More than 12 000 Eastern Cape small businesses are being squeezed financially because the Eastern Cape provincial government has failed to pay them more than R 1.4 billion for services rendered.
In a written reply to a parliamentary question lodged by the Democratic Alliance, Finance MEC Phumulo Masualle admitted the province had failed to pay 40 525 invoices submitted by 12 735 suppliers by March 31 – a debt amounting to R 1.45 billion.
Masualle said the department of health was the biggest culprit in non payment to suppliers as it owed close to R900-million to 3 983 suppliers who had submitted 15 126 invoices.
The troubled provincial education department had failed to settle 13 348 invoices submitted by 6 716 of their suppliers, amounting to R 247 million.
Policy stipulates government departments are supposed to settle debts 30 days after an invoice has been submitted by service providers.
Yesterday Dumisani Mpafa, provincial chairman of the Black Management Forum, slammed the nonpayment by government departments, a growing trend his organisation had been fighting unsuccessfully.
“It’s killing the entrepreneurship skills we want in this country. It presents black people as bad businesspeople and it destroys our credibility,” said Mpafa.
“It will only change once someone litigates but people are reluctant to do so for fear of losing future deals.”
The DA warned delayed payments could force small businesses to close.
“Thousands of businesses in the province are squeezed financially by these delayed payments which could drive some under,” said DA MPL and finance shadow MEC Bobby Stevenson.