Treasury seeks to tighten PPE procurement

And Mboweni clarifies reports on tender corruption and the IMF bogeyman.
Budgets have deficits and those holes need to be filled, says Finance Minister Tito Mboweni. Image: Dwayne Senior, Bloomberg

In the wake of reports that Covid-19 funds are under siege from supposed covidpreneurs, Finance Minister Tito Mboweni has said that National Treasury is looking into tightening procurement processes which might include centralising the procurement of personalised protective equipment (PPE).

Mboweni was speaking during the National Assembly debate of the Adjustments Appropriation Bill, in which opposition parties raised criticism on supposed tender fraud related to Covid-19 funds.

The assembly passed the bill, which looks to reprioritise government spending in order to account for the health, social and economic needs necessitated by the Covid-19 pandemic. 

Revenue is expected to fall by some R304 billion this year due to the Covid-19 economic restrictions implemented by government and the disruptions in global supply chains. The pandemic fallout has left Treasury with a record-high budget deficit of 15.7% of GDP compared to the February budget forecast of 6.8%. 

Malfeasance 

“We have been reading reports about possible acts of corruption with some of the contracts awarded with respect to Covid-19 equipment,” said Mboweni. 

“To that extent, I have had discussions with the National Treasury director-general and his exco to see how we can further tighten these procedures in this regard.

“One of the things we are thinking about is how to centrally purchase some of the equipment required, given the capacity issues between ourselves and the national Department of Health.” 

Read: No room for complacency in implementing reforms: Treasury

The Special Investigating Unit (SIU) is investigating a number of tenders that appear to have been awarded irregularly. This follows President Cyril Ramaphosa signing a proclamation empowering the unit to probe corruption in the awarding of Covid-19 funds. There have also been reports that politically exposed persons may be linked to irregular tenders. 

But Mboweni also tried to dispel the notion that all contracts awarded for Covid-19 needs were innately corrupt. 

“I must emphasise that the feeding frenzy that is going on now in the country, that every contract or tender issued is equivalent to corruption, is incorrect and to assume that a tender that is R125 million is a gift to someone is incorrect,” he said. 

“That allocation must still go and buy the relevant goods.”

The devil is in town 

Mboweni also moved to set the record straight about the nature of the $4.3 billion loan from the International Monetary Fund (IMF), saying the perception that the “biggest devil has arrived in town” is also wrong.

The finance minister explained that every year when the budget is tabled Treasury lays out the revenue, expenditure and the shortfall for that financial year. 

This shortfall, or funding gap is normally plugged through domestic and international borrowing on the bond market – which Treasury refers to as the “annual borrowing requirement”. 

Read: SA may give in to IMF by introducing debt ceiling

Last year, when South Africa was not battling a health and economic crisis stemming from a pandemic, the government borrowed $5 billion on the international bond market. The bond’s interest rates were much higher than the very low 1.1% interest rate attached to the IMF loan, said Mboweni. 

He said government-issued Treasury bonds are auctioned on a weekly basis in the domestic market to make borrowings of up to R20 billion a week to finance the funding shortfall.

“The R70 billion or so loan from the IMF pales in significance to these weekly borrowings that we do and the international bond issues, if we had to do any,” said Mboweni.

The IMF loan, which is a rapid funding instrument for emergency situations, also does not come with structural adjustment conditions that are traditionally attached to its loans. But the government has made a number of commitments related to stabilising debt and implementing reforms in its Letter of Intent motivating for the approval of the loan.

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Treasury hasn’t been able to tighten spending by run-away thieving Municipalities, or procurement by governments, let alone State Owned Enterprises, in nearly 25 years. Twenty-five years!!!

What makes you believe that they are going to get proper control over spending on Personal Protective Equipment?

If you believe, that nonsense, I got an Eiffel Tower and a bridge to sell to you. Just give me a call.

Now that a number of cases have been highlighted in the media now the so called “corrective action” is taking place. Same old, same old.
When we see a number of offenders in orange overalls will we start believing this political double talk.

