EDITORIAL | NSFAS debacle passed summa cum laude by higher education department

It doesn’t take a degree to see we are being played in the National Student Financial Aid scheme (NSFAS) debacle.

While higher education minister Blade Nzimande unveiled the new NSFAS MasterCard approach in September last year, it was only last month that the fine print was revealed, unleashing a groundswell of student ire and uncovering a tangled web of questionable relationships.

Not only were four relatively unknown financial technology companies awarded a whopping five-year renewable contracts to pay allowances to NSFAS beneficiaries at South Africa’s 26 public universities and 50 technical vocational education and training (Tvet) colleges, it turns out they are not registered as financial service providers.

This is now the subject of an investigation by the public protector after a complaint by the Stellenbosch University student representative council. It has the potential to destabilise the whole funding process and unlock a quagmire of legal battles involving the companies, the department and NSFAS.

Students were understandably incensed when they found out that Tenet Technology, eZaga, Norraco Corporation and Coinvest Africa will rake in at least R4.3m off them per month in new bank charges and other service fees. That fury has, in terms of damage to property and lost academic time, cost campuses including NWU, the University of the Free State, Vaal University of Technology and Durban University of Technology.

Perhaps the most insidious facet of this controversial NSFAS issue, is that a similar venture seems to have taken root under Ngongo’s watch. Where were the background checks? Did any alarm bells go off?

At a time when everyone is tightening their collective belts on financial burden, it is alarming to understand how such a scheme with scant regard for its beneficiaries was seemingly passed summa cum laude by the department.

But thankfully a dogged investigation by the Organisation Undoing Tax Abuse (Outa) found that one of the companies cashing in on the new payment scheme, is led by a director who scored a multimillion-rand deal with a training authority five years ago to supply promotional items at grossly inflated prices, and in both instances, Andile Nongogo, NSFAS CEO, was at the helm of the institutions.

In a report published by the Sunday Times, Outa found “there exists a historical business and tender relationship between Nongogo and the director of Coinvest”, Tshegofatso Ntumba — who was then a co-director at Star Sign and Print — to provide Services Sector Education and Training Authority (SSETA) with T-shirts, caps, lanyards, USB sticks and other items.

The higher education minister at the time, Naledi Pandor, asked the National Skills Authority (NSA) to conduct a forensic investigation, but the authority found the prices were market-related. Outa found the maths didn’t add up. 

It said the NSA found that SSETA paid R4.9m for 30,000 lanyards — a price of R165.22 each. Desktop research by Outa in July last year found that the average price for a lanyard, taken from four suppliers, was R16.92.

Which begs the question — if the NSA panel found the goods were market-related, were they sourcing the prices from Louis Vuitton or Gucci?

But perhaps the most insidious facet of this controversial NSFAS issue, is that a similar venture seems to have taken root under Ngongo’s watch. Where were the background checks? Did any alarm bells go off? Or was student welfare lowest in the pecking order of Maslow’s hierarchy of needs?

All we seem to be demonstrating to our future leaders is how to excel at being nefarious, how best to milk a tender and how to maximise relationships for mutual financial gain. Corruption 101 coming soon to a campus near you, unless we hold those in power accountable.

While the NSFAS board meeting, reportedly called urgently on Monday to address the Sunday Times expose, is a potentially promising turn in an otherwise shameful chapter documenting the reality faced by our country’s youth, the buck stops with the higher education department.

They need to fix this sorry saga urgently before the entire student population becomes collateral damage.