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  • Writer's pictureMBF


Many of us rarely think about how government agencies spend taxpayers' money - it amounts to a fortune! They are the largest purchasers of goods and services from the private sector. Global procurement reached $11 trillion (R203 trillion) in 2019. This is around 12% of global Gross Domestic Product and in countries like South Africa, procurement accounts for a staggering half of government expenditure.

Electronic procurement, or "e-procurement", speeds up this spending on services, and speed is decisive in crises such as e.g. COVID-19. It has been proven that in South Korea, the introduction of e-procurement means that the processing of tenders has been cut from an average of 30 hours to just two, while in Argentina the public procurement process has fallen by more than 11 days.

However, e-procurement does much more than make government agencies move faster. It reduces corruption in government spending and makes it more efficient. This is crucial because corruption is a trillion-dollar problem worldwide every year, with few solutions. The world is now doing just as poorly on corruption as it was a decade ago, according to Transparency International.

At the local level, public procurement is one of the biggest sources of corruption within municipalities, so the introduction of e-procurement can be incredibly effective in minimizing it. The most obvious, immediate and well-documented consequence is that e-procurement saves government agencies money. Research indicates that for every rand spent on e-procurement systems, savings of R38.00 will materialise. Just think what that could mean for Mafube.

It is not only in pandemics that such a system can show its value. E-procurement helped Ukraine's government continue to function when it was invaded by Russia. Transparency International reported last year that "the procurement system and all platforms are working every day", even though much of the country has been attacked.

An e-procurement system reduces waste in public spending, builds resilience and allows governments to be better prepared for upcoming challenges. Every government agency, and especially municipalities should follow such a policy. National Treasury specifically pointed out the dysfunctionality of Mafube Local Municipality in this regard, in their recent Status Quo report. MBF commented on the Municipal Financial Rescue Plan and identified shortcomings on which proposals were submitted on how assistance could be given to MPM to get policies and systems in place for an e-procurement system.

MBF invite residents, business owners and taxpayers to visit our offices at 18A Church Street, Frankfort on Mondays to Thursdays from 08h30 to 16h00 and Fridays 08h30 to 12h00. Call or send a WhatsApp message to Marina on 079 145 4295. Visit our website and follow us on Facebook.

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