Procuring for Innovation, with Innovation
Speech by Deidré Baartman
Western Cape Minister of Finance
5th International Conference on Public Procurement Regulation and Policy in Africa
Stellenbosch
12 September 2025
“Procuring for Innovation, with Innovation”
Ladies and Gentlemen,
African Procurement Law Unit,
Colleagues in the Finance and Legal sectors.
INTRODUCTION
Public money becomes real only when it shows up in people’s lives. A streetlight that works at night. A staffed clinic that has medicine on the shelf. A classroom where books arrive before the term begins. Procurement is the bridge between a budget line and that lived result. Government budgets set the intent. Procurement turns that intent into buses that run, classrooms that open, and pipes that carry water. When public procurement works well, people feel it. When it falters, they feel it even more.
The Western Cape Government (WCG) has been reforming our procurement engine so that it is smarter, faster, and more practical. Our task is simple to state and hard to execute. It is to spend each Rand in a way that stretches its reach and not only delivers but improves the service the public receives. That requires steady reforms, patience with detail, better planning upfront, competition that is real, contracts that are managed, and data that is open to scrutiny.
While fairness, value-for-money, and trust have always been embedded in our systems, given the national fiscal constraints, provinces have to do much more with less and increasingly for more people. This means, we need to shift to procuring for innovation, and through innovation.
First, fairness requires us to procure in a manner that is competitive and transparent.
Secondly, we have, and will continue to focus on value-for-money to make sure we stretch every Rand as far as possible.
Third, if we wish to be a government you can trust, then we must disclose who we procure with, what we procure, how we procure, and the outcomes of our procurement system. That’s why we publish our Public Procurement Disclosure reports quarterly and annually.
Finally, between 2016 and 2025, the Western Cape’s population expanded by 18.0 per cent, or 1.162 million people.
A further 1.127 million residents are expected by 2035, requiring long-term planning for infrastructure, housing, and social services. This outpaces our GDP growth, growth in net jobs, decline in Gini-coefficient and even our increase in our Human Development Index metrics.
Our provincial replacement level (the average number of children the ‘average woman’ needs to have so that, when she and her partner eventually pass away, the population can essentially “replace” itself and stay the same size) has dropped below the international norm of 2.1. Between 2001 and 2026, the Western Cape fertility rate declined from 2.27 to 1.79. This means our population growth is driven by in-migration.
When considering this within our national fiscal constraints, it means we need to be more innovative in order to grow our economy and create jobs.
And this is where the hard part comes in. How do we procure for innovation and how do we procure using innovation? Compliance is the easy part, but procuring for goods and services that don’t exist yet, while remaining within the framework of Section 217 of the Constitution – that is the hard part.
For the 2024/25 financial Year, the Western Cape Government’s total procurement spend was R20.99 Billion, of which 41.83% was for the Department of Health and Wellness (R8.8 Billion), followed by the Department of Infrastructure (R5.5 Billion), and the Western Cape Education Department (R3.7 Billion).
Our top commodities were property payments (15.76%), other fixed structures (14.56%) and medical supplies (10.07%).
I will start off by addressing how we embed fairness, value-for-money, and trust in our system.
FAIRNESS: GOVERNANCE AND CLEAN ADMINISTRATION AS THE FOUNDATION
In public service, fairness is not a preference, it's an obligation. It promotes competition and transparency alike. It is a mechanism that protects public money while opening doors for capable businesses, large and small. For the Western Cape Government, this means building a procurement system where the rules are public and predictable, the criteria are set in stone before a tender is advertised, conflicts of interest are managed transparently, and every key decision is justified and recorded. These are the essential guardrails that keep our entire system fair.
This is why, in the Western Cape Government, our e-Procurement System (ePS) automates procurement for transactions up to R1 million, reducing paperwork, speeding up decision-making, and ensuring a fair, competitive environment for suppliers. This system helps government departments manage their procurement more efficiently and ensures that suppliers have a smoother, more accessible experience.
This system has been in place since 1999, when the WCG employed an e-Procurement solution for transactions up to R500 000, and on 01 December 2021, the WCG launched an upgraded in-house ePS, extending its capacity to handle procurements up to R1 million.
