The Eastern Cape government, which governs the third poorest province in South Africa, is the worst payer of supplier invoices out of the country’s nine provincial governments.

Out of the nine provinces, the Eastern Cape was single-handedly responsible for the highest number of unpaid invoices at the end of September 2025. These are invoices that are older than 30 days, but should have been paid within 30 days from the day they were submitted by suppliers.

According to a recent report by the National Treasury, the province was responsible for 51% of 92,223 unpaid invoices by the nine provincial governments.

The unpaid invoices by all the provinces amounted to R12.1bn, leaving thousands of suppliers across South Africa facing a cash flow crunch -- an outcome that forces many suppliers to resort to borrowing to pay bills, wages, rent, and other financial obligations.

At the end of June 2025, the total number of unpaid invoices was 80,299 -- which means late or non-payment of invoices worsened by 15% in the three months from June to September. The failure to pay the invoices resulted in the provincial governments owing suppliers about R11.4bn.

“The late and non-payment of suppliers’ invoices continues to negatively impact the financial well-being of small and medium enterprises,” revealed the National Treasury.

The Eastern Cape is the worst culprit when it comes to late or non-payment of invoices within the legally stipulated 30-day time-frame. By the end of September, the province had not paid 46,583 invoices valued at R3.8bn.

The second worst payer of supplier invoices is the Gauteng provincial government, which is responsible for 19% (or R4.3bn) of unpaid invoices, followed by North-West with 11% (or R792m) of unpaid invoices and KwaZulu-Natal with 8% (or R1.5bn) in the fourth spot.

Western Cape reported the lowest number of unpaid invoices. By the end of September, the province had not settled 37 invoices amounting to R3m.

Suppliers that do business with the Western Cape government generally applaud its efficiency in processing of invoices. The province pays its suppliers timeously, helping them to avoid invoice discounting - a mechanism where invoices are sold to lenders at a discount for quick cash.

According to the National Treasury, provincial governments are responsible for 75% of late payments while national departments accounted for 25% of late payments.

The common reasons provided by supply chain and procurement officials for late or non-payment of invoices range from inadequate budgets, cash blocking, financial system and central supplier database lapses to disputed invoices with suppliers, and unresolved supply chain management-related challenges.

Late or non-payment of invoices is also blamed on internal control deficiencies, staff shortages, late processing and authorisation of invoices, and misfiled, misplaced, or unrecorded invoices.

The National Treasury has recommended that government officials that engage in wilful or negligent failure to pay suppliers on time should face financial misconduct charges.

“This must be investigated, and disciplinary action must be taken against officials who fail to comply with the requirements to pay invoices within 30 days and who undermine the systems of internal control,” recommends National Treasury.

This recommendation by the National Treasury comes at a time the department was in the middle of developing a new differential procurement policy. The policy, a key pillar of recently-promulgated Public Procurement Act (PPA), will facilitate and regulate access to government tenders for small businesses and black suppliers.

The PPA is intended to regulate how government spends its R800bn annual budget on goods and services.

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