Government audits black business' share

2015-02-15 15:00

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Government has hired a data mining company to find out exactly how much black businesses earn from state tenders.

Chief procurement officer Kenneth Brown says this report should be delivered in nine months’ time.

Despite the lack of any solid information, he believes the report is likely to surprise the Black Business Council (BBC) and other lobbyists who contend that black business gets a relatively small share of the government’s pie.

“We don’t know who we spend our money on. Anecdotally, we can show a lot goes to black companies,” he told City Press in an interview at his Pretoria office.

He cited Gauteng’s housing contracts, which he said went exclusively to black businesses.

“The problem lies with government not having information to show its progress,” said Brown.

Organised black business groups were dealt a bloody nose on two important points by government’s first full review of the state’s procurement systems in a decade.

So-called set-asides and an overhaul of the preference-point system for government contracts (see sidebars) have been central to the BBC’s agenda.

But when Treasury published its supply chain management review last week, it politely noted these ideas – and then suggested a very different plan of action.

Brown said the efficiency reforms proposed in the review would do far more for small black businesses than either of the radical policy interventions the BBC had been calling for.

Xolani Qubeka, the BBC’s secretary-general, told City Press he had not yet read the review report.

But he rejected Brown’s contention that black companies were already receiving a meaningful amount of business from the state.

“If you look at big construction and infrastructure contracts, 90% goes to big companies,” he said.

“It is even worse at local and provincial levels," he added.

“For us, Treasury only tends to look at costs, but you need to also look at the social impact. There is a cost-benefit equation there.”

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