TOWARDS PROCUREMENT FOR DEVELOPMENT: A COMMENT ON PARI – POSITIONS ON STATE REFORM IN SOUTH AFRICA

The author comments on PARI's position papers regarding state reform in South Africa, arguing that public procurement should be used as a tool for industrial policy and economic transformation. The text distinguishes between 'developmental' procurement, which fosters high-productivity industries and innovation, and 'non-developmental' procurement, which often results in the outsourcing of state services to dependent firms. The author suggests that while South Africa has used procurement to support black business growth, there is an urgent need to transition toward 'Procurement for Innovation' (PPfI) to drive structural transformation and reduce the influence of state-dependent coalitions associated with 'state capture'.

• Public procurement can serve as a powerful instrument of industrial policy by providing stable, non-market demand for emerging industries, helping them reach critical scale thresholds and acting as a form of protection.
• The author distinguishes between developmental procurement, which promotes innovation-led growth in high-productivity industries, and non-developmental procurement, which involves outsourcing state services to firms that remain entirely dependent on public contracts.
• In South Africa, public procurement has been used to support the growth of black business through tenders and the inclusion of supply chain criteria in BEE scorecards, though the author notes this form of procurement has limited developmental payoff.
• The author posits that smaller, state-dependent businesses created through existing procurement frameworks may have been central to the political coalitions driving 'state capture' in South Africa.
• To achieve long-term development and economic de-racialization, South Africa needs to shift expenditure toward 'Procurement for Innovation' (PPfI), which requires the creation of state agencies capable of long-term industrial planning.

APA

Reddy, N. (2019). TOWARDS PROCUREMENT FOR DEVELOPMENT: A COMMENT ON PARI – POSITIONS ON STATE REFORM IN SOUTH AFRICA. Public Affairs Research Institute. https://pari.org.za/wp-content/uploads/2020/04/ACP_20190712_NiallReddy_ProcurementComments.pdf

Chicago

Reddy, Niall. TOWARDS PROCUREMENT FOR DEVELOPMENT: A COMMENT ON PARI – POSITIONS ON STATE REFORM IN SOUTH AFRICA. Public Affairs Research Institute, 2019. https://pari.org.za/wp-content/uploads/2020/04/ACP_20190712_NiallReddy_ProcurementComments.pdf.

Wikipedia

{{cite press release |last1=Reddy |first1=Niall |title=TOWARDS PROCUREMENT FOR DEVELOPMENT: A COMMENT ON PARI – POSITIONS ON STATE REFORM IN SOUTH AFRICA |publisher=Public Affairs Research Institute |date=July 2019 |url=https://pari.org.za/wp-content/uploads/2020/04/ACP_20190712_NiallReddy_ProcurementComments.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@misc{reddy2019towards, author = {Reddy, Niall}, title = {{TOWARDS PROCUREMENT FOR DEVELOPMENT: A COMMENT ON PARI – POSITIONS ON STATE REFORM IN SOUTH AFRICA}}, publisher = {Public Affairs Research Institute}, year = {2019}, month = jul, url = {https://pari.org.za/wp-content/uploads/2020/04/ACP_20190712_NiallReddy_ProcurementComments.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }