Government officials who stall on paying small businesses could face disciplinary action, if President Jacob Zuma has his will.
On Friday Zuma told members of the Black Management Forum that Government is considering taking drastic actions to ensure that small businesses are paid on time. Those measures include putting a provision in the performance contracts of Government accounting officers and senior managers saying that SMEs must be paid within 30 days.
In this way, Zuma says officials will be forced to comply or face disciplinary action if they fail to do so. The National Treasury has already begun to police compliance with the prescript to pay small suppliers within a month.
However, this all sounds too familiar. The president has previously made similar remarks, and the National Treasury guidelines state that Government must pay its suppliers, especially small businesses, within 30 days. But that hardly happens. Sometimes small businesses have to wait for as long as six months to get payment for work they’ve already done.
Champ Thekiso, director for business development at SSC Group, and head of the Association for the Advancement of Black Accountants of Southern Africa’s leadership programme, says it will take more than tough talking for Government to overturn its slow payment systems, which inadvertently inhibit the growth of local SMEs. He says Government needs a seamless system to process invoices, which must be free of corruption, in addition to strengthening accountability with its employees.
Government wants to rope-in small black businesses in its infrastructural roll-out of R844bn over the medium-term expenditure. It plans to spend more than R3tr over the period 2012 to 2020 on infrastructure roll-out.
The New Growth Path, Government’s economic blueprint, identifies infrastructure as a critical and an effective jobs driver and development tool.