MEC DUNGA STATEMENT ON GAUTENG UNPAID SERVICE PROVIDERS

We want to begin by thanking every single service provider who is in this room this morning.
We are aware that you have businesses to run, invoices to follow up on, workers to pay and families to feed, and yet you set all of that aside to be here with us today. That is not something we take lightly, and it is not something we take for granted.

I must also be honest with you from the outset, the very fact that we have had to convene an Imbizo of this nature is, in itself, should be a source of discomfort for us as the provincial government. We should not need to gather service providers in a hall to explain why they have not been paid on time. Payment for goods and services rendered should be routine and timeous. That it has become necessary to account to you in this manner should embarrass all of us who carry public office. We are not proud of where we find ourselves. But we would rather stand before you and be honest than hide behind reports and statistics while your businesses suffer in silence.

When we were assigned this responsibility, one of the very first issues brought to our attention was the matter of accruals, invoices recognised as owing but which remain unpaid, sitting on our books month after month. This was not a footnote in a briefing document. It was flagged to me as one of the most serious risks facing this province, both fiscally and in terms of our credibility with the people who keep our government running, you, our service providers.

We made it clear to the senior management of the Gauteng Provincial Treasury that this could not continue to be treated as business as usual. We agreed that we needed to take ownership of this problem, intervene directly, and put concrete measures in place to arrest it. 2 We also committed that when we take this matter to my colleagues in the Executive Council, we will not go there alone or unsupported. Treasury’s senior management must walk this journey with us, so that when we ask other departments to change how they manage their payments, we do so with credibility and evidence, not merely an instruction from above.

Let me now turn to where we currently stand, because you deserve facts, not vague reassurances.
As at 31 May 2026, the accruals and payables not yet recognised across the Gauteng Provincial Government stood at R7.5 billion. This figure includes goods received but not yet invoiced, invoices not yet received, and transactions still in process. Of this R7.5 billion, R4.2 billion relates to amounts still within 30 days, while R3.3 billion, representing 44% of the total, has already exceeded 30 days. When we compare this to April 2026, the overall figure has grown, which tells us that despite the interventions under way, the pressure on our payment system has not yet eased. When we look further back, to March 2026, total accruals and payables stood at R9.4 billion, and a year before that, in March 2025, the figure was R12.6 billion.

So while R7.5 billion remains an enormous number, one that should trouble every one of us, it does represent an improvement of roughly 40% compared to where we were a year ago. I share this not to congratulate ourselves, but so that you understand, progress is happening, but it is far too slow, and it is nowhere near where it needs to be for you to feel the difference in your businesses.
I must also be honest about where the greatest pressure sits. The Department of Health alone accounts for R3.6 billion of the R7.5 billion in accruals, very nearly half of the province’s total exposure. The Department of Education accounts for a further R1.4 billion. These two departments, more than any others, are where service providers are waiting longest and hurting most.

On the broader question of payment compliance, that is, paying within 30 days as required by law, the province as a whole achieved 65% compliance in May 2026, and 55% for the year to date, which, I should say, is a marked improvement on the 15% we recorded over the same period last year. But when we strip out the Department of Health, provincial compliance actually rises to 67% for the month and 59% year to date. This confirms what many of you already know from bitter experience: Health is the single biggest source of delay in this province, driven by over- 3 commitments and cash constraints that have placed enormous strain on its ability to honour its obligations.

When accruals are properly factored into that department’s compliance rate, it in fact falls to below 1%. That is not a number any of us should be comfortable with.
I also want to draw your attention to how long some of these amounts have been outstanding, because ageing tells its own story. Of the invoices awaiting a payment run as at 31 May 2026, the Department of Health accounted for 97% of the total number and 87% of the total value of everything older than 30 days. More troubling still, of the invoices aged beyond 120 days, the Department of Health alone was responsible for 8 158 invoices, worth just over R2 billion.

These are not new bills. Some of these invoices have been sitting unpaid for four months or longer. I do not say this to shift blame away from the collective failure of this administration, but to be specific about where the crisis is most acute, because a general statement that “government is slow to pay” does little to help us fix the actual bottleneck.
Part of what is driving this is not only a shortage of cash, but weaknesses in our own internal processes. Our analysis shows that a number of departments continue to raise purchase orders manually, outside of the normal system-based process, or raise purchase orders only after an invoice has already been received, sometimes months after the fact. Fourteen departments and three public entities were found to be issuing purchase orders after the invoice date during the period under review. This is a process failure that is entirely within our control to fix, and it has nothing to do with a lack of budget.

