NEWS & ANALYSIS

Social grants: The Post Office better not mess this up!

Zohra Dawood says with hybrid model adopted SAPO has a huge responsibility

SASSA settles for SAPO

12 December 2017

Like a knight in shining armour, Minister in the Presidency and Head of the Inter-Ministerial Committee (IMC), Jeff Radebe, announced on Sunday 10 December that a landmark deal had been signed between SASSA and the South African Post Office (SAPO), bringing years of court battles and political wrangling to a close.

With three months to go before the expiration of a Constitutional Court order declaring the contract with CPS invalid, Minister Radebe stepped into the breach and pressed parties closer to a deal. This would see a “hybrid” model implemented to ensure a seamless process of grant distribution come 1 April 2018. While SAPO will assume key elements of the payment process, the private sector, including the formal banking sector, will play an additive and supplementary role to ensure grant beneficiaries are not prejudiced. In his news briefing, Minister Radebe was at pains to emphasise the role of the “second economy”, including general merchants, corner shops, spaza shops, village banks, and cooperatives in the townships and rural areas as payment points for social grants.

The proposal to go hybrid is not a new one, former DG of the Department of Social Development, Zane Dangor, and the former CEO of SASSA, advocated this self-same strategy and were shut down and sent packing, literally, while Minster of Social Development, Bathabile Dlamini, lives to see another day in the Zuma Cabinet. This has raised the ire of many in the country who have decried the exit/firing of able public servants while less than credible politicians remain in their posts. 

Minister Bathabile Dlamini, coupled with SASSA’s acting CEO, demonstrated a stubborn resistance to enabling an inter-governmental approach to grant distributions by SAPO in favour of maintaining the status quo, despite the order of the Constitutional Court, raising questions about their motivation.

While SAPO is working hard, under the leadership of Mark Barnes, to clean up its act and become an effective state agency, its role in terms of the grant process is not an exclusive one. It will provide amongst a range of services to grant beneficiaries, electronic banking services, on-boarding of new beneficiaries and biometric authentication. While CPS has developed sophisticated IT systems, SAPO is yet to develop these, per the contract struck by Minister Radebe. This must not jeopardise efforts to transfer services to SAPO, but SASSA must play a supporting and enabling role in the interest of 18 million beneficiaries.

Several key questions remain to be asked, both by the Standing Committee on Social Development, SCOPA and Treasury. These include the cost of transferring the operations to SAPO, including the potential saving arising from “in-housing” grant payments and distribution within government. Why has SASSA, despite its raison d’état, not assumed greater responsibility for “in-sourcing” this function over the last few years, and finally, what measures are in place to ensure that beneficiaries receive their grants both seamlessly and safely at cash points and other facilities. Levels of crime, criminality and corruption in the country are a reality. The most vulnerable are at risk, particularly grant recipients receiving old age and disability pensions. Their interests and lives must be protected. 

SAPO is now vested with enormous responsibility, more than it has ever had per its original and evolving mandate. While earnest attempts have been made to resuscitate the institution over the last few years, rescue it from bankruptcy, and deal with wholesale corruption at its various outlets, its management and structures have the unmitigated responsibility to work efficiently and effectively to implement its new mandate. It must draw on the expertise of the banking sector, the institutions of the “second economy” as Minister Radebe described them, and crucially, ensure that trust and safety of beneficiaries is top of mind. 

Ms Zohra Dawood, Director, Centre for Unity in Diversity, 12 December 2017