Our ePS includes our Western Cape Supplier Evidence Bank (WCSEB), a central repository for essential supplier documentation. The WCSEB uses the Central Supplier Database (CSD) as its primary data source, ensuring suppliers meet all tender requirements; all essential documents such as your Declaration of Interest (WCBD 4), B-BBBEE certification (WCBD 6.1), and affidavits are stored on the WCSEB; and active suppliers must have a valid Declaration of Interest, renewed annually, to participate in ePS procurement. If your documents are expired, it will result in suspension on the system.
TRUST: A GOVERNMENT YOU CAN TRUST
This brings us to trust. It is wonderful to have electronic systems, but in a rapidly evolving technological age, it is important that we take our residents and suppliers with us on our electronic procurement journey. This is why we host tutorials on our website on how to use the system, as well as provide physical, online and telephonic guidance and assistance via our Procurement Client Centre.
But we cannot end here.
We now have to do the work for transactions exceeding R1 million, which is difficult as there are national rules we need to comply with in terms of systems.
The next big goal, to enforce our strong controls, transparency and instil trust, is to completely digitise our procurement system for all transactions – from planning to payment. Our current ePS system already creates an automatic audit trail, recording every step from advert to award to payment.
But being a government you can trust also means that you need to have capable officials, who have integrity, who ensure that the rules are clear and businesses feel supported. We are committed to building this trust not just through policy, but through practical, on-the-ground support for the thousands of suppliers who want to work with us.
The frontline of this effort is our Procurement Client Centre (PCC), which was established to help businesses navigate the procurement process. This centre provides direct assistance with everything from registering on our systems to managing documents and answering general queries.
The scale of this support is significant. In the last quarter of financial year alone, the PCC handled 8,665 queries from suppliers. This included nearly 3,000 walk-ins, almost 1700 supplier registrations and profile maintenance support, and over 1,100 queries related to our e-Procurement solution.
We are now embarking on reforming our Procurement Client Centre so that we can increase our capacity and ability to support both departments with procurement expertise and suppliers with making it easier to do business with government.
Finally, sunlight keeps the system honest.
To foster both fairness and trust, we publish quarterly and annual Public Procurement Disclosure Reports. These reports are a public window into our work. They allow residents, oversight bodies, and the market to see exactly what we buy, from whom, at what price, and with what results.
VALUE FOR MONEY: UNDERSTANDING HOW GOVERNMENT SPENDS YOUR MONEY
Value for money is the ultimate test of our procurement system. We measure it by ensuring that prices are competitive, processes are efficient, and the goods and services we buy deliver real-world results for our residents. Our annual procurement report provides the data to track our performance, and over and above our procurement report, you can filter down into commodities and departmental procurement spend on our website.
In order to promote value-for-money (or cost-effectiveness as the Constitution refers to it) we drive value through open competition. The foundation of a fair price is competition. Our planning shows that the vast majority of our procurement, representing 85% of the total estimated value, is designated for the open competitive bidding process. This commitment to open competition is our primary tool for ensuring we get the best possible value.
It is also important that we use procurement to build an inclusive economy. Value for money also means creating opportunities. Our spending in the 2023/24 financial year directed significant support to priority groups, with 53.84% going to black-owned businesses, 32.60% to women-owned businesses, and 5.65% to youth-owned businesses. Furthermore, R8.90 billion was spent with suppliers based here in the Western Cape, supporting local jobs and livelihoods. Our spending towards black-owned businesses and women-owned businesses exceed the National Treasury target of 30%, and we achieved this without set-asides or mandatory sub-contracting. By increasing access for suppliers to our system, we grow our pool of diverse suppliers, allowing us to focus on value-for-money instead of simply ticking compliance boxes.
These numbers are evidence of a procurement system designed to translate public funds into tangible public value that delivers essential services, builds our economy, and ensures every Rand is spent responsibly. Because it’s not our money. It’s not National Treasury or the President’s money. It’s not even the Provincial Treasury or the Premier’s money. It is the people’s money. And we must spend the people’s money in the best and most responsible manner possible.
