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Govt's late payments to service providers add up to R2.2bn

Cape Town – Despite government’s best efforts to ensure that service providers are paid within the stipulated 30 days, there are currently over 23 000 payments valued at R2.2bn outstanding. 

This is according to Jeff Radebe, Minister in the Presidency responsible for Planning and Monitoring, who kicked off a snap debate in the National Assembly on Thursday on government’s turnaround strategy concerning the payment of service providers within 30 days. 

“Government is especially shining the light on small businesses as the sector that is ideally placed to bring about growth in development in South Africa.

“But many small businesses who do business with government are in distress because of late payments,” Radebe said. 

The small business sector in South Africa employees 47% of South Africa’s workforce and contributes 42% to GDP, he added. 

Since Radebe’s Department of Planning and Monitoring developed a special unit to tackle the non-payment of suppliers there has been significant improvements. Out of the total of 40 national departments, 31 showed improvement in the payment of invoices. 

Altogether 11 departments have a “clean record” with no invoices outstanding, Radebe said, such as Minister Rob Davies’ Department of Trade and Industry. 

As of September 2016, altogether 23 511 invoices were over the 30-day payment period, totalling R2.2bn. 

READ: Prasa owes suppliers R796m - minister 

The Democratic Alliance’s Sej Motau said in his speech it was heartening that the DA and government have found some “common cause” in the call for service providers to be paid within 30 days. 

“We welcome the special unit in your department to assist service providers with getting paid and we’ve noticed you’ve made some progress.” 

However, he cited some regressions in seven state departments where thousands of invoices were still unpaid after the 30-day period, such as the Departments of Public Works and Home Affairs. 

“At provinces there was a R600m deterioration in the payment within the specified time,” Motau said, “and I’m sorry to say that the biggest transgressor is Gauteng.” 

Mzingisi Dlamini from the Economic Freedom Fighters opined that the lack of payment within 30 days was a “straightforward matter of incompetence” by government. 

“This government is incapable of managing its own affairs and is the biggest enemy of black business development. Your incompetence has led to the closure of over 300 000 black businesses over the past three years,” Dlamini said. 

READ: Tender corruption is killing small businesses - minister 

Mkhuleko Hlengwa from the Inkatha Freedom Party said he’d like to “narrate a story” when members of parliament feared that they were not going to be paid on time. “Now imagine the stress small businesses must be under when they’re subjected to late payment.” 

The ACDP’s Kenneth Meshoe said he has heard “heart-breaking stories” from small business owners who were victimised when insisting to get payment from municipalities. “There were instances where invoices were rejected months after receiving them. There’s no justification for such delays.” 

Radebe concluded the debate, appealing to big businesses to do as government does and attempt to pay small businesses within 30 days. 

He also reminded members of parliament that they had to be vigorous in their oversight role making sure that the departments they watch over adhere to the 30-day payment policy. 

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