Johannesburg – The Democratic Alliance (DA) has called for Minister of Higher Education, Science and Innovation, Dr Blade Nzimande, to suspend the direct payment of the National Students Financial Aid Scheme (NSFAS) until the Special Investigating Unit (SIU) completes its investigation into the matter.
This comes after the damning report by the Organisation Undoing Tax Abuse (Outa) on the NSFAS direct payment tender and the relationship between NSFAS CEO Andile Nongogo and Coinvest Africa possibly being questionable.
Outa said this relationship must be ‘’seriously considered’’ by the Minister as it has raised suspicions.
Last week, Nzimande came out in support of the new payment system, which has seen students from across South Africa’s higher education institutions stage country-wide protests due to delays in the payment of their allowances.
‘’The student-centred model reduces too many role players in the payment of allowances to students,’’ Nzimande said.
In a statement on Monday, DA shadow minister of higher education Chantel King said, in light of the Outa’s investigative report, Nzimande must instruct the NSFAS board to temporarily put aside the contracts of Coinvest Africa, Tenet Technology, eZaga Holdings, and Norraco Corporation until such time as the SIU and the Public Protector investigations are completed.
‘’Minister Nzimande’s mandate as the accounting authority of the higher education and training sector is to ensure that no student is left behind or financially deprived,’’ King said.
According to the report by Outa, it was revealed that well-established banks that applied were denied the opportunity to take part even though they are three times more capable of handling the direct payment system into students’ own bank accounts.
The report also reveals how the third tender notice was glaringly changed from the previous two bids, where there were no requirements to be a financial service provider; only a sponsored bank was needed to tender.
According to Outa, this opened the door for companies with no banking or fintech experience to apply, with at least three of the companies having no licences or permits to render financial services.
King said more than one million students receive funding from NSFAS, which therefore only makes sense that well-established service providers like ABSA Bank, Nedbank, Standard Bank, or First Rand Bank, who applied, should have been awarded the tender.
‘’This would have lowered the costs for students. A clear comparison is highlighted in the Outa report,’’ King added.
King added that the report highlighted that Tenet Technology and Noracco Corporation were not registered for VAT at Sars.
Furthermore, the report found that Access Bank, the sponsor bank, is not listed as an official bank with whom the state institutions can transact. It also made mention that sub-contractors, as stipulated in the contract, are not mentioned by any of the four service providers, among many other irregularities.
King said the report has called on the minister to exercise his duties to take students’ concerns to heart and call for the immediate suspension of these contracts.
‘’We also call on Sars to investigate possible tax evasion by the two service providers as well as the Minister of Finance to clarify if Access Bank can conduct business with state institutions.’’
‘’The Financial Sector Conduct Authority should give clarity on the position of these service providers, their alliances, and the services provided to them, as recommended in the Outa report,’’ King said.
King said the DA and other institutions would not allow funds meant to improve the economic prospects of the poor and working class to be squandered, leaving many to be erroneously de-funded in the middle of an academic year.
The Star
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