Gov,t owes suppliers over P3.7bn

The Ministry of Finance has revealed that government payment instructions for 6,614 suppliers amount to P3.7 billion as of March 11, underscoring the scale of outstanding obligations to contractors and service providers.Responding to a parliamentary question from Molepolole North MP Arafat Khan, Finance Minister Ndaba Gaolathe explained that the figure reflects only invoices formally submitted to the Ministry of Finance.Many invoices remain at the level of Ministries, Departments, and Agencies (MDAs) and have yet to be processed, partly due to delays in manual submission systems.“We acknowledge that some invoices remain at the MDA level and have not yet been submitted to the Ministry of Finance for payment,” Gaolathe told Parliament.Currently, 1,470 invoices worth P991 million are still outstanding at MDAs. The Ministry has urged departments to submit all pending invoices before the end of the financial year in March 2026.Gaolathe admitted that the government is struggling to meet its statutory 10-day payment turnaround due to cash flow pressures. Instead of the usual “first-in, first-out” method, payments are now prioritised based on availablecash balances.To manage the situation, the Ministry has suspended nonessential expenditure; introduced centralised Government Purchase Order (GPO) authorisation to prevent unfunded commitments; and adopted daily liquidity tracking to monitor cash in real time.On VAT, Gaolathe said it was not possible to provide precise figures on tax charged or collected from outstanding invoices, since payments are made on a VAT-inclusive basis and suppliers are responsible for remitting VAT to the Botswana Unified Revenue Service (BURS).He noted that some suppliers are not VAT-registered, while others provide exempt goods and services.To improve transparency, the Ministry plans to roll out an integrated e-procurement system and link government payment platforms with BURS through digital interfaces.This initiative, anchored on the Integrated Tax Administration System (ITAS), is expected to strengthen compliance, reduce corruption, and enhance revenue collection.Gaolathe acknowledged the severe impact of delayed payments on business liquidity, warning that prolonged delays could force some companies to close.He pledged that the Ministry is committed to clearing the P3.64 billion balance by the second week of April 2026, coinciding with the receipt of Southern African Customs Union (SACU) revenues and the start of the new financial year.While declining to disclose individual supplier details due to data protection laws and contractual confidentiality, Gaolathe assured Parliament that a comprehensive summary of outstanding payments has been provided to ensure fiscal accountability.

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Gov,t owes suppliers over P3.7bn