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30% procurement policy to boost growth of SMEs, says Zulu

The Government wants to fast track the implementation of the 30 percent procurement policy of government contracts for small and medium enterprises (SMEs). Small Business Development Minister Lindiwe Zulu said yesterday she believed this policy would inject much needed growth of SMEs in the country. Zulu, who was briefing journalists on her budget vote, said they were waiting for the Treasury to issue the practice note to start implementing this programme. She believed this would be done soon. Zulu’s department has been allocated R3.5 billion over the government’s medium-term expenditure framework and she will present her budget in Parliament tomorrow.

She said the 30 percent procurement policy would be able to sustain a number of small businesses, who were battling to survive. She said she would give more details on this policy during her budget vote. She said she was aware that there were those who believed this 30 percent procurement policy for SMEs was unconstitutional. However, the government took the decision because it believed it was constitutional and in the interest of boosting SMEs. “The 30 percent procurement policy was taken by government. There were those who were saying whether it is constitutional or not constitutional, but our view is that it has to be implemented.” The minister also added that they would keep much more attention on the payment of suppliers within 30 days.

There has to be compliance by government departments on this policy. Departments have been accused of failing to pay small businesses on time, leaving them in dire straits. “Paying small businesses and co-operatives on time is critical to the sustainability of their businesses,” said Zulu. “We are working in collaboration with the Department of Planning, Monitoring and Evaluation as well as Treasury,” she said. The standing committee on public accounts and the standing committee on appropriations have spoken strongly against this in Parliament, demanding that officials who in future fail to pay small businesses on time must face action. SMEs have complained that they lose businesses because of late or non-payment by departments. Some were forced to close shop because of delays in payment.

Zulu also announced that they would come up with a business rescue strategy for SMEs and co-operatives in financial distress, but declined to give details, saying she would reveal everything tomorrow. “We will also announce tailor-made funding instruments for enterprises owned by women and youth,” she said.

Source: www.iol.co.za

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30% procurement policy to boost growth of SMEs, says Zulu

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