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It's time the state stopped strangling our entrepreneurs

The Times Editorial | 2012-07-09 00:05:42.0

The Times Editorial: Despite the government's commitment to promoting small businesses - backed up by the establishment of a plethora of support agencies and financing mechanisms for small, medium and micro enterprises - the state is failing many budding entrepreneurs in the most fundamental way.

Thousands of small operators who do business with the government are forced to wait months, sometimes years, before the bureaucrats finally get their act together and secure the necessary approvals so that they can be paid. This is despite the fact that officials have repeatedly pledged to ensure that people who do business with the government are paid out within 30 days of the contract's completion.

Though a large company can often weather the storm for six months waiting for a director-general to sign a cheque for work done, small operators simply don't have this luxury - many are forced to raise emergency finance or go to the wall because often the government is their only client.

Given that small businesses, particularly in a developing country, are regarded, both by the government and by many economists, as the engine room of economic progress, this shameful state of affairs cannot be allowed to continue.

On Friday, President Jacob Zuma told the Black Management Forum that the government was looking into the possibility of inserting a clause into the contracts of state accounting officers stipulating that small enterprises must be paid within 30 days. Failure to comply would result in the wayward director-general or manager facing disciplinary action.

The proposal is an excellent one which, if implemented properly, will make a huge difference in the lives of many small entrepreneurs.

For far too long now, senior bureaucrats have been playing fast and loose with people's lives while receiving their (invariably fat) salary cheques on time each month.

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