The role of preferential procurement in promoting historically disadvantaged SMMEs : evidence from Ekurhuleni Municipality

Rantseli, Palesa (2011-03)

Thesis (MDF)--Stellenbosch University, 2011.


Small, medium and micro enterprises (SMMEs) play an important role in the economic growth and development of any economy. They contribute to the goals of growth, equity, job creation and poverty reduction in different ways. Given the importance of the SMME sector, governments throughout the world including the South African government, have focused their attention on the development of this sector to promote economic growth, income distribution and employment opportunities. Most SMMEs in South Africa fail due to a variety of reasons, including a lack of access to markets, which is one of the critical factors for the survival and growth of SMMEs. The government of South Africa has introduced the Preferential Procurement Policy Framework Act (Act 5 of 2000) to address the challenge of market access for SMMEs. The Act is aimed at utilising the purchasing power of government as an instrument of SMME development. SMMEs, especially those owned by historically disadvantaged individuals, are afforded an opportunity to access markets they would otherwise find difficult to penetrate. Given the importance of access to markets to SMMES, the study seeks to analyse the role of preferential procurement in Local Government with specific reference to Ekurhuleni Metropolitan Municipality (EMM), as an instrument of promoting the development of historically disadvantaged SMMEs in South Africa.

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