Mr President, don’t miss your value-for-money moment – IRR

If President Cyril Ramaphosa fails to address the need for value-for-money in the state’s more than one-trillion-rand-a-year procurement spending, his eighth State of the Nation Address (SONA) tomorrow will be incomplete and short of key reforms, warns the Institute of Race Relations (IRR).

The warning is contained in a letter to Ramaphosa from IRR CEO Dr John Endres, urging the President to use his 2026 SONA to signal a decisive shift to a new approach in state spending.  

Says IRR Strategic Engagements Manager Makone Maja: “With this address, the President has an opportunity to endorse value-for-money principles espoused in IRR draft legislation, the Value For Money Bill. The Bill makes the case for the procurement of goods and services on a value-for-money basis in place of incurring the costs of Black Economic Empowerment (BEE) premiums being added to every purchase.”

According to Maja, BEE premiums cost South African neighbourhoods development and efficient service delivery. These premiums not only entrench corruption in integral institutions, but also incentivise appointing service providers for reasons other than their ability to adequately deliver on the job. 

“Value for money in procurement is the best chance Ramaphosa has of reaching his 2025 SONA vision of ‘A nation that works for all’. It achieves this by repealing a system in which people who are poor are burdened with enriching an elite BEE class at the cost of their own access to state goods,” Maja adds. 

She continues: “When budgets meant for increasing capacity for public schools are instead used to pay premiums to enrich a few tenderpreneurs, an entire community is robbed of access to quality education. The same goes for all things public procurement. Consider that public health facilities could have access to more healthcare professionals, have more beds, medical devices, food, medication, and cleaning services, and much more. Yet they too procure all their goods at a premium – hence the Special Investigating Unit (SIU) investigation into the likes of Hangwani Maumela adding one more super car to their fleet. 

“The current system perpetuates a gross miscarriage of justice for insisting that taxpayers sacrifice their development to enrich a few. Maximising value-for-money is the surest way President Ramaphosa can provide security to South Africans who are concerned about the misuse of their taxes. Constituting commissions of inquiry into state capture is not enough. Adopting a value-for-money approach would be a decisive step in committing to efficient governance and in taking the Zondo Commission’s recommendations seriously,” Maja concludes.  

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