On 7 April 2014 the South African Minister of Trade and Industry launched the sixth version of government’s Industrial Policy Action Plan (IPAP) covering the period 2014/15 to 2016/17. Public procurement features prominently in the IPAP as a key lever of industrial development. The Plan in particular contemplates increased focus on designating specific sectors of public procurement for local content thresholds. Under the Preferential Procurement Regulations, 2011 (issued in terms of the Preferential Procurement Policy Framework Act 5 of 2000) the Department of Trade and Industry is empowered to designate sectors where only locally produced goods or services or goods meeting stated thresholds of local production may be procured. In a key paragraph the IPAP states:
“Nevertheless, too much emphasis in procurement processes is still being placed on the traditional practice of acquiring goods and services at the lowest cost, regardless of origin and quality – thereby failing to stimulate either domestic development of improved products and services or the creation of new markets for industrial innovations.”
The IPAP also expresses strong support for the current comprehensive review of the public procurement regime headed by National Treasury.