‘40% of Govt goods and services budget consumed by inflated prices it pays’

"It means, without adding a cent, Government can increase its output by 30% to 40%," says Chief Procurement Officer Kenneth Brown.

National Treasury’s Chief Procurement Officer Kenneth Brown says as much as 40% of Government’s R600 billion goods and services budget is consumed by inflated prices by suppliers – and by fraud.

Brown sites an example of a paper binder that government buys for R25 000 – 13 times what it costs in the shop.

"It means, without adding a cent, the government can increase its output by 30%-40%," said Brown.

"We could be building more roads, more schools without even adding more money to the current budget."

The Money Show’s Bruce Whitfield interviewed Brown.

Scroll down for quotes from the audio below.

We’re spending about R1.8 billion on Microsoft. We’re busy with some serious renegotiations.

Kenneth Brown

We’re renegotiating a number of leases. Government spends about R5.6 billion a year on leases.

Kenneth Brown

We’re looking at the fee structure of construction professionals.

Kenneth Brown

South Africa’s procurement system is way too paper based!

Kenneth Brown

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Article brought to us by Old Mutual.