No welfare payments crisis, says Zuma
President Jacob Zuma on Thursday refused to take action against his welfare minister, saying there is no crisis in the nation’s social grants system. By Amogelang Mbatha and Paul Vecchiatto.
President Jacob Zuma refused to take action against his welfare minister, saying there is no crisis in the nation’s social grants system even as the cabinet apologised for the “anxiety” caused by uncertainty around whether 17m people will be paid next month.
South Africa is scrambling to ensure that the payment of more than R150bn of grants a year will be paid from 1 April when a contract with Net1 UEPS Technologies ends and the constitutional court is considering arguments from human rights groups to supervise any new agreement.
While the court ruled in 2014 that the deal with Net1 was invalid, the department of social development says it’s the only company with the capability to pay.
“How do you evaluate a person on something that has not happened?” Zuma told lawmakers in Cape Town on Thursday in response to opposition party demands that social development minister Bathabile Dlamini be fired. “1 April has not happened and the minister and her colleagues are working on ensuring people get paid.”
Any interruption to the signature programme of the ANC could spark protests in poor communities where many households have no other income.
The debacle is the latest in a series of missteps by Zuma’s administration that have curbed growth, dented investor confidence and stoked conflict between government officials and departments.
The South African Social Security Agency on Wednesday asked the constitutional court to either extend Net1’s contract or award it a new one. Black Sash Trust, Freedom Under Law and Corruption Watch argued that the deal must be supervised by the court until a new operator can be found, and that the company shouldn’t be allowed to profit from the contract. The Post Office said it could take over the payments.
Net1 proposed in court papers on Thursday a fixed monthly fee of R194m to continue to run the system for two years. It’s also prepared to accept an order to keep the same terms as its previous deal for a shorter period, provided the auditor-general consider an increase in the fee to compensate for inflation. The fee proposed took into account estimated inflation, according to the submission to the constitutional court.
A group of ministers, including Dlamini and finance minister Pravin Gordhan, are working to ensure the payments will be made, minister in the presidency Jeff Radebe told reporters in Pretoria after a cabinet meeting. It would also investigate the actions of the welfare agency and seek advice on further legal action, he said.
Cabinet “regrets the anxiety caused by uncertainty over the social grant payments”, Radebe said. — (c) 2017 Bloomberg LP