Social Development Minister Bathabile Dlamini is adamant that social welfare grants will be paid on April 1 but she is very thin on the details of how the payments will be made.
All she confirmed was that Cash Paymaster Services, the same company that had been paying grants on behalf of the South Africa Social Security Agency (Sassa) but whose contract was declared invalid by the Constitutional Court in 2014, would continue to distribute grants.
The Constitutional Court decided to allow the contract to continue until March 31 2017, but Sassa never appointed another service provider to take over from March 31.
Dlamini is expecting more information on the negotiations with CPS from a “technical team” on Friday.
Despite CPS’s chief executive Serge Belamant telling the media on Monday that the company had reached a deal with Sassa, Dlamini said they had no such agreement with CPS as yet and that negotiations for a new post-March 31 contract were still ongoing.
While Dlamini could not say how or how much or anything about the terms of the yet-to-be-signed agreement, she warned against saying the government would not pay grants after March 31. This, she said was akin to “removing the government in the eyes of the people”.
“It’s fine that people are asking questions about the tender, like what is going to happen when it gets terminated because we also understand that when the 31st of March comes, the tender will fall off automatically,” said Dlamini.
“But ... what I think is going on right now is that, during elections, there are those who use pensions to campaign and then now the same issue is used so as to remove the authority of the government in the eyes of our people,” she added.
“If you are talking about a government that kept everyone in limbo, you are removing that government in the eyes of the people. Maybe we should wait up until April 1 and see whether we won’t be able to pay grants,” she added.
The social welfare grants is the government’s flagship programme to protect the poorest citizens from abject poverty.
Analysts have previously claimed that a large number of social grants recipients are ANC voters.
Dismissing the calls to use banks to distribute grants, Dlamini revealed that the bank they once worked with, Standard Bank, still owed them about R500 million including interest because they had dormant accounts. She said Ithala Bank owed about R1.1 billion and yet “no one has come to us to say ‘how are you dealing with the issue of those dormant accounts and money that has not been paid back to the department or government’.”
Dlamini said they therefore couldn’t “just jump and go there [to the banks] because everyone is saying we must go there and disregard the experience we are having.”
She said the government’s approach was to be people-centred, that payments should be taken to where communities are so that the money does not go to big retailers.
“We have been given the opportunity to contribute towards radical economic transformation [and] to be able to deal with that we must try to ensure that the whole process and work is inclusive of our people.”
Members of Parliament were quick to point out that CPS was an American-owned white company.
“How does CPS fit into the radical economic transformation agenda?” asked the Inkatha Freedom Party’s Mkhuleko Hlengwa.
Other MPs questioned the company’s black economic empowerment credentials.
The lack of BEE credentials or failure to verify them was the basis of the Constitutional Court’s decision to invalidate CPS’s contract in the first place.
Yesterday, caught out, Dlamini admitted that they overlooked the much vaunted “radical economic transformation” in renewing a contract with CPS. She said this was due to “pressure”. “We didn’t look into the issue of economic transformation when negotiating new grant tender,” she said.
Dlamini said the first year of the new contract would be used for phasing out and the second year would be about rolling out all the processes.
The only admission of wrongdoing from Dlamini was that they had underestimated the work they were supposed to do.
“Taking over payments is a lot of work ... but the two years would be just part of a five-year process to revolutionise the South African Social Security Agency,” said Dlamini.
Finance Minister Pravin Gordhan is expected to appear before the committee next Tuesday to account for the Treasury’s role in the saga.