Late payments by government to SMEs kill our small service providers, costing us jobs

20 August 2018

The Democratic Alliance (DA) in North West wants to remind President Cyril Ramaphosa about the promise he made during the State of the Nation Address earlier this year to pay invoices for small and medium enterprises (SMEs) within 30 days.

The same promise was made by the former Premier Supra Mahumapelo at the State of the Province Address. The ANC is yet to deliver on these promises.

The DA was approached by a small business ambulance service provider in Matlosana that has been struggling to get its invoices paid since October last year. We have verified all communication between the business and the Department of Health, the MEC for Finance and various national offices who continued to promise payments. See the latest letter here.

We are in possession of all the outstanding invoices since last year and the total amount from October to March exceeds R1.5 million and to date has not been paid. See invoiceshere.

Payments made after 30 days affect the cash flow of SMEs, undermining their ability to survive. This often leads to job losses and closure of some SMEs, further worsening the rate of entrepreneurial activity in South Africa.

In a province where there is more unemployed than employed people, we should be focusing on SMEs as the drivers of job creation. Despite this, the government is notorious for late and non-payments to SMEs who do business with the state.

Our people deserve better and entrepreneurs and jobs should be shielded in our already struggling economy. We will again raise this point in the North West Provincial Legislature as well and ensure that the Administrator adheres to prompt and regular payments of service providers.

Issued by Joe McGluwa, DA North West Provincial Leader, 20 August 2018