Is the social grants crisis a Nkandla reboot?

There is another crisis brewing for government and the ruling ANC over the social grants debacle that threatens to be just as embarrassing as the scandal over Nkandla. This week, President Jacob Zuma and social development minister Bathabile Dlamini sprang into action to mitigate the damage — only it was three years late.

In 2014, the constitutional court ruled that government’s contract with Cash Paymaster Services (CPS), a division of the JSE-listed Net1 UEPS, to distribute grants to 17m welfare grant beneficiaries every month, was "invalid".

The court ordered that a new tender be run by Dlamini’s department.

However, she failed to do so. Now, with CPS’s original five-year contract due to expire at the end of March, Dlamini has also failed to appoint anyone else to distribute the grants. At the eleventh hour, she now wants CPS to continue distributing grants on an emergency basis for the next two years — only at a much greater cost to the taxpayer.

It has created an intense political backlash, with the ANC’s own alliance partner, Cosatu, calling for Dlamini to be axed.

This week, Dlamini and Zuma pulled out all the stops to stress that there is no crisis.

On Tuesday, Dlamini appeared before parliament’s standing committee on public accounts (Scopa) and claimed, implausibly, that the widespread talk of a "crisis" was simply part of a political campaign to undermine the authority of government.

Dlamini stuck to her message that social grants would be paid on April 1 — the day after the unlawful contract with CPS expires.

But during the heated parliamentary hearing, in which she was frequently accused of incompetence, Dlamini did admit that her department and the SA Social Security Agency (Sassa) had underestimated the amount of work required for Sassa to handle the payment of R140bn in annual grants.

While Sassa is now negotiating a new contract with CPS, this has not been concluded yet. An announcement that a deal has been hammered out could be made as early as Friday.

The damage control campaign by Dlamini and Zuma got under way seriously on Saturday, when Zuma summoned her and finance minister Pravin Gordhan for a hastily arranged briefing.

Gordhan’s support is vital for Dlamini because treasury has to approve any deviation from the Public Finance Management Act — and appointing CPS without a new tender would be just such a case.

But Gordhan’s position is a tricky one because treasury says it can only act if given the go-ahead by the constitutional court.

Dlamini’s message all along has been that people should simply "trust government". On Monday night, Zuma echoed this sentiment during a televised message to the nation from Jakarta, Indonesia.

In an astonishing statement, Zuma urged cabinet ministers not to answer questions as this was not helping. "The less we talk [about this] the better. There is no useful purpose that will be served answering questions and feeding into speculation that there is a crisis."

Zuma said that from April, beneficiaries would still be paid their social grants, and questions could be asked afterwards.

It was a stunning statement, implying that the executive should be allowed to do what it pleases — even if this involves ignoring the law and the constitutional court, and riding roughshod over the democratic checks, which require executive accountability.

Central to the volte-face, where Dlamini has adopted a more contrite tone in public is the constitutional court case brought last week by the Black Sash, in which the opposition DA has asked to intervene.

The Black Sash, whose clients include thousands of grant recipients, asked the court to take an immediate "supervisory role" over both Dlamini and Sassa. It has said there is no longer any alternative but for government to contract with CPS, even thought it would be "an impermissible deviation from the constitutional requirements of a fair, equitable, transparent and cost-effective competitive public procurement".

The Black Sash says Dlamini "has not performed her constitutional and statutory oversight function in respect of Sassa".

The DA supports the Black Sash’s application — but it has gone further, and asked the court to censure Dlamini, Sassa and its CEO for violating their constitutional duties and disrespecting the court.

The case will be heard on March 15.

But with the April deadline looming, this crisis has already claimed a number of victims. Last Friday, Dlamini’s trusted director-general Zane Dangor resigned, while Sassa CEO Thokozani Magwaza also mysteriously disappeared "on sick leave" last week.

This follows a tense week in which

Magwaza submitted an application to the constitutional court for it to approve a new contract with CPS on Tuesday.

Dlamini evidently didn’t approve because, within hours, Magwaza had gone on sick leave and his application was immediately withdrawn. In its place, Sassa acting CEO Thamo Mzobe handed the court a simple report informing it of Sassa’s plans, without asking for the court’s approval.

Dlamini told the public accounts committee that she had instructed that Magwaza’s affidavit be withdrawn because she had not seen it — as was her right. There were a number of problems with Magwaza’s affidavit, she said, including the fact that CPS, Gordhan and treasury were not cited.

Both Dangor and Magwaza believed the court should play a larger role in approving a new contract. Dlamini, however, clearly didn’t want the court to meddle in her plans.

But, as Scopa chairman Themba Godi pointed out, "the issue is not whether people are paid or not, but whether they are paid legally or not". If Dlamini has had a plan all along — which Godi, the DA and many others believe is the case — she has not been willing to share it with anyone, lest she be prevented from carrying it out. Quite why she has been so adamant that CPS remain in the saddle, however, is a question yet to be answered.