NSFAS ropes in SIU to fire payment partners

  • NSFAS is finally ready to fire the four controversial fintech partners it hired to support the direct payment system.
  • Administrator Freeman Nomvalo says that the SIU is helping NSFAS with the termination of the contracts.
  • Nomvalo says that NSFAS will be seeking criminal charges for employees implicated in the Werkmans Attorneys report.

After nearly a year of controversy, the National Student Financial Aid Scheme (NSFAS) is poised to begin severing ties with its four fintech payment partners for good.

NSFAS announced its intent to terminate contracts with eZaga, Coinvest, Narocco, and Tenet Technology nearly 10 months ago following an internal investigation. Now at the end of May 2024, the scheme says it is finally embarking on concrete actions to dissolve these agreements with the help of the corruption-busting Special Investigation Unit (SIU).

Previously, the former NSFAS administration said that it was holding off on firing the companies because they were still aiding students with payments, and would only do so before the 2025 academic year. It seems this is no longer the case as the scheme has devised new payment methods for beneficiaries.

The internal investigation, published in the Werkmans Attorneys Report, alleged that former officials at NSFAS colluded with two of the four fintech partners and flouted proper tender agreement protocols to sign the companies to multi-million Rand contracts for a job they could not do properly.

“I am happy to announce that the process to terminate these contracts has commenced with the filling of the necessary Court papers on the 24th May 2024. In the termination of these contracts, NSFAS collaborated with the Special Investigation Unit (SIU),” NSFAS administrator Freeman Nomvalo told the media on Monday.

“Through our lawyers, we have communicated this decision to all the direct payment partners today.”

At least two of the providers, eZaga and Tenet Technology told Hypertext at different times that NSFAS had never shown them the Werkmans Report, and insisted up until April that they were still operating based on their mandate with the scheme.

“We have made significant progress in subjecting all implicated NSFAS employees in the report to appropriate disciplinary action. Where appropriate, we will also consider laying criminal charges,” added Nomvalo.

The top name implicated was former NSFAS CEO Andile Nongogo, who was quickly fired after the report was released. It was alleged that Nongogo had personal ties with eZaga and Coinvest.

“eZaga strongly denies any association with or connection to Mr. Nongogo before the tender was awarded,” the company told us via email last year.

“eZaga was awarded the tender having met all the necessary tender specifications and has consistently delivered on these requirements.”

The four fintech firms were initially onboarded to provide direct digital payments from NSFAS to students in the now-obsolete direct payment system. The system was immediately met with enormous criticism and pushback from students and political organisations after launching in July 2023.

Further allegations made in the internal report suggest that the system was rolled out in a rushed manner, without a feasibility study conducted at all to see if the system would even work in the first place.

According to the Organisation Undoing Tax Abuse (OUTA), the system would cost the South African taxpayer over R5 billion over five years. It is likely to have only cost NSFAS under a billion Rand since it is now defunct.


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