Mashaba: Tenderpreneurs cannot be South Africa’s economic policy

ActionSA leader Herman Mashaba said government must build internal capacity to deliver essential services rather than relying on private contractors and “tenderpreneurs” to perform functions that are permanently required.

Build state capacity before outsourcing

Mashaba argued municipalities should develop their own skills and institutional knowledge and only outsource where there is a clear case that government cannot or should not perform a function internally. He said,

“If a worker is permanently required to perform a permanent function, there must be a compelling reason why that worker should not be permanently employed.”

He described his position as not an attack on the private sector, saying government has a different responsibility from business and should question why municipalities pay intermediaries to employ people performing permanent functions.

Permanent municipal functions and worker insecurity

Mashaba said that during his time as Johannesburg mayor his administration absorbed thousands of security guards and cleaners into permanent city employment. He pointed to a protest by more than 300 casual workers at Pikitup’s Randburg depot in July, saying they demanded permanent employment directly from Pikitup.

Mashaba criticised arrangements where middlemen earn substantially more than the workers doing the work, calling it exploitation and saying,

“That is not empowerment; that is exploitation. And I refuse to accept a system where the politically connected become wealthy while the people actually doing the work remain trapped in insecure employment.”

Outsourcing only where necessary

He said municipalities should first consider whether they can develop the capacity to provide essential services themselves rather than automatically issuing a tender, noting that certain services such as refuse collection are ongoing needs:

“Refuse collection is not a temporary function. Johannesburg will need refuse collection next year. It will need it in five years. It will need it in 20 years.”

ActionSA, Mashaba said, supports private-sector participation where government genuinely lacks expertise or where outsourcing provides better value, but the party is not advocating a blanket ban on private involvement.

Investment in skills and institutional knowledge

Mashaba said government should invest in training artisans and developing engineers, technicians, electricians, plumbers and other professionals within public institutions so that “we need government departments and municipalities that know how to do things themselves.” He warned against a permanently outsourced institutional competence, citing China as an example of the importance of building state capacity while stressing South Africa should not copy its political system.

He praised measures in Tshwane to strengthen internal capacity, including filling critical vacancies, skills development, artisan training and insourcing initiatives.

On economic empowerment and procurement

Mashaba called on South Africa to confront what he termed its “tender economy”, saying government procurement should not be presented as automatic economic empowerment.

“For too long, government procurement has been presented as if issuing tenders automatically constitutes economic empowerment. It does not.”

He summed up the party’s stance:

“Tenderpreneurs cannot be the economic policy of South Africa.”

Mashaba said ActionSA proposed legislation in 2022 requiring municipalities to conduct feasibility and financial-impact assessments before outsourcing core functions and that the party would train South Africans where skills were needed and build capacity where municipalities lacked it.

He added:

“But we will not outsource government simply because government has forgotten how to do things itself.”

Concluding on the role of government, Mashaba said the purpose of government was not to create opportunities for tenderpreneurs but to create “opportunity, dignity and prosperity” for citizens.