South Africa

SassaGate Reloaded: CEO Magwaza fired as Dlamini sets Sassa on course for another crisis

By Marianne Thamm 17 July 2017

Just hours after Themba Godi, chair of Parliament’s Standing Committee on Public accounts lashed out on Monday at shadowy individuals threatening the life of Sassa CEO Thokozani Magwaza, Minister of Social Development Bathabile Dlamini fired the embattled CEO. The shocking move comes as Magwaza was putting finishing touches on a contract with the South African Post Office to replace CPS in March 2018 as the distributor of social grants to 17-million South Africans and worth a whopping R10-billion a month. Dlamini appears to be hell-bent on manufacturing another social grants crisis. By MARIANNE THAMM.

Only nine months in the hot seat and Sassa CEO, Thokozani Magwaza, was ousted on Monday by Minister of Social Development Bathabile Dlamini. Magwaza was in the process of finalising a contract with the South African Post Office to partner with Sassa in the payment of social grants when the current extended (and illegally awarded) CPS/Net1 contract ends in March 2018.

Daily Maverick has learnt that Magwaza has signed a “non-disclosure agreement” with regard to the reasons that led to an “irretrievable breakdown” in the relationship with Dlamini. In March this year social development DG, Zane Dangor, resigned also after clashing with Dlamini. Dangor had fiercely resisted the renewal of a contract with CPS without prior approval by the Constitutional Court.

Like Magwaza, Dangor’s life was threatened. His home was also invaded by two intruders who assaulted one of his children. A vehicle involved in the Dangor home invasion was also spotted outside Magwaza’s home.

In April, Minister Dlamini fired her long-time special adviser Sipho Shezi, who had dared to criticise her. Shezi had attempted to support key Sassa officials in the lead-up to the crisis that ended up in the ConCourt.

Dlamini named Shezi in an SMS she sent to Dangor on 8 March accusing both men of being “used” by Magwaza who was, said Dlamini, “a friend to my former boyfriend who wanted to extort money from Lunga [Ncwana] and could not”. The Minister’s “boyfriend” at the time was only identified as Cessaro, an intelligence official.

Ncwana once acted as a conduit for funds from the late corporate raider Brett Kebble to the ANC and is a mutual friend of Dlamini and Brian Mosehla, who scored an R85-million cash windfall and a 12.5% share in CPS in a 2013 deal after CPS’s originally listed BEE partners had been dumped. (Read full investigation here.)

Magwaza’s firing (or “termination of contract after consultation”) on Monday comes in the slipstream of the CEO’s cancelling on 29 June of “workstreams” which cost R47-million and which were set up by Minister Dlamini in 2013.

The workstreams reported directly to Dlamini. Magwaza cancelled these after Treasury confirmed to Sassa that the R47-million expenditure is irregular. In affidavits to the Constitutional Court in March, Magwaza and Dangor set out that the workstreams formed parallel structures within Sassa and had specifically favoured a solution involving CPS.

On Monday, before Magwaza’s sudden exit, Scopa chair Themba Godi issued a strongly-worded statement saying there was “an orchestrated campaign to remove Magwaza”.

Just as we have seen the suspension of two director-generals in the Departments of Water Affairs and Sanitation (Mr Dan Mashitisho) and Agriculture, Forestry and Fisheries (Mr Mike Mlengana), all in circumstances that point to conflicts of interest with their political principals,” said Godi.

He said he had spoken to Magwaza on Sunday with regard to alleged death threats as well as the details of the contract the CEO was finalising with SAPO.

As Scopa, we are shocked and angry at what is evidently brazen lawlessness by a criminal gang of rent-seekers who want to intimidate Mr Magwaza out of his job so they can frustrate the Sassa Sapo contract and instead open the door for the looting of public funds,” Godi said.

He added that the fate of 17-million South Africans was at stake.

This is an attack and sabotage of national interest for the benefit of an immoral and parasitic clique,” charged Godi.

Godi said that Magwaza was right to have shut down the workstreams which worked parallel “to the legal management of Sassa”.

The appointment of these workstreams was declared irregular by the National Treasury, and there was therefore no other way than to immediately terminate them, as required by the Public Finance Management Act,” said Godi.

On Monday evening Godi expressed his shock that Magwaza had been ousted.

Dlamini, apparently undeterred by the searing judgment handed down by the Constitutional Court in March this year that she was responsible for creating a near national catastrophe, appears to be remarkably emboldened, surprisingly so as there are only eight months to go before a new grants payment system must be put in place by Sassa to pay out social grants.

This is bound to end up as SassaGate reloaded in March 2018 as it is highly unlikely that Sassa, now without Magwaza at the helm, will continue to negotiate with SAPO or other potential partners that are not favoured by Dlamini and those officials who support her.

Magwaza had been determined to ensure the entire process passed constitutional muster and that the monthly R10-billion contract should be circulated between government departments instead of benefiting private commercial interests who will most certainly seek to profit from the contract.

Magwaza, who was appointed in November last year, clashed with Dlamini from the start. In February he was booked off sick for a week due to stress and Dlamini has continued to thwart her CEO at every turn, rendering his term in office unbearable.

Magwaza and Dangor are both scheduled to testify against Dlamini in a public inquiry, ordered by the ConCourt, that will probe whether she should be personally liable for the considerable legal costs incurred in the Black Sash application to the ConCourt with regards to the extension of the CPS contract.

Democratic Alliance Shadow Minister of Social Development Bridget Masango said on Monday that the sudden departure of Magwaza “is yet another damning indication of the toxic influence that Minister Bathabile Dlamini has on Sassa and the Department of Social Development (DSD)”.

The IFP’s Liesl van der Merwe has said she will be writing to Scopa and the Portfolio Committee on Social Development to ask that Dlamini be called to account for her actions.

What is perhaps most revealing is Minister Dlamini’s complete silence with regards to the serious issue of the death threats levelled at a senior official in her political orbit.

Even worse, neither Dlamini nor her spokesperson Lumka Oliphant have bothered to reply to a series of questions seeking to determine reasons for Dlamini’s firing of Magwaza.

Dlamini clearly is of the opinion that she is not accountable to anyone, an attitude the Constitutional Court described as “extraordinary”. The court very clearly set out that it thought Dlamini responsible for the crisis in March and noted that there was “no indication on the papers that [the Minister] showed any interest in Sassa’s progress before October last year”.

Constitutional Law expert and Daily Maverick columnist Pierre de Vos described the judgment as containing “the most scathing criticism of a member of the executive I have ever seen”.

In the end the court removed responsibility from Sassa and the department and placed it with an independent 10-member panel that consists of former Reserve Bank governor Gill Marcus, head of the National Payment System Tim Masela, ANC veteran Mavuso Msimang, IT expert Mmamolatelo Mathekga, Deloitte director Angela Bester, partner at Genesis Analytics Anthony Felet, advocate Werner Krull, attorney Doris Tshepe, banking consultant Heinz Weilert and consultant Brand Taute.

It is not known at this stage whether this panel will be able to probe or question any decision taken by Dlamini.

Magwaza as well as Minister Dlamini did not reply to questions at the time of writing. DM

Photo: (Left) Sassa CEO Thokozani Magwaza (Photo: SIMPHIWE NKWALI / TimesLIVE) (Right) Minister Bathabile Dlamini (GCIS photo)