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Estern Cape pays R906m of R1.4bn owed to health, education suppliers

The departments of health and education are being urged to speed up payments to businesses
The departments of health and education are being urged to speed up payments to businesses

The Eastern Cape government has paid R906m of the R1.4bn owed to suppliers by the embattled departments of education and health.

However, the two departments, which get the lion’s share of the provincial budget every year, are still R494m in the red.

Covid-19 regulations have been cited as the main reason for the late payments by national and provincial departments.

The delay in paying businesses within the 30-day stipulated period after submitting invoices has forced some businesses to close shop, leading to job losses in the province.

Bhisho has for years said it was committed to timeously paying suppliers and even launched the Have I Been Paid app, which allows businesses to track the status of their claims online.

The National Treasury has also red-flagged the Eastern Cape as the worst culprit when it comes to not paying suppliers within 30 days.

At the end of the first quarter of the 2020/2021 financial year, 27,716 invoices amounting to R4bn were outstanding.

Economic development MEC Mlungisi Mvoko’s acting spokesperson, Pumelele Godongwana, said the provincial government had put measures in place to ensure a quicker turnaround in processing payments.

The provincial treasury has since implemented the monthly creditors forum, which is aimed at ensuring the two departments meet their payment obligations to suppliers.

“The provincial treasury continues to engage with health and education in an effort to turn the situation around and we have reasons to believe that they are as committed in this journey,” Godongwana said.

However, he encouraged SMMEs to have faith and continue to work with the government despite a heavy financial backlog.

“We acknowledge the challenges but the provincial government is embarking on this implementation plan to turn  the situation around.

“Business is critical in our plans to rebuild and recover the economy, and this is why the provincial government is making all the efforts to accelerate payment of their services so they continue to contribute to job creation and ultimately to economic growth of the province,” Godongwana said.

Bhisho’s implementation plans include:

  • Departments providing proof of payments relating to the outstanding accruals and payables on a weekly basis after each disbursement until they are settled;
  • Where there is lack of funding on payment of accruals and payables, departments are encouraged to shift funds from non-core items; and
  • Where needed, the provincial treasury will allow extra disbursement dates for the remainder of the financial year to ensure timely processing of payments.  




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