Public Procurement and Local Economic Development: Unpacking the Challenges Faced by Small and Medium Enterprises

Small and Medium Enterprises (SMEs) are critical for employment creation and inclusive growth in South Africa. Public procurement has been positioned as a policy tool to stimulate SME development and redress historical inequalities. However, procurement systems at the municipal level often fail to deliver on these developmental objectives. This study employed a quantitative design using a structured survey administered to 70 SME owners in the Thulamela Local Municipality. Descriptive statistics were used to analyse perceptions of procurement and the challenges encountered in accessing opportunities. Results indicate that while SMEs recognise procurement as essential for accountability, value for money, and service delivery, they perceive processes as inequitable, inaccessible, and bureaucratic. Key barriers include corruption, excessive documentation, weak institutional capacity, and the ineffectiveness of empowerment frameworks such as B-BBEE. Internal SME capacity gaps further restrict participation. The study highlights the need for procurement reforms that strengthen governance, promote transparency, simplify procedures, embrace digitalisation, and provide targeted SME support to enhance inclusive local economic development.