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Social Grants: Five minutes to midnight – and Bathabi...

South Africa

South Africa

Social Grants: Five minutes to midnight – and Bathabile Dlamini is still holding a gun to SA’s head

Minister of Social Development Bathabile Dlamini and senior SASSA officials finally came clean on Wednesday, admitting SASSA would be unable to disburse grants to some 17-million South Africans come April 1 and that there was no option but to renegotiate a new contract with the currently illegally appointed service provider, CPS/Net 1. The Minister also acknowledged that, even though the ConCourt had made a ruling in 2014, officials had only begun working on a plan in October last year. And with five weeks to go before the contract expires, the committee learned that officials had not yet even met with CPS to negotiate new terms. And there is no real Plan B. By MARIANNE THAMM.

It was positively Trumpian.

At the close of an almost two-hour briefing by Minister of Social Development Bathabile Dlamini and SASSA officials to a hastily arranged social development portfolio committee meeting on Wednesday with regard to how grants to some 17-million South Africans will be paid after March 31 when the current contract with CPS expires, ANC committee chair, Rose Capa, took the opportunity to do a Donald deflection.

I appeal to all South Africans to disdain or to really stop terrorising the poor by saying one day you will wake up without a plate of food. Whether it is for political scoring or whatever, whether it is hostility against individuals or against government it is painful for those people who await for a plate of food every morning up until we are able to be equal. This is an honest appeal, not a populist statement but my belief is whether you are media, whether you are in opposition, whether you are a ruling party, whether you are man in the street or a woman in the street, is to ensure that we nurture the feelings of those who are unfortunate. It is very, very critical what we say after this meeting, because each time we go to a meeting the only question is ‘will I have what belongs to me on the first?’.”

In other words, those tasked with informing 17-million people who depend on social grants to survive, that the minister and SASSA had “manufactured an emergency”, as opposition members have termed the crisis, amounts to terrorism.

Questions as to how prepared SASSA would be to act as paymaster when the current contract with CPS expires on March 31 have been asked, at least by the DA, the IFP, the EFF and the ANC itself, since at least June last year.

Since then there have been several heated portfolio committee meetings where members have attempted to extract from the minister, her department and SASSA exactly what will happen come March 31.

Show us a plan, the figures, the negotiations” has been the refrain.

Minister Dlamini herself missed a few crucial meetings, as did SASSA officials who in November jetted off to a conference in Panama City instead. In December the minister and key officials did arrive to present, but key documents were delivered late and Dlamini refused to be “pushed into saying who is going to pay our people”, saying that doing so would “put her department at risk”.

In the meantime SASSA, while it originally stated on February 2 that it would be approaching the Constitutional Court on February 8 to apply for an extension of the existing tender held by Net1-UEPS subsidiary Cash Paymaster Services, later revealed that it would now, after taking legal advice, not be doing so. SASSA would instead, it said, be filing a supplementary report that will “clarify the drastic changes on its plan from the one filed at the onset”.

Treasury in the meantime has informed SASSA and the minister that it would only consider a deviation to enter into a new contract with CPS if the Constitutional Court granted SASSA’s request.

The emergency situation places Net1-UEPS CEO Serge Belamant in an extraordinarily strong position to renegotiate the contract, on terms that will no doubt be favourable to the company. But on Wednesday committee members learned that there is no additional budget and that Belamant would have to just accept SASSA’s offer.

Belmant has however intimated that CPS would not be that amenable to continuing the relationship in its current form.

CPS has received no increase for five years. We have had to absorb cost increases on many fronts, including labour. We can’t carry on doing that,” he told Business Day on Wednesday.

Belamant added that CPS had initially estimated the pre-tax profit margin on the SASSA business to be about 18% but that this had not been the case as “we’ve had to spend far too much money on unrelated issues such as lawsuits and dealing with reputational risk”.

He added that based on CPI increases over the past five years, he would require a 9%-10% increase from SASSA.

There was much waffling and obfuscation at Wednesday’s briefing to the portfolio committee – with very little in the way of concrete budgets or timelines – but perhaps, in the interests of not terrorising the poor, we should allow the minister, SASSA officials and opposition members to speak for themselves.

Here is Minister Dlamini explaining why SASSA would not be approaching the ConCourt on February 8 as promised at an earlier committee meeting:

Looking at the recommendation of the Treasury we are not going to meet the deadline that was suggested in that last meeting of the last portfolio committee. When the team came here we were still negotiating with the Treasury which is why I was personally jittery about coming here and presenting a solution that was not endorsed by the Treasury. Because Treasury is important in our work and secondly the work streams, I must say they have started doing their work but they have not been approved by the Treasury. I don’t want to pass the buck to the Treasury because we also started late in October last year to do the work with the work streams and when they looked at the report of the advisory committee.”

