A detailed quarterly report by the Public Service Commission (PSC) reveals no provincial government paid their suppliers within the prescribed 30 days from the receipt of an invoice or, in the case of civil claims, the date of settlement or court judgment – as per the PFMA.

The North West provincial government is among the top five contributors of non-payment of suppliers, as at the end of December 2021. The province recorded 5 296 invoices, which amounted to R416 519 583 that was not paid within the 30 days. 

Also read: FS government to pay up R90m to Centlec

The Free State Provincial Government recorded 731 invoices amounting to R38 547 043 by the end of December 2021. Some of the offices under the provincial government previously had their water and electricity cut off due to non-payments towards their bills to the cash-strapped Mangaung Metro Municipality.

The Free State government is currently paying R90 million monthly – as per the agreement with the Metro’s power utility, Centlec - in an attempt to service their debt. It is still unclear how the provincial government will service their debt to the Metro, as their water bill amounts to billions of rands.

Also read: FSPG in talks with MMM over debt

However, the Northern Cape provincial government – compared to other provincial governments in the country - recorded the lowest amount of money that they failed to pay in time. They failed to settle 20 invoices by the end of December 2021, which amounted to over R595 200.  

The report further states late or non-payments of invoices imposes dire consequences on the financial health of businesses. Late payments are particularly more damaging for Small, Medium and Micro Enterprises (SMMEs). SMMEs play a pivotal role in contributing to the government’s initiatives on job creation and poverty alleviation.

Therefore, the late and non-payment of suppliers is counterproductive to Government’s job creation and poverty alleviation initiatives as employees lose jobs and contribute to unemployment.

“Late and non-payment of suppliers can expose departments to costly litigation for non-payment, including being ordered to pay interest on late payments resulting in the already scarce financial resources being diverted from priority areas,” the report reads.

OFM News/Corn Koteli and Kekeletso Mosebetsi