No white businesses welcome for state contracts below R20 million

The National Treasury’s draft Public Procurement Regulations required businesses which get contracts below R20 million to be 100% black owned.

This is the warning from Gerhard Papenfus, the chief executive of the National Employers’ Association of South Africa (NEASA).

The National Treasury published the draft General Public Procurement Regulations, 2026, on 16 April 2026.

On the same day, it published the draft Public Procurement Tribunal Regulations, 2026, for public comment.

“These regulations are necessary to bring into effect the Public Procurement Act, 2024, which was assented to by the President on 18 July 2024,” the National Treasury said.

They outline mechanisms, financial thresholds, and conditions for preferential procurement for government contracts.

The draft regulations also include set-asides, pre-qualification requirements, and mandatory subcontracting, particularly targeting SMMEs.

Papenfus said that the regulations set aside state contracts below R20 million for companies that are 100% owned by previously disadvantaged persons.

“White male-owned businesses, even partly white male-owned businesses, are completely excluded,” said Papenfus.

“A company that is 90% black-owned does not qualify. A firm that has followed every BEE code for two decades does not qualify.”

Papenfus argued that this was not redress. Instead, he described it as the economic exclusion of businesses with white males as owners.

He said these proposed regulations will harm all sectors of South African society and drive up prices.

“It shrinks the supplier base, drives up prices, and hollows out service delivery. The taxpayer pays for all of it,” he said.

“Our courts have already ruled that the government cannot disqualify a tender purely on race. These regulations do exactly that.”