The Gauteng Health Department owes R2.8 billion to 2093 companies for more than six months.
This information was revealed by Gauteng Health MEC Bandile Masuku in an oral reply to my questions in the Gauteng Legislature on Tuesday this week.
Furthermore, 505 companies are owed for more than a year, and the oldest debt dates back to 2010!
According to Masuku, the total amount of accrued debt stood at R4.8 billion in April at the beginning of the 2019/20 financial year.
He says that payment plans have been arranged with the largest debtors and all debts would be settled in the next two years.
This would include R1.2 billion owed to the National Health Laboratory Service (NHLS).
I am most concerned by this gigantic debt overhang that eats into the current budget and will take a large slice from next year’s budget as well.
Many jobs are lost because of late payment by government departments, and some companies refuse to deal with the Gauteng Health Department because of its poor payment record.
Progress will only be made when all debts are paid up and all companies are paid within the legally required period of 30 days.