R2,3 billion backlog in government payments crippling EC business

Issued by Bobby Stevenson, MPL
DA Leader in the Eastern Cape Provincial Legislature

A shocking R2,3 billion rand in outstanding payments in excess of 30 days, was owed by Eastern Cape government departments to suppliers for goods and services rendered, as at the end of February this year.

There is no place for a job-crushing administration in these times.

In a period like this, where businesses are battling to make ends meet and pay their staff, the non-payment for work runs contrary to any commitment to economic recovery.

This uncaring approach to paying timeously, is crippling businesses and destroying jobs!

We need to get the money owed flowing into the economy as fast as possible.

In response to a parliamentary question for oral reply, finance MEC, Mlungisi Mvoko, revealed that 18 174 invoices, totaling R2.3 billion, were more than 30 days in arrears, and still needed to be paid.

SEE: Oral Response IQP 2 Q 19

The Department of Health made up the bulk of these, owing in excess of R2,1 billion to its suppliers. Of the 18,174 outstanding invoices, 17,470 were from the Department of Health.

The reasons given for Health’s non-payment of suppliers was that voted funds were depleted. This means that as at the end of February 2020, the department no longer had any funds left in their budget to pay suppliers.

This is simply unacceptable!

In contrast, the second worst performer was the Department of Education, which owes just over R154 million to its suppliers.

Altogether 10 out of the 14 departments in the province are experiencing problems in making timeous payments to their suppliers.

The provincial treasury needs to urgently intervene to ensure that suppliers are paid within 30 days, with a special focus on addressing the backlog in the Department of Health.

The entire health sector could end up being crippled if service providers withhold their services due to non-payment.

I welcome the commitment of the MEC that Provincial Treasury and the Office of the Premier have agreed to set up a team to look at both the department of health and education to see how these problems can be overcome.

I will continue to fight for businesses to be paid so that they can survive in this difficult time.