OUTA Demands Resignations Amidst Allegations of Corruption at NSFAS

The Organisation Undoing Tax Abuse (OUTA) has called for the immediate resignations of Dr. Blade Nzimande, Minister of Higher Education and Training, and Ernest Khosa, chairperson of the National Student Financial Aid Scheme (NSFAS) board. OUTA’s Investigations Manager, Rudie Heyneke, asserted that if the two do not step down voluntarily, President Cyril Ramaphosa should dismiss them without delay.

The demand for resignations is backed by the release of incriminating voice recordings from two meetings between Khosa and a service provider representative. The recordings allegedly reveal that service providers paid substantial kickbacks to both Nzimande and Khosa, as well as at least R1 million to the South African Communist Party (SACP), in exchange for tenders and protection. The revelations have ignited a fresh wave of scrutiny over corruption and mismanagement within NSFAS.

OUTA’s comprehensive report accompanies the voice recordings, shedding light on the systemic issues at NSFAS. The scheme recently admitted to a backlog, leaving at least 20,000 students nationwide still waiting for their 2023 allowances due to a breakdown in the payment system. This breakdown occurred after four new service providers, namely Coinvest Africa (Pty) Ltd, Tenet Technology (Pty) Ltd, Ezaga Holdings (Pty) Ltd, and Norraco Corporation (Pty) Ltd, were awarded tenders for facilitating direct payments to students since July 2023.

OUTA had previously warned in October 2022 that entrusting these service providers with the tender could lead to problems in student payments while costing taxpayers millions. The organization has since published multiple reports highlighting fund mismanagement and exposing the role of NSFAS CEO Andile Nongogo, tracing his questionable activities back to his tenure as CEO at the Services SETA (SSETA).

The latest revelations and voice recordings will be shared with authorities, including the Special Investigating Unit (SIU), Public Protector, SARS, and the Auditor-General’s office. Heyneke confirmed that the voice recordings are already in the hands of the SIU, which has been investigating corruption at NSFAS since 2022. He emphasized the need for a thorough investigation into the extensive web of corruption in the higher education sector.

The leaked recordings document two meetings that occurred after the NSFAS board’s decision (on August 16, 2023) to place CEO Andile Nongogo on special leave amid an ongoing investigation into his conduct. Khosa allegedly used his authority to draft investigation terms that would favor Nongogo, excluding potential issues. Khosa is also heard expressing concern about the need to appoint a legal firm under his control.

Heyneke decried the unethical nature of Khosa’s meetings with service providers, questioning the necessity of sharing internal matters and seeking their input on board decisions. The second meeting’s recordings reportedly revealed that millions of rand were paid to the SACP, Minister Nzimande, and Khosa, further deepening the corruption allegations.

OUTA believes the recordings validate previous claims about patronage networks within the Department of Higher Education and at higher education institutions. Companies linked to Ntumba, the whistleblower who leaked the recordings, were reportedly awarded tenders worth millions in the past, corroborating OUTA’s investigation reports.

The revelations have prompted OUTA to not only seek resignations but also to open a criminal complaint against Nzimande, Khosa, and Ntumba. Additionally, the organization plans to inform Nedbank, whose client Coinvest is implicated, urging the bank to investigate and reconsider its sponsorship. As students face delays and uncertainties, OUTA underscores the importance of ensuring that future leaders are not tainted by corruption and urges vigilance as elections approach.