How NSFAS tapes knocked Blade Nzimande against the ropes

14 Jan 2024

Student organisations and political parties now calling for the chairman of the student financial aid scheme and the Minister of Higher Education to step down following Outa’s report into corruption at NSFAS.

The Organisation for Undoing Tax Abuse (Outa) has kicked a hornet’s nest with the release of its latest report into corruption in higher education.

While poor students couldn’t afford food, accommodation, toilet paper or even sanitary products, service providers raked in millions of rands and allegedly paid kickbacks to the chairperson of the National Student Financial Aid Scheme (NSFAS), Ernest Khosa, and the Minister of Higher Education and Training, Blade Nzimande.

Read more in Daily Maverick:

Calls for action after recordings expose alleged cosy relationship between Blade Nzimande, NSFAS chair Ernest Khosa and service providers

Time for a ‘revolutionary visit’ — SA Students Congress sounds warning of protests over NSFAS chaos

Nzimande vows to sue Outa for spreading ‘nefarious’ lies

This was revealed as thousands of students still wait for their payments from last year to be disbursed. Student organisations have vowed to escalate matters, if NSFAS fails to pay the disbursements by 15 January.

They also want a thorough investigation into corruption at NSFAS, with the SA Union of Students (SAUS) calling on Nzimande and Khosa to leave office.

This is what we know

Background

Outa launched its first investigation into NSFAS in 2022 after it discovered that Services Sector Education and Training Authority (SSETA) contractors were linked to other tenders among the SETAs and NSFAS. It published its preliminary report on three NSFAS tenders in February 2023.

The probe into SSETA uncovered maladministration, corruption and contractual non-performance in relation to a R170-million tender for an attendance monitoring system awarded to the Grayson Reed consortium. See more here.

In February 2023, Outa found that NSFAS hired service providers without their having the required banking licences.

In June 2023, Outa laid a criminal complaint of corruption against then NSFAS CEO Andile Nongogo, a former SSETA colleague and two service providers.

On 4 August 2023, Outa reported that Nongogo had, while CEO of SSETA, signed off on a R37-million branding campaign which included T-shirts costing R4,600 each, umbrellas for R44,000, coasters for R980, and R668,200 to print 100 copies of the SSETA Annual Performance Plan. See more here.

On 8 August 2023, Outa published an updated report on the NSFAS probe into how the mandatory requirements for tenders awarded to Coinvest Africa, Tenet Technology, Ezaga Holdings and Norraco Corporation were modified to suit the new service providers. Read here.

In response to the reports and media coverage, Werksmans Attorneys was appointed to investigate corruption at NSFAS. They submitted their report on 12 October 2023.

In December 2023 Outa shared a report on student accommodation with NSFAS and Nzimande’s office, and only received acknowledgement of receipt from NSFAS.

On 4 January, Outa called for Nzimande and Khosa’s resignation over two leaked recordings and a comprehensive report linking the minister and Khosa to kickbacks and corruption. Khosa is heard in both recordings discussing board decisions, making promises on behalf of NSFAS and conspiring to protect the service providers.

The service providers — an unknown man and Thula Ntumba, husband of Tshegofatso Ntumba (a director in Coinvest, one of the four service providers appointed in June 2022 to manage direct disbursements to students) – also discuss Nongogo’s role; Outa’s investigation into Nongogo’s term as SSETA CEO; and donations of R1-million and T-shirts and bags to the SACP, Nzimande’s party.

Behind Khosa’s back, Ntumba and the other man discuss meeting with the minister and Khosa; previous criminal charges the chairperson faced; service providers paying Khosa and Nzimande R6-million each; and putting Khosa under pressure to extend the investigation into Nongogo’s conduct.

Nongogo is axed in October 2023.

Fallout

Khosa has taken 30 days’ leave from NSFAS, to allow investigations to proceed. He has admitted it is his voice in both recordings. But his spokesperson, Ishmael Mnisi, claims the recordings were manipulated. Outa’s investigations manager Rudie Heyneke says they tweaked the levels to reduce ambient sound as both recordings were made in restaurants.

Nzimande claims his hands are clean and he’s threatened to take Outa to court.

The SA Communist Party, of which Nzimande is chairperson, has denied receiving money from Ntumba or other service providers.

Nongogo has lost his Labour Court bid to be reinstated.

Outa has called for the resignation of Nzimande and Khosa.

The Democratic Alliance has laid criminal charges against Nzimande.

An EFF statement says there is no longer a place for Khosa at NSFAS “after he has been exposed as a leech who has prioritised self-enrichment at the expense of poor children. He and his cronies must know they will never again have access to the NSFAS and its procurement system and the sooner he resigns, the better”.

The party also wants Nzimande to resign, “not only for his incompetence and failure to bring stability to the sector for more than a decade, but also for his involvement in the alleged defrauding of the NSFAS”.

NSFAS claims that only 20,000 students have not been fully registered on the new platform.

But SAUS says NSFAS is undercounting because, by the scheme’s own admission, a significant number of students have been unable to get on to the new system.

Asive Dlanjwa, SAUS spokesperson, said: “As far as the last numbers they gave us, in November last year, 10% of students have not been able to get on to the new payment platform to be able to receive the allowances now. NSFAS has 1.1 million students so 10% is almost 110,000 students that they confirmed that they have not fully on-boarded onto the payment system.”

The SA Students Congress (Sasco) and SAUS are furious over the bombshell revelations, saying if the crisis is not thoroughly investigated by both the scheme and the authorities, and acted upon expeditiously, they will escalate pressure on NSFAS.

Sasco says it might be time to pay a “revolutionary visit” to NSFAS offices because it’s unlikely students will receive their outstanding payments by Monday. DM

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This is what we know

Background

Fallout