Rethinking the buy local conditions in the SA infrastructure investment programme

The author critiques the push for 'buy local' conditions in South Africa's R787 billion infrastructure programme, arguing that import substitution is unsuitable for a modern economy with integrated supply chains. The text highlights that local suppliers often lack the necessary scale, skills, and technological know-how, meaning that preferential procurement could lead to higher prices and lower quality. While noting that South Africa is not a signatory to the WTO's Government Procurement Agreement, the author contends that the government should instead focus on industrial diversification and exports to ensure long-term competitiveness.

• South Africa has announced an infrastructure investment programme of approximately R787 billion over three years, targeting power generation, transport, bulk water, schools, clinics, and municipal projects.
• The Department of Trade and Industry's 2007 National Industrial Policy Framework (NIPF) Action Plan aimed to lower import leakage from 40% to 30% by 2012 through better coordination between parastatals and domestic suppliers.
• Proposed 'buy local' expansions include pharmaceuticals, medical supplies, clothing, textiles, food, computers, automobiles, and consulting services, with suggestions to use 9 out of 10 preferential points for local procurement.
• The author argues that 'buy local' conditions function as import restrictions that foster monopolistic pricing, limit consumer choice, and render the domestic economy uncompetitive.
• South Africa is not a signatory to the World Trade Organisation's (WTO) plurilateral agreement on government procurement (GPA), meaning WTO legality regarding 'buy local' conditions is not applicable.

APA

South African Institute of International Affairs (2009). Rethinking the buy local conditions in the SA infrastructure investment programme. https://saiia.org.za/research/rethinking-the-buy-local-conditions-in-the-sa-infrastructure-investment-programme/

Chicago

South African Institute of International Affairs. Rethinking the buy local conditions in the SA infrastructure investment programme. 2009. https://saiia.org.za/research/rethinking-the-buy-local-conditions-in-the-sa-infrastructure-investment-programme/.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=Rethinking the buy local conditions in the SA infrastructure investment programme |date=15 May 2009 |url=https://saiia.org.za/research/rethinking-the-buy-local-conditions-in-the-sa-infrastructure-investment-programme/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairs2009rethinking, author = {{South African Institute of International Affairs}}, title = {{Rethinking the buy local conditions in the SA infrastructure investment programme}}, institution = {South African Institute of International Affairs}, year = {2009}, month = may, url = {https://saiia.org.za/research/rethinking-the-buy-local-conditions-in-the-sa-infrastructure-investment-programme/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }