Procurement policies and sustainability on SMMEs: a case study of Gauteng Province

Master Thesis


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SMME targeted procurement policies in South Africa gets swapped and changed every couple of years before they take hold and assessed against initially set desired outcomes, this makes them unsustainable. As such, it has become necessary for research to be undertaken to investigate those SMMEs that do business with State Owned Enterprises (SOEs), with the aim of establishing whether the preferential procurement policies are supportive of the growth and sustainability of their businesses. The study also sought to further ascertain whether the targeted procurement policies are achieving the objectives they were created for in the first place, which is to promote growth and empowerment through the growing of the SMME businesses or are they non-responsive. Lastly, this study intended to understand whether the continued swapping and changing of the targeted procurement policies is resulting in their unsustainability to grow a sustainable SMME sector in South Africa which in turn raises a question of whether the designing and implementation of these policies is well informed by the actual challenges bedevilling the sector to be able to address these challenges on the ground. The study was a qualitative study that enabled the expression and description of feelings and opinions regarding whether the targeted policies had achieved their objectives and the concerns respondents would express. From the data was collected through interviews, the respondents indicated that the policies were theoretical and do not address the actual challenges that bedevil small businesses in South Africa. If anything, the policies have not attained their set objectives of growing and empowering SMMEs but rather made doing and growing their businesses difficult due to an unfriendly business environment. In addition, high taxes, inflexible labour laws, access to finance, inability to market their companies and products, delayed payments for services rendered are some of the problems faced by SMMEs. The SMME sector is dwindling, the small businesses are folding, and the targeted policies have proved unsustainable. Based on the findings of this study the targeted procurement policies needs to be reviewed and in certain instance overhauled to improve their efficacy. Policymakers need to establish forums where small business raise their concerns, shortcomings of the policies and put forward their ideas of making the policies more beneficial to them. There is a great need to also identify and address impediments pertaining to the operating environment and make it truly pro SMMEs.