Twelve months and four CEOs ago — including two acting — the public looked on in disbelief as the South African Social Security Agency (Sassa) seemed incapable of realising the implications of the March 31 2017 deadline.
Here we are again, looking on with even more disbelief as it becomes more apparent that there is no detailed plan for April 1 2018.
The only thing that saved the country from the inevitable chaos that would have resulted from the failure to distribute social grants effectively in 2017 was intervention by the top court in the land.
The self-imposed crisis resulted in the Constitutional Court micromanaging a 12-month extension, during which Sassa was to extricate itself from Cash Paymaster Services (CPS) and put in place an alternative failsafe distribution system. Not only was Sassa required to submit monthly progress reports to the court, an expert panel was also appointed to oversee the transition and required to submit quarterly reports.
It was an unprecedented level of hand holding. And last week it became evident that it had achieved little.
While Sassa has applied to the court for a six-month extension of the suspension of invalidity of the CPS contract to allow the company to continue to distribute cash to about 2.5-million recipients, this appears to be only part of the picture.
Even as Sassa CEO Pearl Bhengu was telling the court it had "made arrangements" for the remaining 8.3-million recipients, she was discussing the continued provision of critical back-end banking systems for the social grant distribution system with CPS.
In an early February letter to CPS, Bhengu refers to the need for "system support for the existing Sassa-Grindrod cards for as long as ... [they] are still in circulation. CPS has extended the lifespan of those cards to end-December 2018.
"In addition, until such time as Sapo [the South African Post Office] is ready to start rolling out the new Sassa-branded card, CPS will be expected to continue issuing the current Sassa card to new beneficiaries, as well as to those existing beneficiaries who require replacement cards," said Bhengu in her letter to CPS.
Sassa seems little closer to a solution to its CPS challenge than it was 12 months ago.
In response to the pressure from the court and its expert panel, it has gone through the motions of engaging with a variety of parties, principally the Post Office and, to a lesser extent, the banks.
Last week, Post Office chief operating officer Lindiwe Kwele told Parliament the Post Office would take control of the grant system "in principle" in April. She raised concern about the lack of details on the "phase-in-phase-out process".
Later in the week, the portfolio committee on social development said it was concerned that there was little co-operation between Sassa and Post Office CE Mark Barnes. The lack of Sassa co-operation doesn’t end there. It has been a common refrain of the expert panel reports and has also afflicted the banks’ efforts to help.
"There doesn’t need to be a crisis," says Cas Coovadia of Banking Association SA, "we can come together pragmatically" to devise a solution.
Sassa is pushing the banks to develop a standardised product. It’s an option the banks are unhappy about.
They claim, unpersuasively, a standardised product would cause problems with the competition authorities and that each of the banks has an appropriate product. Their concern is that Sassa will not provide them with the data to determine which of the 8.3-million recipients who are not paid out at CPS cash paypoints are using which banks’ ATMs to withdraw their grants.
Herman Kotze, CEO of CPS’s holding company, Net1, says that most grants are withdrawn at ATMs or point-of-sales terminals on day one or two.
It’s unclear how many of the 8.3-million recipients have bank accounts. Recent results from Net1 reveal more than 2-million have EasyPay Everywhere accounts, the controversial accounts run by Net1 and Grindrod.
The expert panel estimates less than half a million of the remaining 6-million or so have active bank accounts.
The banks have been unable to access the data that will enable them to look at a solution for these recipients.
One frustrated Treasury official reckons nothing will get done while Social Development Minister Bathabile Dlamini is still around.
But not everyone believes the banks are ideal.
The Black Sash, an nongovernmental organisation that has championed the rights of recipients, fears unless there are clear rules, bank charges could gouge much of the grant.
Coovadia says the banks are not in it to make money, but they do want to recover some of their costs.
All that’s missing is a workable plan.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.