The government is hoping to use money from the next diamond sale to clear arrears of P7 billion owed to local companies for services rendered and goods delivered
BONGANI MALUNGA
The government owes local companies P7 billion in arrears associated with the Government Accounting and Budgeting System (GABS), President Duma Boko has said.
Addressing a kgotla meeting in Letlhakeng recently, the President said such is the pile-up of the debt that the government is pinning its hopes on the next De Beers diamond sale in April for funds that will be channelled to the companies.
He added that the last government should have been honest about cash flow problems rather than blaming payment delays on GABS, saying his government has inherited a financial mess that has left businesses struggling for survival.
“There was no money”
“I am sure you have all heard about the GABS system and its problems,” he said. “The harsh truth is that there was no money in government coffers.
“It was a tactic used to avoid letting the public know that funds were not available to pay businesses on time. Some of that culture may still be there and we need to eliminate every last bit of it.
“As we begin a new financial year, the government’s backlog for services rendered and products delivered but unpaid for stands at P7 billion.
Next diamond sale
“A lot of businesses and companies have gone months on end without receiving payment for work that they completed. A lot of the businesses have had to close while others have been forced to lay off their employees because they could not operate on a deficit.”
The President stated that a quick fix for the payment delays could be the funds generated from an upcoming diamond sale but warned that there is a possibility that the situation may not be solved immediately.
“Our country is renowned for making revenue in the diamond market,” he said. “That is where we are pinning our hopes on in the next few weeks.
“We are actively working on solving the problem but a lot will depend on the upcoming diamond sale in mid-April. If things don’t go as well as we are hoping, we may need more time to solve the payment issues.”