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Govt departments more than R600m behind in payments to businesses - Minister

Aug 15 2019 17:25
Khulekani Magubane, Fin24

Minister of Small Business Development Khumbudzo Ntshavheni has told Members of Parliament through a written reply to questions that national government departments owe service providers over R600m, and are 30 days or more behind in their payments.

According to Ntshavheni's written reply to questions from Democratic Alliance MP Leon Schreiber, the truants in the 2018-19 financial year were the Department of Water and Sanitation, the Department of Agriculture Forestry and Fisheries and the South African Police Service.

Government has come under fire for publicly citing the importance of small and medium enterprises to the South African economy, while businesses face late payments for goods and services they provide to government departments. 

According to the latest available report by the Department of Small Business Development, released in September 2017, a total of 71 883 invoices to the value of R4.3bn were unpaid by government departments and were older than 30 days. Over 23 000 invoices were paid late by provincial government departments in 2016, totalling more than R2bn, Fin24 previously reported.

In the reply, Ntshaveni cited National Treasury data, but said the data did not differentiate between large and small-to-medium enterprises in its report on non-compliance with payment of suppliers.

"According to the National Treasury 2018-19 annual report, the total rand value of invoices older than 30 days and not paid by national departments at the end of the 2018-19 financial year amounted to R634m," said Ntshavheni.

Ntshavheni said the Department of Water and Sanitation was 30 days behind on R492m owing, while the Department of Agriculture, Forestry and Fisheries arrears stood at R99m and The South African Police Services arrears were R24m.

Ntshavheni said the Department was working on a database for SMMEs that would be linked to the Central Supplier Database of the National Treasury. 

When the systems are integrated, the Department will be able to know the amount owed to these businesses, she said.

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