State non-compliance shocking, says Zuma
GOVERNMENT departments’ non-compliance in paying suppliers within 30 days had reached alarming levels, President Zuma said yesterday.
“A key contribution to the development of small business by government would be improving government’s ability to pay suppliers on time, within the prescribed 30-day period.”
Zuma was speaking at the Soweto International Conference on Entrepreneurship and Small Business Development, at the University of Johannesburg’s Soweto campus.
Zuma said the National Treasury issued an instruction on November 30 last year, directing national and provincial departments to report non-compliance and reasons for this to Treasury. “The outcome demonstrates that we had reason to be concerned,” Zuma said.
For March 2012, 27 national departments and six provincial treasuries, that cover 72 provincial departments, submitted their reports.
According to the report the current number of unpaid invoices older than 30 days in national departments was remarkably high at over 2 438, Zuma said.
“The amounts are in excess of R88-million.”
In provincial departments there were 11 370 invoices outstanding, amounting to over R548-million.
“When all the departments submit exception reports the figures are likely to grow substantially,” Zuma added.
“Most of the reasons provided relate to internal management problems in departments.
“Some of the reasons are shocking, such as that the officials responsible for processing the accounts went on leave.”
Zuma said the Forum of SA Directors General was directed to work with its members to ensure a reduction in the number and value of unpaid invoices.
“It is unacceptable that departments can be so relaxed about something that can destroy some small businesses if not attended to urgently,” he said.
Cabinet would get regular reports to monitor progress in the campaign, he said.
Meaningful economic activity in townships and rural villages and towns was also needed to fight poverty, unemployment and inequality, Zuma added.
“Boosting small business in these areas is a most logical way of achieving this goal,” he said. “We are of one mind in the belief that our townships should be thriving centres of economic activity and excellence, instead of the purposes for which they were established by colonial and apartheid regimes,” he said.
Zuma said the government had decided to focus on growthorientated enterprises as well as enterprises in priority sectors like tourism, construction, agriculture, cultural industries and information and communications technology.
“Our target is to support primarily the enterprises which are owned by black people, disabled people and women as well as the youth,” he said.
Zuma said all stakeholders had seen the importance of growing small business, which is the engine of growth and development.
The three key pillars of the small business strategy were financial and business development support services, procurement support and an improved regulatory environment, Zuma said. — Sapa