are now beyond talking action,” said Business Unity SA CEO Nomaxabiso Njokweni.
The deal would not only help improve local competitiveness, but would go a long way toward developing new enterprises and boosting existing ones, Njokweni said.
Congress of SA Trade Unions (Cosatu) secretary-general Zwelinzima Vavi described the move as a “milestone in reversing the wrong things that we have seen happening.
“I must say it has a potential to reverse the job losses and other things that are happening in the manufacturing sector,” Vavi said. “Our task now is to mobilise ordinary masses of our people to support the initiative of buying local.”