Abstract
This study attempted to gain an understanding of the causes and challenges related to MSMEs’
low levels of participation in public procurement in Gauteng, and how best to accelerate and
assist MSMEs in penetrating public and corporate procurement. The researcher used the
mixed-research or triangulation method to conduct the research. This approach is based on the
premise that no single research method would assist with the attainment of study outcomes or
objectives; instead, the researcher preferred a complementary approach.
Primary data were gathered through interviews and questionnaire feedback from supply chain
experts, business analysts, and economists, among others, while secondary data were collected
from reports, articles and other data sources. The study found that while the government
established measures to advance the transformative agenda, made empowerment provisions
(such as the public preferential procurement set-aside for township businesses, women-owned
businesses, youth-owned and people with disability), localisation and other means, public
procurement continues to benefit non-township businesses. The study attributes townshipowned
businesses’ low procurement level to the government’s inability to structure and align
development finance institutions (DFIs) with the transformative agenda.
While the study acknowledges the mismatch between the provincial mandate and resource
alignment to drive the transformative agenda, most DFIs do not have a specific programme
that assists MSMEs to leapfrog and transition to higher levels of development. Instead, they
provide a one-size-fits-all or ‘spray gun approach’ that is not tailored to MSMEs’ unique needs.
The Gauteng province has also failed to leverage the proximity of institutions of higher
learning, banks and the private sector to assist MSMEs in penetrating and transforming the
economy’s current structure. The study found that MSMEs’ current development finance
model would not change the economy’s structure unless there is a change in the current DFI
structure that favours well-established businesses and is pro-market in orientation (putting
profit before development).