Public procurement has long been sold as South Africas ultimate lifeline for small and medium enterprises SMEs. On paper, it offers a predictable pipeline of work and a pathway to growth, innovation and more jobs. In reality, though, the system meant to support SMEs is sabotaging the very businesses it was designed to uplift.
Every year, our government pours more than R1-trillion into goods and services, much of it meant for SMEs, particularly black-owned ones. Yet for many, their real barrier is not ambition and capability but a procurement system that is built to cater for the needs of large corporations and not the everyday realities of small enterprises.
The most immediate and destructive barrier for any business is cash flow. Despite regulations requiring payment within 30 days, late payment has become routine for many businesses. According to the auditor-general, in financial 2024, 117 municipalities 47 failed to pay suppliers within 30 days, instead taking an average of 286 days to settle invoices. Even more alarmingly, since financial 2022, municipalities have incurred R14.58bn in interest and penalties due to late payments.
