Higher Education Minister Blade Nzimande has rejected reports that he received millions of rands in kickbacks related to a tender to pay allowances to students. In 2022, the National Student Financial Aid Scheme (NSFAS) hired four service providers to pay allowances directly to students.
Last week, the Organisation Undoing Tax Abuse (OUTA) released voice recordings from two meetings between NSFAS Board Chairperson Ernest Khosa and a service provider representative.
These recordings reveal how these providers allegedly paid kickbacks to Nzimande and Khosa, with an additional payment of at least R1 million to the South African Communist Party (SACP). In exchange for these payments, the service providers would be awarded lucrative tenders to pay NSFAS allowances to qualifying students and receive protection.
These recordings, accompanied by OUTA's report, represent the latest revelation exposing corruption and mismanagement within NSFAS.
However, Nzimande has rejected the allegations made by OUTA labelling them as malicious and views them as an attempt to undermine a smooth start to the 2024 academic year.
The Minister views the allegations contained in this leaked report as reckless and largely based on gossip and are intended to undermine a smooth start to the 2024 academic year.
Universities and Technical and Vocational Education and Training (TVET) colleges are set to commence their respective academic years soon while NSFAS, which provides comprehensive bursaries to financially vulnerable students, is currently processing bursary applications.
Nzimande also took the opportunity to say that he has never used money from any of the Department's entities to fund the SACP. In addition to his role as minister of higher education, Nzimande is a general secretary of the SACP.
The minister warned that he reserves the right to take legal action against OUTA for publishing their investigation.
Given the damaging allegations continued in this report the Minister reserves his right to take the necessary legal action.
However, the leaked recording is not the first time OUTA has published startling findings about NSFAS.
NSFAS Direct Allowance Payment System
The Werksmans Report revealed several startling findings indicating that the four companies chosen to facilitate the direct payment of allowances to students may have been possible relationships between key individuals at NSFAS.
OUTA raised alarm bells regarding the tender for direct NSFAS allowance payments which indicated that students would be charged inflated prices for services related to their NSFAS bank accounts with the service providers chosen by NSFAS. They compared this to what students may have been charged if their NSFAS bank account were facilitated through larger commercial banks.
OUTA also highlighted that the former NSFAS CEO Andile Nongogo may have played a role in the awarding of the tenders and activities during his tenure as CEO at the Services SETA (SSETA).
Nongogo’s job as NSFAS CEO was terminated in 2023 after Werksmans Attorneys independent report indicated that two of the fintech companies had a “possible relationship with the former CEO”.
Khosa previously said NSFAS is working on terminating the contracts of the direct payment service providers. This is being done on the basis that they agree that these contacts were irregular. They added that this is being done in a manner that does not disadvantage students.
