Extending the 30 day payment campaign to municipalities would fast track payment of over R16 billion of outstanding payments owed by municipalities to service providers, some of which are over 90 days, a special engagement session hosted by the Office of the Premier of the North West Province in Mahikeng on Tuesday concurred.
According to the 4th quarter aggregated municipal creditors age analysis from National Treasury presented by Dr Senelisiwe Ntsele, senior economist at the National Economic Development Department, the average value of unpaid invoices is approximately R60 000 implying that it is predominately small suppliers who are affected.
Although national and provincial departments are performing poorly in this regard, Dr Ntsele commended the North West Provincial Administration for its initiative to reduce accumulation of outstanding payments to service providers after receiving a briefing presentation on interventions to reduce outstanding payments and said that other provinces could learn from the province.
Ntsele said that municipalities in the North West province owed service providers over R590 million as part of the R16 billion owed to service providers. A deliberate strategy to delay payments in order to solicit incentives from service providers before processing payments from service providers is suspected to be the major factor contributing towards the accumulation.
She said that based on exceptional reports provided by National Treasury, only 9 out of 39 national departments and 47 out of the 104 provincial departments there were 18 409 invoices which have not been paid within 30 days in February 2012 to a value of R1,1 billion.
The session attended by Provincial Heads of Departments, Chief Executive Officers of State Owned Enterprises and their respective Chief Financial Officers acknowledged that delayed payments have a negative impact on input costs of service providers doing business with government, has led to closure of businesses, job losses and stifles economic growth.
The objective of the campaign led by the Economic Development Department, National Treasury and Small Enterprise Development Agency is to cultivate a culture of speedy processing of invoices within government departments, equip service providers in doing their part to ensure speedy processing of their invoices and reduce the number of Small, Medium and Micro Enterprise (SMME’s) failing due to late payments.
Enquiries:
Lesiba Moses Kgwele
Tel: 018 388 3705
Cell: 083 629 1987
Fax: 086 620 4802
E-mail: LKgwele@nwpg.gov.za
Thumps-up for North West 30 day payment campaign
Province
