Government non-payment killing small business in the Eastern Cape

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

The Eastern Cape provincial government continues to destroy the livelihoods of small businesses by repeatedly failing to pay its suppliers within 30 days.

Over 24 000 invoices from suppliers valued in excess of R3,5 billion were still outstanding at the end of the last financial year, playing a tremendous amount of stress on businesses that have had to carry the costs during extremely difficult times.

In response to a Parliamentary Question, MEC for Finance, Mlungisi Mvoko, revealed that 24 222 invoices, valued at R3,5 billion and older than 30 days, were still outstanding at the end of the last financial year, on 31 March 2021. This would never happen in a capable state, with a government committed to getting things done.

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The vast majority of these were invoices owed by the Department of Health, with 23 733 invoices totalling a staggering R2,9 billion unpaid.

This once again highlights the need to place the department under administration and for a financial recovery plan for the department to be put in place.

Only 7% of the Health Department’s budget is available for goods and services.

It is clear that no one wants to take responsibility for this wayward department, which focuses more on creating jobs for cadres in a bloated bureaucratic administration, than in filling critical vacant funded medical posts that will save lives!

With funds at hospitals already running out, it is simply unacceptable that service providers go home with empty pockets, while the department makes space for more millionaire cadres.

Also concerning is the more than half a billion rand owed on 429 invoices by the Department of Education, due to cash flow issues. This is the same department dragged before the courts over an irregular multi-million-rand tablet contract with Sizwe Africa.

It is also the same department that dolled out millions from its infrastructure budget to pay for PPE supplied by hairdressers and estate agents at drastically inflated prices.

The province is now staring down the barrel of Health’s accruals. Unless they pull the trigger on their bloated bureaucracy, patients will potentially face a death sentence when the department’s goods and services budget is depleted at the end of July.

Unless the provincial government bites the bullet the health crisis has the potential to capsize the finances of the entire province.