‘CONSIDER INTEREST ON ARREARS’

MBABANE – Government should consider paying interest on the amount owed to suppliers.

This is the view of Business Eswatini, in reaction to a call by the Ministry of Finance to all suppliers owed by government to submit claims by December 20, 2019. The reason for this, according to Chief Executive Officer Nathi Dlamini, is that some of these companies are, and have been, holding government IOU’s, and others verbal promissory notes, which are essentially useless to their suppliers.

He said these companies borrow money from banks in order to meet their supply contracts or tender obligations to government and these loans accrue interest charges against the borrower, which interest charges can wipe out any small profit margin a company could have made from the deals. Dlamini said while they received the call as good news, the organisation noted with great concern that the late payment did not include interest charges to the supplier.

Advocate

“I believe, and hereby advocate, that government be persuaded to begin paying suppliers interest charges,  much like the banks do for outstanding loans. That would be fair,” he said.
Dlamini said if this does not change, it means that the private sector will continue, as has been the case all along, to bankroll government against its will, much to the detriment of the economy which is struggling. The CEO said the announcement was good news to the business community and he congratulated government for finally coming to the party, despite that others are saying government is too late.

Regrettably

“It is true that some businesses have already shut down, thanks to government, and regrettably there were job losses in the wake of these company shut-downs. ‘‘The record of casualties as a result of government defaulting on payment of its obligations to the business community, is too long to enumerate,” Dlamini said yesterday. With government encouraging the private sector in particular to grow the economy, Business Eswatini has never doubted its sincerity. “However, it should be said that the private sector cannot grow the economy, even in the best of times, when most of the companies that matter are swimming in red ink due to unpaid debts by government.

Business Eswatini recognised the efforts being made by government and assured it of its continued support as long as it (government) is honestly pursuing the Turnaround Strategy.
“Anything less is bound to attract public rebuke. If they (government) want to get to the other side quicker, as they should, they must begin by ruthlessly cutting spending. So far, I don’t feel the sense of urgency. It would appear the spending spree has not subsided and it is such things that tend to cause hopelessness to many. More so because everyone wants this government to succeed,” he said.

Post your comment

Your name:

Your e-mail address:

Add your comments:

Please enter the code you see in the image:

Image:

Code: