1 day Ago By Tshwarelo Mogakane
Mpumalanga’s main business funding agency has become a cash cow for inexperienced entrepreneurs who take loans and vanish.The Mpumalanga Economic Growth Agency (MEGA), created to support small businesses and drive development, is bleeding public money. (adsbygoogle = window.
adsbygoogle || []).push({}); A damning parliamentary report shows that MEGA has failed to recover over R285 million in loans and other receivables.Loan beneficiaries, many of them start-ups with limited capacity, simply took the money and never paid it back.
Prescribed debt claim period“The debt claim must be prosecuted within three years. It’s now past five years,” said Scopa (Standing Committee on Public Accounts) chair Desmond Moela.Scopa believes MEGA allowed defaulters to slip through the cracks by failing to act before legal deadlines expired.
“The prospect of success in this case is too limited, because of the Prescription Act of 1969,” Moela said.MEGA continued approving loans and disbursing funds despite warnings about poor repayment patterns and rising risk exposure.Some of the unpaid loans were linked to the Government Nutrition Programme, where companies were paid but never delivered.
The report says MEGA was warned in 2021 but waited too long to start recovering the money. (adsbygoogle = window.adsbygoogle || []).
push({});By then, most debts had expired under South Africa’s three-year legal window for collection.Instead of recouping funds, MEGA has now accumulated R248.6-million in irregular expenditure.
In the last financial year alone, R18.1-million was spent irregularly. This was often through unapproved contract extensions.
Procurement rules were flouted, local content thresholds were ignored, and scoring criteria were misapplied.Culture flourished without accountabilityScopa said MEGA allowed this culture of non-compliance to flourish without enforcing accountability.“Disciplinary action must be taken against all officials who violated the PFMA and Scopa resolutions,” Moela said.
Yet the agency admitted that most of those responsible had left. Also that others only received verbal warnings.MEGA also lacks a permanent chief financial officer and several key managers.
This has raised further concerns about whether the agency has the skill to manage public money responsibly.Deputy board chair is disgraced ex-Communications MinisterOf concern is the presence of Dina Pule, MEGA’s deputy board chair and former Minister of Communications.Pule was dismissed from cabinet in 2013 after abusing state resources to benefit her romantic partner.
Her return to a leadership role has coincided with MEGA’s deepest financial crisis to date.Opposition parties are now calling for the agency to be shut down entirely.“The Premier needs to act now and disband MEGA,” said DA MP Trudie Grovè-Morgan.
“This agency has neither the necessary skills nor expertise to be at the forefront of economic growth.”Premier Mandla Ndlovu has not acted on Scopa’s recommendations or calls for action.Attempts to get comment from provincial government spokesperson George Mthethwa were unsuccessful by the time of publishing.
Visit SW YouTube Channel for our video content.
