Last week, Employment and Labour Minister Thulas Nxesi announced the suspension of a job-creation project that was allegedly meant to assist unemployed youth and UIF beneficiaries to establish their own businesses.
“Employment and Labour minister Thulas Nxesi has taken the decision to suspend the Thuja Capital Fund's facilitation of the R5-billion Unemployment Insurance Fund labour activation programme.”
The minister’s decision to suspend the project comes amid concerns raised by The Congress of South African Trade Unions (Cosatu) who questioned the authenticity of the company, along with several media reports alleging that the UIF is intending to give R5 billion to a company that allegedly:
- Is not registered with the Companies and Intellectual Property Commission nor the South African Revenue Service.
- Has no history of economic activity, let alone experience or expertise in the field of investments it has submitted to the UIF to fund.
- The company refuses to disclose which third party banks and companies it will partner with and the nature of those partnerships.
Cosatu is now calling for the UIF to be placed under administration and have urged government to urgently deal with the allegations of serious corruption and wasteful expenditure at the social security centre.
Cosatu also called on government and law enforcement authorities to keep the UIF under close surveillance.
The union's Parliamentary Coordinator, Matthew Parks says the union was alarmed that the UIF decided to donate funds to Thuja Capital despite the adjudication committee, which assesses the criteria of any applicants requesting investments, raising a red flagged saying that the company was not worth investing in.
“We were told there was a significant rush to invest in the project and the company was not going to contribute any capital itself and would solely rely on the UIF donations,” explained Parks.
Parks says that the federation raised concerns with the government and presidency dating back to 2020 voicing that the systems at the UIF are not fit for purpose, as a result of numerous system failures and wasted expenditure.
He continued and referred to the Bounty Brands saga which saw the UIF lose R1.77 billion on two failed investments in 2018.
The union believes that in order to gain a sense of confidence in the body, the UIF needs to be put under administration and get credible external experts that can identify where the problems are and develop a new fit-for-purpose system that works adequately.
