Small businesses suffer as Emfuleni struggles to pay them

The Emfuleni local municipality is so broke that it has failed to settle a debt of just R580 owed to a tyre repair company for the past six months.

And a company that supplies it with grass-cutting equipment has been waiting for more than six months for it to settle its R1,500 bill, while a funeral parlour has been waiting to be paid for paupers’ burials it did almost a year ago.

These unpaid debts owed by the troubled municipality in the south of Joburg were revealed by Gauteng finance MEC Nkululeko Dunga in the legislature early this month.

Dunga said that as of May, Emfuleni had a R10.8bn debt, with most of it owed to Eskom and Rand Water.

The municipality seems to be struggling to settle the smaller debts owed to companies who might not have the financial muscle to make a court application to take over the municipality’s bank accounts like Eskom has done in the past.

Under the Municipal Finance Management Act (MFMA) municipalities and other government entities must pay all money owed to service providers within 30 days of receiving an invoice.

But some of the invoices submitted to the municipality have not been paid for more than 200 days.

The owner of Tyre and Tube Hyper in Vereeniging, who did not want to be named, said one of his subcontractors has been waiting for over six months to be paid R580 for work done to a municipal vehicle.

He said he had stopped dealing directly with the municipality years ago because of concerns over delayed payments — the company had previously waited between 18 months and three years to be paid.

“The last time, I think in 2019, we waited like two or three years for the payment on their accounts,” he said.

“So, when they paid it eventually, we decided to get other people to service their cars. It’s not correct to pay your creditors in that manner,” he added.

Another service provider, Boiketlong Funeral Directors in Sebokeng, said the municipality still owes it money for indigent and pauper funerals.

The owner, Jerry Malindi, said the municipality’s delayed payments had become so common that he had learnt to work around it.

If you keep quiet and do not ... [remind them about your invoices], you will not get paid.