- The NSFAS board of directors has fired the scheme’s CEO, Andile Nongogo, citing his failure to act honestly in his role.
- Last week the scheme also terminated the contracts of four companies that were brought on to support the NSFAS direct payment system, the only way that students can receive their funding currently.
- NSFAS has yet to say how it will replace the four fintech companies whose digital infrastructure was being used to disburse payments. All the while the system continues to suffer IT problems halting payments.
The CEO of NSFAS, Andile Nongogo has been fired by the scheme’s board of directors as of Tuesday.
This comes after the release of a bombshell report last week, alleging that Nongogo had an existing relationship with two of the four businesses contracted by the scheme to aid it with its new student payment system to the tune of a reported R1.5 billion.
If the allegations are true, this would be in breach of the government’s systems for awarding tenders to private companies with connotations that Nongogo sought to personally benefit from the procurements.
According to EWN, the NSFAS board informed Parliament of its decision to axe CEO Nongogo following a collapse of the scheme’s IT systems that caused further student payment delays.
This collapse was seemingly the last straw for Nongogo who was allowed to explain his case to the NSFAS board last week following the findings of the report.
As per City Press, who saw a letter sent by the board to Nongogo on the eve of his firing, the NSFAS board was not satisfied with the former CEO’s reasons for not being let go.
“Having considered your letter, we are of the opinion that your response does not answer the adverse findings made against you in the investigation report. You instead adopted a posture of questioning the process and avoided addressing the adverse findings made against you in the report,” the letter reads.
“You have failed to act honestly, faithfully, and diligently to fulfil the duties and responsibilities of the chief executive officer,” it adds, noting the reasons for his termination.
Nongogo’s departure follows a decision to terminate the contracts of the four fintech partners that were assigned to support the direct payment system implemented in July this year to replace the existing system of tertiary institutions disbursing the funds to students.
The new system, and by extension the four private companies, have received extensive media and public backlash over perceived high bank fees, IT problems leading to missed payment deadlines and lack of communication and information to aid students to adopt the new system.
Initially, the system was conceived as a method for NSFAS to cut out costly middlemen who handed out funds, namely universities, TVETs and their respective banks. It was also supposed to limit the amount of fraud that the system had been facing.
Now near the end of the academic year, when many university students are preparing or in the midst of exams, NSFAS is left without a means to disburse funds with its new direct payment system. Previously the four fintechs, namely eZaga Holdings, Tenet Technologies, Narocco and CoinVest Africa were disbursing funds to 1.1 million NSFAS beneficiaries over smartphone apps and other digital means that belonged to the companies.
Without these companies, the question remains of how NSFAS will keep the system going. Chairperson Ernest Khoza did make sure to say that the scheme believes in and will continue using the direct payment system, despite a year full of challenges, controversy, missed payments, and angry and confused university students, most from disadvantaged backgrounds, who have had to withstand the ill-fated revamp of payments.
At least two of the fired fintechs, eZaga and Tenet Technologies have publically stated that they will be considering legal action against NSFAS for the cancellation of their contracts. Further, eZaga has told Hypertext in an emailed statement that allegations made by NSFAS against it have caused “insurmountable damage” to its industry reputation, credibility and public perception.
The scheme has yet to explain how it plans to maintain the payment system without the fintech partners supporting it with their digital infrastructure. By all accounts, the million beneficiaries of NSFAS are now left in the lurch.