Gauteng pays 65% of suppliers late: Finance MEC must visit and learn from Western Cape
The Gauteng Provincial Government continues to jeopardise the province's economy by not paying the suppliers of goods and services on time. According to the most recent information given to the DA by Premier Nomvula Mokonyane, the province only succeeds in paying 35% of its invoices within the legally required 30 days, despite a marginal improvement
The summary of the problem is as follows:
|
|
Invoices |
|
|
|
Department |
Received |
Paid within 30d |
% |
|
Entire Province |
57 126 |
19 880 |
35% |
|
Health |
33 842 |
6 722 |
20% |
|
Education |
8 320 |
4 645 |
56% |
|
Transport |
1 635 |
708 |
43% |
|
Infrastructure |
2 171 |
1 027 |
47% |
|
Social Development |
4 694 |
2 528 |
54% |
|
Economic Development |
1 403 |
897 |
64% |
|
Housing |
1 388 |
975 |
70% |
|
Others |
3 673 |
2 378 |
|
Delayed payments put enormous pressure on the companies that do business with the province, in some instances causing companies to go bust and putting people out of jobs.
Some companies are also withholding supplies until they get paid, threatening the province's ability to provide services needed by the poorest and the most vulnerable. These services include Health, Education and Social Welfare. The rate at which these departments have paid their suppliers within 30 days is 20%, 56% and 54% respectively.
Other big culprits are Roads and Transport, Infrastructure and Economic Development at 43%, 47% and 64% respectively. This must impact on the province's economy and ability to create jobs. The current high rate of unemployment is likely to escalate even higher as companies decide to relocate to better business environments.
It is not as if the provincial government does not have money, which is freely transferred from the National Treasury. The provincial government is also sitting with about R3 billion in the bank and earns hundreds of millions of rands in interest.
The province's inability to pay suppliers on time is therefore not due to a lack of cash, but due to sheer inefficiency, incompetence and a lack of political will to fix it.
The DA in Gauteng suggests that Finance MEC Mandla Nkomfe visit his Western Cape counterpart Alan Winde. Here the DA-led administration runs the creditor payments system properly and suppliers get paid on time, creating an enabling environment in which local businesses can grow and employ more people. The Western Cape provincial treasury has implemented strict management of invoices from the time of receipt to disbursement by date stamping all receipts.
Perhaps MEC Nkomfe should undertake the visit to see how it should and could be done.
Statement issued by Mike Moriarty MPL, DA Gauteng Finance Spokesperson, November 19 2012
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