Minister of Small Business Development, Stella Ndabeni, has raised concerns over unpaid invoices to the small business sector.
The Annual Report for the 2023/2024 shows that the Eastern Cape failed to pay R4.5-billion to service providers. This follows the Gauteng government, which failed to pay over R2.7-billion. The two provinces remain the most indebted to service providers.
Ndabeni said some national departments, such as Public Works, and Employment and Labour, also failed to submit monthly exception reports.
She said her department would approach each department responsible for failure to pay. This has grossly disadvantaged and badly affected the small business sector.
“The economy needs a thriving small business sector. [When this sector thrives], it will supply the government and the private sector and help grow our economy. However, when invoices are not paid on time, cash flow and liquidity constraints threaten their very existence,” said Ndabeni.
Undermines sector’s capacity to grow, boost economy
“This undermines their capacity to ignite economic growth and create jobs. It also sustains systemic patterns of economic inequality,” the minister adds.
Ndabeni said her department will practice what it preaches and ensure that all invoices are paid within their timeframe. This means that an invoice will be paid a month or 30 days after it has been received.
She said the 30-day payment stipulation was part of the department’s preferred method. It formed part of its performance reporting.
New ombud service office for sector
“Collectively, the government shoulders the responsibility to create an enabling environment for small businesses to grow and thrive. Among other things, this requires that we pay small businesses on time for services rendered,” said Ndabeni.
The department is also expected to open an office of the small enterprise ombud service. This as amended by the National Small Enterprise Act.
As such, the small business sector would have an office where complaints may be officially laid. The ombud office will also act as a mediator in disputes with no need for costly litigation processes.
“We are confident this will begin to address the non-payment of small businesses by both the public and private sectors,” said Ndabeni.
