Treasury to seek ConCourt clarity on government tender criteria

• National Treasury director-general Dondo Mogajane said the Treasury would apply to the Constitutional Court to provide clarity on the government's legal position on procurement.
• It lost a case about legislation that stipulated that only companies that complied with certain criteria, including B-BBEE status, could apply for tenders.
• Mogajane added that a bill was in the works to ensure the public and private sectors can cooperate more effectively to develop infrastructure.
  

National Treasury director-general Dondo Mogajane said the Treasury would apply to the Constitutional Court to provide clarity on the government's legal position where it relates to the public procurement of goods and services.

In February, the Constitutional Court dismissed an appeal from the minister of finance seeking relief from a case Afribusiness initiated to have the minister found to have acted beyond their scope of powers when the office promulgated the Preferential Procurement Policy Framework Act in 2017.

The legislation stipulated that only companies that complied with certain criteria, including B-BBEE status, could apply for tenders. However, Afribusiness challenged the framework, saying it excluded white South Africans and their businesses.

National Treasury then issued an advisory to all state-owned entities and departments stating that all tenders advertised after 16 February would be held in abeyance pending further clarity from the highest court in the land.

"We are filing for the courts to be clearer on this issue, and we are coming out with more indications of what the procurement regime should look like and respond to where the court says we are out of line," Mogajane said.

Mogajane added that a bill was in the works to ensure the public and private sectors can cooperate more effectively to develop infrastructure.

"It will be a difficult environment going forward and there is a lot in the air that we have to balance. We need to make sure business is happy, that the vulnerable and the poor are happy, to make sure we build infrastructure and contribute to productive aspects of the economy," he said.

Mogajane was addressing a panel discussion on the 2022 national Budget in February. The panel discussion was organised by auditing firm Deloitte.

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Mogajane told the Deloitte panel discussion that Godongwana's maiden budget speech prioritised 59.4% spending on a social wage but was also preoccupied with improving the outcomes of government spending.

Mogajane said the non-implementation of structural reforms was a critical own goal for government.

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'Better spending outcomes'

South African Revenue Service commissioner Edward Kieswetter said governance remained a challenge, which is exemplified by the obsession state-owned entities and government departments have with getting a clean audit opinion from the Auditor-General when such a feat is merely the baseline.

"Leaders should be taking their work their work seriously instead of taking themselves seriously. There is a saying that China works because of government and India works in spite of government. We are edging closer to being a place where things work in spite of government," said Kieswetter.

Economist Thabi Leoka said she was surprised by how much the budget achieved with so little. She noted upward pressure on the Social Relief of Distress grant with many calling for it to not only be extended but increased to R800 or over R1 000, which could crowd out productive spending and infrastructure investment.

Mogajane responded by saying that it would be critical to monitor the outcomes of the social wage in the coming years before making a long-term commitment to the extension of a relief grant or the introduction of a basic income grant.

This article was amended to clarify that the event at which Mogajane spoke was organised by Deloitte.

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