Millions of S.A's most vulnerable face benefits cut-off

PUBLISHED: Tue, 28 Feb 2017 16:06:01 GMT

Millions of South Africa’s most vulnerable people, including the disabled and the old, are in danger of missing their social security payments because of a service-provider dispute, setting the government racing to meet an April 1 deadline.

Zodwa Mvulane, project manager at South Africa’s Social Security Agency (SASSA) said on Tuesday the agency was seeking to ensure as many as 17 million people continued to receive their money, despite concerns that retaining the existing service provider is both unlawful and costly.

“We will be negotiating with the current service provider for a new contract,” she said.

The existing contract, run by Cash Paymaster Services, a unit of technology company Net1 unit, has been in doubt since South Africa’s highest court ruled four years ago that the tender process to acquire its services was unlawful. It ordered that a new contract to be negotiated.

SASSA has so far failed to find a new service provider to take up the service at the start of April or set up its own payment agency, officials said, adding that they opted to renew the deal with Cash Paymaster Services despite the court order.

The looming crisis saw opposition parties and ruling African National Congress members of parliament unite on Tuesday in a rare display of cross-party condemnation as SASSA officials struggled to justify the delays.

For millions of South Africa’s most vulnerable SASSA money is often the difference between an empty or full belly.

The Treasury has expressed misgivings about SASSA retaining Cash Paymaster Services, a move also criticised by members of parliament’s committee on public accounts.

“You are literally between a rock and a hard place, because Treasury will have to approve your process and it doesn’t look like it wants to do it,” said Tim Brauteseth of the opposition Democratic Alliance.

Brauteseth quoted a Treasury letter to SASSA saying extending a contract declared invalid by the Constitutional Court was “not justifiable”.

The government’s expenditure on social grants in the 2017/18 financial year amounting to more than 150 billion rand ($12 billion), a key expenditure item in a low-growth environment.

Social Development Minister Bathabile Dlamini assured beneficiaries that government would continue with payments. The minister said she would hold a news conference on Wednesday to address all questions related to SASSA.

($1 = 13.0375 rand) (Editing by James Macharia/Jeremy Gaunt)

Sign Up for Our Newsletter Daily Update
Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent.
Get this delivered to your inbox, and more info about about our products and services. By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.