No R2 million, no tender

Jacques Smalle MP

DA Limpopo Provincial Leader

The Limpopo provincial government is implementing procurement policies that deliberately exclude small businesses.

The DA has been contacted by a number of small, black-owned businesses that are currently acting as service providers for the Limpopo provincial government. These are exactly the kind of small businesses that the DA believes should be supported by government procurement policies.

These small businesses are being pushed out of business by the Limpopo provincial government. Limpopo now requires these small businesses to indicate that they have at least R2 million in their bank accounts before their tenders can be renewed. Here is a letter to one of the affected businesses stating the requirement.

The vast majority of small businesses are not able to do so, which means that larger, more established companies are favoured by this new requirement. The affected small businesses that we know about work in the education, health and security sectors.

It is unfair to expect small businesses to have R2 million cash on hand before being able to do business with the state.

It is also worrying that the companies that have come in to replace the small local businesses are from outside of Limpopo and are much larger and better established.

Limpopo’s new procurement policy is benefitting big companies at the expense of smaller emerging companies. This R2 million requirement must be scrapped.
We will call for a debate in the provincial legislature on this new procurement requirement. It makes no sense. We should be using our government procurement to uplift small emerging companies from Limpopo.