{"id":23281,"date":"2026-02-19T15:17:14","date_gmt":"2026-02-19T15:17:14","guid":{"rendered":"https:\/\/microvibenews.com\/?p=23281"},"modified":"2026-02-19T15:17:14","modified_gmt":"2026-02-19T15:17:14","slug":"r700bn-procurement-crisis-demands-more-than-compliance","status":"publish","type":"post","link":"https:\/\/microvibenews.com\/?p=23281","title":{"rendered":"R700bn procurement crisis demands more than compliance"},"content":{"rendered":"<p><\/p>\n<div id=\"textFreeArticle\">\n<p><iframe loading=\"lazy\" src=\"https:\/\/iframe.iono.fm\/e\/1647966?layout=modern\" width=\"100%\" height=\"170\" frameborder=\"0\" data-mce-fragment=\"1\"><\/iframe><\/p>\n<p>You can also listen to this podcast on iono.fm here.<\/p>\n<p><strong>J<\/strong><strong>EREMY MAGGS:<\/strong> New estimates are suggesting procurement fraud and irregular expenditure may have cost South Africa as much as R700 billion. Despite years of reform, scandals continue and consequence management remains painfully slow. It\u2019s a worrying situation.<\/p>\n<p>Paul Vos is with me now from the Chartered Institute of Procurement &amp; Supply (Cips), and he says that compliance alone is not going to fix the system. Fundamentally, behaviour has also got to change.<\/p>\n<p>Paul, a very warm welcome to you and let\u2019s get to that R700 billion, it is a staggering number. How realistic is that?<\/p>\n<p><strong>PAUL VOS: <\/strong>It\u2019s very realistic, Jeremy. We have a very strong legislative framework in South Africa.<\/p>\n<p>The issue isn\u2019t that our reforms are focused overwhelmingly on compliance, so the paperwork, the processes, instead of the actual behaviours and the capabilities that we need to apply that legislation effectively.<\/p>\n<p>Listen\/read: Macpherson: Poor performers will be blacklisted from state projects<\/p>\n<p>So you end up with a system that looks really, really good on paper, but it doesn\u2019t always work in practice. So that\u2019s the situation we find ourselves in.<\/p>\n<p><strong>JEREMY MAGGS: <\/strong>So it\u2019s about behaviour and capability. Where specifically then does it fail in practice if the reforms look good on paper.<\/p>\n<p><strong>PAUL VOS: <\/strong>I think one of the biggest issues is around capability. We place these highly complex, high-value procurement responsibilities on people who don\u2019t necessarily have the training as procurement professionals.<\/p>\n<p>Even the best legislation can\u2019t compensate for that capability gap.<\/p>\n<p>Another issue that we see quite a lot from Cips\u2019 perspective is around misaligned authority.<\/p>\n<div class=\"visible-sm-block visible-xs-block m1010\">\n<div class=\"ad-container-wrapper\">\n<p>ADVERTISEMENT<\/p>\n<p>CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n<p>So junior staff often do all the operational work, while senior officials who may not have the requisite procurement expertise are the ones who are approving decisions. So that mismatch then leads to bottlenecks and inconsistent judgment.<\/p>\n<blockquote>\n<p>Also on the contract side, there\u2019s often contract misalignment as well, which is arguably where most of the of the problems lie.<\/p>\n<\/blockquote>\n<p>Many audit findings we see don\u2019t come from the tender process itself, but from what happens after the award.<\/p>\n<blockquote>\n<p>After the award there are issues like weak oversight, there\u2019s scope creep \u2013 and we\u2019re familiar with many, many government projects in South Africa that have extensive scope creep \u2013 there\u2019s late delivery, there\u2019s poor supplier management.<\/p>\n<\/blockquote>\n<p>So all those issues are fundamental.<\/p>\n<p>Then around the professional independence, procurement can\u2019t be done well when officials are under pressure and whether that pressure is political or internal.<\/p>\n<p>So without that independence, good governance collapses. So that\u2019s where we see some of the fundamental issues.<\/p>\n<p><strong>JEREMY MAGGS: <\/strong>How big an obstacle is political interference then when it comes to clean procurement?<\/p>\n<p><strong>PAUL VOS: <\/strong>I think that there\u2019s interference on multiple levels and I think that political interference really plays a part in terms of ensuring that there\u2019s transparency around tender processes.<\/p>\n<blockquote>\n<p>What we\u2019re seeing is that we need to divorce the political side of governance from the process of awarding tenders and awarding contracts to suppliers.<\/p>\n<\/blockquote>\n<p>I think the political side of things, given our history and given some of the issues that are in the public space, really needs proper attention from our lawmakers.<\/p>\n<p><strong>JEREMY MAGGS: <\/strong>You don\u2019t think that process has just become too entrenched? It\u2019s almost impossible to fix now. It\u2019s almost part of the currency of the deal.<\/p>\n<p><strong>PAUL VOS: <\/strong>I\u2019m a glass half empty person. I do think that there\u2019s opportunity for us to shift. I think there are opportunities.<\/p>\n<div class=\"visible-sm-block visible-xs-block m1010\">\n<div class=\"ad-container-wrapper\">\n<p>ADVERTISEMENT:<\/p>\n<p>CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n<p>If we look at systems like e-procurement systems, if we have transparency around suppliers, if we have transparency around beneficiation, I do think that there are opportunities for us to arrest this issue, but it\u2019s going to take a massive amount of effort.<\/p>\n<p>Read: Day of reckoning coming for non-performing construction contractors<\/p>\n<p>What is interesting is that if we look at some of our neighbouring countries, they\u2019ve already implemented e-procurement systems.