Gauteng MEC for Finance Nkululeko Dunga says the provincial government is facing mounting financial pressure, with unpaid invoices, declining revenue collection, irregular expenditure and municipal debt threatening service delivery across the province.

Addressing the media at Dube Hostel in Soweto on Thursday, Dunga outlined the state of Gauteng Provincial Government finances and announced a programme of action aimed at restoring financial discipline and improving governance.

Dunga said Gauteng was now overseeing the implementation of its R179.2 billion budget for the 2026/27 financial year under increasingly constrained economic conditions.

“We will not mislead the people of Gauteng about the state of provincial finances and the challenges before us,” Dunga said.

He warned that global instability, including conflict in the Middle East and rising fuel prices, was placing additional pressure on provincial finances and working-class households.

According to Dunga, Gauteng collected about R177.19 billion in total receipts by the end of March, including R138.73 billion from equitable share allocations and R29.52 billion from conditional grants.

However, provincial own revenue fell short of the targeted R8.4 billion by about R1.3 billion.

Dunga attributed the shortfall largely to weaknesses in revenue collection systems, declining gambling revenues and municipalities failing to transfer motor vehicle licensing revenue owed to the province.

He said municipal debt linked to motor vehicle licensing revenue alone had exceeded R2.57 billion.

Dunga said Education and Health continued to dominate provincial spending, accounting for a combined R137 billion, or about 77% of the provincial budget.

Despite the scale of spending, Dunga acknowledged persistent problems in schools and healthcare facilities.

“The continued existence of overcrowded classrooms, increasing learner numbers, inadequate school infrastructure, deteriorating hospitals and clinics, shortages of medicines, and long waiting periods for healthcare services demonstrates that the current fiscal framework remains under severe pressure,” he said.

Dunga also highlighted the ongoing financial burden of the Gauteng Freeway Improvement Project and the e-tolls debt settlement arrangement.

He said the province had already paid R9.28 billion towards the settlement, with a further R10.8 billion still outstanding over the medium term.

An instalment of approximately R4.64 billion is due at the end of June.

The MEC said Gauteng departments and entities continued to accumulate irregular expenditure, with unresolved historical irregular expenditure standing at about R36.5 billion.

According to Dunga, the Health Department accounted for approximately R22.8 billion of the total, followed by Education at R5.9 billion and Human Settlements at more than R4.1 billion.

“Where officials have acted negligently, recklessly or in violation of procurement prescripts, there must be consequences and disciplinary action. Heads must roll where necessary,” Dunga said.

The province is also grappling with growing accruals and unpaid invoices owed to businesses.

Dunga said provincial accruals and payables not recognised stood at approximately R9.3 billion by the end of March, with more than R4.9 billion already overdue by more than 30 days.

“The direct consequence of this situation is collapsing businesses, job losses, weakening local economic activity and declining confidence in the state’s ability to honour its obligations on time,” he said.

According to Dunga, Gauteng municipalities collectively reported outstanding debtors amounting to about R173.3 billion, while creditors stood at approximately R34.3 billion.

He said municipalities had also under-reported debt owed to Eskom by about R12.7 billion and debt owed to Rand Water by approximately R2.7 billion.

Dunga identified Emfuleni, Sedibeng, Lesedi and Merafong among municipalities facing serious financial distress and governance challenges.

He said the Gauteng Provincial Treasury had intensified interventions through financial health assessments under the Municipal Finance Management Act.

The MEC announced several immediate interventions, including stricter oversight of procurement systems, efforts to recover outstanding revenue, improved debt management and intensified monitoring of departments with recurring audit findings.

He said Treasury would also explore the feasibility of introducing direct provincial payment platforms at licensing departments and other revenue collection points to reduce leakages and improve accountability.

Dunga further announced plans to engage the private sector on investment and re-industrialisation initiatives, including public-private partnerships.

He confirmed that the province had received progress presentations on proposals for a provincial state-owned bank and a provincial pharmaceutical company.

Dunga said Treasury would also investigate the phased insourcing of selected outsourced services such as cleaning, maintenance and security where financially sustainable.

He further pledged to strengthen protection for public servants involved in anti-corruption and financial oversight work, citing the killings of whistleblower Babita Deokaran and municipal officials Martha Mani Rantsofu and Mpho Molefe.

“The success of public finance management will ultimately not be measured by accounting processes alone, but by whether communities experience improvements in schools, clinics, roads, housing, transport, municipal services, public safety and broader living conditions across Gauteng,” Dunga said.

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Gauteng Premier Panyaza Lesufi has appointed former Finance MEC Lebogang Maile as the new MEC for Education, replacing Matome Chiloane, in a cabinet reshuffle that brings the Economic Freedom Fighters (EFF) into the provincial executive.

Speaking at a press briefing on Wednesday, Lesufi confirmed that EFF Gauteng chairperson Nkululeko Dunga will take over the Finance portfolio, saying the move, approved by ANC national leadership, was aimed at stabilising governance and unlocking service delivery.

“It was within this context that the national leadership of the ruling party gave us the go-ahead to engage with other political parties… so that we can stabilise numbers and ensure that we’ve got a reliable government in our province,” Lesufi said.

The reshuffle follows mounting instability in Gauteng’s Government of Provincial Unity, where disputes among coalition partners recently delayed the adoption of an adjustment budget.

Lesufi said the EFF had agreed to join the executive after negotiations, while talks with the uMkhonto weSizwe Party (MKP) are continuing.

“Both the Economic Freedom Fighters as well as uMkhonto weSizwe Party agreed to cooperate with us… the discussion with the Economic Freedom Fighters was concluded and they’ve accepted our offer to bring them into the executive,” he said.

Addressing Chiloane’s removal, Lesufi said the decision was not performance-related.

“I must be honest, I’m hurt with MEC Chiloane. He’s done nothing wrong… it has been a difficult decision,” he said, adding that alternative responsibilities would be considered for him.

Lesufi acknowledged that political considerations influenced the reshuffle.

“The problem with appointments… is that it’s a very difficult situation,” he said.

Defending Dunga’s appointment, Lesufi said it reflected respect for coalition partners.

“We don’t want to invite somebody to be part of the government and undermine their role… MEC Dunga was an MMC of finance in Ekurhuleni, so we’re not throwing him in a lion’s den,” he said.

Dunga’s return follows his removal as Ekurhuleni finance MMC amid disputes with the ANC-led administration.

Lesufi also outlined progress on service delivery, particularly water supply stabilisation.

“Almost 90% of our province has access to water now,” he said, citing infrastructure upgrades, leak repairs and improved coordination, alongside long-term planning linked to Phase 2 of the Lesotho Highlands Water Project.

He stressed that the ANC would maintain existing partnerships despite bringing in the EFF.

“We respect partnership… we don’t dump you,” he said.

Lesufi added that engagement with multiple parties would continue, with talks with the MKP still underway.

Beyond politics, he highlighted priorities including economic growth, crime reduction and social support, noting a food distribution programme reaching over 400,000 residents and the deployment of SANDF troops to crime hotspots.

“As you all know, Gauteng remains the epicentre of crime, but since the deployment of soldiers, we’ve seen a drastic shift,” he said.

Newly appointed MECs are expected to be sworn in on Thursday.

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