South Africa’s CTFL Procurement Holds R7.55 Billion Localisation Opportunity

Government procurement of clothing, textiles, footwear and leather (CTFL) products in South Africa could provide a significantly larger opportunity for local manufacturing than official procurement data currently indicates, according to a study commissioned by the Localisation Support Fund.

The study, titled Lost Threads: The Case for Compliant CTFL Public Procurement and prepared by BMA, estimates annual government CTFL procurement at around R7.55 billion. This is substantially higher than the R1.63 billion captured in the National Treasury’s Basic Accounting System (BAS) dataset.

The wider estimate includes procurement by the South African Police Service, South African National Defence Force, state-owned enterprises and municipalities, whose spending is not fully reflected in standard Treasury data. The study used employee headcounts, financial statements and other indicators to model the additional procurement.

Only 32% Verified As Local
The study found that only 32% of the estimated R7.55 billion in CTFL procurement could be verified as reaching compliant local manufacturers and suppliers.

The remaining 68% was classified as spending from unconfirmed or non-local sources. According to the study, this does not necessarily reflect a lack of local manufacturing capacity, but points to inconsistent application of mechanisms used to verify and direct government procurement towards local manufacturers.

Local sourcing performance also varies significantly between government departments and product categories. Some buyers are achieving substantially higher levels of local procurement using existing verification tools and industry registers.

R7.16 Billion GDP Impact
The study estimates that closing the current localisation gap could generate R5.11 billion a year in additional local manufacturing revenue and contribute R7.16 billion to GDP, while supporting approximately 51,684 direct and multiplier jobs.

The potential gains would come from redirecting existing government procurement expenditure towards compliant local suppliers rather than requiring additional government spending.

Meeting the CTFL Masterplan’s target of 60% local content in government procurement could nearly double the manufacturing revenue captured locally and support tens of thousands of additional direct and indirect jobs.

The study estimates that every additional R1 billion directed towards compliant local procurement could support around 2,450 direct manufacturing jobs and a further 5,050 indirect jobs across the value chain.

New Procurement Framework
CTFL products have been subject to local-content preference requirements since 2012 under the Preferential Procurement Policy Framework Act (PPPFA). However, the enforcement mechanism was weakened in 2022 after local-content rules were removed from the PPPFA Regulations, leaving procuring entities largely dependent on self-declarations at the bidding stage.

The Public Procurement Act of 2024 and its Draft General Regulations, published in April 2026, provide a potential route to redesignate CTFL products under Section 20 and establish a more enforceable local-content compliance framework.

Five Steps Proposed
The study recommends standardising local-content requirements in CTFL tenders and strengthening verification requirements beyond the current self-declaration system.

It also calls for regular training of supply-chain management officials, clearer guidance distinguishing local suppliers from local manufacturers, and linking payment release to local-content verification.

For larger or higher-risk contracts, the study recommends SABS verification, while lower-value procurement could use invoice-based evidence of local manufacture.

It also proposes a more targeted approach to SABS post-tender verification, with checks focused on higher-risk suppliers rather than applying costly site visits universally.

Finally, the study recommends structured monitoring involving industry bodies, Proudly South African, the Department of Trade, Industry and Competition (dtic) and National Treasury, supported by regular eTenders tracking and a public register of verified manufacturers.

The study argues that a significant portion of the localisation opportunity can be captured using existing procurement mechanisms, stronger verification and more consistent implementation, while the regulatory framework evolves.