Finance Minister Enoch Godongwana has followed through on a threat to withhold funding from the Eastern Cape government, citing the province’s persistent failure to pay municipalities for services rendered.
In a letter to Eastern Cape Finance MEC, Godongwana highlighted R1.4 billion in outstanding debt for property rates and services, with over R450 million owed for more than a year. The Minister stated that this breach of the Public Finance Management Act (PFMA) undermines municipal service delivery and creditor payments.
Democratic Alliance (DA) Eastern Cape leader Dr. Vicky Knoetze said the situation points to three major problems: a systemic failure to meet financial obligations, a serious and persistent breach of financial legislation, and an entrenched culture of non-payment.
“It is mainly because of the complete lack of consequence management specifically when it comes to financial obligations in the Eastern Cape,” Knoetze said. She noted that R1.3 billion of the total debt is older than 30 days, contravening PFMA regulations.
Knoetze revealed that she has written twice to the Standing Committee on Public Accounts (SCOPA) about the R1.4 billion owed, including R450 million outstanding for more than a year, as well as 1,400 pending cases of financial misconduct in provincial departments. She reported receiving no response regarding the misconduct cases.
The provincial government has until May 30 to respond to National Treasury, explaining why the equitable share should not be stopped, providing proof of payments, submitting a time-bound payment plan, and detailing preventative measures.
Knoetze identified three departments for immediate action: Public Works, which accounts for over R700 million of the debt, along with Health and Education. She called for departmental leadership and officials to appear before a joint committee of provincial treasury and SCOPA to account for the amounts.
According to Knoetze, 16 of the province’s 39 municipalities are already severely distressed per the Auditor-General, affecting service delivery in a province with 44.6% unemployment.
The Eastern Cape government declined to comment on the issue.
