Procurement Dynamics and Threats in South African Local Government

• Pages: 176-186
• Date: 01 December 2021
• Published date: 01 December 2021
• Author: Nokele Sonayena Kenneth,Shopola Moraka Arthur
• Subject Matter: Derecho Público y Administrativo

European Journal of Economics, Law and Social Sciences

IIPCCL Publishing, Graz-Austria

Special Issue

December, 2021

ISSN 2519-1284

Acces online at www.iipccl.org

221

Procurement Dynamics and Threats in South African Local Government

Nokele Sonayena Kenneth

Shopola Moraka Arthur

Tshwane University of Technology

Abstract

There is general consensus among global corruption combating organisations, academics,

policy – makers alike and supply chain practitioners that public procurement is one of the

most vulnerable government activities when it comes to corruption. South African local

government is no exception. Since from its early years, South Africa’s local government system

has demonstrated inertia to deal with procurement fraud and corruption. As a result, billions

of rand have been lost to procurement corruption, with the Auditor-General (AG) South Africa

countlessly agging tendering fraud that perpetually cripples municipalities (AG, 2011/2012 -

2019/2020). This article was qualitative in nature and analysed data collected from secondary

sources such as government reports, scholastic outputs, and journal publications. As the article

found, there is reluctance by municipalities to detect symptoms related to tendering fraud.

This is because the available legal instruments are deliberately ignored. Unethical leadership,

recklessness by the involved ocials and lack of reward systems for ethical practices amongst

others are blameable for intentional fraudulent and corrupt activities in the procurement

system. As part of contribution, the article culminated into a practice-based approach which

suggest a number of actions municipalities need to take, and these include strengthening

whistle blowing strategy and establishing independent institution that is solely responsible

for combating procurement corruption at the local sphere of government.

Keywords: Ethical leadership, public sector, municipalities, tendering, South Africa.

Introduction and Context of The Study

“While most countries have made lile to no progress in tackling corruption in nearly a decade,

more than two-thirds of countries score below 50” (Corruption Index Report, 2020:4).

The quest to have a practice-based model in controlling, detecting, and responding to

fraud and corruption in government procurement practices has grown inconsolably

not only in South Africa but the whole world. Notably, there is general consensus

among global corruption combating organisations, academics, policy – makers alike

and supply chain practitioners that public procurement is one of the most vulnerable

government activities when it comes to corruption. The Organisation for Economic

Co-Operation and Development (OECD) Bribery Report (2014) shows that in 2014,

57% of corrupt activities in the public sector resulted purely from public procurement.

In South Africa, more than 50% of the allocated R 800 billion procurement budget in

the 2016/2017 f‌inancial year was lost to intentional abuse of the system, with R14.8

billion already being investigated by the Special Investigating Unit for procurement

irregularities (Institute for Security Studies, 2021; Corruption Watch, 2020).

Municipalities are no exception from the above problems as they report lost billions