This is why the Western Cape Government has approached the Constitutional Court directly under section 167(4)(e) of the Constitution to challenge the Public Procurement Act of 2024.
It is our view that the National Assembly (National Assembly) failed to facilitate meaningful public participation. It made material amendments to the Bill (including the wholesale replacement of Chapter 4 on preferential procurement) without giving the public an opportunity to comment, and it is our view this contravenes section 59(1)(a) of the Constitution, which requires the NA to “facilitate public involvement in the legislative process.”
Further, the National Assembly failed to consider all public submissions. Of the 112 written submissions received, National Treasury only considered about 41 submissions. Substantial, detailed submissions (including those of the WCG) were never assessed or placed before the NA Finance Committee. Parliament thus acted unreasonably and failed to discharge its constitutional duty as set out in Doctors for Life and Mogale judgements. We argue that these failures render the Procurement Act unconstitutional and invalid.
Additionally, WCG reserves its right to pursue substantive constitutional challenges dealing over-centralisation, inclusion of the preferential procurement, the extension of the Office of the Chief Procurement Officer’s authority in the High Court. We believe that the Act goes further than simply establishing a framework, but attempts to centralise the policy making powers of organs of state.
INNOVATION: MODERNISING PUBLIC PROCUREMENT
This brings me to the final leg of our work – Innovation. How do we procure for innovation and using innovation?
To deliver better services for our citizens, we must innovate. For the Western Cape, this starts with moving our procurement system out of filing cabinets and onto a modern digital platform that is transparent, efficient, and accessible to all. We want to make it easier for suppliers to do business with us and to assist departments (our clients) in expediting their procurement needs so that they can focus on what matters.
Sometimes we tend to forget, the supplier is not the Provincial Treasury’s client, our Departments are.
- Strategic Sourcing
To support our Departments in procuring for innovation, we will focus more heavily on strategic sourcing and we work with Departments individually on projects to identify areas for these projects.
- Smarter Planning
We have also introduced an Automated Procurement Planning Toolkit in the 2021/22 financial year. All provincial departments use this toolkit to capture their procurement plans, helping the Provincial Treasury to create a provincial-wide procurement plan. The toolkit also assists in tracking departmental progress every quarter. This helps us with smarter planning.
This will be bolstered by our work to digitise our procurement system for transactions over R1 million.
- Outcomes Based Procurement: Procuring for that which does not yet exist
A central part of innovation is answering a difficult question: how do you buy a solution that is not on the shelf? When we face complex problems, like improving learner outcomes or delivering healthcare more efficiently, a standard tender for a known product is not enough. It requires a fundamental shift in our thinking. We must move from prescribing inputs to defining problems and inviting the market to develop solutions with us.
Traditional procurement often focuses on inputs – the hours worked, the items bought, the boxes delivered. We are shifting our focus to what truly matters, which is the outcome. The core of outcomes-based procurement is simple. We pay for verified results, aligning the goals of our suppliers with the needs of our residents.
The method is direct. We define the public good we need, agree on how to measure its success, and then link payment to the delivery of that result.
Instead of giving you a compliance checklist and dictating your every action, we want to create a framework in which you deliver an outcome for us. This will be a key component that we will be exploring as part of our work to draft a new Western Cape Government Public Procurement Policy, as well as how we could use values and principles for procurement instead of harsh rules (for example, possible utilisation of the UN Sustainable Development Goals).
We hope that this process will also guide us in updating our Disaster and Emergency procurement rules in order to make it easier for Departments to procure goods and services when it is most needed, faster than ever.
- Procurement and Alternative and Blended Financing
As part of innovation, we also have to ask ourselves, how do we procure better for Infrastructure.
Our economy is not growing fast enough to bridge every funding gap we face to build infrastructure and improve and expand access to social services. Our provincial budget is already stretched across competing priorities. We are increasingly realising that we cannot single-handedly deliver the economic-, digital-, energy-, social-, and ecological- infrastructure that our society and aspirations demand. Relying solely on traditional public finance is not an option anymore and it is a constraint we must move beyond.
That is why, the Western Cape Government’s launched its new Alternative & Blended Finance (ABF) Framework.
