SA Parliament urged to end race-based tender costs

The Institute of Race Relations (IRR) in South Africa is calling on Parliament to enact provisions in the Appropriations Bill that would eliminate Black Economic Empowerment (BEE) preference premiums, previously capped at 25% for contracts under R50 million, across R82 billion in public procurement. Gabriel Crouse, Legal Executive Director at IRR, emphasized the move would “scrap the BEE premium tax.”

BEE premiums are additional payments, above the market price, made to suppliers based on race. These premiums currently incentivise procurement from businesses with BEE certification, often resulting in higher costs than identical goods or services. IRR highlighted that under the existing regulations, set by the Preferential Procurement Policy Framework Act, premiums are capped: 25% for contracts under R50 million and 11.1% for larger ones.

Here’s the IRR’s Gabriel Crouse.

As Parliament debates the Appropriations Bill, the issue will test whether South Africa’s fiscal policies prioritize efficient government spending or continued race-based economic incentives.