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Govt spends E2.8bn paying suppliers

By Siphesihle Dlamini

The government has spent about E2.8 billion in the three weeks settling its suppliers’ arrears. This was announced by the Minister of Finance Neal Rijkenberg on Wednesday at the ministry’s boardroom.

Rijkenberg said they managed to pay all invoices which were submitted to the Treasury before the end of June 2022. “ In the last three weeks, the government has been able to settle suppliers 100 per cent up to the end of June 2023 which means all the requests for payment that come to the Treasury before the end of June 2023 had been paid in full as of yesterday (Tuesday),” Rijkenberg said, adding that that does not mean there would be no invoice in draws because there might be suppliers who still have outstanding invoices.

He reiterated: “About E2.8 billion has been spent on settling suppliers’ arrears. Having all suppliers paid by the end of June gives a huge relief and it also means that taxation gets better, and it should mean that there would be a lot of health in the economy.”

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The minister then pledged that those invoices which will come through will be processed and eventually be paid. “We will start to work with the suppliers and the ministries involved to see what is blocking the payments; whether is a budget issue in that concerned ministry or is a matter of delayed processing of invoices,” the minister said.

Rijkenberg also undertook that his ministry will continue to do its best to ensure that the suppliers are paid on time as this is the better time of the year when the government is expecting big payments from taxpayers. “We, therefore, foresee that in the short to medium term, we will be able to remain on top of paying suppliers on time,” he said.

Detailing where the government got the money to pay the suppliers, Rijkenberg said: “We have been fortunate in the last three weeks where we have provisional tax payments coming through which have contributed about E800 million in taxes and we had SACU come through which was around E3 billion and about half of that we pushed to the Central Bank in advance which we use to pay government salaries but about E1.5 billion we managed to set aside to pay suppliers. As well as the fact that the CBE has made a profit/windfall of about E445 million which we have also spent on the payment of suppliers.”

Providing a background of why the government has been struggling to honour its obligations, Rijkenberg said when the current Cabinet came into office, it found E6 billion of arrears due to suppliers. He said they then managed to successfully pay them on time for about a period of 18 months into office and then faced cashflow challenges again.

Rijkenberg said the government had planned to raise a portion of the budget to pay owed suppliers through a listing of Treasury Bonds in the Johannesburg Stock Exchange (JSE). “However, the legislation took a while to get to Parliament and there were time delays in the listings, and as we speak, we have not yet listed but there is progress and we are confident that within a month or two, we should be floating the Government of Eswatini Treasury Bonds on the JSE.”

Rijkenberg Blames health ministry over drug crisis

The Minister has blamed the Ministry of Health for the sporadic drug crisis in the country. While confirming that his Ministry through the Treasury and the Central Bank of Eswatini have done tremendous work in settling all the arrears for all health suppliers which submitted their claims before the end of June, Rijkenberg said the drug shortage crisis is caused by the health ministry which fails to process the paperwork on time after they have made large orders from suppliers.

“All Health suppliers that have submitted their invoices to the Treasury before the end of June have been paid as we speak now. Unfortunately, the Ministry of Health give large orders for medicines, and they do not process the paperwork until the order has been supplied in full. And that unfortunately causes a delay in the payments because sometimes suppliers supply two-thirds of the order, and they don’t supply the last third of the order until they are fully paid. And because of that principle, we do know that there had been delays at the Ministry of Health regarding the supply of medicines,” he said.

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He said at the moment, there has been a large drive to settle outstanding arrears for the Ministry of Health “and as I said, till the end of June, 100 per cent of invoices which were at Treasury have been paid but at the same time we do hear of suppliers of the Ministry of Health who are waiting to put orders as the paperwork is delayed and once it comes through, we will process them.”

The minister also expressed that he was happy that the new budget for the ministry has been processed and they have been able to extend the tendering period for three months from the previous years’ because the tendering process is sometimes delayed.

He also disclosed that the government has been able to settle arrears under the Phalalala Fund. He explained that the challenge with Phalalala Fund arrears was also caused by the ministry overspending which then demands the government to pump in more than was budgeted, which subsequently affects emaSwati who need special treatment in South Africa.

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