The DA is challenging the MEC for Finance Sakhumsi Somyo to explain why a figure of R1,4 billion of unpaid health debt was not reflected in a reply to a legislature question I asked recently. For the reply click here. In March, the MEC for Health, Dr Phumza Dyantyi, told the national parliament that health debts (accruals) amounted to R1,4 billion as at 31 January 2017. Has the Health Department been hiding this crisis from the MEC for Finance, or has he been hiding it from the legislature?
This crisis will be compounded by South Africa’s downgrading to junk status as the expected rise in inflation and costs of borrowing will further drive up the costs of healthcare in the Eastern Cape. Imported medicines and machinery will cost more, and there will be less funding for service delivery as the national government will allocate more funding to the repayment of debt.
This is going to have catastrophic consequences not only for the overall financial position of the province but also for the majority of people in the province who are reliant on state-funded healthcare.
This huge amount of money owed by the Department of Health will have a serious knock-on effect for the province, as this money will have to be paid from the new health budget for 2017/18 or sourced from other departments. The problem is worsened by the fact that overall, provincial departments owed suppliers R243-million as at 31 December 2016
This all has the potential to destabilise the province finances completely and place us once again into the rollercoaster years of high over-expenditure.
According to the reply by the MEC to my question, money owed by the provincial departments to suppliers as at 31 December 2016 in excess of 30 days came to a total of R50,5-million, more than 60 days totalled R23,2-million and in excess of 90 days, totalled R169-million.
The departments of health owed a total of R149-million, education owed R47-million and roads and public works owed R21-million.
This state of affairs is particularly unfair to small businesses that cannot be expected to bankroll the poor financial administration of the provincial government. Failure to pay timeously causes businesses to fail and further drives up the unemployment rate.
Provincial Treasury must take strong action to improve the financial management of the province and come clean to the public about the true state of our financial affairs.
For further information, please contact Bobby Stevenson, MPL on 082 775 3444