Microsoft says it does not disclose or comment on the commercial terms of customer agreements.
The Gauteng Provincial Government owes Microsoft R344 million in unpaid licence fees.
This was revealed during a recent e-government portfolio committee meeting. According to a presentation by the provincial government’s finance department, it embraced digital transformation by integrating a range of Microsoft products into its operations.
These tools, including Microsoft Office 365, Teams, SharePoint and Azure, support efficient communication, collaboration and secure data management across departments.
By utilising Microsoft’s technology solutions, the provincial government aims to improve service delivery, enhance productivity and foster innovation to meet the needs of citizens in a rapidly evolving digital landscape.
Michael Waters, the Democratic Alliance’s (DA’s) member of the provincial legislature, says a modern government cannot function without digital systems, and by failing to pay the Microsoft licence fees, the Gauteng Provincial Government has placed core services, from healthcare to education, at risk.
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The presentation to the e-government portfolio committee seen by ITWeb shows the provincial government has 24 791 Microsoft users.
“The evolution of Microsoft products reflects the company’s ability to anticipate and shape technology trends. From pioneering personal computing to leading in cloud innovation and AI, Microsoft continues to empower individuals and organisations to achieve more in a rapidly changing digital world,” reads the presentation.
The Department of e-Government had not responded to ITWeb queries about the outstanding licence fees by the time of publication.
Responding to ITWeb’s request for comment, Microsoft South Africa says: “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.”
According to Waters, the debt stems from the 2022-2025 licence agreement, where the Department of e-Government failed to pay invoices, citing “untimely billing” and “late invoices”.
He noted that at its peak, the debt amounted to R631 million. “Despite partial payments, the outstanding amount remains at R344 million.
“To make matters worse, the same department has now signed a new three-year contract with Microsoft (2025-2028) worth $53.2 million (R915.9 million), a 33% increase from the previous deal. That’s R228 million more than the last agreement signed while still being in arrears. This is financial mismanagement on a massive scale.
“Gauteng residents suffer when IT systems fail, hospital files are lost, schools are unable to operate and departments are paralysed. This isn’t just about numbers; it’s about services, safety and stability.”
The DA has submitted urgent questions to finance MEC Lebogang Maile, requesting a detailed breakdown of the debt currently owed to Microsoft, a list of all departments affected by the mismanagement, clarity on who was responsible for failing to make the required payments, and information on any contingency plans in place to prevent potential service shutdowns.
The Gauteng Department of Finance had not responded to ITWeb by the time of publication.
