Makhura’s big township plan
JOHANNESBURG, (CAJ News)- GAUTENG Premier, David Makhura, has threatened to sanction government departments that fail to pay suppliers within 30 days.
Pledging his support to small and medium enterprises (SMEs) said by non-payment or late payment of invoices, government was complicit in black business and SMEs.
“We are cracking whip on departments who are not paying service providers on time,” said the premier.
“We cannot be government that destroys black business and SMEs through non-payment.”
Makhura’s commitment to pay small enterprises on times comes on the back of high number of SMEs complaining about access to finance, especially delays by government departments to pay for services.
The Premier said the SMES need maximum support as they were now a major lifeline of economic activity in the province.
Statistics indicate since 1994 small business activity in South Africa has grown in line with the country’s gross domestic product (GDP).
The Global Entrepreneurship Monitor 2014 SA report shows that 19,7 percent of the adult population in 2001 saw opportunities to start a business in the country, but by 2014 this figure had increased to 37 percent.
However, lack or non-payment for services had become a major talking point on small business development.
Nonetheless, Makhura said ten out of the 14 departments achieved 90 percent compliance with the payment of services providers within 30 days.
“The digitisation of invoicing has introduced new efficiencies in our governance systems and is helping us to pay service providers on time,” Makhura said.
He added Members of the Executive Council had assured him of a turnaround in their performance in the next financial year.
Adil Nchabeleng, Secretary General of the National Association of Manufacturers in Electronic Components (NAMEC), a grouping of small and black-owned electronic manufacturers, welcomed Makhura’s intervention on payments on services and products.
“Government departments that don’t pay on time must be punished. The fact that a service or product has been supplied means costs have been incurred.
“Most SMEs collapse not because they are not good but due to delay or non-payment which causes massive cash flow problems,” said Nchabeleng.
Meanwhile, in his State of the Province Address, Makhura expressed satisfaction on Gauteng’s township economy revitalisation strategy, led by MEC for Economic Development, Environment, Agriculture and Rural Development, Lebogang Maile.
Speaking in Sebokeng, he disclosed his government had spent R1,8 billion on procuring goods and services from township enterprises benefiting 1 805 township enterprises.
Township economy development had been high on the agenda of government in the last 18 months.
The government fully supported the Competition Commission’s market inquiry into the expansion of the grocery retail sector into townships with the hope it would expose the collusion and other ills hampering growth of businesses in the township.
In a separate interview Finance MEC, Barbara Creecy, told Gauteng Guardian supporting the township economy through financial and related initiatives was one of key issues she would address in her provincial budget in a fortnight.
Creecy said the government was already using 11 percent of its budget spent on township based businesses to boost economic activities in those areas.
– CAJ News
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