The document is a blueprint that will enable us to leverage our good governance, stable provincial fiscus by leveraging public funds with innovative private and commercial finance mechanisms, and/or philanthropic capital, in order to realise the objectives of our 2025-2030 Provincial Strategic Plan, our 2050 Western Cape Infrastructure Framework, and 2023-2035 Growth for Jobs Strategy.
Through the ABF Framework we will be able to mobilise the resources needed to unlock strategic infrastructure projects, deliver measurable social outcomes, grow our economy and create jobs, whilst protecting a balance sheet that keeps investors on board. No shortcuts, no gimmicks, simply a smarter and more innovative way to fund what matters.
Having established a clear need for new solutions, our focus will now turn to how they will function to deliver meaningful results.
The ABF framework fundamentally reforms how we approach private, commercial, development and/or philanthropic funding. Its core vision is to transform collaboration into capital, and over our term it will open fresh channels for investment that will expand infrastructure and service delivery, all while ensuring every rand spent is carefully accounted for.
Public funds will serve as catalytic capital that will be leveraged to strategically lower investment risks and render sizable projects attractive and viable. With the right financial structures in place, the aim is to ensure every rand of provincial funding can leverage additional resources from the market to enable projects, using both on- and off balance sheet instruments. Whilst complying with Constitutional provisions, legislative requirements, and National Treasury regulations, this Framework aims to foster confidence among stakeholders that the WCG’s blended finance activities are lawful, just, and fiscally prudent.
We have prioritised five Key Sectors for potential investment – economic, digital, energy, social and ecological. Each was selected specifically for its powerful multiplier effects on economic growth and job creation.
We will further inform our decision-making process through the Guiding Principles of additionality, policy alignment and holistic impact, result orientation, accountability, fiscal sustainability, legal compliance, transparency, integrity and fairness, collaboration, and capacity development.
Trust is the bedrock of all sound investment. To realise our vision for mobilising capital on an unprecedented scale, this document rests securely on clear legal and strategic principles.
Every transaction undertaken within this framework will fit squarely within the Public Finance Management Act (PFMA) and the Borrowing Powers of Provincial Governments Act and maintains oversight by the National Treasury. This guarantees that all associated loans, guarantees and partnerships remain lawful, transparent, and fully accountable, and thereby safeguards both public money and private confidence.
Clear lines of responsibility are essential for turning strategy into tangible results. To achieve this, distinct roles are assigned.
The ABF Framework outlines in detail the Project Preparation and Approval Processes departments need to follow for on-balance sheet instruments and its integration with the Provincial Budget Process and the Infrastructure Delivery Management Stage (IDMS) Gates.
We will establish a Provincial Loans Coordinating Committee (PLCC), to review and recommend projects to our Provincial Cabinet for approval, and ultimately the National Loans Coordinating Committee (NLCC). Our PLCC will consist of our Premier, Minister of Finance and Minister of Local Government, and chaired by myself as the provincial Executive Authority for Finance.
The PLCC is tasked with vetting funding terms and monitoring aggregate debt levels, and line departments will shape projects and carry them to close. Provincial Treasury will provide crucial central oversight. We will act as the single point of control for establishing standards to ensure consistent reporting and manage portfolio-level risk.
We will further establish a Technical Provincial Loans Coordinating Committee to advise the committee by screening and assessing proposed projects that are technically compliant to serve before the PLCC. Finally, all ABF on- and off balance sheet instruments will be reported on to our Innovation, Culture, and Governance Cabinet Sub-Committee as well as through respective financial documentation.
Where a project involves a municipality, our Department of Local Government will coordinate to ensure Municipal Finance Management Act (MFMA) and local council compliance.
The Western Cape Government’s established good governance record, positive bank balance, debt-free books, 100 per cent unqualified audits, and quality financial statements gives us a clear edge and is the platform upon which swift, high‑impact action can proceed without delay or doubt.
We already have world-class infrastructure, effective local and provincial governments, a growing provincial economy and stable provincial government.
The Western Cape is a Province you can Invest in!
But a clear plan fails without projects ready to break ground.
