Don’t judge us yet – Sapo

SA Post Office (Sapo) chief operating officer Lindiwe Kwele is astonished at suggestions that the parastatal will flounder in taking on the mammoth role of paying all 17 million social grant beneficiaries over the next three months.

Kwele has taken umbrage with observers likening Sapo’s services to that of current social grant distributor Cash Paymaster Services (CPS), a subsidiary of Net1 UEPS.

“If you are going to judge our ability to deliver grants based on what CPS did, then I wonder who said the CPS solution is the be-alland-end-all,” she said. “People expect us to replicate the CPS model of payment because that’s what they are used to. It’s not fair.”

Sapo is already the social grants distributor, having taken over a large portion of grant payments from CPS in April.

“We are confident we will take over grant payments,” said Kwele. “Most people didn’t know that we could pay grants. They are basing their judgment on our ability to deliver mail.”

Kwele said a new service agreement between Sapo and SA Social Security Agency (Sassa) was signed on June 19 to reflect the former’s new task of administering cash payments to an additional two million beneficiaries.

Beneficiaries would then withdraw their grants over the counter at 856 Sapo branches, any of its merchants (such as Shoprite) or agents, and ATMs run by commercial banks.

A panel of experts appointed by the Constitutional Court to monitor Sassa’s progress in phasing out CPS’s contract is fiercely critical of Sapo. The panel members include Auditor-General Kimi Makwetu and former SA Reserve Bank governor Gill Marcus.

In its sixth report submitted to the court on June 14, the panel flagged concerns about Sapo missing key targets, adding that parts of its services might not be ready as early as July.

The panel warns that Sapo will require a R541 million preinvestment from Sassa in year one of paying social grants. The preinvestment might increase substantially as Sapo is still waiting for its full banking licence from the central bank. In the interim, Sapo is piggybacking off Standard Bank’s licence and services.

So far this month, Sapo has already replaced more than 500 000 cards.

The stakes are high if Sapo does not meet its targets. The worst-case scenario is that CPS’s contract might be extended again – for the third time.