Small businesses around the country that provide products and services to the government are asking to be paid faster. Many small business owners can identify with tight cash flow management. With business owners who sometimes have to wait for up to four months before invoices are settled, many small businesses are suffering.

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Malose Monama reports from Johannesburg - Government is considering a proposal from South Africa's small businesses to cut down payment turnaround times on contracts to a maximum of 30 days.
The small and medium enterprises (SME) sector says one of the reasons is the time it takes government to pay for work done. This negatively affects the cashflow of the emerging sector.

The sector says the lengthy delays in payments inhibit the ability of these enterprises to secure commercial financing.

It also compromises the profitability of the jobs.

Government hopes to have adopted a position on the issue by the end of this month, said Trade and Industry Minister Mandisi Mpahlwa at last week's briefing of the economic, investment and employment cluster.

Government procurement for SMEs

Mpahlwa said the cluster was also considering how government procurement could be targeted to assist SMEs.

"The department of trade and industry completed an analysis of data on government procurement to determine a list of relevant products and services for procurement preference to SMMEs," he said.

He said there had been progress on the unification of infrastructure arrangements of the Apex Fund and the Micro Agricultural Finance Schemes of South Africa.

"Government is sensitive to ensuring that financial and non-financial support for SMMEs are addressed concurrently.

"The cluster has therefore asked the relevant departments to increase their emphasis on linking financial and non-financial support so that chances of enterprise success are increased," he said.

The cluster is also considering ways to strengthen the effects of tourism on the second economy.

The national tourism sector has adopted a skills plan and a national tourism conference on skills development is scheduled for later this month.

Mpahlwa said the cluster was also looking at developing infrastructure for street trading.

"Sites for infrastructure development are being visited and a draft manual for local economic development has been completed."

No 'well-governed activities'

He said the cluster had identified pilot municipalities for the location of infrastructure for street trading.

"A constraint on the success of street-trading initiatives is the lack of organised and well-governed street- trader networks who can work with government to integrate street-trader activities into formal sector-value chains," he said.

President of the African Co-operative for Hawkers and Informal Business, Lawrence Mavundla, said that it was co-operating with government on the initiative.

"We are looking to link the infrastructure roll out by municipalities to hawker training and by providing access to capital markets," he said.

Mavundla said it appreciated the fact that government had set plans in motion to draw street traders into the formal economy.

Original article from www.fin24.co.za