Govt Admits It Owes Suppliers Millions But Blocks Them From Using Third Parties To Claim Their Money

Finance, Economic Development and Investment Promotion Minister Mthuli Ncube has warned Government suppliers and contractors against engaging third parties and consultancy firms to pursue payment of money owed to them by the State.

In a recent statement, Ncube said it had come to the attention of Treasury that some suppliers and contractors who are owed money for goods and services rendered to Ministries, Departments and Agencies (MDAs) have been engaging third parties to pursue settlement of their claims in exchange for a fee or a percentage of the contract value.

Treasury said Government will not entertain such arrangements.

“Treasury wishes to clearly advise all Government creditors that they should not engage any third-party intermediaries or so-called consultancy firms to pursue Government outstanding payments to service providers and contractors,” said Ncube.

“Government will not entertain claims or obligations arising from arrangements entered between Government creditors and consulting firms or other third parties for the recovery or facilitation of payment on Government arrears.”

The Minister said Government will not assume responsibility for any fees, commissions, percentages or other costs arising from such arrangements.

Ncube said all MDAs have been directed not to tolerate claims submitted by consultancy firms or other third parties purporting to act on behalf of Government creditors in the recovery or facilitation of payment of Government arrears.

He added that MDAs have also been advised to desist from delegating their responsibilities to suppliers or contractors to follow up on payments directly with Treasury, as it is completely against Government systems and procedures.

“Treasury would like to unconditionally advise that officials will not entertain or engage any such suppliers or contractors who visit or call on them,” he said.

The warning also extends to holders of Treasury Bills. Ncube said holders of TBs should desist from engaging third parties to follow up on payments for matured TBs or their liquidation, as Treasury will not entertain any third parties.

He said Treasury will also not consider any requests for discounting of Treasury Bills as their maturity profiles were set strictly in line with Government cashflows.

Ncube reminded government creditors that all matters relating to outstanding payments should be pursued through established Government procedures and official channels, with follow-ups on arrears directed to the respective MDAs that contracted the suppliers or service providers and to which the relevant payment obligations relate.

“The business community is further advised that no consultancy firm, agent or other third party has the authority or mandate to facilitate, guarantee or secure payment of funds owed by Government,” said Ncube.

“Therefore, Government creditors who choose to engage such entities do so at their own risk and should not expect Government to recognise or settle any resulting fees, commissions or other associated costs.”

Ncube urged all Government creditors to approach the respective contracting MDAs directly and to follow the established procedures for the verification, processing and settlement of legitimate payment claims.