Skyrocketing R2 billion nonpayment to suppliers contributes to EC high unemployment rate

A staggering R2 053 013 billion is now owed by the provincial government in excess of 30 days or more to suppliers, as at the end of March 2018. To view the response, please click here:

These slow payments to suppliers are literally slitting the throat of our economy, as there is less money in circulation as well as strangling the future of small businesses by causing them to go under.

This comes against the background of last week’s Quarterly Labour Force Survey, where the Eastern Cape, has the highest expanded rate of unemployment in the country at 45, 8%. This means that 730 000 people are unemployed in this province and an additional 412 000 have given up looking for work. This has a devastating impact on families who are struggling to put food on the table, pay for medical expenses and educational costs for their loved ones. Families are literally starving as a consequence of the slow payment to suppliers and the knock on effect of the unemployment rate.

The youth are most effected by the unemployment opportunities available to them. In South Africa, the youth remain the hardest hit by joblessness, with 67, 1% of the 15 – 24 year old bracket, and 43, 2% of the 25 – 34 year old bracket remain unemployed.

A recent response received from the MEC for Finance, Lubabalo Oscar Mabuyane, indicated that a staggering 8414 suppliers are still owed money in excess of 90 days, amounting to R2 053 013 billion.

In a reply to a legislature question that I asked the former MEC of Finance, Sakhumzi Somyo, in April 2018, a total of 5 503 businesses in the Eastern Cape were owed over R311 million in excess of 30 days as at the end of December 2018. To view the response, please click here:

Compared to the response given to a question in August 2017, it just proves that the current ANC government does not prioritise timeously paying their suppliers and affording them the opportunity to keep their businesses afloat and highlights the fact that this is not getting any better. To view the response, please click here:

A DA-led government will bring real change to this province by ensuring that the right climate for job creation is created. This means paying suppliers within 30 days, fixing our education system so that young people are equipped with skills that can get them jobs. Entrepreneurship training is critical in our schools. We need to create a climate in this province that is conducive to attracting investment. We need a province of entrepreneurs.

The government must do its bit by eradicating corruption, fixing the infrastructure, improving safety, delivering services, and governing well. We all deserve a province that works, where opportunity is rising and hope is created. — Bobby Stevenson MPL, Shadow MEC for Finance.