The Minister of Finance, Neal Rijkenberg, says that the government is currently facing cash flow problems and is in the process of raising international loans to fund the national budget.
Rijkenberg made these remarks during the recent weekly “Finance in Focus” program at the Ministry of Finance offices. Rijkenberg disclosed that this time of the year presents financial strain as government ministries rush to submit invoices before the financial year ends in March. This has placed pressure on government finances, resulting in delayed payments.
“At this time of the year, the cash flow is particularly tight because government ministries are submitting invoices for payment before the end of the financial year in March. This creates a lot of pressure to make payments, and we are currently behind on some of these invoices,” he said.
He urged suppliers and service providers to exercise patience, stating that financial constraints would persist until the end of March. “Between now and the end of March, things will remain tight, so I ask all those supplying government to bear with us and work with us during this time,” he added.
To alleviate the situation, Rijkenberg revealed that the government is in the process of securing international loans under a financial mechanism known as “budget support.”
He clarified that this funding is not allocated for specific infrastructure projects such as water or electricity but is intended to meet general budgetary needs.
“We do need this budget support to be able to fund everything we need to in a healthy manner,” he stated.
The Ministry is currently engaging with international financial institutions, including the World Bank, AfDB, and the JSE, to ensure the loans secured are cost-effective.
While acknowledging that budget support can be expensive, Rijkenberg assured that efforts were being made to negotiate favorable terms. The loans are expected to start flowing by the end of March or early April 2025.
In the interim, the government is prioritizing the clearance of outstanding payments. Rijkenberg reaffirmed the government’s commitment to settling overdue invoices and strengthening budget controls to prevent further financial strain.
He also addressed concerns raised by the Auditor General regarding unauthorized expenditure, clarifying that while some funds had been used outside proper channels, they remained within the approved budget.