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The DA has received overwhelming public support for our proposed Preferential Procurement Policy Framework Amendment Act or ‘Social Impact Bill’ following the Notice of Intention and Invitation for Comment in the Government Gazette.

83.3% of the comments we received supported our Bill, 13.3% were neutral and 3.3% expressed opposition.

Our ‘Social Impact Bill’ seeks to remove broad-based black economic empowerment (BBBEE) from the Preferential Procurement Policy Framework Act (PPPFA), and rather award tenders based on competency or adherence to specific social development goals (SDGs).

Many of the comments we received support the DA’s view that while BBBEE might have been intended as vehicle of upliftment and economic freedom, it has become a tool for corruption. Only the politically connected individuals benefit from BBBEE, while the vast majority of poor black South Africans continue their struggle for daily survival.

In order to directly the address the causes of inequality of opportunity in South Africa and invigorate our economy, government must discard its race-based policies in favour of a policy that will truly benefit the majority of poor and vulnerable citizens.

The DA’s ‘Social Impact Bill’ is in the final stages of preparation and will be brought before Parliament shortly.

The utilization of the Bill’s SDG model has a number of benefits over the current BBBEE model:

• It will leverage the significant government procurement expenditure of almost a trillion rand, approximately 22% of our GDP, to incentivise private companies’ contributions towards achieving SDGs;
• The most important factor for government procurement will remain price and functionality as capability to execute and lowest cost will benefit those reliant on government services the most, and in turn lead to the greatest upliftment of society as a whole;
• Root causes of inequality will be directly addressed without relying on ineffective trickle down redress;
• The SDG model will target the vulnerable and disadvantaged directly, the majority of whom have been classified as black under Apartheid, and make it more difficult for those who do not require benefits to accrue them. This will also stem rampant corruption and patronage;
• The SDG model will provide for 17 different goals, which companies focus on based on what they will have the most sectoral impact on;
• The SDG model is globally recognized, and is increasingly international best practice, whereas existing legislation is highly localised and not internationally accepted;
• The SDG model may encourage investment in companies with strong SDG awareness and commitments. The PPPFA tends to discourage local and international investment.

Without urgent reform of the current legislation, South Africa’s inequality gap will continue to widen. The current BBBEE model that continues to marginalize the poor and vulnerable is simply unsustainable and will eventually lead to a revolt – as seen during the 2021 July riots. South Africans deserve a system that puts their economic freedom above the ANC’s greed.

Issued by Dean Macpherson MP - DA Shadow Minister of Trade, Industry and Competition