eZaga: Call for Nzimande to suspend contract awarded for NSFAS direct payments

The Democratic Alliance (DA) has called on Higher Education Minister Dr Blade Nzimande to immediately suspend contracts awarded to Coinvest Africa, Tenet Technology, eZaga Holdings and Norraco Corporation until such time the Special Investigating Unit (SIU) and the Public Protector investigations are completed.

The contracts were awarded to the companies for direct payments to beneficiaries of the National Student Financial Aid Scheme (NSFAS). A number of institutions suspended academic activities as students protested against eZaga citing lack the bureaucracy in signing up as well as continuously being able to access their money, the exorbitant bank charges and the lack of a set payment date.

DA WEIGHS IN ON CONTRACT AWARDED TO EZAGA HOLDINGS BU NSFAS 

The DA says in light of the OUTA 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 the Special Investigating Unit (SIU) and the Public Protector investigations are completed.

An investigation by the Organisation Undoing Tax Abuse (OUTA) on the NSFAS direct payment tender and relationship between NSFAS CEO Andile Nongogo and Coinvest revealed that well-established banks applied three times to handle the direct payment system into students’ own bank accounts but were not considered.

The report further revealed that the four companies awarded with the tender to handle the direct payment system for NSFAS were not registered as financial services providers. Ezaga Holdings – held an affiliated banking licence with Access Bank. A banking licence or affiliation with a bank with a banking licence was a compulsory bid requirement. Two of the successful bidders, Norraco Corporation and Tenet Technology, were also not registered as VAT vendors when they submitted their tenders.

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DA Shadow Minister for Higher Education Chantel King said 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 more than one million students receive funding from NSFAS, it 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 and this would have lowered the costs to students.

In light of the findings the party has urged Nzimande 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 of the two service providers; the Minister of Finance to clarify if Access Bank can conduct business with state institutions; and the Financial Sector Conduct Authority to give clarity on the position of these service providers, their alliances and services provided to them, as recommended in the OUTA report,” King said. 

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Despite the findings by OUTA, with investigations to be done by the Office of the Public Protector and the SIU (Special Investigative Unit) Nzimande says the four companies fairly won the bid.

“The appointed partners(the four companies) are sponsored by banks that possess commercial banking licences. They additionally have both Payment Association of South Africa licenses and Affiliate Banking licences in order for them to have a sponsored banking license to operate and process payments”, he added.

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