OWED government suppliers have revealed that as government is taking time to pay them for services rendered, they have had to resort to loan sharks so as to stay afloat.
They claim that they have not been paid for six months, adding that they are now struggling to keep up with their financial obligations such as rent payment, loan repayments as well as payment of salaries for their employees.
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The suppliers further alleged that due to the prolonged wait for payment from government, some of their employees had not been paid for the past two months.
They also alleged that government’s failure to pay them on time had resulted in some companies shutting down, resulting in the loss of employment to hundreds of employees.
Federation of Eswatini Business Community (FESBC) Hhohho branch Chairman Isaac Gamedze yesterday confirmed that some owed government suppliers had not yet received their payment from government.
He said they were hoping to start receiving payment today. “None of our members have received payment from government.
We are hoping that some suppliers will start receiving payment from tomorrow(today),” he said.
FESBC President Prince Themba said delayed payment of suppliers by government had a negative impact on business as this resulted in delayed payment of taxes and many other obligations.
“Akuhambi kahle as suppliers are also expected to comply with their obligations such as payment of taxes and servicing loans from financial institutions,” said the president. He said the Eswatini Revenue Service (ERS) expected taxes to be paid on time and delayed payments resulted in penalties for their members.
He further pleaded with government to prioritise the payment of businesses on time.
On Friday, after months of growing frustration due to unpaid invoices, over 50 unpaid government suppliers stormed the accountant general (AG)’s offices to demand payment from the national Treasury.
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Minister of Finance Neal Rijkenberg later revealed that government had since made plans to release around E130 million between Friday and today to settle part of its debt with suppliers.
Speaking to this publication yesterday, Gamedze revealed that the suppliers had not been paid. However, he said they would follow up with the treasury department today. He said there were many suppliers who were on the brink of shutting down as they were unable to keep up with their loan payments.
“Our members are also employers and cannot pay salaries to their employees,” he said.
He added that their members were also struggling to compete for new tenders as they were still owed by government. He said the suppliers were also unable to get tax clearances from the ERS to qualify to compete for new tenders.
He said most of their members were struggling to stay afloat and unable to pay their own suppliers as well as purchase fuel as some have been owed for more than three months. He mentioned that they had previously engaged the ministry of finance but after they realised that there was no change, they resorted to invite their members so they could hear first-hand what the challenge was.
According to a government supplier who preferred anonymity, the situation was painful, mainly for small and medium-sized enterprises (SMEs) who have resorted to loan sharks as banks were no longer willing to provide funding for them.
He said suppliers were caught between a rock and a hard place as they were unable to fulfil their orders while waiting for payment from government.
“As suppliers we end up being forced to approach loan sharks and using our vehicles as collateral to access funds,” he said. He said what pained them the most was that government went all out to ensure that civil servants’ salaries were paid on time but failed to prioritise suppliers who contribute to the economy through taxes.
He said the delayed payment had a negative impact on the economy as they were unable to pay taxes on time. He said some suppliers had their assets repossessed by financial institutions due to their failure to keep up with their loan payment.
Govt to pay suppliers from today – Neal
MINISTER of Finance Neal Rijkenberg has assured suppliers that they will be paid from today.
Rijkenberg said the E130 million to be used to pay the suppliers was a draw down from the Central Bank of Eswatini (CBE).
“We felt we could draw down the E130 million without causing too much trouble with the salaries for November and the commitment was to pay suppliers between Friday and Monday (today),” he said.
He clarified that it did not mean that all the suppliers would be paid, but the timelines of the payment that were outstanding would be caught up quite considerably.
He also emphasised that government had sourced two loans amounting to about E1.75 billion meant for budget support and clearing arrears. He said some of the pending payments were part of the arrears.
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He said last week the loans received royal assent and the funds would be secured in the next two to three weeks.
Minister Rijkenberg re-assured that suppliers would be paid by the end of the month.
This followed the recent passing of two loan bills by both chambers of Parliament.
The parliamentarians debated and passed the loan bills amounting to about E1.75 billion for budget support as well as clearing arrears.
These are the second and third loans sourced for clearing arrears this financial year following the first loan amounting to E1.8 billion sourced from the World Bank in June.
“It normally takes about three weeks to get the money in after the gazette has been issued and to get the final loan agreement signed,” he said.
Rijkenberg recalled that government had been having a stock of arrears ever since he became minister, which were about E6 billion at the time.
He shared that at present, arrears were fluctuating between E1 billion and E2 billion.
He said when government took the previous loan of about E1.8 billion from the World Bank, the financial year’s budget needed about E2 billion.
He said the plan for the two new loan bills was to squash arrears once and for all.
The minister previously assured that if the two loan bills were passed, until April, 2026, they would have enough cashflow to ensure that everyone was paid on time.
He said upon receiving the Southern African Customs Union (SACU) receipts in the next quarter, they would be able to pay everyone on time as well as projects under the Regional Development Fund (RDF) and Microprojects.
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