Eastern Cape's R2 billion bill is a death trap for South Africa's economy

Eastern Cape's R2 billion bill is a death trap for South Africa's economy

- The Eastern Cape government owes service providers a little over R2 billion

- Incorrect billing, rate disputes, late invoice submission and the changing of banking details by suppliers are some of the reasons given for late or non-payment

- The government's failure to pay their debt is killing small companies and the SA economy

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In South Africa, it's nothing new to hear that the government is in major debt. But when that debt starts amounting to billions, it's worrying.

The Eastern Cape government has gone from owing service providers R466 million this time last year, to owing a mountainous R2‚053‚013 at the end of March.

TimesLIVE reports that the Democratic Alliance started asking the Provincial Legislature questions about the debt of the Eastern Cape.

The EC government had a strategy of paying companies within 30 days and the DA wanted to know it was working.

Apparently not.

The Eastern Cape finance‚ economic development‚ environmental affairs and tourism MEC Oscar Mabuyane says all government departments have trouble paying service providers on time.

Bobby Stevenson of the DA feels this debt is killing South Africa's economy. Failure to pay small businesses is cutting their throats and causing them to go under. As a result, the economy weakens.

This, of course, affects many families who then struggle to survive.

With the help of the Eastern Cape Black Contractors Association, thousands of companies revealed that the EC government owed them more than R400 million. This was in March 2018.

ECBCA member‚ Siyabulela Moko says they have been paid since.

Briefly.co.za gathered that about 8‚414 suppliers are owed more than R2 billion by the provincial government. The worst offender of the departments is the health department, who owes R1.7 billion.

The reasons given for late payments or failure to pay include incorrect billing, rate disputes, late invoice submission and the changing of banking details by suppliers.

Mabuyane stated that the treasury is working on resolving the problems.

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Source: Briefly.co.za

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