It reflects poor discipline in how orders are placed, tracked and reconciled, and it is one of the more frustrating causes of delay, because service providers are sometimes left waiting not because the money is unavailable, but because the paperwork behind the payment was never properly set up in the first place. We are treating this as an urgent, fixable problem, and interventions such as budget blocking and system-level automation of our reconciliation processes are already beginning to reduce this over time, even if the pace of that improvement is still too slow for many of you.
4 Ladies and gentlemen, these are not just numbers on a slide. Behind every rand of that R7.5 billion is a business that planned around being paid, a payroll that had to be met regardless, and very often, a service that a resident of this province was supposed to receive.

When government fails to pay on time, the consequences ripple outward in ways that are sometimes invisible to us as officials but are devastatingly visible to you. Contractors who are not paid cannot pay their own suppliers, and so the delay cascades down the value chain, hitting smaller and more vulnerable businesses the hardest. Projects stall.
Equipment cannot be maintained. Materials cannot be procured. In sectors like health and infrastructure, this translates directly into service delivery failures: clinics without adequate supplies, maintenance that does not happen, infrastructure projects that grind to a halt while communities wait. For your businesses, non-payment often means having to take on expensive short-term credit just to keep the lights on, retrenching staff you fought hard to keep, or, in the worst cases, closing your doors entirely.

We have seen credible businesses, built over years, collapse simply because government did not honour its side of the contract. And every business that closes, every job that is lost, is a direct hit to the Gauteng economy, an economy that we, as this province’s government, are meant to be nurturing and growing, not undermining through our own inefficiency. When service providers cannot rely on government to pay on time, they price that risk into future bids, they hesitate to invest, and some simply choose not to do business with us at all. That, in the long run, weakens competition, drives up costs for the state, and ultimately makes government itself less capable of delivering for the people of this province.

We must also be honest that the businesses hit hardest by this are very often the ones that can least afford it: small and medium enterprises, black-owned businesses, and township-based suppliers who do not have large balance sheets or access to cheap credit to absorb months of delay. When a large corporate is paid late, it is an inconvenience. When a small township-based supplier is paid late, it can be the difference between staying open and shutting down permanently, between keeping five employees on payroll and retrenching all of them. So this is not only a fiscal management issue for us. It is an economic transformation issue. 5 Every month that we delay payment to a small, black-owned business, we are working directly against our own stated goals of inclusive growth and township economic revitalisation in this province.
This is why we are here today.

But I want to be clear about the spirit in which we come to this Imbizo. We have not come here to stand at this podium and deliver a series of long speeches at you. We have come here, first and foremost, to listen. You are the ones living this reality, invoice by invoice, month by month, and we need to hear directly from you what this has cost you, what has gone wrong from where you sit, and what you believe needs to change.
To support that conversation, we have brought key stakeholders into the room with us today.
The South African Revenue Service is here, because we know that payment delays have tax and compliance implications for many of you. The Companies and Intellectual Property Commission is here, because business registration and compliance status often sit at the heart of payment disputes. The National Home Builders Registration Council is here, given how many of you operate in the built environment and infrastructure space.

And Standard Bank, as the official banker of this province, is here, because access to finance and cash flow support are often the difference between a business surviving a late payment and a business going under because of one.
I must also be honest that we had invited other key departments to be part of this conversation:
Education, Health, Human Settlements and Infrastructure Development, departments that, as you have heard from the figures I have shared, are central to this challenge. Regrettably, they were unable to join us today. This is a new approach we are testing, a new way of trying to resolve a very old and stubborn problem, and I want to be optimistic rather than despondent about their absence. My hope is that, having seen how today unfolds and the value that comes from this kind of direct engagement, they will join us at future sittings of this Imbizo, and indeed take the lead in engaging their own service providers in the same way.

So, this is what I ask of you today, let’s speak frankly. Tell us where the system has failed you, tell us about the human and business cost of these delays, and tell us what practical solutions you believe would make the greatest difference. We are not here to defend the indefensible. 6 We are here to understand it fully, so that when we speak again later today, our commitments are not empty promises but practical, implementable steps with clear timelines and clear accountability. That is the only kind of commitment worth making to you, and it is the only kind I intend to make