CAPE TOWN (Reuters) - South Africa’s Finance Minister Pravin Gordhan said on Tuesday he was “fairly confident” social security payments will be paid on April 1 despite a service-provider dispute that has cast doubt over the welfare benefits.
The South African Social Security Agency (SASSA) is scrambling to ensure that as many as 17 million people continue to receive their money, despite concerns that retaining the existing provider is both unlawful and costly.
Dominated by more than 11 million child support grants, the welfare system is a lifeline for South Africa’s most vulnerable. Each month long queues form at pay points across the country as people wait for the money that is often the difference between going to bed hungry or not.
“I am fairly confident grants will be paid,” Gordhan told parliament’s public accounts committee, referring to April 1.
The dispute has led to opposition calls for the social development minister, an ally of President Jacob Zuma, to resign.
The existing contract, run by Cash Paymaster Services (CPS), a unit of technology company Net1 unit, has been in doubt since South Africa’s highest court ruled in 2014 that the tender process to acquire its services was unlawful. It ordered that a new contract be negotiated.
At the time, SASSA and CPS said the system was working well and there was no realistic possibility anyone else could take over the contract without huge disruption.
“It would take at least 18 months for anyone to come in and do the same thing,” Serge Belamant, Net1’s chief executive, also told 702 Talk Radio on Tuesday.
Officials at SASSA have said the agency has opted to renew the deal with Cash Paymaster Services despite the court order. A new deal has not yet been made public.
The Constitutional Court will on Wednesday hear an application by non-government bodies, Black Sash and Freedom Under Law, for the court to play a supervisory role in any new contract agreed.
The Treasury has expressed misgivings about SASSA retaining Cash Paymaster Services, a move also criticised by members of parliament’s committee on public accounts.
“We are trying to be careful not to pre-empt the court in anyway, and the court will finally determine the shape and direction of many of the issues we are looking at,” Gordhan said.
Facing a hostile opposition in parliament, Social Development Minister Bathabile Dlamini said “there is no crisis at SASSA” despite media reports citing SASSA’s CEO saying he was prevented by the minister from trying to resolve the issue by responding to the Constitutional Court.
Dlamini, who heads the ruling party’s Women’s League, dismissed opposition concerns, describing their allegations of corruption and political intervention as “political grandstanding”.
Opposition lawmakers were unanimous in their condemnation.
“The minister must do the honourable thing and resign. She is no longer fit for purpose, she is a threat to the social stability of this country,” Mkhuleko Hlengwa of the Inkatha Freedom Party said.
The SASSA has said it would only be ready to take over the payments by 2019/20.
Additional reporting by TJ Strydom in Johannesburg; Editing by James Macharia and Alison Williams