SA province owes Microsoft R344-million
More than a third of a billion rand was recently revealed as being in arrears during an e-Government portfolio committee meeting.
According to the Democratic Alliance’s spokesperson for e-Government, Michael Waters, the Gauteng Department of e-Government owes Microsoft R344-million in unpaid licence fees.
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The amount due is for the 2022-2025 licence agreement.
This debt stems from the 2022-2025 licence agreement, where the Department of e-Government failed to pay invoices, citing ‘untimely billing’ and ‘late invoices'.
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Waters says that this affects Gauteng residents who suffer when hospital files are lost, IT systems fail, departments come to a halt, and schools cannot operate.
This isn’t just about numbers; it’s about services, safety, and stability.
Newsday reports that Waters claims the debt reached a peak amount of R631-million and has been reduced to the new amount through partial payments.
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Despite the outstanding debt, the Department signed a new three-year contract with Microsoft from 2025 to 2028 worth $53,2-million (R915,9-million) a 33% or R228-million increase from previous years.
Newsday reached out to Microsoft and the Gauteng Department of e-Government for comment, and this was the response.
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Microsoft told Newsday: “As a matter of policy, Microsoft does not disclose or comment on the commercial terms of customer agreements, as these are subject to strict confidentiality.”
The Gauteng Department of e-Government has not yet responded.
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The Department’s 2024 annual report states that “Computer services” cost R1.01 billion in the 2023/24 financial year.
According to the report, this was due to “payment for subscriptions for Microsoft Smart Solution and payments for software licenses.”
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These included licences for:
- Open Text
- Microsoft defender endpoint detection and response solution
- Archiving Platform Integration for email security
- Firewall implementation and configuration.
Waters said the DA has written to Gauteng MEC for Finance, Lebogang Maile, demanding a full breakdown of the debt, a list of departments affected, clarity on who failed to make the payments and asked what plans exist to avoid service shutdowns.
A modern government cannot function without digital systems, and Lesufi’s administration has placed core services, from healthcare to education, at risk. Gauteng cannot afford a digital blackout.
This is also not the first time the Department has had issues with payments to Microsoft.
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In 2021, according to a TechCentral report, the DA revealed the Department of e-Government had paid $21-million (approximately R318,3-million at the time) instead of R21-million.
The province was able to recall the funds, but due to exchange rate losses, it only received R311,5-million a shortfall of R6,8-million.
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MyBroadband also reported in 2016 that the Gauteng Department of Education (GDE) received complaints from public schools that they were struggling to install new Microsoft products.
This was the result of the schools not receiving new licences from the Department, which then limited users from installing specific software on new PCs or fixing old Windows systems.
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