Big development for businesses in South Africa that want to partner with government

South Africa enacted changes to its public finance laws that will reduce the red tape for projects valued at less than R2 billion where the government partners with private businesses. 

The amendments to Regulation 16 of the Public Finance Management Act also introduce the concept of unsolicited proposals, where a company can pitch ideas for projects to a state institution instead of first waiting for the government to request bids. 

The National Treasury first proposed the amendments in February last year and published the changes in a government notice on Feb. 7. They take effect from June 1. 

With finances of the state and government-owned companies “hollowed out,” public-private partnerships “are the best chance we have,” Business Leadership South Africa Chief Executive Officer Busisiwe Mavuso said in August. 

Weak economic growth that’s averaged less than 1% annually over the past decade has left the National Treasury with few options to reduce debt repayments that consume more than a fifth of its budget and fund a rising wage bill without cutting spending to government departments.