Corruption in Sassa crisis?

It felt like a parallel reality. The Presidency said this week that Social Development Minister Bathabile Dlamini was keeping President Jacob Zuma abreast of developments around the social grants 17-million South Africans receive each month. “The president is keen that the social grant beneficiaries should not be inconvenienced,” a spokesman was reported as saying.

Inconvenienced? That’s an almost criminal understatement of the problem. Without the R1,600 monthly state pension and the R350 in child support, millions of poor South Africans will face debilitating hunger — not mere inconvenience.

Yet that is the potential catastrophe the president and his social development minister, who is also the president of the ANC Women’s League, have allowed to befall SA.

The contract of Net1 subsidiary Cash Paymaster Services (CPS) to distribute the social grants is due to expire in just four weeks, on March 31, and at this stage, there is no alternative in place to get the grants to the beneficiaries.

What is most striking about the past couple of weeks is the evidence that has emerged of how many alternatives have been proposed — and have been blocked, mainly by the minister herself. That “manufactured emergency”, as it were, means the government may be forced to sign a new contract with CPS, at a much higher price, to ensure that 17-million people don’t starve, or riot, or both.

Few have been bold enough to say it. But Cosatu didn’t pull punches this week when it called on Zuma to fire Dlamini and said the crisis “smelled of corruption”.

The corruption question is worth asking, especially given that, historically, there were allegations of corruption around the awarding of the grant distribution tender to Net1 under previous political heads.

Originally, there were different service providers in different provinces and Net1 was just one of the companies doing the distribution. But after the government centralised the grants under the South African Social Security Agency (Sassa), Net1 won the tender to distribute the grants to the whole of SA, becoming the monopoly infrastructure provider, in effect.

But in 2013, the Constitutional Court found that the tender had been awarded improperly and Sassa had to do it again. That was when the crisis began because instead of going out to tender, Sassa decided it could do the job itself.

Why anyone in the government thought this was a good idea is mysterious, but as we now discover, Sassa does not have the capacity to distribute the grants and has no plan for what to do from April 1 — other than to reappoint CPS, which is demanding a much higher price per grant for a new contract than the already generous price it was being paid under the old contract, which the Constitutional Court allowed, reluctantly, to be extended.

As it turns out, others do have plans. That includes the department’s own officials, who have been talking to the Reserve Bank and the Treasury. They are reportedly keen to see a solution that involves distributing grants through the banks to those who have bank accounts — who, according to some, make up well over 90% of grant recipients — and appointing a service provider to distribute cash grants to the unbanked. The Post Office, with more than 2,000 branches extending its range into deep rural areas, is also keen.

Meanwhile, the minister has consistently refused to appear before the parliamentary committees that have tried to hold her accountable for the crisis — and tried simply to find out what’s going on.

That social grants might not get paid on April 1 is surely the greatest threat Zuma and his administration have faced so far. It’s time the president took the “inconvenience” a lot more seriously.

WHAT IS MOST STRIKING … IS HOW MANY ALTERNATIVES HAVE BEEN PROPOSED