EFF statement on unlawful transfer of R300 million from the National Lotteries Commission to the South African National Treasury
16 September 2024
The Economic Freedom Fighters (EFF) is appalled by the reports that have revealed that the South African National Treasury, led by Enoch Godongwana, unlawfully instructed the National Lotteries Commission (NLC) to transfer R1.2 billion of its surplus funds, to the National Revenue Fund in 2023 for no verifiable purposes.
This instruction, which resulted in R300 million being transferred from the NLC to Treasury, amounts to a violation of the Public Finance Management Act (PFMA) and the Lotteries Act which legislates how the institutions funds ought to be utilised. Primarily, the National Lotteries Commission is prescribed by law to use its resources to fund grassroots and needy projects, and organisations which include but are not limited to non-profit organisations, cultural bodies, educational institutions, sporting bodies and sports clubs.
Additional to this, Section 25 (2) of the Lotteries Act is explicit that any surpluses must be carried forward from year to year, to be used in line with the purposes prescribed in the Act. It is alarming that there were any surpluses to be unlawfully raided by Treasury in the first place, while the NLC is said to have rejected 6 500 funding applications from needy organisations within the financial year that they transferred a surplus of R300 million to Treasury.
It is important to note that none of the provisions in the Lotteries Act, allow the NLC to fund state-entities and departments, and the NLC received adequate legal advice that the instruction from the National Treasury was unlawful and unconstitutional. This leaves the EFF with a suspicion that those who preside over the distribution of funding at the NLC were deliberately not utilising funding, so as to leave room for Treasury to unlawfully raid its funds under the auspices that the Commission could not find any developmental use for them.
These actions by the Treasury are proof of a trend in the institution itself, which has become a law upon itself and operates without any meaningful accountability to any legislative or constitutional statutes in South African. Under Enoch Godongwana the SA Treasury has gone rogue, and is characterised by austerity, disregard of its responsibilities, and disregard for the law and impunity.
It is the SA Treasury that is hell-bent on destroying critical developmental institutions in this country by using the mechanism of budget cuts. With the NLC, Treasury has misused its authority to deprive needy and philanthropic organisations monies that the NLC is obliged to provide to them, in accordance with the Lotteries Act, the PFMA and the Constitution of South Africa.
The SA Treasury has, year after year, cut the budget allocations to the education sector, and it is only now that those consequences are beginning to bear fruit, as teachers face retrenchments and public schools are set to be understaffed. It is the perennial budget cuts instituted by the SA Treasury that have crippled Statistics South Africa (StatsSA), the South African Post Office (SAPO) and the Office of the Auditor General, and all have had their abilities to execute their necessary tasks hindered by Treasury's misguided fiscal framework, with SAPO effectively collapsed.
A new strategy now by Gondogwana seems to be to raid the coffers of institutions such as the NLC, through a manipulative use of National Treasury Instruction Notes, to replenish the funds of the National Revenue Fund. The deliberate incompetence of the SA National Treasury is destroying any prospects of development in South Africa and the EFF will not idly stand by and allow this to happen.
The EFF will seek accountability on the R300 million that was allegedly transferred to the Treasury by the NLC, and if it is proven to be correct, this money must be retumed so that it can be utilised for its prescribed purposes.
Issued by Leigh-Ann Mathys, National Spokesperson, EFF, 16 September 2024
