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Social grants corruption is a corrosive, deviant culture that crushes hope and destroys trust

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Professor Letlhokwa George Mpedi is the Vice-Chancellor and Principal of the University of Johannesburg.

Social grants are the primary source of income for roughly 25% of South African households. They are also the second most crucial source of income for close to 50% of the population after salaries.

Social security, which includes non-contributory social assistance and contributory social insurance, is a fundamental right and a necessary safeguard. As US President Franklin D Roosevelt said in his 1944 State of the Union address, “we have come to a clear realisation of the fact, however, that true individual freedom cannot exist without economic security and independence. Necessitous men are not free men.”

In South Africa, social security, particularly tax-funded social assistance, offers stability and hope to citizens grappling with inequality and unemployment challenges. It is a constitutional obligation that represents a commitment to the well-being of all South Africans and emerges not only as a policy choice but as a moral imperative.

According to the latest General Household Survey by Stats SA, social grants are the primary source of income for roughly 25% of South African households. Moreover, they are also the second most crucial source of income for close to 50% of the population after salaries.

The arguments for social security are sound, but what happens when this very system is twisted?

In recent years, corruption and fraud have seeped into the very fabric of South Africa’s society. One merely needs to mention “capture” or “Zondo” to trigger a visceral response. This deviant culture has seeped through every facet of our society — and the repercussions are substantial.

On Monday 9 October 2023, it emerged that corruption had infiltrated the South African Social Security Agency (Sassa). In the last two years, 701 suspected fraud cases were investigated, involving an estimated 40 Sassa officials, which amounted to a potential loss of just over R50.5-million. The cases ranged from fraudulent collection of grant funds, disability grant applications based on falsified medical information, and the unlawful collection of child support grants.

Failures and access issues

In September, Postbank, which distributes social grants to more than 18.2 million beneficiaries, said it had to deploy cybersecurity technology to reinforce its systems and to prevent future fraudulent activities after R90-million of social grant money was looted over two months in 2021.

Earlier in the month, the board of Postbank was fired by Minister of Communications and Digital Technologies Mondli Gungubele after a forensic investigation found that Postbank had maintained contracts with suppliers unlawfully, including the switch technology which enables grant payments, and an illegal R140-million contract paid to a software company.

Days before, a nationwide system failure affected payments to 600,000 old-age grant beneficiaries. To call this merely a glitch is a gross underestimation of the impact.

These instances of fraud, which could very well only scratch the surface, are particularly distressing when you consider that Sassa grants are essential to millions of poor South Africans. This subversion becomes a tool of exploitation, deepening inequalities, eroding trust, and crushing the very hope it was designed to foster.

Read more in Daily Maverick: Social grant payments are a mess – and the public needs answers from Sassa, Sapo and Postbank

How do we combat this? Importantly, we need to understand the root causes of fraud.

On the one hand, this comes from a sense of desperation. South Africa has been called the most unequal country in the world and has among the highest unemployment rates in the world. This has created an environment where vulnerable individuals often resort to fraudulent activities out of sheer necessity.

On the other hand, corruption emerges and persists against a backdrop of our history, an overreliance on extractive resources, poor governance frameworks and institutions, political factions, and the shaky economic context. Based on this, what is to be done?

Considering our socioeconomic context, it is apparent that we need to invest in quality education and appropriate skills training programmes to empower citizens and focus on job creation through joint initiatives with industry. Our social welfare programmes should also be designed with efficiency in mind.

As demonstrated above, however, this calls for more rigorous checks and balances in the tender process at a government level. There also need to be severe penalties for fraud that act as a deterrent. This requires a culture of transparency and accountability.

Ethical leadership within government institutions thus becomes paramount, particularly as we work towards rebuilding trust between the citizens and the state.

The shift towards cybersecurity frameworks is, of course, an important solution. Yet, we must also be mindful of the potential consequences. For instance, the World Economic Forum’s (WEF) Global Risks Report 2021 warned of the impact of cybersecurity failure, particularly on public services. In anticipation of these threats, governments and organisations alike must establish robust cybersecurity strategies to safeguard critical systems, protect data and ensure seamless service delivery.

As we continue to wade through a challenging economic context, social security has to continue to be a priority for us, and we must not forget that citizens and their well-being are at the heart of it.

Perhaps in this endeavour, it is helpful to remember the words of Noam Chomsky, who once said “social security is based on a principle. It’s based on the principle that you care about other people. You care whether the widow across town, a disabled widow, is going to be able to have food to eat.” DM

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  • Michele Rivarola says:

    Unfortunately there are other realities that the article fails to acknowledge. An increasing population without a corresponding increase in employment opportunities, a rapacious corrupt political elite all of which place an unbearable burden on the country’s productive means combined with many active taxpayers emigrating to greener pastures. Whilst no one disagrees that social security must be a priority equally no one seems to be be looking at where the funding is going to be coming from which is the problem SA is experiencing atm. Is the rand going to go the same way as the Zim dollar? There are politicians who spoke of quantitative easing as the solution: print money and use it to pay your debts. Baffles the mind how someone could be this ignorant and be one of those who makes financial decisions the outcome of which the whole country will have to bear for generations to come

    • Steve Davidson says:

      Well said Michele. One thing that has always bothered me with SASSA and unemployment – why aren’t the people in this position given the opportunity to actually earn this ‘free’ money by doing something like cleaning their streets, or other useful jobs like that, instead of – apparently – just creating more and more babies in order to get even more ‘free’ money? Very strange.

      • Caroline de Braganza says:

        Sassa doesn’t fund the unemployed. There are 8 different types of grants including the War Veterans Grant for those who fought in the Second World War or Korean War, Disability Grant, Foster Child Grant, Older Persons Grant and Care Dependency Grant. The Child Support grant limits the number of children in a household that can qualify, so please stop the tired narrative about making more babies.

        Are you suggesting that me ((73) and my husband (84) go sweep the streets in order to qualify for our Older Persons Grant?

  • David McCormick says:

    I agree with your opinion Prof Mpedi. Social security payments are needed to sustain a substantial percentage of our population. Without this support, the situation would be so much more severe for many South Africans who lack the skills to create a living in the “formal” economy.
    Sadly, the current generation of corrupt officials have followed the example of those politicians, religeous leaders and business persons whose sole aim is to enrich themselves at the expense of South Africans or other shareholders. Until there is a consequence for this corruption, nothing will change. Just one small incident – the looting of VBS by some political leaders – yet those same people serve on the committe that selects judges.
    Until the education system provides the requisite economic skills to more South Africans, or more low-skill jobs can be created, social security payments remain the only option to sustain the unemployed.
    Funding of social security payments requires utilization of South Africa’s vast resources for the benefit of South Africans rather than the few politically connected souls. To create more jobs, employment legislation has to be simplified. For example, after the cost of compliance, adminstration and lost business opportunity (i.e. lost jobs) is taken into account, how much value has BEE added to the economy? Ironically, it is the people reliant on social security grants who could vote for the changes required to create jobs.

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