Late payments from govt departments is hurting small businesses – DA

JOHANNESBURG – Some 80 percent of South African small businesses fail within the first three years of activity, many of them due to late payments including from government departments and state firms, the main opposition Democratic Alliance said on Tuesday.

The party cited the example of Bobby Mabe, whose manufacturing company supplies state power utility Eskom but nearly went under due to late payments.

“In many similar cases, lack of payment has resulted in the closure of emerging businesses and the loss of jobs. With this approach, it is no wonder that the country is facing an unemployment rate more than 27 percent,” the DA said. 

“The ANC government continues pay lip service to the small business community but fails at every turn to create assist the small businesses.”

The party said the government was sitting on about R27 billion in outstanding invoices from small and medium enterprises, with Gauteng province alone owing R9.5 billion by end of March 2018.

The DA, which runs Western Cape, says the province created more than 75 percent of all the new jobs in South Africa in the first quarter of 2018 and that in the commercial hub of Johannesburg, which the party has run in a coalition since 2016, 109 000 jobs were created in the first two quarters of the year.

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