A service provider supplying South Africa’s provincial state hospitals is suing the government in a bid to recover R360m in unpaid invoices, some from eight years ago. The legal suit adds more woes to thehealth departmentafter the auditor-general recently put eight provinces in the red for R24bn in unpaid bills. Economist Prof Alex van den Heever has warned that the public health sector trend of non-payment bankrupts businesses and could lead to companies refusing to do work for the state.
Afrox, which supplies medical gases to state hospitals nationally, has turned to the high court in Pretoria to force the provincial health department to pay R360m with accumulating interest. The company, which has a supply agreement with National Treasury from 2017 to supply medical gases to hospitals, accuses all nine provincial health departments of being bad payers and pins its litigation on breaches of the Treasury’s regulation of a maximum 30-day waiting period for payment. The Eastern Cape health department, which has a budget of R31bn in 2025/26, owes the highest amount of R90m, with some unpaid invoices dating back to 2017.
The 2024/25 auditor-general’s health departments report showed the Eastern Cape had R7bn in accruals (incurred expenses not paid). “Negotiations are under way with the service provider to finalise a suitable payment plan,” Eastern Cape health spokesperson Camagwini Mavovana told Business Day. Mavovana did not answer questions as to what happened to funds budgeted for the tender or how the department failed to pay the service provider for some of the purchases from 2017.
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The Gauteng health department faces a claim of R57m. Its accruals in 2024/25 amounted to R8bn, making it the province with the highest unpaid bills carried to another financial year. In the current financial year, the department was allocated R67bn.
The company also claims the Free State has a debt of R28m, KwaZulu-Natal R34m, Limpopo R24m, Mpumalanga R15m, Northern Cape R64m, North West R31m and the Western Cape R15m. The Western Cape province is opposing the application. “There is significant financial mismanagement in the provinces, which appears to be from the central cause of failed leadership. The leadership is not focused on service delivery and financial management but political appointments,” Van den Heever said.
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