South Africa—Analysis, Design, and Implementation Plan for Business Commitments in Local Procurement Accord

The South African business community, in a 2011 Local Procurement Accord, committed to “promote measures that will enhance the level of localization in private sector supply chains.” Signed by constituents of the business, labor, and government sectors, the accord ultimately aims to create 5 million jobs by 2020.

To gauge businesses’ commitment and to create momentum, Business Leadership South Africa (BLSA) commissioned DAI to conduct a study of a small sample of BLSA members to identify potential opportunities for increasing local procurement. In two phases, the aim of the study was to guide future efforts toward achieving Commitment Four (Support for Local Manufacturing by Organized Business) and Commitment Five (Investment of Domestic Manufacturing Sectors) of the Local Procurement Accord. The second phase built on the recommendations of the first with the aim of providing guidance to businesses in the fulfillment of their commitments.

Sample Activities

• Conduct firm-level interviews with a dozen large South African corporate firms, and engage in discussions with a few relevant industry bodies.
• Assist BLSA members to establish a baseline of the proportion of their annual capital and operating expenditure that is spent on goods and services produced in South Africa.
• Identify product procurement for Local Content Procurement.

Select Results

• Created a macro analysis of import statistics and other strategies that reveal high potential products and sectors.
• Held firm-level discussions and provided analysis to pinpoint opportunities for local procurement, spend analysis, obstacles, policy and regulatory issues, and views on how these can be addressed.
• Compiled a detailed report outlining local procurement constraints, opportunities, and recommendations.