Outa calls for resignation of Nzimande, NSFAS CEO following damning report

South Africa - Pretoria - 18 October 2023 - The Board of the National Student Financial Aid Scheme (NSFAS) Chairperson, Ernest Khosa. Picture: Thobile Mathonsi/ANA

South Africa - Pretoria - 18 October 2023 - The Board of the National Student Financial Aid Scheme (NSFAS) Chairperson, Ernest Khosa. Picture: Thobile Mathonsi/ANA

Published Jan 8, 2024


Cape Town - Higher Education Minister Blade Nzimande and National Student Financial Aid Scheme (NSFAS) board chairperson Ernest Khosa have dismissed yet another damning investigative report by the Organisation Undoing Tax Abuse (Outa).

On Thursday, Outa released its latest report following a series of similar investigative reports into tender corruption and mismanagement of student funds at NSFAS, while calling for Nzimande and Khosa’s resignation.

The report follows leaked voice recordings of meetings between Khosa and a representative of a service provider as well as a third unknown person. Khosa reportedly met Thula Ntumba, the husband of Tshegofatso Ntumba, a Coinvest director.

Coinvest is one of four service providers appointed for the disbursement of student funding. A previous investigation by Outa found that NSFAS hired businesses without banking licences or VAT registrations to handle the direct payment of student allowances.

The recordings were brought to light by a whistle-blower with Outa stating that it would be shared with the authorities, including the Special Investigating Unit (SIU), Public Protector, SA Revenue Service (Sars) and the Auditor-General.

According to Outa, the recordings reveal how service providers “allegedly paid millions of rand in kickbacks to Nzimande and Khosa, as well as at least R1 million to the SA Communist Party (SACP). This was done in return for tenders and protection for service providers.”

Nzimande also serves as the SACP national chairperson. The SACP has denied sourcing funds illegitimately.

In a recording, Khosa could be heard saying, “What we’re unable to do is to sponsor certain people to do certain things.”

He later said the minister was “sh*t-scared” over the possible release of communications.

“We are in trouble and the only way we can manage this trouble is when we collaborate. If we don't, they’re going to hit each one of us separately,” Khosa said.

While claiming that there was nothing illegally done by NSFAS CEO Andile Nongongo, he said this was all part of a plan by the ANC, which he referred to as the “enemy”, while particularly mentioning Deputy Minister of Higher Education Buti Manamela and “friends” in an attempt to remove the minister and the NSFAS board.

“Let us be seen to be taking action”, he said, referring to the decision to investigate Nongogo, which was led by Werksmans Attorneys relating to a conflict of interest in the appointment of service providers, as well as his work with the Services Sector Education and Training Authority (SSETA).

“The pressure will cease on us and on the minister, in particular him because the target was him by these guys from Luthuli House. Our enemies is the ANC, it's not Outa,” he said.

He also referred to an investigation as a waste of money. “We’re going to waste about half a million rand just investigating that.”

He also revealed the terms of reference of the investigation would be done by him and that they could exclude certain elements.

“You get a firm you can manage. One of the reasons why I'm going there is that he must tell me which firm. He must give me the firms.”

Werkmans was suggested to him during the meeting stating that they knew partners, implying that the partner could be managed/influenced.

The report findings released in October found a possible relationship between Nongogo and Coinvest and eZaga Holdings.

Outa said companies linked to Ntumba were awarded tenders worth millions in the past by different SETAs and more recently at NSFAS.

“The recordings confirm that Ntumba and his associates financially looked after people like Nzimande, Khosa and Nongogo. They in turn rewarded Ntumba and companies linked to him with contracts,” Outa said.

Outa said it would be writing to President Cyril Ramaphosa, requesting Nzimande's removal as Cabinet Minister and Khosa’s removal as NSFAS chairperson. Criminal complaints against Nzimande, Khosa, and Ntumba will also be opened.

In a statement, NSFAS said it had noted with “outrage” the statement calling for the resignations.

“The NSFAS Board notes the fight back by some unscrupulous individuals and organisations who are determined to defocus NSFAS from implementing the Werksmans Attorneys report recommendations.

“It is also interesting to note that the Outa statement coincides with the NSFAS Board's decision to start legal proceedings to terminate the contracts of the direct payment solution service providers.”

The statement further said the chairperson would be providing more information to the public “at an appropriate time” including attempted threats on his life following the implementation of the Werksman Attorneys report.

A statement on Friday, the DHET said the minister never used any money from any of the department's entities for the purpose of funding the SACP.

DHET media liaison officer, Veli Mbele, said: “The minister reserves his right to take the necessary legal action. At the moment, the minister is weighing his options and will make a further announcement at the appropriate time.”

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