Former Sassa CEO ‘put in his place’

2017-07-23 06:04
Thokozani Magwaza

Thokozani Magwaza

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The choice of the vehicle that government will use to pay social grants to the poor and disabled should be an operational decision, not a political one. This is according to former SA Social Security Agency (Sassa) chief executive officer (CEO) Thokozani Magwaza, who spoke out this week amid claims that he sought to undermine his former boss and dictate policy.

Bound by a nondisclosure clause since his sudden exit on Monday, Magwaza told City Press that he could not comment in detail, but said he had always been clear that Social Development Minister Bathabile Dlamini had the latitude to determine the policy direction for Sassa.

However, he insisted that the payment of grants and the mechanism used to achieve that was a procurement decision guided by the Public Finance Management Act and therefore the process fell squarely within his mandate as the accounting officer.

“This is operational and nothing else. It is the day-to-day running of the organisation and therefore it cannot be a policy matter to pay grants,” he said. “I have never disputed the issue of policy. But the minister must concentrate on the policy side and leave the day-to-day running to the accounting officer.”

Magwaza had widely been portrayed as the main obstacle between politicians’ alleged scheme to loot the social grants tender by imposing their close associates as part of the deal. This has irked Dlamini’s allies both inside and outside of government, who have accused him of being “a law unto himself” and riding on the negative corruption narrative around the minister and President Jacob Zuma as head of government.

A government insider said Magwaza “was a problem and he remains a problem, which is why the minister had to find someone who will do that task”. He said “the kind of animal that will replace the current contract with Cash Paymaster Services (CPS) must, at a policy level, be defined by Dlamini and not Magwaza”. The CPS contract expires next April as per the Constitutional Court order issued in March.

The insider said Magwaza wanted to tell the minister what to do and had on several occasions been asked to explain “who determines policy”. “There have been interdepartmental meetings that said Dlamini should define policy, how it should be and what it should be. Magwaza was defying Dlamini left, right and centre, causing confusion and havoc at Sassa. He is being praised as a hero, but he was a major problem.”


City Press was informed that Magwaza had favoured the SA Post Office (Sapo) to take over from CPS, while Dlamini preferred “a hybrid model” that involved commercial banks, local merchants, Sapo and “state agencies of relevance”.

Treasury officials said Magwaza had written to Treasury asking to condone deviations from procedures so that Sapo could get the contract. “And that has not come to light because Sapo does not have capacity,” a source said.

He said the official policy was that the capacity to pay grants must be built in-house, but you have to use a hybrid model in the interim. “The temporary model will involve banks, retailers and Sapo. That is where the decision is at and Magwaza wanted to go the route of Sapo alone. He was going to sink the country.”

The source said that, at an interministerial committee meeting held in Cape Town last month, before Parliament went to recess, Magwaza had been explicitly instructed to follow Dlamini’s policy direction on the social grants payment plan.

“And in the discussion, he could not sustain his argument because he was told it was not his space.” The source said: “Magwaza was put in his place because other departments were clear that he was causing confusion. The policy is set by the principal [Dlamini]. He is undermining Dlamini on policy matters. You cannot be the CEO and do as you please.”

He said “the interministerial committee meeting had agreed on a hybrid and that is what Magwaza was supposed to be working towards, but he was not doing that and instead went the route of Sapo”. He said the Reserve Bank had informed Sapo that the laws had to be aligned before it could operate as a bank.

Magwaza confirmed the Cape Town meeting, but denied that he was ever “put in his place on anything by anybody at any given time”. “I was never put in my place because I have never disputed the issue of the minister’s jurisdiction on policy. The issue of policy never even arose and we dealt with the report, preparing the interministerial committee meeting on what is going to be in the report to court,” he said.

A Dlamini ally said: “The minister was being targeted for Magwaza’s exit because the environment is politicised. Those who want Zuma and Dlamini out of power try to make her look the worst.” He said Sapo did not have a banking licence, although it had applied.

“Currently, it is a deposit-taking institution. Come next April, if they do not have a licence, they cannot assist.

“Sapo has many shortcomings, but the minister is prepared to include it, together with banks and local merchants.”

For example, he said, Sapo had 2 800 branches and Sassa had 10 000 pay points. “So, how can they deliver grants because those pay points need to be covered equally?”

He said that, by law, the minister had “an overarching role over Sassa and can overrule any decision made by the CEO”. “People turn a blind eye on the overarching powers that he has by legislation. She has legislated powers and when this thing falls apart, the law does not look at the CEO, but at the minister.”


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Read more on:    sassa  |  thokozani magwaza  |  social grants

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