Eastern Cape provincial departments owed more than 9000 suppliers a total of R243.7-million in unpaid invoices as of December last year.
The provincial department of health is the worst offender when it comes to paying suppliers on time. The department accounts for more than 60% of the outstanding payments, owing a total of R149.7-million.
This was according to department of economic development, environmental affairs and tourism (Dedeat) MEC Sakhumzi Somyo, replying to a written question by DA shadow MEC of finance Bobby Stevenson.
Somyo said provincial departments owed 6478 suppliers close to R170-million in excess of 90 days while in the same period 1851 suppliers were not paid R50-million in excess of 30 days.
A further 926 suppliers were owed R23-million in excess of 60 days.
According to Somyo, the most common cause of this, although there were plenty, was the changing of banking details by suppliers without notifying the departments.
Stevenson, who is also the DA leader in the Bhisho legislature, said the non-payment of suppliers was forcing some businesses to close, while others had to lay off staff.
“No business can survive if it is not paid on time for its services. In a province where projected growth for the year was a dismal 0.7% prior to the ratings downgrades to junk status, non-payment by the government is unacceptable,” Stevenson said.
“These actions by the government lead to staff layoffs and businesses going under.”
He said the government should focus on “radical economic payment” instead of monopolising provincial capital to the detriment of businesses owed money.
“If we want to get the economy of the Eastern Cape moving, we need to dump the rhetoric and get down to real action.”
In his written question, Stevenson had also asked Somyo what steps the department had taken to resolve the problem of non-payments.
Somyo replied: “Provincial treasury continues to engage departments through creditor management forums on a quarterly basis to strengthen creditors’ reconciliation and improve their turnaround time. Departments continue engaging suppliers in fast-tracking outstanding invoices and payments.”
In his state of the province address two months ago, premier Phumulo Masualle saidmentioned the issue, saying policy provisions were in place to ensure service providers would get paid within 30 days to bolster small businesses.
“To further give impetus to the growth of SMMEs and cooperatives, policy provisions have been put in place to ensure that service providers are paid within 30 days,” Masualle said at the time.
The department of education was the second-worst offender in unpaid invoices, owing suppliers R47-million, while the department of human settlements owed the least of all the departments at R24000.No figures were given for the department’s of social development, provincial legislature and treasury department in the reply. — firstname.lastname@example.org