With only five weeks to go, here is the minister on negotiations with Belamant where he will be informed that he will have to negotiate a new contract with an old budget:

What we have been trying to do is negotiate in good faith and therefore if you negotiate in good faith you do a get a most of the time what you want. We are going there with our plan. We are going to negotiate. If we think the conditions that are put up are compromising or unreasonable we will have to go back to the drawing board and see how we deal with that. But I can’t pre-empt the discussions before they take place.”

Without wanting to alarm anyone it is the words “we will have to go back to the drawing board” that sort echo in one’s mind, but don’t tell the poor.

Here is SASSA CEO Thokazani Magwaza:

The issue of Post Office and Post Bank kept on coming up all the time… we have engaged the Post Office and not the Post Bank because the Post Office is a government agency. We are doing a parallel process. CPS is our first option. If something falls through we need to have a back-up and going forward and the Post Office is part and parcel of that. The problem with the Post Office is it is mostly peri-urban… We have 10,000 SASSA payout points and they are mostly rural… We need to go out on quick RFP (request for proposal) as suggested on cash management serves in case CPS does not go the way we want them to go.”

No cause for alarm with “in case CPS does not go the way we want them to go”. Nothing to see here.

Here is Zodwa Mvulane, SASSA project leader, on the status of talks with CPS:

We have not started negotiating with CPS but we have been communicating with CPS. We wanted to get them to agree in principle… there have been letters written and they have responded positively towards the request…”

Department of Social Development Director General, Zane Dangor:

The budget will have to work within the existing admin budget which means in negotiating the issues [with CPS] with regard to R1.2-, R1.3-billion that is floating out there will not be possible in terms of dealing with the existing budget, so the negotiations will be tough. There will be a negotiating team which will include the DG of Social Development, Treasury and hopefully someone from the South African Reserve Bank.”

Here is IFP member Liezl van der Merwe:

I think it is very unfortunate it took us the whole month to get the truth when on February 2 we were served with half truths. But minister, let me be frank, I think you and your department have been negligent and beyond this negligence you have shown complete disregard for the 2014 Constitutional Court order, and you have shown complete disregard for the reputation, the dignity and the authority of the Constitutional Court. The court told you in 2014 already to prepare yourself for 1 April 2017.

I still don’t understand what has happened in the last three years. Because by your own admission and your opening remarks you only started working on the work streams and engaging with Treasury doing due diligence on CPS in October. Now we are forced into a crisis and I still don’t understand in terms of clarity you say Treasury said to you ‘engage with the banks’ … Then Treasury says it’s fine, ‘we will look at what the ConCourt says’. Now you are telling us you are going to the Constitutional Court on March 31 on the very day the contract expires, or you are not even approaching the court at all, yet Treasury said ‘we will see what ConCourt says’.”

And also:

Can you confirm they [CPS] are seeking an extra R1.3-billion from this department to pay out the social grants. I also want to know that you don’t want to pass the buck to Treasury but there are allegations that come March 31 and there is a problem of some sorts you will pass the buck and blame Minister Pravin Gordhan which will give the minister and the president more ammunition to fire Pravin Gordhan.”

To which the committee chair tongue lashed Van der Merwe for “bringing things into this meeting from the outside”.

The DA’s Shadow Deputy Minister of Social Development, Lindy Wilson:

I must admit I am concerned about the report [given by SASSA]. It says it is a progress report… I see no progress. You said you would be going to the Constitutional Court in February… Five weeks down the line you are still consulting with lawyers. Where is the progress? The presenter [Zodwa Mvulane] says you are still negotiating with CPS. How many times have you met with CPS and how far are your negotiations? Your presentation says you are only meeting next week. We have a presenter saying ‘should we fail we get to Plan B’. How much will it cost to extend this illegal contract and what stops you from coming to us [the committee] to say you want to extend it to five years or indefinitely. There are just too many contradictory statements.”

To which Capa responded that Wilson was attempting to “smuggle in information” under the guise of seeking “clarity”.

You have mentioned three times things that have not been mentioned. You bring what you saw outside,” said Capa.

And there we have it, citizens of South Africa.

But whatever you do, don’t go out there and terrorise the poor. You can leave that to Minister Dlamini. DM

Photo: Minister of Social Development Bathabile Dlamini launches Disability Rights Awareness Month 2016 at Sibonile School for the Visually Impaired in Sedibeng East, Meyerton. South Africa. 03/11/2016. Siyabulela Duda


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