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Dlamini up in arms over Sapo

In an interview with Sunday Independent on 11 February 2018, Social Development Minister, Bathabile Dlamini, expressed her concern at Sapo’s level of readiness for distribution of SASSA grants from 1 April 2018. According to Minister Dlamini, Sapo has been unable to meet the necessary infrastructure deadlines needed to handle a project of this magnitude.


With just over a month before the South African Post Office (Sapo) is due to fully take over payment of social grants to millions of beneficiaries, Social Development Minister Bathabile Dlamini is citing serious doubts about its readiness.

She was responding to Sapo chief executive Mark Barnes, who accused the South African Social Security Agency (Sassa) a few days ago of being “non-responsive and causing delays” regarding the parastatal’s takeover of grant payments on April 1.

In an interview with Independent Media, Dlamini came out guns blazing, casting aspersions on Sapo’s capacity to deliver on all aspects of the service agreement. Sapo had to date failed to deliver on “the simplest” of its obligations, which was to open a corporate account, she charged.

This had led to scepticism about whether Sapo could actually deliver on a project of this magnitude, she added.

“We are dealing with dishonest people here who are largely motivated by self-interest rather than a need to serve millions of the country’s most vulnerable citizens.
“Prior to the signing of the service agreement with Sapo, its CEO was highly vocal, telling everyone social grant payments was a simple task with no complexities at all. Now Sapo has told South Africa it will not be able to meet the April 1 deadline.

“One other challenge for Sapo is the biometric system that enables cards to be issued. Their offices have to meet Sassa norms and standards for payments. You must be able to check through biometric or PIN numbers to check if people qualify to receive grants. They don’t have these systems in place.

“In court they said they could do this in four months. They have since issued a tender without talking to us. They are evaluating the tender and this is in violation of the memorandum of understanding we have with them.”

Last week, Sassa filed papers with the Constitutional Court requesting an extension of Cash Paymaster Services’ (CPS) contract to pay out grants for another six months, from April 1.

Sassa wants CPS to be in attendance during the transition to ensure payments are not interrupted. The transition period will involve CPS’s phasing out and the phasing in of Sapo for electronic payments and a new service provider for the cash payments.

But Dlamini said Sapo had a lot of questions to answer. “The Constitutional Court was also very explicit that if we are not able to do some work for some reason, we should inform them. We have done that under the stewardship of the inter-ministerial committee led by Jeff Radebe with state law advisers.

“The advisory committee suggested Sapo must re-establish itself and be one of the distributors of grants, working with other stakeholders. We thought they had the necessary expertise. Now it’s a problem for them because of the huge number of recipients.

“And to exacerbate their woes, many post offices have closed, making the institution inaccessible to many recipients, especially in rural areas.”

The initial idea had been to give Sapo the opportunity to start small and grow into the process gradually. Although Parliament’s portfolio committee on social development backed the idea, it was rejected on other fronts, including Parliament’s standing committee on public accounts (Scopa).

She added: “Scopa did not even ask pertinent questions. They were outright hostile and vicious.”

Everything possible was being done by her department to ensure grant recipients were paid. Sassa has a contingency plan that saw it successfully paying over two million beneficiaries who receive their grants from commercial banks, she said. This was done through a Paymaster general account. She hailed this as a giant step towards Sassa ultimately paying all beneficiaries via any type of electronic payment method.

Come the end of the month, she was confident Sassa would use the contingency plan again, this time to pay about 5.7million recipients.

The plan was supported by the inter-governmental committee led by Minister in the Presidency Jeff Radebe, she noted.

Dlamini had strong words for Sapo, which she advised “to have a clear understanding of what they are supposed to do”.

“Furthermore, they must have a clear programme that outlines how they are going to do it. Lastly, they must be realistic about what they can and cannot deliver because this is about the lives of people, more so the most vulnerable members of society.”

Dlamini also urged Sapo to be co-operative and warned its bosses to refrain from “running to the media if they aren’t able to do their work”.

She also had harsh words for a panel of experts appointed by the Constitutional Court, saying that they viewed a grant as a privilege and not a right.

“They are also insisting recipients must not choose where they receive their grants but should be told where to go or to register with banks.

“Clearly grant payments are seen by some as a lucrative business instead of a service to society’s most vulnerable.”

The experts were “strongly pushing us” to go the route of banks.

“In our view, the only bank that has gone all out to the rural areas and one of a few banks that is using biometric authentication system is Capitec.
“Perhaps that explains why the bank was discredited and rubbished - so we don’t consider them for grant payments.”

This was a reference to a recent controversial report by the Viceroy Research group which asked the SA Reserve Bank to place the bank under curatorship, a move that could see it collapse.

The report alleged that Capitec Bank was a loan shark masquerading as a bank, and that it could not cover the debt it has incurred through client loans.
Dlamini said this was indicative of how some people were prioritising their personal interests in this process.

“There must be honesty and proper reports of what everyone is capable of doing. We must be allowed to give guidance on the whole matter because we understand fully the role of Sassa.

“According to the Sassa Act, the buck stops with Sassa. Everyone who wants to support us must understand this. There is no reason for us to put the state in danger because we know grants are about vulnerable people.

“In fact, whatever committee has been put in place must also understand what it’s all about.”

Sapo could not be reached for comment. CEO Mark Barnes’s phone rang unanswered yesterday.