Grants payment crisis replay likely

Former South African Social Security Agency (Sassa) CEO Thokozani Magwaza’s allies say his departure risked a repeat in 2018 of the March 2017 crisis and the department is now freer to push through a five-year plan favoured by Social Development Minister Bathabile Dlamini.

But the ministry said that Magwaza’s departure would allow the agency to pursue its plans to find a viable solution for the payment social grants.

A letter of intention to appoint the South African Post Office and a panel appointed by the Constitutional Court appear to be the only obstacles to Dlamini’s R6bn, five-year plan. A leading feature of the plan is the replacement of Net1 with another private sector partner, which will be paid several billion rand.

On Friday, Dlamini denied she was behind the dramatic resignation of Magwaza. She said Magwaza’s departure was “by way of mutual agreement and in the best interest of Sassa”.

Dlamini said the ANC had instructed her to work with the Post Office and she had always ensured it was “in the picture”. Friday’s press release repeated Dlamini’s belief that the Post Office “should assist in the disbursement of social grants”.

However, the senior Sassa source told Business Day that Dlamini saw the Post Office’s role as limited to the actual cash disbursement to beneficiaries. It would have no strategic role.

The source said the “closeout” report drawn up by the workstreams was an updated version of previous presentations made to Parliament by Sassa payment transition project manager Zodwa Mvulane.

Just days before his departure, Magwaza secured the Treasury’s approval to issue a letter of intent to appoint the Post Office without going through a tender process.

The court-appointed panel held a scheduled meeting last Tuesday. Magwaza’s departure was reportedly discussed.

The panel has indicated it would submit a report on Sassa’s June 15 progress to the court by mid-September.

Although Sassa’s report was signed off by Magwaza, it appears to have been drafted by the workstreams and is aligned to the R6bn plan.

It is similar in tone and content to the confusing presentations made to Parliament’s social development portfolio committee at the end of 2016 by Mvulane, who is a close ally of Dlamini. However, while the

committee was unable to challenge Mvulane’s parliamentary presentation, a Sassa source said: “They are asking the questions that should have been asked long ago about a plan that doesn’t stand up to scrutiny.”

Magwaza opposed the R6bn plan being hatched by workstreams appointed by Dlamini in 2013. The workstreams, appointed without approval from the Treasury, operated out of Sassa’s offices and reported directly to Dlamini.

At the end of June, a few weeks after the Treasury issued a letter to Sassa pointing out the irregular nature of the workstreams, Magwaza, who had said the workstreams derailed Sassa’s own plans to take over payments, terminated them. He asked them to submit a “closeout report”.

Magwaza had been working on an alternative plan in which the Post Office played a significant role in a “build, operate and transfer” model. It would take over the functions of Cash Paymaster Services (CPS) and Grindrod and over time transfer those functions to Sassa.

Last week, Post Office CEO Mark Barnes said it would be possible to take over CPS’s functions by next March “But we need a very specific mandate.”