Spike in job losses blamed on state

● President Cyril Ramaphosa’s government is directly responsible for the recent jobs bloodbath, say small business owners who have had to close shop because the state owes them more than a staggering R7bn in unpaid invoices.

The Sunday Times can reveal that the government, both national and provincial, owes struggling businesses R7,1bn for services rendered.

The shocking figure was revealed by small business development minister Khumbudzo Ntshavheni in a written reply to a parliamentary question from the DA this week.

Invoices should be settled within 30 days, according to government policy.

The details showed that provincial departments were the worst offenders.

Provinces account for almost the entire R7.1bn outstanding bill to struggling businesses, owing R6.5bn.

Gauteng is the worst offender at R2.6bn, followed closely by the Eastern Cape, which racked up R2.1bn in unpaid invoices.

At national level, the biggest culprit is the department of water & sanitation, which clocked up an outstanding bill of R492m in the 2018/2019 financial year, followed by the department of agriculture at R99m and police at R24m.

There was no response to questions sent to Ntshavheni’s office by the Sunday Times.

Struggling small business owners owed money by the government, who spoke on condition of anonymity for fear of victimisation, said the late or nonpayment of their invoices was killing their companies and forcing them to retrench workers.

The quarterly labour force survey released by Stats SA last month indicated that unemployment had increased from 27.6% in the first quarter to 29% in the second.

Small business owners who deal with the government have sad stories to tell about the unwillingness to pay them on time.

An Eastern Cape-based civil engineering firm owner said she had been sent from pillar to post for almost a year over outstanding invoices. “We are unable to pay our staff. There are outstanding salaries in our company for about six months. As a result, we are down to two staff members from 11.”

The manager of a construction company running government projects in the Free State said they had been forced to suspend work due to nonpayment.

“The suspension of work resulted in a loss of jobs. This does not just affect the company, but community members employed through the project. The nonpayment led to cash flows being disrupted because we could not pay our suppliers. Eventually staff were retrenched,” he said.

DA MP Leon Schreiber, who put the question to Ntshavheni, accused the ANC-led government of “crippling” businesses, while it had no qualms about paying civil servants who were illegally doing business with the state.

We are unable to pay our staff

Civil engineering firm owner

Eastern Cape