African Oxygen (Afrox), a major supplier of medical gases to South Africa’s state hospitals, has taken the national and provincial health departments to court over R360m in unpaid invoices, some dating back to 2017. The High Court action in Pretoria signals a deepening payment crisis across provincial health systems and raises fresh concerns about the stability of public hospital supply chains.
Afrox says it supplies medical gases nationally under a National Treasury agreement that began in 2017. It argues that all nine provincial health departments have become chronic late payers. The company is seeking payment of the outstanding amounts, plus accumulating interest. Afrox is pinning its case on Treasury rules that require departments to pay suppliers within 30 days.
The lawsuit lands as the auditor-general has flagged severe pressure in provincial finances. A recent report placed eight provinces “in the red” for R24bn in unpaid bills, adding to evidence that late payment is now systemic rather than occasional.
Afrox Unpaid Invoices Highlight A Widening Supplier Squeeze
Afrox’s court papers set out large debts across provinces. The Eastern Cape is the biggest alleged debtor, with a R90m debt, despite a R31bn budget for 2025/26. Some invoices in the province reportedly go back eight years. The auditor-general’s 2024/25 health report also reflected R7bn in accruals in the Eastern Cape, meaning expenses incurred but not paid within the financial year.
The Eastern Cape health department said negotiations are underway to finalise a payment plan. However, questions remain about why payments were missed for purchases going back to 2017, and what happened to funds budgeted for the contract.
Gauteng faces a claim of R57m from Afrox. Gauteng’s 2024/25 accruals reached R8bn, the highest in the country. In the current financial year, Gauteng health has been allocated R67bn, yet the backlog persists.
Afrox also lists debts of R64m in the Northern Cape, R34m in KwaZulu-Natal, R31m in North West, R28m in Free State, R24m in Limpopo, and R15m each in Mpumalanga and the Western Cape. The Western Cape is opposing the application.
Afrox Unpaid Invoices Raise Risks For Patient-Critical Services
Health economist Professor Alex van den Heever warns that non-payment in the public health sector can bankrupt businesses. Smaller suppliers are often least able to absorb delays. He cautions that repeated court action could expose departments to asset attachments if debts remain unpaid. Over time, supplier refusal becomes a real risk, especially for non-essential items. But for critical inputs like oxygen and medical gases, interruptions could be deadly.
Van den Heever links the payment culture to failed leadership and weak financial discipline, arguing that political appointments can undermine accountability. He also points to a correlation between poor financial management and poor health outcomes, while noting that the Western Cape tends to record lower accruals than other provinces.
In Gauteng, DA MPL Jack Bloom describes a “chronic problem” of late payment, saying Afrox is one of hundreds of suppliers affected. He argues that litigation is becoming unavoidable. He also notes that the department under-spends annually, including a projected under-spend of R725m this financial year, which he frames as a sign of dysfunctional planning and execution.
For suppliers of life-saving goods, the dilemma is stark. They cannot simply stop deliveries when invoices go unpaid. In a hospital setting, the consequences are immediate, and patients carry the risk.
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