Public procurement regulations must support industrial development
The IEJ’s submission on the General Public Procurement Regulations of 2026 welcomes the progress made towards restoring legal certainty and strengthening the enforcement of procurement policy. However, it argues that the draft Regulations do not provide sufficient detail on how Section 20 of the Public Procurement Act, which governs designated sectors for local production and content, will be implemented.
This gap risks weakening one of public procurement’s most important functions: using state spending to support local manufacturing, employment, and broader economic development.
Local manufacturers face a deepening crisis
IEJ research into renewable energy manufacturing has found that local content requirements have frequently been waived, evaded, or poorly enforced. As a result, South African manufacturers have lost orders, retrenched workers, reduced production, and, in some cases, closed or shifted into lower-value activities.
An unstable project pipeline has compounded these difficulties. Manufacturers cannot maintain stock, retain skilled workers, or invest in additional capacity without predictable demand. Orders are also often placed too late for local firms to meet project timelines, creating grounds for further waivers and reinforcing the decline of domestic industrial capacity.
Make local content mandatory and enforceable
The submission recommends that local content requirements be treated as prequalification criteria rather than optional points in bid evaluations. This would require all bidders to meet designated thresholds instead of allowing firms to compensate for weak local content commitments elsewhere in the scoring process.
The Regulations should also specify how compliance will be monitored and the consequences of non-compliance. Contractors found to have misrepresented local content should be required to purchase and deploy locally manufactured equipment at their own cost or face debarment.
All waivers should be publicly gazetted, with clear reasons provided. Procurement committees should have the technical expertise needed to assess claims that local suppliers cannot meet required standards. The IEJ also proposes an SABS-administered certification process through which manufacturers can verify the proportion of local content in their products before bidding.
Link procurement to jobs, quality, and value for money
Local content rules should support decent work, skills development, and sustained industrial capacity. The submission argues that value for money should be assessed across the full project lifecycle, rather than through upfront price alone. Locally manufactured goods may provide better compliance with domestic standards, stronger maintenance capacity, and lower long-term repair costs.
The Regulations should also allow additional production time where necessary and should not automatically exclude sectors with fewer than three local manufacturers where stable demand could support future competition.
Coordinate procurement and tariff policy
Finally, local procurement requirements must be aligned with tariff and industrial policy. Investigations into imported goods replacing committed local products should also examine possible tariff evasion, misclassification, and failures to meet quality standards. Coordinated policy is essential to create stable public- and private-sector demand for South African manufactured goods.