Read the Conversation
Meeting highlights:
- Public procurement as a development tool: The South African government leverages its significant procurement power—over 1 trillion rands annually—to promote local pharmaceutical manufacturing, reduce import reliance, and achieve both health and industrial goals.
- Strategic focus on local production: Pharmaceutical products, including antiretrovirals and family-planning drugs, have been designated for local production since 2011 through the Preferential Procurement Regulations. The upcoming Public Procurement Act will continue this emphasis and aim to attract API (active pharmaceutical ingredient) investments.
- Masterplans for sectoral growth: The dtic coordinates multi-stakeholder industrial masterplans, including medical devices and medical cannabis, designed collaboratively with businesses and labor to advance targeted sectors.
- Health as a pillar of inclusive growth: South Africa is using its G20 Presidency to advocate for health as central to sustainable development, aiming to improve outcomes while creating economic opportunities and investment.
- Success metrics and future vision: Makube’s vision includes growing local market share, expanding intra-African exports, developing technological capabilities, and building skills—all while viewing South Africa’s health challenges as a springboard for capability development and innovation.
EF: Could you briefly introduce us and tell us how the dtic is working to build a more globally competitive and sustainable framework in South Africa?
TM: I joined the dtic in December 2011 as the Chief Director responsible for implementing the local content policy grant, which is still my official position. Currently, though, I’m acting as the Deputy Director-General responsible for the Sectors Branch. It’s a big division within the dtic. I oversee several units: the agro-processing unit, steel and metal fabrication sector, critical minerals, pharmaceutical and chemical, and the auto industry sectors. I’ve been in the acting Deputy Director-General role since October last year.
Academically, my background is mainly in energy economics. I hold a PhD in Energy Studies. I’m also a barrister and an advocate of the High Court of South Africa.
EF: From your point of view, how can South Africa capitalize on this important year with the presidency of the G20 to build long-term value?
TM: As a country, we appreciate the opportunity to chair the G20. Our focus is on inclusive growth, with health at the center of that agenda. This aligns with the Sustainable Development Goals, particularly in reducing poverty and advancing the role of women in society. As you know, Africa as a whole, including South Africa, carries a high burden of disease. So, we are advocating for better health outcomes on the continent and within our country. We're using the G20 as a platform to push for this position and to attract the necessary investments in the key areas identified under the G20 framework, health is one of them.
EF: Can you tell us how dtic and you, in your role, are leveraging public procurement to enhance local manufacturing, especially on the pharmaceutical and chemical side?
TM: Broadly and globally speaking, the government is the biggest spender in any economy. The World Bank estimates that public procurement accounts for approximately 15% of a country's GDP. In South Africa, government spending on goods and services exceeds a trillion rand, a significant expenditure. So, strategic procurement becomes very important.
There are two critical issues in the health sector. First, South Africa has a high burden of disease, which means our health expenditure is very high. The second issue is how we procure resources in the health sector. Our basket of imported products shows that pharmaceutical goods are in the top ten, possibly ranked sixth or seventh. We must strategically procure these, aligning procurement with health needs and our economic and industrial objectives. This is why we emphasize local production. Since 2011, South Africa has had regulations to support local procurement within the public procurement system. We've designated certain products for local production, including pharmaceutical products.
We procure a large volume of antiretroviral drugs and family-planning medicines. The country should support local manufacturing instead of sourcing these from international markets. As a department, we've officially designated pharmaceutical products for local production. With the new Public Procurement Act yet to be implemented, we will continue designating products for local production within the public procurement system. We also want to attract investment in areas like API (Active Pharmaceutical Ingredient) formulation. We don't have much capacity in that space yet, but we can develop it by partnering with international companies to build local capability.
EF: How do you work with different stakeholders to align your mission and advance the industry?
TM: At the center of what we're doing is implementing the industrial policy. Within that policy, we have different programs. I've already mentioned local content, but we also have the master plans. These master plans are sectoral, focusing on specific, targeted program sectors. We have eight master plans we're currently focusing on, including steel and metal fabrication. The latest addition, particularly relevant to the health sector, is the cannabis and hemp master plan, which has been transferred to the dtic. We aim to expand our role in the medical cannabis industry, so we're developing a commercial strategy for this sector.
Another area is support for medical technologies. We have a master plan for that as well, which was approved last year. It's still in the early stages, but it's important because we import significant medical technology for hospitals and clinics. So we want to build our capabilities in that space. Now, it's important to remember that, as a department, we are not the procurers of health products. That responsibility primarily falls under the National Department of Health, and in some cases, the provinces also play a role in procuring specific health products. Our role is more about coordination. Within government, we act as the coordinators of the economic cluster, driving policy from a master plan perspective.
This master plan isn't only a government effort; it's a collaborative project with social partners, including businesses and labor groups, all pitching in to make it work. The dtic helps coordinate things, but the real momentum comes from the broader coalition behind it. That's how we've designed this program; the approach makes the most sense for initiatives like this.
EF: How do you measure the success of your work, and what would you like to see differently in the medium term?
TM: All the master plans have specific pillars that must be achieved. One of them is market optimization, which involves measuring the level of local content in the economy. I must make it clear that this is not about import replacement. It's about leveraging public expenditure and the country's existing industrial capabilities to scale up local production. That's what we aim to measure. We also want to track market share increases, especially in exports. South Africa can expand its share of manufactured products through the African Continental Free Trade Area. That's a key focus for us.
Skills development is another critical area. Without skills, there's no way we can progress economically. That's something we're also measuring. Technological development is also a key focus area, which increases aggregate economic demand and facilitates the implementation of supply-side interventions. These are the core pillars of the master plans. We report quarterly to the ministers on our progress against those targets.
EF: In building this key framework, encouraging local production and enhancing long-term value in the competitive market, do you have a final message for our readers, something you hope to see in the G20?
TM: We appreciate the opportunity. As a country, we see the disease burden as a challenge and a chance to develop our capabilities. We must address our health challenges to resolve the poverty challenges we face. We don't view this in a negative light. Instead, we see it as something that can be overcome. And we are capable, as a country, of providing solutions to it.
