The department of small business development wants the budgets of various national and provincial departments that owe small and medium enterprises huge sums of money to be slashed to allow the Treasury to pay the affected businesses directly.
While the national development plan — the government’s blueprint for eliminating poverty and reducing inequality — identifies the SME sector as crucial in the drive to tackle the unemployment crisis, late payments continue to hamper small-business owners, with many saying that not being paid on time is their biggest financial challenge. SMEs are more affected by late payments as their cash flows are weaker than those of their larger and more established peers.
The department of water and sanitation was the worst offender, owing R492m, or 78% of the total amount owed by all national departments. The department of agriculture, forestry and fisheries owed R99m, followed by the SA Police Service . Ntshavheni said her department is working on a database for SMEs that will be linked to the Treasury’s central supplier database. When the systems are integrated, the department will be able to know the exact amount owed to small businesses, she said.
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