Africa-Press – South-Africa. The National Treasury has published the draft General Public Procurement Regulations for public comment, which could lead to sweeping changes to procurement legislation and black economic empowerment (BEE) in South Africa.
The Treasury explained that, due to the length and complexity of the draft General Public Procurement Regulations, a longer consultation period has been given for submitting public comments.
These regulations, if passed, will bring into effect the Public Procurement Act, which President Cyril Ramaphosa assented to in July 2024.
This Act has been controversial since its inception, as various parties have supported or opposed the new procurement rules, and the draft General Public Procurement Regulations are set to be no different, particularly regarding BEE requirements.
Under the draft General Public Procurement Regulations, companies that wish to do business with the government must demonstrate that a large percentage of their prior procurement was with majority black-owned businesses.
Specifically, the regulations state that companies must show that at least 40% of their prior procurement was spent on enterprises that are at least 51% owned and managed by black persons.
This detail, and other specifications in the regulations, show the Treasury’s commitment to ensuring BEE in the new legislation.
This comes at a time when BEE policies are increasingly under scrutiny, both within and outside the government.
It also comes as Trade Minister Parks Tau is developing the idea of a new Transformation Fund, which many suspect may replace BEE policies as they’re currently understood.
Ramaphosa previously explained that this Transformation Fund will be used to support black-owned and small businesses, though he rejected suggestions that BEE should be abandoned.
While details are still lacking, it is believed that the Transformation Fund will be funded by companies that choose to contribute 3% of their net income.
Companies that do so will earn double the BEE points currently available for their contributions towards enterprise and supplier development.
This setup has led some, including Efficient Group chief economist Dawie Roodt, to refer to the Transformation Fund as an effective “empowerment tax” that South African companies can pay rather than deal with complex BEE scorecards.
Public procurement in the spotlight again
Minister of Trade, Industry, and Competition Parks Tau
The Public Procurement Act, which the Treasury’s draft General Public Procurement Regulations are seeking to give effect to, is intended to close loopholes and improve South Africa’s procurement processes.
South Africa’s weak procurement regulations and enforcement have been a thorn in the country’s side for years, having been exploited by various bad actors seeking to profit.
On 9 April 2026, the Institute for Race Relations’ (IRR) Makone Maja explained that South Africa’s public procurement rules have been weaponised against citizens and require a major overhaul.
“Public procurement processes are often more amenable to abuse by opportunistic and corrupt officials seeking self-enrichment,” Maja said, specifically in reference to revelations made during the Madlanga Commission.
“The IRR hopes the Madlanga Commission will go further in establishing the role of BEE as the glue that binds procurement to wasteful expenditure through BEE premiums, as well as corruption and capture through patrimonialism.”
“This golden thread runs through both the Zondo and the Madlanga commissions, which have effectively investigated the same issue.”
Maja explained that both of these commissions uncovered state capture by private interests who collude with politicians and others in public office.
This collusion, she said, is done to exploit procurement processes in a bid to enrich themselves at the expense of critical state institutions most South Africans depend on for basic services.
“As the retired Justices Madlanga and Zondo reach similar conclusions regarding public procurement rules, we must demand that their recommendations regarding procurement and BEE be reflected in all institutions and laws,” Maja said.
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