The greatest threat to social stability

Grant payments should be declared a national priority before it becomes a national disaster.
Non-payment of social grants will result in disaster and massive social unrest. Picture: Moneyweb

The chronology of the carefully crafted and expertly executed #StateCapture strategy as described by Jacques Pauw in The President’s Keepers is sickening to the core.

It is one of the most depressing reads of the year, particularly if you are a proud South African who wants to see their country flourish. Adriaan Basson and Pieter du Toit’s Enemy of the People: How Jacob Zuma stole South Africa and how the people fought back is next on the list, but I fear it will be more of the same.

From Pauw’s book and other revelations, it is clear that Zuma is one of the most cunning and streetwise politicians this country has seen since the dawn of democracy and it is a pity he did not use his skills to build a better South Africa, because if he had, the country would have made great strides forward.

But he didn’t. On the contrary, he has corrupted virtually every state institution set up to protect our democracy. As a colleague remarked, despite the revelations by the media and various authors, the president continues to loot unabated.

The fact that Zuma could fire Pravin Gordhan and instill Malusi Gigaba without losing sleep is proof of the absolute control he wields over the ANC.

Rock bottom

Twenty years in journalism has taught me never to proclaim that something has hit rock bottom. We live in a wonderful country where most websites and newspapers can solve any novelist’s writers block, and any ‘the end is nigh’ declaration always seems to come back to haunt you.

But there is an event on the horizon that may plunge South Africa into a dark abyss from which it could take a very long time to recover.

It is neither the ANC’s presidential race nor a surprise nuclear deal.

It is the possible non-payment of around 17 million social grants in April next year.

A lot has been written about South Africa’s social grants. It represents a major expense to the fiscus, around R150 billion this year. Many argue it is not sustainable, but in a 40% unemployment scenario these monthly payments are the foundation of South Africa’s social stability. Apart from putting food on the table, these payments sustain economic activity, especially in rural areas.


ConCourt ups ante on Sassa’s social grants payment plan

National Treasury steps in over Sassa and Sapo scrap

In fact, within the context of the current looting, corruption and dysfunction of state organs, these grant payments could be the most productive money government spends on the economy, but that is probably a debate for another day.

The SA Post Office

April 1 2018 is D-Day. It is the day the South Africa Social Security Agency (Sassa) takes responsibility for payments from the current service provider, Net1-owned Cash Paymaster Systems (CPS). By all accounts, CPS provides a world class service, despite winning the tender under extremely dodgy circumstances. (Yes, we live in a wonderful country.)

On D-Day a new entity will have to make the payments, and from last week’s various parliamentary presentations it is quite evident that Sassa will not be able to do it.

Not even close.

There was one remark during one of the presentations that sent the longest and coldest shiver down my spine. It was a statement from minister Jeff Radebe, head of the inter-ministerial committee tasked with fixing this mess. He said, almost matter-of-factly, that the SA Post Office will develop a new IT system to pay the grants. I hope he oversimplified the status of this new payment system as it could take years to develop. It is impossible to do this in four-and-a-half months. Ask any IT engineer.

Such a system should be in a final testing phase if it is to be ready in April next year. If not, the non-payment of the grants looks like a real possibility.

The consequences will be devastating, and will pose a risk to social stability. It will make the current spate of service delivery protests seem like birthday parties.

ANC self-destruct

In some ways, it is good for democracy to see the ANC in self-destruct mode. It seems inevitable that the ANC will split. But the opportunity cost could be incredibly high. Hopefully, some sanity will prevail to declare the Sassa payments contract a national priority before it becomes a national disaster. I am not too optimistic though, as Pauw’s book clearly shows that the president has several agendas, none of which includes social stability.

Interestingly, the only ‘out-of-the-box’ solution would be for Sassa to acquire CPS from Net1, as this system has proven to work. This would be a tricky transaction to negotiate because as another Moneyweb colleague remarked… it will not come at a Black Friday price….

But luckily, we have a president that is a negotiator par excellence.

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I fear your analysis Ryk is chillingly accurate!

The social unrest caused by failure of payment of grants will result in our leader invoking a state of emergency. Voila. No more elections.

To have complete control over the payment system for social grants, is the ultimate insurance policy for the Zuma faction. With the state capture program Zuma built himself a nice fortified position. He is protected by his evil knights who were put in key positions by him. The only threat to his fortified position is that it can be overrun by the people in his feudal system when they choose to vote for the opposition.

In order to protect his fortified position, and to keep on plundering his fiefdom, he needs to have the absolute power to pacify his ultimate enemy, the citizens of the country. Control over the payment of social grants is Zuma’s strategic insurance policy.

What we can deduct from this scenario is that with colonization, the oppressor used his army to enslave the people and plunder the resources. Under democracy the people enslave themselves voluntarily, by voting for the evil oppressor who plunders them. The point is this, people with a slave mentality will always succeed at enslaving themselves in some way or another.

This is great analysis Ryk.

And yes it does send a shiver down my spine too when people say that an IT system can be developed willy nilly or when Mark Barnes says the post office can take this over.

The post office can’t even process a fraction of the Gauteng vehicle licenses. And that is a once a year. Imagine them processing payments for 16 million people once a month.

You make a great point. I had to renew my license disk a few weeks ago. The process took around 8 minutes and there are nearly 10 different steps. The clerk had to run between two workstations to complete the renewal. There surely needs to be some IT development to simplify this process.

I don’t see what the problem is. Ever heard of an EFT or payment to mobile.
Even the poorest of the poor has a cellphone.

Just like the tollgate scenario when a fuel levy would have sufficed.

Yep there is no problem at all. Just leave the current payments system with Net1 in place.

It works so wtf is the problem, other than a bunch of socialists getting their panties all wet?

Set up a new bidding process if u do not like Net1 and allow sufficient time to get system up to speed. But do not cause a totally avoidable meltdown.

Q E D.

In 1990 I was one of those South Africans that wanted to see the country thrive… by 2001 that dream had faded and by 2010 it was nothing more than a delusional fantasy…. so we left the country for the second time. This time it was for good and we have no regrets. Would we return? Absolutely, but only if the crime, corruption, anti-white racism, murder and outright disregard for human life is restored…. until then, South Africa will never see $1 of my money.

End of comments.



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