The Western Cape Cabinet has given the green light to a bill that seeks to limit provincial employees' business dealings with the province.

Provincial finance minister Alan Winde said on Wednesday that the draft law was aimed at fighting corruption and cronyism in the public service.

Employees and their families would be prohibited from holding more than 5% of shares or other interests in an entity that did business with the provincial government.

Before the province entered into any contract, the supplier had to provide an affidavit disclosing whether it was owned or part-owned by employees of the province.

All provincial employees would be required to disclose their business interests in the same way as members of Cabinet.

Employees with a greater than 5% stake in a company currently doing business with the province would be exempt from the legislation until completion of the contract.

Winde said that the bill would now go to the Western Cape legislature for consideration.