Government could blacklist over 500 companies in South Africa
Finance Minister Enoch Godongwana revealed that more than 500 companies could soon be barred from doing business with the state.
This forms part of a wider effort by the government to crack down on corruption, fraud, and non-performance in public procurement.
In a recent parliamentary Q&A, Godongwana said that 509 companies and individuals had been flagged for possible blacklisting, with 18 already restricted from working with the government.
The remaining 491 cases are still under review, awaiting proper referral and documentation from the organs of state responsible for initiating the process.
Godongwana explained that the Presidency had formally referred the 509 cases to the National Treasury on 20 September 2025.
Treasury then contacted the relevant government entities—among them Eskom, Umngeni Water Board, and Transnet—to follow up on the required paperwork.
Some, such as the MICT SETA, had already submitted their requests, although certain cases remain outstanding.
Others, like the Free State Provincial Treasury, had their submissions returned due to “insufficient information”.
According to Godongwana, this is a key reason why hundreds of companies identified for blacklisting have not yet been formally restricted.
“National Treasury does not initiate the restriction but facilitates the process of loading the restriction on the database of restricted suppliers,” he said.
For a company to be blacklisted, the process must be initiated by the organ of state affected.
“In the absence of requests from the organs of state, National Treasury cannot restrict the affected suppliers,” he added, noting that even though the Special Investigating Unit (SIU) may flag wrongdoing, the legal process must still be followed.
Earlier this year, the Department of Public Works announced plans for a national database of delinquent contractors and consultants.
This includes those who fail to deliver on building projects, perform substandard work, or engage in corruption.
Public Works Minister Dean Macpherson said the system will prevent blacklisted companies from resurfacing in another province or bidding for work through a different department.
All provinces will establish a “restriction committee”
Macpherson noted that the scale of public frustration over non-performing contractors has been impossible to ignore.
He said that South Africans have witnessed countless project failures, often linked to disappearing budgets, poor planning, and a lack of accountability.
In response, he said his department has been forced to confront the systemic failure behind these problems and to rethink how the state deals with delinquent suppliers. “We’ve sought to look at what the root causes are,” he said.
Macpherson made it clear that the era of no consequences is over. In just 12 months, Public Works has blacklisted 40 companies, compared to just one company blacklisted over the previous 22 years.
“It should be an honour to do business with the state. Unfortunately, it’s seen as an opportunity to rip off the state,” he said.
“So I don’t care who you are or what membership card you carry. If your business doesn’t perform, you will be blacklisted, and you won’t be able to operate anywhere.”
One of the biggest obstacles is that many contractors simply rebrand themselves and return under new company names or shell entities.
According to Macpherson, provincial governments warned that this practice had become widespread.
Macpherson said provinces themselves raised this issue, and the solution was found in Limpopo, which created a “restriction committee” to track individuals and companies that fail to deliver.
“They get added to the restriction committee, and that then gets shared with municipalities and other spheres of the state,” he explained.
All provinces will now be required to establish these committees, which will feed data into a central database managed by the Construction Industry Development Board.
Once flagged, “no arm of the state can or should do business” with those individuals or firms, and Treasury will also receive the list.
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