Subscribe

SASSA CEO exit leaves post office prospects in limbo

Simnikiwe Mzekandaba
By Simnikiwe Mzekandaba, IT in government editor
Johannesburg, 19 Jul 2017

UPDATE: Dlamini appoints acting SASSA CEO

Minister Bathabile Dlamini this afternoon appointed Pearl Bhengu as acting CEO of the SA Social Security Agency (SASSA), following Thokozani Magwaza's abrupt departure.

In a statement, the social development department says Bhengu has been serving as SASSA regional manager in KwaZulu-Natal since 2012.

The minister stated the first priority of the acting CEO is to stabilise the agency and ensure it focuses on its Constitutional mandate of administering and paying social grants in line with the SASSA Act.

With only eight months to go before the SA Social Security Agency (SASSA) has to usher in a new payment provider, the prospect of the South African Post Office (SAPO) taking over this function is likely to be hampered by the sudden exit of SASSA CEO Thokozani Magwaza.

Magwaza unexpectedly resigned from his position as CEO of SASSA this week, a decision that is seen as him being forced out.

This development at SASSA will likely be a wet blanket for the national postal service provider as it looks to turn things around by bringing in the lucrative social grants business.

According to the Daily Maverick, SAPO CEO Mark Barnes received a signed final letter from Magwaza "expressing the agency's intention to appoint the post office as part of the plan to 'in-source' the payment of social grants after March 2018".

SAPO has been vocal about its desire to distribute social grant payments on behalf of SASSA. In May, telecoms and postal services minister Siyabonga Cwele reiterated the post office is ready to use Postbank to assist SASSA to pay social grants.

While Magwaza has supported SAPO's aspirations, social development minister Bathabile Dlamini peripherally mentioned her department has begun engagements with other organs of state towards phasing out the services of the current service provider by year-end.

The former SASSA CEO has also placed on record that Dlamini torpedoed plans to involve SAPO during the previous time SASSA was looking to take over social grant payments.

Reaching far and wide

SAPO's Postbank will have to compete with a network of over 10 000 Cash Paymaster Services (CPS) pay-points nationally. SA's social grants continue to be distributed by CPS, a Net1 UEPS Technologies subsidiary.

The post office is looking to be the next distributor of SASSA grants.
The post office is looking to be the next distributor of SASSA grants.

After SASSA failed to timeously find a suitable service provider and successfully facilitate the switch of payments in-house, the Constitutional Court granted a one-year extension of the current invalid contract.

The court instructed SASSA and the social development department to use the time to find a suitable entity that will assist the agency to take over payments in the future.

Herman Kotz'e, CEO of Net1 UEPS Technologies, has said there is a place and rationale for government's intention to use SAPO to distribute social grants, but the question of how it will specifically cater to citizens in deep rural areas still remains.

No comment

Social development minister Bathabile Dlamini.
Social development minister Bathabile Dlamini.

While the market digests Magwaza's untimely exit, the Department of Social Development has remained mum on explaining reasons for his departure and disclosing the agency's future leadership.

In a brief statement, the department simply said the termination of Magwaza's contract was a "mutual agreement" between him and Dlamini.

Responding to ITWeb's questions, SASSA spokesperson Kgomoco Diseko would not comment on the CEO's resignation, saying only that the matter is being handled by the social development department.

However, in a radio interview this week, minister Dlamini is repeatedly heard saying "stop harassing me"

Share