- National Treasury is exploring the use of AI in procurement processes in South Africa.
- It plans to overhaul its procurement system digitally over the next five years.
- It is hoping this will improve accountability and reduce irregularities in state spending.
- For more financial news, visit News24 Business.
National Treasury is exploring the use of artificial intelligence (AI) in the public procurement system as part of its plan to automate the procurement value chain, aiming to reduce irregularities and increase efficiency in state spending.
Treasury is planning a digital overhaul of the procurement process in South Africa to automate the entire procurement value chain.
The proposal to create an end-to-end electronic government procurement (e-GP) system was included in Treasury’s five-year strategic plan for 2025-2030, which was published earlier this year.
“The aim is to automate the entire procurement value chain to enhance efficiency and reduce administrative burden,” Treasury told News24.
It caveated this by saying that certain processes, particularly those involving strategic or complex procurement decisions, will still require human judgement.
“Certain sourcing approaches will continue to require human judgement and oversight, particularly where strategic or complex procurement decisions are involved. The system will therefore support a combination of fully automated and human-assisted processes,” it said.
Problems with procurement in South Africa have been ubiquitous in the past 20 years.
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In many instances, organised crime groups have infiltrated government procurement processes and looted public funds while service delivery suffers. This has occurred at all levels of government.
Treasury said the new e-GP system was intended to strengthen accountability.
“The anticipated benefits include greater transparency, enhanced monitoring and oversight, and faster processing and evaluation of procurement transactions.
“With procurement data available centrally, oversight institutions, law enforcement agencies, and regulatory bodies will be better equipped to fulfil their mandates, thereby strengthening accountability and reducing opportunities for irregular practices,” it said.
Treasury said it was aware of digital procurement systems being implemented successfully in countries including Rwanda, Ukraine, the Republic of Korea, North Macedonia, Ethiopia, and Tanzania.
It said the intention was to make the system available for procurement by all organs of state in line with the requirements of the Public Procurement Act.
The strategic plan stated that Treasury aims to pilot an automated process for handling requests for quotations by the 2025/26 financial year and implement a fully automated end-to-end tendering solution by 2027/28.
It states that it aims to complete its project on building a digitised public procurement system by 2030.
Treasury told News24 that it had not yet appointed a service provider for the development of the e-GP system.
“The National Treasury is currently finalising the foundational principles that will guide the phased development and implementation of the solution,” it said.
It added that it was exploring the use of AI in the public procurement system.
“The National Treasury is exploring the use of AI and other advanced technologies to enhance efficiency, improve data analytics, and strengthen decision-making in the public procurement system.
“These technologies will be introduced incrementally, guided by governance and ethical standards,” it said.
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