Several government departments have defaulted on the payments of thousands of invoices for services from businesses, which severely impacted the finances of those businesses.<\/p>\n
The Public Service Commission (PSC) said that in the third quarter of 2022 – 1 October 2022 to 31 December 2022 – over 3,000 invoices were not paid to businesses that provided services within thirty days.<\/p>\n
Although the PSC usually looks at payments for the whole quarter, most of the information it provided was in relation to non-compliance in December alone.<\/p>\n
In December, numerous government departments were responsible for the non-payment of over R90 million to service providers<\/strong>.<\/p>\n PSC Commissioner Anele Gxoyiya said that the 1.6% expansion of the economy in the third quarter of 2022 would have been greater if government departments paid service providers on time, who could then pay their employees.<\/p>\n He added that several smaller companies have collapsed due to the lack of payment, as SMMEs could not meet their overhead costs, resulting in job losses.<\/p>\n He commended the departments of Defence, Water and Sanitation, and Social Development, which did not owe any of their service providers in December.<\/p>\n However, most government suppliers were not paid within the thirty-day limit.<\/p>\n The departments of Agriculture, Land Reform and Rural Development, Health, Home Affairs, Tourism, Public Works and Infrastructure and Stats SA were the worst-performing departments.<\/p>\n The Health Department was the worst offender and owed more than R55 million to businesses in roughly 2,000 invoices by the year’s end.<\/p>\n The situation worsens when looking at the non-compliance of provincial departments.<\/p>\n Gxoyiya noted that in the nation’s nine provinces, there are non-compliant departments, accounting for the non-payment of over R5 billion.\u00a0<\/strong><\/p>\n The Eastern Cape and Gauteng were the worst offenders and owed R2 billion and R1.6 billion, respectively.<\/p>\n The Western Cape was the best-performing province and only owed roughly R200,000.<\/p>\n Gxoyiya said that provinces have regressed by 31.6% in payments compared to the previous quarter – adding that all progress made in the second quarter has been eliminated.<\/p>\n “The lack of consequence management is the main cause of the departments continuing as if everything is normal when service providers are suffering the pain of their businesses collapsing.”<\/p>\n “The intervention by the Portfolio Committee of the Public Service and Administration is yielding some positive results, albeit those results are at a slower pace,” he said.<\/p>\n He said that accounting officers must ensure that there are consequences for the non-payment of service providers, as this will ensure that these businesses do not collapse.<\/p>\n
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