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SASSA CEO speaks out on social grants crisis

Staff Writer
By Staff Writer, ITWeb
Johannesburg, 12 Mar 2017
SASSA CEO Thokozani Magwaza told City Press that minister Bathabile Dlamini got in the way of papers being filed in the Constitutional Court three times.
SASSA CEO Thokozani Magwaza told City Press that minister Bathabile Dlamini got in the way of papers being filed in the Constitutional Court three times.

Social development minister Bathabile Dlamini on several occasions blocked efforts by the SA Social Security Agency (SASSA) to report back to the Constitutional Court (ConCourt) about the payment of social grants and directly interfered with attempts to find a solution to the crisis. This according to SASSA CEO Thokozani Magwaza who was speaking to City Press.

Magwaza listed a number of occasions - dating as far back as early February - when his office was ready to petition the ConCourt for guidance, only to be abruptly halted by last-minute instructions from Dlamini.

This ahead of tomorrow's deadline for SASSA to explain to the ConCourt why it had handled the social grants in the manner it did and why it had failed to communicate with the court.

The fate of 17 million South Africans hangs in the balance as a five-year contract with Cash Paymaster Services (CPS) to disburse welfare grants expires on 31 March. CPS, which is a subsidiary of JSE-listed Net1 UEPS Technologies, last week said a new agreement had been reached with SASSA and the department but details on the agreement have not been revealed.

Magwaza is currently on sick leave amid speculation that he may be suspended. He told City Press that Dlamini got in the way of papers being filed in the Constitutional Court three times and that a research report, submitted in October, which detailed SASSA's inability to take over grant payments from CPS in April, was initially withheld from him when he took office in November.

He also said Dlamini torpedoed plans to involve the SA Post Office in the distribution of grants and said he was being victimised for recommending a 12 month temporary contract be secured with CPS, instead of the 24 to 36 months preferred by others.

CPS was awarded a five-year, R10 billion tender in January 2012 to administer and distribute social grants in SA However, the contract was declared invalid by the Constitutional Court in 2014, after it emerged that irregular tendering processes were followed. Over the years, the relationship between the department, SASSA and CPS has turned sour as allegations of unlawful deductions and corruption persisted.

Despite being at odds with the Net1 subsidiary, the department and SASSA have been locked in negotiations with CPS to discuss the terms and conditions of a new contract, as the agency attempts to avert a social payment disaster on 1 April.

Meanwhile The Sunday Independent reports that investment management company Allan Gray is launching an investigation into the business conduct of Net1 for allegedly extending loans to poor beneficiaries. Through Allan Gray, clients who include ordinary South Africans have a 16% shareholding in CPS' parent company which is accused of extending micro-loans to the poor and making illegal and unlawful deductions from their grants.

The newspaper reports that the deductions that CPS makes from recipients of social grants looks set to dominate proceedings in the Constitutional Court on Wednesday when the application of advocacy group the Black Sash will be heard. The Black Sash wants the court to put a stop to these deductions and has made an urgent application for the ConCourt to have oversight over the proposed contract.

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