Commit to value for money in SONA 2026, IRR CEO urges Ramaphosa

End Black Economic Empowerment (BEE) premiums and save taxpayers billions of rands by endorsing the Value for Money Bill drafted by the Institute of Race Relations (IRR).

This is the challenge IRR CEO Dr John Endres has delivered in a letter to Cyril Ramaphosa as the President finalises his ninth State of the Nation (SONA) speech, slated for 12 February.

The Value for Money Bill is part of a legislative package drafted by the IRR aimed at genuinely transforming South Africa into a prospering, non-racial society.

The other bills in the package – all four of which were published last year – are the No More Race Laws Bill, the Right To Own Bill, and the Freedom From Poverty Bill.

The Value for Money Bill contains proposals which stand to enable the government to save taxpayers up to R150 billion in procurement spending by eliminating BEE premiums and appointing government service providers on a strictly value-for-money basis.

Inspired by the findings and recommendations of the Judicial Commission of Inquiry into Allegations of State Capture, Corruption, and Fraud in the Public Sector, or the Zondo commission as it is popularly known, the Bill maximises value for money in procurement and, by so doing, addresses many issues facing South African households, including the cost-of-living crisis, declining service delivery, the lack of jobs, and stagnant economic growth.

IRR research demonstrates that implementing the Bill could save government between R100 billion and R150 billion, and would enable it to cut Value-Added Tax (VAT) from 15% to 11.5%. Lowering taxes would relieve much of the financial pressure on households, and curb wasteful public spending that presently runs to billions of rands.

Dr Endres cites IRR polling in which seven out of ten respondents elect value-for-money as the principle of their choice in public procurement. Taxpayers believe the government should prioritise buying the best-quality product that offers durability and longevity rather than paying more to fund BEE premiums.

“Polling also shows that South Africans overwhelmingly support tax relief when it is credibly linked to better value for money. Cutting waste and overpricing in procurement enjoys far broader support than raising taxes or expanding spending under current conditions. A value-for-money reform agenda therefore carries not only economic logic, but democratic legitimacy,” says Dr Endres.

According to Dr Endres, the SONA 2026 presents Ramaphosa with the opportunity to the implement bold reforms. 

“The right of a South African president to address Parliament at the start of each year carries a serious obligation to provide more than mere rhetoric and political grandstanding,” Dr Endres writes in his letter to the President. “As head of state and government, you have the unique opportunity to demonstrate in your upcoming address to Parliament that you are willing and able to lead pro-growth reforms in the interest of all South Africans.”

The IRR has invited Ramaphosa to discuss the detail of the Value for Money Bill. You can learn more about the draft law here, and sign a petition in support of its proposals here.

Media contact: Makone Maja, IRR Strategic Engagements Manager Tel: 079 418 6676 Email: makone@irr.org.za

Media enquiries: Michael Morris Tel: 066 302 1968 Email: michael@irr.org.za