State boost for small companies

12 November 2007

South Africa is to direct as much as 85% of government spending on selected goods and services to small, medium and micro enterprises (SMMEs) – and ensure that they are paid out within 30 days, says government spokesperson Themba Maseko.

Although the government already procures many products and services from SMMEs worth millions of rands, this is the first time that a specific target has been set.

Briefing reporters following a Cabinet meeting last week, Maseko said the spending would be directed at 10 products and services, while the 30-day payment rule for paying small enterprises would be implemented with immediate effect.

The 10 selected products and services include advertising, media and communication products and services; interior and exterior cleaning services and cleaning product supplies; clothing and textiles; computer equipment and consumable supplies; interior and exterior furniture and decor; events coordination and management; maintenance, repairs, construction and office space; travel coordination and shuttle services; perishable food supplies and stationery supplies and printing.

Government-funded small enterprise support agencies would also provide dedicated financial and non-financial procurement-based support for the selected products and services, which were identified following research by the Department of Trade and Industry.

To make sure the 30-day payment rule is applied, Maseko said its implementation would be included in the performance contracts of accounting officers in government departments.

In addition, the Small Enterprise Development Agency (Seda) is to set up a call centre to handle complaints from small business owners about late payment for goods supplied and services rendered.

The National Treasury is also to issue guidelines to all national and provincial departments to ensure the implementation, monitoring and reporting on the expenditure targets.

Maseko said such moves were necessary to ensure timely payment to SMMEs, as they do not have the large cash reserves to survive long periods without payment.

“The only way we will grow small enterprises is by giving them work,” he said, pointing out that SMMEs stood to benefit from hundreds of millions of rands of government expenditure.

He said that while the expenditure would be targeted at black-owned enterprises in line with broad-based black economic empowerment guidelines, this would not prevent the government from considering other options, as the initiative was aimed at all small businesses in the country.

Source: BuaNews