‘Bathabile is to blame’

EX-CEO CLAIMS MINISTER WAS AGAINST BANKS PAYING GRANTS Testimony another indication of how Dlamini was at centre of the crisis.

Former SA Social Security Agency (Sassa) CEO Thokozani Magwaza said Social Development Minister Bathabile Dlamini ordered him to find dirt on commercial banks in order to discourage them from being part of the social grant payments system.

Magwaza’s submission yesterday at the Sassa inquiry is an explosive confirmation that Dlamini was against commercial banks – mainly Nedbank, Standard Bank and FNB – paying social grants to 17 million beneficiaries.

The Constitutional Court-mandated inquiry is tasked with determining whether Dlamini should be held personally liable for the Sassa fiasco and pay legal costs.

Sassa insiders have accused Dlamini of favouring current social grants distributor Cash Paymaster Services (CPS) and extending its contract, despite the court declaring it invalid in 2015.

Sassa’s contract with CPS – a subsidiary of Nasdaq-listed Net1 UEPS – was declared invalid as it didn’t go through proper tender processes.

Before CPS’s contract expired on March 31, 2017, Magwaza said Dlamini, who oversees Sassa operations, approached him to find “something that will nullify the banks” so that the open architecture model of paying social grants “does not work”.

The open architecture refers to a model in which the South African Post Office and commercial banks would collaborate to take over social grant payments from CPS.

This model, which was endorsed by the National Treasury, was first mooted in January 2017, by a technical team that included former social development director-general (DG) Zane Dangor, former Treasury DG Lungisa Fuzile, Deputy Governor of the Reserve Bank Francois Groepe and Sassa project manager Zodwa Mvulane.

However, as a result of delays by Sassa, this model was thwarted and at the eleventh hour, the Constitutional Court extended CPS’s contract for another year – ending on March 31, 2018. In other words, Magwaza said Dlamini ordered him to “find dirt” on the banks to discourage them from submitting tenders to be included in the social grants payment network.

“I said [to Dlamini] that I am not going to do that,” Magwaza said when cross-examined at the inquiry by Dlamini’s advocate, Ishmael Semenya.

Magwaza was fired by Dlamini in July 2017, due to a breakdown of their relationship.

Magwaza’s testimony is another indication of how Dlamini was at the centre of the social grants crisis that nearly placed the livelihoods of beneficiaries in jeopardy and how she frustrated Sassa’s efforts in finding another distributor besides CPS.

SA’s major banks were initially keen to participate but were put off by the onerous tender requirements imposed by Sassa. They already have the biometric technology that could verify social grant recipients, and ATMs that social grant recipients can use to withdraw their money – factors that qualify banks to pay social grants.

The inquiry continues.

Dlamini ordered me to find dirt on the banks.