Status of Cooperative Banks Act, Public procurement opportunities and red tape, NT funding for MSMEs and cooperatives

Video The Committee convened to receive a briefing on the status of the Cooperative Banks Act, public procurement opportunities, red tape, and the role of National Treasury in supporting micro, small and medium enterprises (MSMEs) and cooperatives. National Treasury presented an overview of the Public Procurement Act, which had been signed into law in 2024 but had not yet come into force. It explained that implementation would occur through phased proclamations once the regulations were finalised. The new Act would replace several existing legislative instruments, including the Preferential Procurement Policy Framework Act (PPPFA), but the current procurement framework under the Public Finance Management Act (PFMA), the Municipal Finance Management Act (MFMA) and related regulations would remain in effect until the new system was fully operational. Treasury reported that the regulations were at an advanced stage and were expected to be promulgated by next March, enabling implementation from the 2026/27 financial year. Members were also briefed on persistent failures by departments to pay suppliers within 30 days, a requirement set out under the PFMA and reinforced through Treasury regulations. The Committee was informed that late payment continued to have severe consequences for small businesses, many of which operated with limited financial reserves. Treasury reported that billions of rands in invoices were being paid late across national and provincial departments, with a growing number of invoices remaining unpaid beyond the financial year-end. These delays constituted risks of fruitless and wasteful expenditure and potential financial misconduct. Members expressed dissatisfaction with the lack of accountability, and emphasised that enforcement mechanisms needed to be strengthened. During the discussion, Members raised concerns that several items on the agenda, including the status of the Cooperative Banks Act and National Treasury's role in increasing access to funding for MSMEs and cooperatives, had not been covered. They called for stricter enforcement of the 30-day payment requirement, highlighted barriers created by costly and cumbersome tender documentation, and noted weaknesses in the preferential procurement framework, which they said enabled circumvention of transformation objectives. Concerns were also raised about dysfunctional municipalities, the absence of clear timelines for implementing the Public Procurement Act, red tape affecting prospective bidders, and inadequate support for local industrialisation, township and rural enterprises. Members also expressed concerns regarding the centralisation of procurement within the Public Procurement Office (PPO), questioning whether adequate capacity, funding and safeguards against political influence were in place. They commented that several terms in the Act lacked clear definition, and that the absence of robust monitoring, enforcement and accountability mechanisms risked weakening oversight and undermining transformation. The Committee also discussed issues relating to the private sector, including limited participation of small enterprises in wholesale and retail value chains, high compliance costs, bid cancellations, and unreliable digital procurement platforms. In response, Treasury acknowledged delays in finalising the regulations, but emphasised that an extensive participatory approach had been adopted to ensure inclusivity. It confirmed that draft regulations would be submitted to Parliament for a mandatory 30-day review period, followed by publication for public comment. It also outlined progress on regulatory development, the distinction between infrastructure procurement and routine procurement, the balancing of cost-effectiveness with transformation, and plans for the tribunal envisioned to assist small businesses disputing tender outcomes. It undertook to return with a full briefing on the Act and on outstanding matters requested by the Committee.