The Democratic Alliance (DA) in Mpumalanga has written to Premier, Mandla Ndlovu, requesting detailed answers as to why his administration is consistently funding and keeping the Mpumalanga Economic Growth Agency (MEGA), despite its disastrous financial track record. Since its formation in 2010, MEGA has been running at a loss, failing its mandate while burning through millions of public funds.
When formed in 2010, the aim was for MEGA to provide funding and promote foreign trade and investment around Mpumalanga Province with a focus on Historically Disadvantaged Individuals (HDIs). MEGA’s mandates and responsibilities have slightly shifted today to funding (through loans and grants) Small Medium & Micro Enterprises (SMME’s), Agro Projects and Farming, Housing and Promoting Trade and Investment in the province.
A recent report by the Auditor-General (AG) and the Select Committee on Public Accounts (SCOPA) paints a grim picture of MEGA’s financial mismanagement. The AG has explicitly stated that the entity’s future is in serious doubt, yet the ANC-led provincial government keeps bailing it out.
SCOPA’s findings are damning:
- In 2022/2023, MEGA wrote off over R447 million in irregular expenditure.
- In 2023/2024, it racked up another R249 million in irregular expenditure – so severe that Provincial Treasury refused to write it off due to non-compliance with the Public Finance Management Act (PFMA)
- MEGA continues to flout regulations, with R18.1 million in irregular expenditure linked to payments exceeding contract amounts and non-compliance with the Construction Industry Development Board (CIDB) requirements.
SCOPA and the AG found the following reasons why MEGA is accumulating and sometimes writing-off millions worth of irregular expenditure:
- Debtors owing the entity are not servicing their loans
- Entity did not take effective and appropriate steps to collect all revenues due as required by Section 51(1)(b)(1) of the PFMA.
- Contract extensions which had not been approved as required by Section 56 of the PFMA.
- MEGA’s Management did not provide leadership, based on culture of honesty, ethical business practices and good governance, to ensure fairness and transparency in the procurement processes.
SCOPA has now recommended that Premier Ndlovu take disciplinary action against MEGA’s leadership and investigate whether its Accounting Authority is fit to lead.
The DA welcomes the recommendations against MEGA accounting officers, and we feel vindicated on our call for MEGA to be disbanded. But we are also disappointed that in his recent State of the Province Address (SOPA), the Premier did not announce the dissolution of this entity, instead he mentioned that they will coordinate regular investment programmes through MEGA, assisted by a specialist investment company.
We want the Premier to implement the SCOPA recommendations and take disciplinary action against MEGA accounting officials. How long will the ANC use MEGA as its cash-cow? This agency has neither the necessary skills nor expertise to be at the forefront of economic growth in Mpumalanga. The Premier needs to act now and disband MEGA.
Once again, the DA’s call for MEGA to be disbanded continues to be backed by concrete statistics. The provincial economy has and continues to be stagnant. This province is in dire need of a government that possesses the right leadership with the political will to make necessary changes, so that the lives of residents can improve.