Departments still failing to pay SMME’s, despite Premier’s assurances

Issued by Kobus Botha, MPL
Office of the Premier portfolio committee member

Despite Eastern Cape Premier, Oscar Mabuyane’s assurances that the average provincial turnaround from invoice to payment is down to 14 days, provincial departments are not paying suppliers on time. The latest available data shows that outstanding invoices older than 30 days were in excess of R2 billion.

A capable state knows that SMMEs have the potential to be key economic and job creation drivers in turning around a contracting provincial economy.

In response to a parliamentary question, Premier Mabuyane confirmed that, as of September 2020, Departments had a collective 11 184 outstanding invoices older than 30 days, amounting to over R 2 billion in outstanding invoices.

SEE: IQP 37 Q 864

The departments which were the worst offenders:

The Department of Health has an overwhelming amount of outstanding invoices.

In contrast, the DA-run Western Cape reported that departments paid on average 99.4% of all invoices for goods and services within 30 days for the 2017/18 and 2018/19 financial years.

Despite launching the Have-I-Been-Paid (HIBP) online system for service providers to query their outstanding invoices, the number of suppliers not paid within 30 days, remains extremely high.

The purpose of the system is to expedite the process and to ensure that suppliers have a direct link to query their invoices and to track payments. However, the online system does not seem to have had the intended impact. There has not been much of a decline in unpaid invoices.

The Premier must do more to ensure that departments pay their suppliers on time.

SMMEs can turn provincial economies around, but if they are not paid on time, these small businesses can run into cash flow issues, which could lead to them being forced to close their doors, resulting in job losses.

Non-payment of suppliers also adversely impacts on service delivery in the province.

The Premier must make sure that accounting officers in the departments ensure compliance with Section 38 of the PFMA which requires them to settle all outstanding invoices within the prescribed period of 30 days. Failing which, effective and appropriate disciplinary action must be taken.

The Premier must take a firm stand against the culture of non-payment that has become the norm in recent years.

To prevent job losses and turn the economy around suppliers must be paid on time.

The DA will continue to fight for the survival of small businesses in the province.