They are kind of like Apple products. Send it out and fix it later???????? HMMMMMMMMMMMMMMMMMM

And it never crossed their minds to put something in place before they “spend” the money.

Yet these are all despicable ANC cadres at work that should know their own kind?

There are no good people left in the ANC and if there were they should walk away very quickly.

Devoid of any human dignity this lot. To steal the money that is supposed to help the nation in a pandemic? You honestly don’t get lower than that.

The fact that the leadership allowed it shows the caliber. Evil greedy “humans”.

You do get lower, you can steal the money supposed be spent on funerals

You are right!

And they do both.

On some of the other social media platforms I get the feeling more and more people are fed up with this lot now. From the top to the bottom.

I am talking of mostly local people. Its time they pay these thieves.

Make all state Procurement transparent by law and accessible over the internet.

Also make strategic Procurement for things like PPE, water, electric, food etc only subject to quality and price, not bee.

Clever, this lets us all feel better and sleep at night. Such a weight off my shoulders, no need to stress and worry, all is in good hands.

Meanwhile at night the rats are eating the cheese…….

A positive take here is that the ANC have been quick to admit there is fraud and failure in delivery. This is, in my opinion, a big plus.
Now they must go the next step and punish those involved with theft and fraud…not only in this case, but in all current cases that have marginalized South Africa and reduced us to a bankrupted nation.
Actions speak louder than words – the ANC must now do the right thing to regain credibility and live up to Mandela’s dream of a fair, equal and Democratic society.

Don’t hold your breath. You cannot pull yourself out of the water to prevent drowning.

Mac, my view is that the admission and hard talk was just talk to sucker the IMF into thinking the money borrowed would be spent honestly. We’ve heard it all before with less than zero result. I give you Gordhan and the SAA black hole.

Ban BEE and publicise tender awards and processes.

A written contract or agreement does not have some magical supernatural powers that guarantee compliance and morality. It is merely an agreement between two parties. It is of no use to enter into an agreement with an unethical person and then try to enforce morality and compliance with a piece of paper that has signatures on it.

Treasury has been trying to enforce accountability for many years now. They have been tightening procurement procedures forever. They are wasting their time. They chose the wrong partners. They have contractual agreements with criminals. With the first, superficial glance, the idea of a developmental state, cadre-deployment, EE and empowerment seems so correct, moral and just, but after some deeper analysis, it becomes clear that this concept is nothing but legalised plunder.

The Treasury has knowingly and willingly entered into agreements with people who were put in positions of power through a process of legalised plunder. How, in their right minds, can Treasury now expect these people to pay any attention to their “tightening procurement processes”? Treasury is an arm of government. The rest of this body of the government relies on legalised plunder to survive. Can the arm choke the body?

Any tightening of procurement measures from the Treasury is a farce, a smokescreen to fool the investors who are funding the looting.

They need to pass a ‘bill’ to try and keep things honest? Really?

Tighten up! That is what treasury has been doing forever. If someone is dishonest, instead of dealing with the dishonest person, they make a few more regulations or they centralize. Now the central guys can do the looting. The moment the incompetent and dishonest people are issued with orange suits, if the money is recovered from them, this will stop. But to do that there must be the political will, right from the top. Sadly, it just is not there.

How about converting Robben Island back to what is was with CR’s bullet train running 24/7 on a circular route from Union Buildings.

Zuma the first passenger with a one way ticket, followed by Ace, Mosebenzi, NDZ, et al.

This is not rocket science

Force all municipalities to publish all tenders (which I think they do) and then publish all tenders fulfilled – pricing,specs,company,directors and shareholders – NOT DIFFICULT

me thinks this would be asking too much – really ??

Has anyone checked on the IMF loan. The ANC looters move quickly – the only time when they show any urgency – and maybe it’s all gone! Let’s be honest, the ANC looters are not vilified, they’re regarded as legends within the organisation.

End of comments.

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