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Pretoria - On Thursday the business sector reacted with cautious optimism to the announcement that the government was planning to pay its creditors within 30 days in future.
On Wednesday President Jacob Zuma announced a plan to try to ward off the current recession which, according to the government, is being caused by external factors.
Apart from the $6bn that the Industrial Development Corporation has promised to struggling industries, the government has committed itself to pay small and medium-sized enterprises (SMEs) and other concerns within 30 days, Zuma said.
The government's tardiness in paying business creditors has previously been pointed out as a giant impediment, especially for SMEs. Some go under because of cash-flow problems when big clients like the government do not pay on time. With other funding sources having become scarce in the financial crisis, businesses are particularly vulnerable and dependent on the money they are owed.
Business Unity South Africa (Busa) has been in discussion with the government on this issue since the beginning of the financial crisis last year.
"For small enterprises [prompt payment] would make the world of difference," Busa deputy chief executive Raymond Parsons told Sake24 on Thursday.
The implementation of this undertaking has been a challenge, he reckons, because it is complicated to coordinate across different government levels. Now it is officially part of the crisis strategy.
The Democratic Alliance (DA) however issued a statement on Thursday, slamming the government and saying businesses have already closed their doors and many jobs have been lost because of late payments.
According to the DA, a recession impacts small businesses first, and much of the damage has already been done. The government's plan was announced only on Wednesday, almost a year after the beginning of the financial crisis.
The government "already said a couple of years ago that it was working towards 30-day payments", a businessman in the construction industry commented.
His concern is dependent on state contracts, and he would therefore remain anonymous.
According to him, one of the major problems is that government departments have so many vacancies.
- Sake24.com
For more business news in Afrikaans, go to Sake24.com.