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Finance minister Enoch Godongwana addressed attendees at the National Treasury’s third Public Finance Management Conference which took place on 20 September 2023. The theme was Innovative and Agile Public Service Funding and Delivery during Volatile, Uncertain, Complex, and Ambiguous (VUCA) Times.
Godongwana had a few profound things to say about public procurement in light of the “tremendous strain” on government finances at the moment. Factors contributing to the undesirable situation include lower than expected tax revenue, ongoing load shedding, poor performance of logistics sectors, and the lasting damage done to public institutions by state capture.
Ethical procurement, he said, is an imperative. This will ensure efficient use of public funds and enable government to deliver on its constitutional mandate of providing services, rather than the generally irregular situation that has been seen in recent years.
“Ethical sourcing of goods and services through public procurement stands as an unassailable priority. Non-compliance with ethical standards in procurement can have far-reaching consequences, compromising the integrity of our financial processes.”
A recent report on certain aspects of public procurement, released on 20 September 2023 by Corruption Watch and procurement expert Prof Geo Quinot, highlights the need for reform in this sector. Among others, it shows that there is great cause for concern in terms of the significant increase of 247% in reported deviations from 2021 to 2022/23, especially as the numbers had been decreasing overall since 2017.
“That in itself is a red flag and one must ask questions about this, and this calls for interrogation to see whether there are good reasons for more deviations being noted or whether there is some abuse going on there,” Quinot said.
Consequence management
Another crucial element for responsible fiscal governance, said Godongwana, is consequence management.
“Accountability, transparency, and ethical financial stewardship are the pillars upon which we build and nurture trust with our fellow South Africans.”
Therefore, he added, it is of vital importance that individuals and entities be held accountable for financial misconduct.
“Without swift and fitting consequences, we risk eroding public trust in our capacity to manage public funds effectively, with less and less funding available to deliver much-needed services to our people.”
That ship has sailed, though, as public trust in government’s capabilities reached an all-time low back in 2021, with no more recent data to indicate that the trend has reversed.
Godongwana continued optimistically: “We can draw inspiration from best practices in audit functions. Rigorous and independent audit practices play a pivotal role in unearthing corruption and financial mismanagement, providing invaluable insights and recommendations for the judicious utilisation of public funds.”
Steps to be taken, he said, include leveraging technology, collaborating across sectors, and putting citizens at the centre of decisions.
