Minister of Finance v Afribusiness NPC

Following complaints about the 2011 Preferential Procurement Regulations, the Minister of Finance promulgated the Preferential Procurement Regulations, 2017 under section 5 of the Preferential Procurement Policy Framework Act 5 of 2000 (PPPFA). The 2017 Regulations introduced pre‑qualification criteria allowing organs of state to restrict eligibility to tender to certain categories of bidders to advance socio‑economic objectives. Afribusiness NPC challenged regulations 3(b), 4 and 9, arguing that they were inconsistent with section 217 of the Constitution and the PPPFA because they permitted tenderers to be excluded before the statutory points‑based evaluation. The High Court dismissed the challenge, but the Supreme Court of Appeal upheld it and declared the regulations invalid. The Minister appealed to the Constitutional Court.

Leave to appeal was granted, but the appeal was dismissed with costs. The declaration of invalidity of regulations 3(b), 4 and 9 of the Preferential Procurement Regulations, 2017 was confirmed. Applications for intervention and direct access were dismissed.

The case is a leading authority on the limits of executive regulation‑making in public procurement. It clarifies that transformative procurement objectives must be pursued within the framework set by Parliament in the PPPFA and section 217 of the Constitution, and that pre‑qualification criteria excluding tenderers before evaluation are impermissible unless authorised by legislation. The judgment has had major implications for public procurement policy and the redesign of preferential procurement regulations in South Africa.