National and provincial government departments have repeatedly failed to pay their contracted suppliers timeously, according to the National Treasury.
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The Eastern Cape is responsible for nearly one in four invoices unpaid by the provincial government to suppliers, the National Treasury has revealed, as the state struggles to settle billions of rand owed in debt timeously.
According to the Treasury, the nine provincial administrations have not paid about R12.46 billion to suppliers by the end of December last year, with the Eastern Cape responsible for almost R4bn of the amount. Of the approximately 95 000 unpaid invoices, the Eastern Cape’s share is just under 40 400.
Gauteng is responsible for about 13 200 invoices valued at R2.92bn, while KwaZulu-Natal has failed to pay almost 25 200 suppliers owed R2.56bn. Limpopo and Mpumalanga only owed five and four suppliers R128 125 and R267 861, respectively, while the Western Cape had not paid 34 invoices totalling nearly R513 000.
"The total number of invoices older than 30 days and not paid by provincial departments at the end of December 2024 amounted to 94 914 invoices with a rand value of R12.4 billion," the National Treasury stated.
Overall, national and provincial departments paid 112 307 invoices after 30 days during the third quarter of the 2024/25 financial year (October to December 2024) valued at R9.5bn.
"The number of invoices older than 30 days and not paid by national and provincial departments at the end of the third quarter of the 2024/25 financial year amounted to 99 907 invoices with a rand value of R 12.9bn.
"This represents a regression of 12%, or 10 538 invoices, compared to the end of the second quarter of the 2024/25 financial year, which amounted to 89 369 invoices," Treasury added.
National government departments accounted for 4 993 invoices valued at R443 million that were not paid for more than 30 days by the end of December last year.
The National Treasury said the rand value of invoices paid after 30 days by national and provincial departments during the third quarter of the 2024/25 financial year amounted to R9.5bn, which represents a regression of 20% or R1.6bn, compared to the second quarter of 2024/25 (July to September 2024) amounted to R7.9bn.
National departments that contributed the most number and value towards the late or non-payment of invoices during the third quarter of the 2024/25 financial year are the departments of Defence, Public Works and Infrastructure, Water and Sanitation, Correctional Services, Transport, Justice and Constitutional Development, Agriculture, Land Reform and Rural Development, as well as the Police.
The common reasons provided by national and provincial departments for the late or non-payment of invoices during the third quarter of 2024/25 included inadequate budgets and cash blocking, financial system and central supplier database challenges, disputed invoices with suppliers, and unresolved supply chain management-related challenges.
Additionally, internal control deficiencies, inadequate internal capacity, late processing and authorisation of invoices, and misfiled, misplaced, or unrecorded invoices were also blamed by the National Treasury.
Government departments have been told that their persistent late or non-payment of invoices has serious impacts on the financial health of suppliers, who are often forced to borrow money to stay financially afloat as well as to continue meeting their contractual obligations with state institutions.
"When these institutions do not pay their suppliers timeously, it often results in suppliers closing down, especially small, medium, and micro enterprises," Treasury explained.
loyiso.sidimba@inl.co.za