Small businesses are the backbone of the South African economy. Yet, by delaying invoice payments (in some cases not even paying at all) both the provincial and national spheres of government are inhibiting the growth of the sector and destroying jobs in the process.
How are small businesses supposed to stay afloat if they don’t get paid what’s due to them?
Section 38(1)(f) of the Public Finance Management Amendment Act states that “accounting officers must settle all contractual obligations and pay all money owing within the prescribed or agreed period”. This period is 30 days from the receipt of an invoice. With the exception of the DA run Western Cape, non-compliance with section 38(1)(f) is endemic among national and provincial departments.
In today’s Portfolio Committee meeting on Small Business Development, it was revealed that on a national level in the 2021/22 financial year 138 332 invoices at R 4.73 billion was paid to small businesses after the mandated 30-day period and at the last quarter of the year 134 invoices at R 4.7 million invoices have not been paid.
On a provincial level the situation is even more dire. The 2021/22 financial year saw 263 359 invoices at R 28.9 billion paid to small businesses after the mandated 30-day period and at the last quarter of the year 67 728 invoices at R 6.1 billion invoices have not been paid.
No mentions regarding the non-payment or delayed payments of local governments were made.
The unacceptably high number of unpaid invoices indicate that department officials are blissfully disregarding controls to ensure that suppliers are paid on time.
This is a direct consequence of the current government’s destructive cadre deployment and BBBEE policies. It is impossible to develop a non-politicised and professional public service if public servants are employed not on a basis of their skills and experience but merely because they are card carrying ANC loyalists.
The sentiment to professionalise the public service sector was even echoed by an ANC committee member present in today’s meeting.
The DA urges any small business that provides a service to government but is yet to be paid, to share their basic details with us on this platform so that we can champion your cause in Parliament and ensure that the plight of the small businesses across South Africa are addressed as a matter of urgence.