7 March 2017
Social Development Minister Bathabile Dlamini says the South African Social Security Agency (SASSA) realised in October 2016 it had “underestimated” the amount of work needed to take over the payment of grants to millions of beneficiaries.
“You can say that we underestimated what is needed in order to do the payments ourselves. Anyone who owns a bank will tell you how hard it is to set up a bank,” she said.
Dlamini was briefing the Standing Committee on Public Accounts (Scopa) in Parliament on Tuesday, as uncertainty mounts over the details surrounding the payment of grants on 1 April.
Addressing a packed room of MPs and members of civil society organisations, she blamed officials for the current crisis at the agency. Scopa chair Themba Godi repeatedly called for order as angry MPs heckled the minister and each other.
Dlamini said the process of taking over the payment of grants from current contractor Cash Paymaster Services (CPS) would take two years. “The first year will be used for phasing out the current service provider and the second will be about rolling out all of our processes.”
Dlamini said SASSA was considering ways to integrate the South African Post Office, but added that CPS was “unhappy” with the inclusion. “I strongly believe that the post office has a bigger role to play in this whole thing,” she said.
The five-year contract with CPS, which began in February 2012, was declared invalid by the Constitutional Court in 2014, but the Court suspended the invalidity so that grants could continue to be paid until SASSA was due to take over the payments in April 2017. SASSA has been widely criticised for its failure to do and its last-minute decision to negotiate a new two-year contract with CPS.
Asked about the details of the new contract, Dlamini told MPs that negotiations with CPS were expected to be completed by Friday and that she could not give “premature” information. She promised to make an announcement after a SASSA technical task team on the negotiations reports back on Friday.
The CEO of CPS parent company Net1, Serge Belamant, told GroundUp on Monday that a deal had been struck for a new two-year contract, with an increase in the fee paid to CPS in line with inflation.
But Dlamini did not respond to MPs’ questions. “We have not signed any agreement with CPS,” she said.
She did however say that one of the terms being discussed was that apart from the authorised 10% deduction from social grants for funeral benefits, those wanting to initiate further deductions would have to get the Minister’s approval. Unauthorised and illegal deductions from the accounts of social grant recipients, some of them to companies in the Net1 group, have plagued the system for years.
Dlamini said two representatives from National Treasury who had been invited to participate did not attend the meetings. When asked why, Dlamini said: “I can’t speak for Treasury, you will have to go ask them.”
She said the contract would remain within the Social Development budget. “We have appointed experts to make sure we don’t pay more than we should. If it comes that we need more money, we will have to reappropriate funds from other programmes,” she said.
Dlamini said grants should be going towards creating radical economic transformation. EFF MP Mbuyiseni Ndlozi questioned SASSA’s decision to contract CPS which he said was a “white owned” company. “You can’t sit here and lie to us. How does that fit into radical economic transformation?” he asked. “I don’t want to be insulted,” said Dlamini.
“You are insulting us,” retorted Ndlozi.
Earlier in the briefing MPs were outraged when Dlamini announced that she would be leaving early to attend a Cabinet briefing. She remained until the end of the Scopa meeting.
“I don’t want South Africans to think I’m arrogant because the amount of meetings I don’t attend are being counted,” she said.
MPs asked Dlamini to assure them that the new contract would be done within the law.
Wrapping up the meeting, Godi said MPs were waiting for the formalisation of the contract which must have the approval of the National Treasury. “We should not play with the anxiety of our people, especially the poorest of the poor, who were meant to celebrate freedom by receiving social grants,” he said. “If that is threatened, freedom becomes meaningless.”