Pravin Gordhan, Bathabile Dlamini and the 12-page letter to Jacob Zuma

On the second day of Pravin Gordhan's testimony at the state capture inquiry, it emerged that Bathabile Dlamini wrote a lengthy letter to then president Jacob Zuma complaining about the National Treasury.

In 2016, Dlamini, who was then social development minister, wrote a 12-page document to Zuma to raise concerns about the Treasury in relation to the payment of Sassa welfare grants.

Dlamini was especially bothered by the issue of "the withdrawal of condonation" of Cash Paymaster Services (CPS) as the facilitator of grants payments, allegedly "without substantive explanation".

Gordhan, now public enterprises minister, told the commission he couldn't remember the details of the condonation. However, he did admit that the Treasury wanted to explore other grant payment methods.

"Treasury colleagues, together with the Reserve Bank, I think it was in December 2016, spent an extraordinary amount of time trying to find alternative solutions other than CPS, which was an expensive option," said the former finance minister.

"The Reserve Bank is the body that has the banking regulation function, so they would be able to get banks, for example, to cooperate on a short-term basis to distribute grants or issue cards or whatever the case might be."

Gordhan told the inquiry that in the letter Dlamini had also accused the Treasury of "bias towards the private sector" when payment options were considered. 

He disputed this accusation, saying the priority for the Treasury was procurement and cost-saving.

"I think it was late December 2016, as I say, after weeks of hard work, a solution either very close to being found or found, it was all turned down."

Shortly thereafter, the Constitutional Court intervened in the debacle. It later ruled that Dlamini had been "reckless" and "negligent" in her handling of grants payments.

"It again illustrates that in a sense, we [Treasury] were right to raise our concern," said Gordhan. 

In the letter read at the inquiry, Dlamini wrote that she was worried that the Treasury was putting the benefit of the financial sector ahead of the needs of the people. Her impression was that radical socioeconomic transformation was not a priority in Gordhan's department.

"I think it's highly unfair to say Treasury is working against the interest of the country because all the evidence points to the contrary," said Gordhan.

"The substance about radical economic transformation is: how do you change the structure of the economy so that we make greater use of the resources we have now, and the anticipated opportunities that we have, but at the same time make sure that the benefits of those changes accrue to all citizens and not to a select few?"

Gordhan concludes his state capture testimony on Wednesday.