In conjunction with our Western Cape Infrastructure Framework, led by our Department of Infrastructure, the ABF Framework will maintain a rolling pipeline across our identified priorities.
Through our Infrastructure Framework, the Western Cape will remain ready with bankable and shovel-ready projects for lenders, development funding institutions, and the banking and finance industry.
In order to realise our ambitious pipeline of projects it will require the right financing tools, which must be carefully matched to project scale, risk, and expected returns.
Firstly, our toolkit includes potential instruments such as public-private partnerships, project finance, and outcomes-based contracts like social impact bonds. Employing these structures would allow fiscal flexibility.
When direct financing aligns better with our goals, we turn to potential concessional loans from development finance institutions or issuance of provincial bonds (always with approval from National Treasury). These have the potential to finance essential long-term assets that directly support our core policy objectives.
Our choice of financing instrument will be context-appropriate. For instance, a utility-scale solar plant might utilise project finance involving private equity and debt, whereas an early-childhood development programme could rely on a social impact bond where payments are tied directly to achieving proven results. Regardless of the structure chosen, every approach respects fiscal ceilings and is designed to secure value for money.
Proof of this approach's success already exists. The City of Cape Town's Green Bond, for example, channelled R1 billion rand into vital water and energy projects using similar principles. We've also seen how the Gautrain public-private partnership fundamentally reshaped commuter transport in Johannesburg. Here in the Western Cape, our own Impact Bond Innovation Fund has improved early learning outcomes by orders of magnitude.
Managing such a diverse range of instruments naturally demands rigorous oversight. Our ABF framework ensures every commitment is tracked, risks are clearly defined and controlled, and performance is transparently reported to give both investors and residents full confidence in every rand spent.
Sound financial management is what underpins bold ideas. As we have done in the past, the Western Cape Government will ensure that each contract is structured such that risk is allocated appropriately.
Before approval, each project will undergo a thorough affordability check, confirming that savings, tariffs, or allocated budget funds can comfortably cover costs throughout its lifespan.
These checks rest on strong institutions and audited reporting, and once again, reassures investors and residents alike that there does not have to be a trade-off between financial innovation and our fiscal integrity. In fact, we are the only provincial government in South Africa that can boast with 100 per cent clean audits across its departments and entities, as at the 2023/24 financial year.
The immediate next step involves launching pilot projects designed to test these new financing instruments in practice. Initially, these pilots could span multiple sectors, enabling us to quickly learn, adapt, and sharpen our approach based on real-world results.
We know finance evolves rapidly, and flexibility is essential. That’s why we encourage your ongoing input and feedback. Potential investors, residents and our colleagues within the Finance family nationally and locally are invited to engage with this framework, recommend improvements, suggest innovative tools, and co-design adaptable solutions.
And today, I invite you, the Legal community, to do the same.
Together, we can ensure the Framework continues to turn financial innovation into tangible results for residents across the province.
The framework sets the stage for real investment, tangible projects, and measurable outcomes. It offers hope amidst uncertain and unprecedented times. It affords us the opportunity to open fresh lines of finance, give the Western Cape the means to build, to grow, and to serve its people better than ever before.
CONCLUSION
The work of public procurement is often technical, but its purpose is profound: to turn public money into a better life for our residents.
Today, I have shared the Western Cape's approach to this vital task. We are building a system anchored in fairness, trust, value-for-money and innovation. We are using digital tools to become faster and smarter and more transparent. Our system is designed to earn trust and make procurement more competitive. Our public disclosure reports aim to detail how we spend every Rand.
By ensuring it is managed with integrity and a constant focus on results, we make procurement the engine that builds our schools, stocks our clinics, and creates jobs. It is the bridge between a budget on a spreadsheet and a tangible difference in people's lives.
I want to thank everyone at the conference today for the care and craft you bring to this field; much of it is unseen, yet it shapes daily life. My thanks to our hosts and organisers for a well-run programme, and to our teams back at the office who keep the work moving while we are here.
It has been a pleasure to share ideas and I hope to learn every more from the outcomes of this conference – from peers across Africa and how we can collaborate to assist one another in expediting our individual and collective goals.
Please enjoy the remaining sessions, and enjoy the rest of your day.
END.