The Congress of South African Trade Unions (COSATU) urges immediate interventions by the African National Congress led government to save thousands of local pharmaceutical manufacturing jobs.  Reports presented to Parliament’s Portfolio Committee on Trade, Industry and Competition present an extremely worrying state of affairs in this strategic economic and health sector with 2 500 local manufacturing jobs lost in the past 18 months alone.

It is deeply disheartening that the Department of Health’s strategic support for local manufacturers appears to have been sacrificed in pursuit of the cheapest possible supplies from overseas producers.  This has led to locally produced HIV/AIDS drugs purchased by the Department, plummeting from 72% in 2008 to 28% in 2025 and similarly alarming downward trends for pills and capsules from 56% in 2014 to 18% in 2026.  This has reportedly led to nine local manufacturers closing and shortages of medicines.

Whilst government must seek the best value for money when procuring goods, including health supplies, this must not be taken to Thatcherite extremes or at the cost of badly needed local jobs, producers and value chains.  The Public Procurement Act requires the state to buy and support locally produced goods where available.  This is key to stimulating badly needed economic growth, nurturing strategic value chains and tackling our existential 43.7% unemployment crisis. 

These legal requirements and ANC manifesto commitments cannot simply be discarded upon the alter of austerity budget cuts if we are to turn the economy around or ensure the security of medical supplies.  COVID-19 and vaccine hoarding by industrialised nations showed the dangers to lives and livelihoods of this reckless approach. 

COSATU will be seeking urgent interventions from the Departments of Health, Finance, and Trade, Industry and Competition with local manufacturers to correct this ham-fisted public procurement approach by the Department. 

This unnecessary own goal that has been raising red flags for some time points to the need to revive and finalise the Health Master Plan to save local jobs, unlock local manufacturers and value chains, and ensure the nation’s security of medical supplies.  This is not a matter that can be allowed to continue or to be abandoned to the follies of neo-liberalism and the vagaries of the market.

It equally points to the dangers of the court challenge currently being pursued against the Public Procurement Act and the need for national government to reach a progressive out of court settlement with the litigants, the Western Cape Provincial Administration and the City of Cape Town.  The nation simply cannot afford further public procurement anarchy.

Issued by COSATU

Matthew Parks (COSATU Parliamentary Coordinator)

Mobile: 082 785 0687

Email: matthew@cosatu.org.za