Government destroys jobs by failing to pay 1662 suppliers
Fourteen national departments and their entities have failed to pay a total of R160 million to 1662 suppliers within the 30-day limit prescribed by the Public Finance Management Act (PFMA)
Overdue payments place enormous pressure on the cash flow management systems of these businesses and can result in them defaulting in the payment of their own creditors. In some cases businesses, like listed company Sanyati, have been forced to close because of late payment.
This information has been provided by government departments in response to DA parliamentary questions. On average the money owed to suppliers had been overdue for nearly 80 days.
The worst offender in this regard was the Department of Water and Environmental Affairs and its entities who had jointly kept 20 service providers waiting for an average of 158 days - nearly four months beyond the 30-day rule.
The department of Rural Development and Land Reform came in second place with 87 service providers who were kept waiting for an average of 122 days beyond the 30-day rule.