Stimulating the economy through local procurement

Prouldy South African

Proudly South Africa’s purpose is to work to combat the triple challenges of poverty, inequality and above all, unemployment.

It is no secret that the South African economy is under huge pressure. GDP growth is almost at a standstill and unemployment at an all time high. One way to help stimulate the economy is to buy and source proudly local says Deryn Graham, public relations manager for Proudly South African.

Proudly South African was established in 2001, born out of the 1998 Presidential Job Summit which was convened by the late former President Nelson Mandela. Like all government initiatives, its purpose is to work to combat the triple challenges of poverty, inequality and above all, unemployment.

Proudly South African seeks to influence local procurement in the public and private sectors, to increase local production and to influence consumers to buy local in order to stimulate job creation. This is in line with government’s plans to revive South Africa’s economy so that millions of jobs can be created and unemployment can be reduced. The work of Proudly South African aligns with the broader National Development Plan and the Local Procurement Accord signed in October 2011.

The best way to get this economy going again is to buy proudly South African says Deryn Graham. “Local manufacturing creates jobs. We work on a programme with retailers and the Consumers Goods Council of South Africa  as well as The Manufacturing Circle (The Manufacturing Circle’s ‘Map to a Million New Jobs in a Decade’ programme is a plan containing constructive and actionable steps to create jobs in manufacturing in South Africa,) to look at import replacement programmes. Many companies had bought into this and are even exceeding expectations, Massmart being a good example. It identified several line items that can be replaced with locally sourced products. It had done so, but over time sourced even more local product than what was expected.”

South African Breweries is another great example of how the economic stimulus works. Its product, from brewing to the glue that sticks the label to the bottle is 97% locally sourced, manufactured and produced. This means everyone who participates in the value chain has money to eventually buy a few Castle Lager’s – and to support the exact product that it gets its own business from.

Proudly South African understands that it is sometimes important for the economy to import certain products. The Department of Trade and Industry (DTI) has a difficult job to juggle import/export agreements. The DTI must make certain preferential import arrangements with other countries to get our products exported again says Graham. “For example, to prioritise our car exports we must accept something from the country it is exporting to. There is always a quid pro quo (a favour or advantage granted in return for something). The commercial decision however lies with the consumer – you and I can decide whether we want to buy the imported product or if we can rather support buying local.”

But buying local starts with government. Our government is the biggest procurer of everything in the country. It has 24 designated items or compulsory local procurement items, everything from wheelie bins to rolling stock, linen for hospitals, certain items for schools etc. This creates massive job opportunities in the local economy.

Questions some business in South Africa sometimes ask  is how can I procure local if I can only find it outside our borders? Graham says, it doesn’t have to be what you sell here. “Your business still needs stationary, furniture, uniforms etc. If this is sourced locally it also makes a valuable contribution to the country. “

The other question is what can individual consumers do to support the local economy? Not knowing whether a product is local or not is not an excuse says Graham. “Everything sold here must have a label of origin. If it doesn’t say made in South Africa don’t buy it. Anyway, anything of local origin has a 600 barcode (fun fact).”

“Business and private individuals have a big responsibility to support and grow the economy. We really have to walk the talk and make informed decisions when we consume or procure a product. The choices we make on a daily basis does influence our economy,” says Graham.

Local content

At least 50% of the cost of production must be incurred in South Africa and there must be ‘substantial transformation’ of any imported material.

High quality/services

The product or service must be of a proven high quality for example, it must be ISO accredited or have a certificate of any other accreditation organisation.

Fair labour practice

The company must comply with the current labour legislation and adhere to fair labour practices.

Environmental standards

The Business/enterprise must comply with environmental legislature and adhere to production processes that are environmentally friendly and acceptable. This shall include recycling methods, waste management, carbon footprint reduction, etc.

Membership cost

MEMBERSHIP CATEGORY CLASSIFICATION PAYABLE FEE PER ANNUM
(excluding VAT)
NGOs / Start-ups / Crafters
  • Newly-established enterprises or enterprises with a turnover of less than R5M
  • NGOs
R500.00
Bronze Enterprises with a turnover between R5M and R10M R1 000.00
Silver Companies with a turnover between R10M and R30M R10 000.00
Gold Companies with a turnover between R30M and R50M R20 000.00
Platinum Companies with a turnover between R50M and R100M R50 000.00
Diamond Companies with a turnover of R100M and above R100 000.00
email

, ,