City pays 99% of suppliers within 30 days, boosting businesses and service delivery

07 Jun 2022 in Where We Govern

The City of Cape Town pays on average 99% of supplier invoices within 30 days, making sure that it enables especially small and medium businesses to keep their cash flow and operations going. Much work has been done in contract management over the past few years to make sure businesses are paid on time in Cape Town. This boosts the economy and protects livelihoods.

‘In the current financial year, approximately R10 billion has been spent on purchase orders both in operational and capital budgets. It is important to pay suppliers on time to support business enablement and also ensure the delivery of services to residents, to boost the local economy and create jobs and protect livelihoods. The City can only do this through its successful contract demand management and open tender processes.

‘One big business improvement that has been made is the electronic submission of invoices. All invoices are now electronically submitted. We thank our City teams, customers and suppliers for this team effort that enables Cape Town to reach new service delivery heights,’ said the City’s Mayoral Committee Member for Finance, Councillor Siseko Mbandezi.

In the case of the 1% of suppliers not paid within 30 days, this is due to various reasons, among others:

  • Poor quality of goods or services
  • Goods not yet fully received
  • Legal or SARS issues
  • Incorrect supplier details
  • Bank rejections

Legislative context – City may not operate like the private sector does

The City functions within a context governed by various laws and regulations such as the Municipal Finance Management Act (MFMA), Preferential Procurement Act, Supply Chain Regulations and various directives and policies. The MFMA coupled with Section 217( 2) of the Constitution is a supreme set of legislation which demands that the City ensures a fair, transparent, equitable, competitive and cost-effective supply chain management process. The City, unlike the private sector, has to abide by these regulations in the procurement of goods, works and services.