Black Entrepreneurs Alliance CEO the cost of not paying small businesses on time

The Black Entrepreneurs Alliance has raised concerns about the South African government's failure to pay small businesses on time, as per their commitment to settle invoices within 30 days. Refilwe Monageng, CEO of The Black Entrepreneurs Alliance, emphasized the detrimental impact late payments have on SMEs, hindering their ability to grow sustainably and create jobs. In a recent interview with CNBC Africa, Monageng highlighted the repercussions faced by entrepreneurs as a result of delayed payments, including difficulties in honoring their own financial obligations, damaging credit profiles, and ultimately leading to business failure. While acknowledging some progress in certain government departments, Monageng revealed that outstanding payments to small businesses currently amount close to a billion rand, signaling a significant increase from previous years. The issue of late payments extends beyond the provincial level, with various provinces struggling to fulfill their financial obligations to small enterprises. Monageng noted the exemplary performance of the Western Cape government in adhering to a 15 to 30-day payment period, contrasting with the challenges faced by other provinces like the Eastern Cape which owe substantial amounts to suppliers. The ongoing impact of the COVID-19 pandemic has further exacerbated the situation, with businesses grappling to recover from financial setbacks. Monageng stressed the importance of the private sector's role in supporting small businesses, urging companies to expedite payments to suppliers. Additionally, he called for government intervention to provide tax clearance and credit bureau amnesties to entrepreneurs, enabling them to access funding and sustain their operations. Monageng proposed a process where tax amnesty would grant small businesses a reprieve from tax penalties, allowing them to obtain the necessary clearances to receive payments from government departments and private entities. The initiative aims to improve cash flow for businesses and enhance their creditworthiness, fostering economic growth and job creation. Despite some challenges in implementation, Monageng expressed optimism about the proposal's potential impact and called for collaborative efforts from both government and corporate entities to support small businesses in South Africa. The need for timely payments to small businesses remains critical in safeguarding the country's entrepreneurial ecosystem and fostering sustainable economic development.