Ricochet News

Bhisho 'killing small businesses' by failing to pay for services on time - DA

Mar 5, 2018
Bhisho 'killing small businesses' by failing to pay for services on time - DA

The Eastern Cape provincial government is continuing to 'kill small businesses' by not paying them within the mandated 30 days, the Democratic Alliance (DA) said on Monday. 

"Small businesses are the backbone of growing the economy and have the potential to create 90% of new jobs.  Our broken payment system needs to be fixed," said Bobby Stevenson (MPL), the DA's Eastern Cape Shadow MEC for Finance.  

According to a reply to a legislature question that he asked Eastern Cape Finance MEC, Sakhumzi Somyo, in October last year, 7 269 businesses in the Eastern Cape are owed a total of R466-million in excess of 30 days.

For the reply, click here:

"The slow payments to businesses that supply the Eastern Cape government departments are extremely detrimental to the economy as it results in the failure of businesses as well as having a negative impact on their credit ratings," Stevenson said. 

"These slow payments are one of the reasons why the Eastern Cape has the highest unemployment rate in South Africa at 35.1%.

"The 754 000 people that are unemployed in the province are looking to this governments saying “pull out all stops to save our broken economy and stop strangling small business that could be giving us work."

He added that the fact that 6 577 of the 7 269 businesses that are owed in excess of 30 days comes from the Health Department, highlights the crisis in that department and how broken the health system is in the province. 

"The health department is obviously experiencing major cash flow problems and should not be punishing small businesses.  I will continue to fight for the improvement of payments within 30 days by the government in this province," Stevenson said.