Gauteng MEC tackles SMMEs and service delivery

Gauteng Finance MEC Nkululeko Dunga says strengthening SMMEs and improving municipal finances are key to creating jobs and restoring service delivery. Residents welcomed the engagement but said they will judge government by its actions.

Gauteng Finance MEC Nkululeko Dunga engaged with residents during an imbizo at the Don Mateman Hall on July 15, where he outlined provincial efforts to support small businesses, address unpaid service providers and respond to concerns over service delivery.

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The session concluded with residents being given an opportunity to ask questions, which Dunga answered.

Dunga revealed that the purpose of his visit was two-pronged: engaging with the community using the imbizo and supporting an incubation program for small, medium and micro enterprises (SMMEs).

“We came here on two aspects. One was the imbizo with the people of Eldorado Park, but the second aspect is an incubation workshop for SMMEs, which runs for about six days. It is not consecutive, but over a period of about three weeks,” he said.

He explained that the programme equips local SMMEs from Eldorado Park and surrounding areas with training on the tendering system, applications, qualifications and pricing while connecting them with financial institutions and other business entities to help grow their businesses.

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Dunga said this was the third incubation workshop he had attended and that government deliberately visits the programme to encourage entrepreneurs because SMMEs play a strategic role in creating employment, particularly at a local level.

Speaking on Gauteng’s finances, Dunga said the province has a budget of R180b, while the City of Johannesburg recently passed a budget of almost R90 billion, much of which is allocated to operational expenditure.

“There are issues in terms of liquidity, and that has not assisted, particularly now that National Treasury has said it is going to withhold conditional grants and equitable share. It is a bit of a crisis, but I think with proper financial management we should be okay,” he said.

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The MEC also acknowledged that government owes billions of rand to service providers.

He said the provincial government closed the previous financial year with about R4 billion in accruals owed to service providers and is working to reduce that amount through initiatives such as the Unpaid Service Providers Imbizo.

He added that municipalities were also falling behind on payments, including to bulk infrastructure providers such as Eskom and Rand Water.

“In the City of Johannesburg, they owe between R6 billion and R8 billion to Eskom. It is a concern because historical debt must be paid in the new financial year, in addition to the commitments of that financial year,” Dunga said.

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He added that the Auditor-General had repeatedly found that government must comply with the requirement to pay suppliers within 30 days in terms of the Municipal Finance Management Act (MFMA) and the Public Finance Management Act (PFMA).

Addressing concerns over refuse collection, Dunga attributed service interruptions to the financial strain experienced by contractors.

“There is a despondency among service providers, particularly under Pikitup, to continue servicing contracts when they are not being paid. The main issue is the non-payment of contractors, together with the escalating costs of fuel, paying drivers and waste pickers,” he said.

He added that companies owed beyond 30 days are forced to source funds elsewhere to keep operating, while rising diesel and petrol prices have placed further pressure on contractors.

“This has constrained service providers, and some have withheld their services because they no longer have the financial capacity to continue without payment. The City of Johannesburg is making the necessary interventions to ensure these service providers are paid so that services can continue,” he said.

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Community member Xolani Mhlambi said he appreciated the MEC’s engagement but believes government will ultimately be judged by its delivery.

“I won’t judge him until he proves and shows. He started it, so he has to finish it. All we have to do is wait and see the development.

“In what he said and his speech, it’s promising that there will be change. There are things he said I didn’t know, but I could say I gained by coming here and listening to him. One thing I want to see is that there will be a way wherein we can get jobs and be developed as well,” said Mhlambi.