<\/p>\n<p>In South Africa, I\u2019m led to believe that National Treasury is only looking at perhaps March 2027 to introduce an e-procurement system. Once those types of systems come into place, there\u2019s a lot more transparency.<\/p>\n<p>That transparency then leads to public confidence. It leads to much higher visibility around what is happening with the public purse and public spending.<\/p>\n<p><strong>JEREMY MAGGS: <\/strong>I accept that, but there is the argument, of course, that digital procurement designed to reduce fraud, but there\u2019s also the risk of just creating new workarounds.<\/p>\n<p><strong>PAUL VOS: <\/strong>Well, I think this is the thing about the e-procurement systems.<\/p>\n<p>There are a multitude of different platforms available to procurement professionals, and this is why we need to be very, very cautious about which e-procurement systems we adopt and obviously, that we have to ensure that any workarounds within those systems have a very robust and transparent audit process so that any workarounds, again, need to be visible, need to be transparent and need to be available to all key stakeholders in terms of justification for those workarounds.<\/p>\n<p><strong>JEREMY MAGGS: <\/strong>Paul, I mentioned in my introduction, consequence and the reality or the problem that I see is that senior officials very rarely face swift consequences for procurement failure. Unless that side of the equation is dealt with, the discussion we\u2019re having here is just academic, surely?<\/p>\n<p><strong>PAUL VOS: <\/strong>I think that\u2019s true because behaviour doesn\u2019t change just because rules exist, and it changes when incentives line up with the outcomes that we, as citizens, really, really want.<\/p>\n<p>Read: Allegations of fraudulent payments amounting to billions at Prasa<\/p>\n<p>At the moment, most officials are more afraid of making an admin mistake than making a poor commercial decision. So that dynamic has to has to change.<\/p>\n<blockquote>\n<p>What we need to do, and I\u2019ve mentioned this earlier around professionalisation, it\u2019s important, we need to professionalise procurement.<\/p>\n<div class=\"visible-sm-block visible-xs-block m1010\">\n<div class=\"ad-container-wrapper\">\n<p>ADVERTISEMENT:<\/p>\n<p>CONTINUE READING BELOW<\/p>\n<\/p><\/div>\n<\/div>\n<\/blockquote>\n<p>If you think about it, you wouldn\u2019t let somebody practice as an accountant or an engineer without proper credentials.<\/p>\n<blockquote>\n<p>Procurement officials really need to hold some sort of recognised professional qualification.<\/p>\n<\/blockquote>\n<p>From our experience, we see that many, many practitioners in the public sector are seconded from other parts of the business, whether it\u2019s operations or finance, so they don\u2019t necessarily have those skills.<\/p>\n<blockquote>\n<p>So when you raise the bar to entry, decision making improves. Then around consequences, we need predictability around the consequence.<\/p>\n<\/blockquote>\n<p>At the moment there\u2019s a lot of inconsistency, as we\u2019ve mentioned also, it\u2019s influenced by politics, unfortunately.<\/p>\n<p>So if someone knowingly breaks the rules, there should be automatic sanctions, whether it\u2019s around the loss of their delegation or suspension of a professional registration or blacklisting, in serious cases.<\/p>\n<blockquote>\n<p>When people know those consequences are real, then behaviour will shift. But until that happens, we\u2019re not going to see a shift.<\/p>\n<\/blockquote>\n<p>I think it\u2019s also important to be able to reward outcomes, not just compliance.<\/p>\n<p>So if we have clean audits, if we are able to reduce irregular expenditure, if we see and experience better supplier performance, those are indicators really of good procurement.<\/p>\n<p>Read: DA proposes bill to end race-based procurement<\/p>\n<p>So when institutions recognise and reward that, people start focusing on results rather than just the box-ticking exercise, which doesn\u2019t really bring us the results that we need in terms of addressing this critical issue.<\/p>\n<p><strong>JEREMY MAGGS: <\/strong>Thank you very much indeed. In conversation there with Paul Vos from the Chartered Institute of Procurement and Supply.<\/p>\n<p><em>Follow Moneyweb\u2019s in-depth finance and business news on WhatsApp here.<\/em><\/p>\n<\/p><\/div>\n<p><script data-cfasync=\"false\">\n            !function(f,b,e,v,n,t,s)\n            {if(f.fbq)return;n=f.fbq=function(){n.callMethod?\n                n.callMethod.apply(n,arguments):n.queue.push(arguments)};\n                if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version='2.0';\n                n.queue=[];t=b.createElement(e);t.async=!0;\n                t.src=v;s=b.getElementsByTagName(e)[0];\n                s.parentNode.insertBefore(t,s)}(window, document,'script',\n                'https:\/\/connect.facebook.net\/en_US\/fbevents.js');\n            fbq('init', '779812924991616');\n            fbq('track', 'PageView');\n        <\/script>#R700bn #procurement #crisis #demands #compliance<\/p>\n","protected":false},"excerpt":{"rendered":"<p>You can also listen to this po&hellip; <\/p>\n","protected":false},"author":1,"featured_media":23282,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[4],"tags":[2265,359,4545,1527,13702],"_links":{"self":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/23281"}],"collection":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=23281"}],"version-history":[{"count":0,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/23281\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/media\/23282"}],"wp:attachment":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=23281"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=23281"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=23281"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}