• NSFAS and the SIU have thrown an urgent order to stop the contracts of eZaga and the other four payment providers from being terminated.
• The High Court threw out the application from eZaga and Noracco Corporation after finding it was not urgent.
• The SIU and NSFAS are looking to declare the four contracts illegal and invalid, as well as force the four companies to pay the government “all the profits they accrued.”

A court order brought to the Western Cape division of the High Court of South Africa by former NSFAS payment partner eZaga Holdings in the hopes of stopping the aid scheme from terminating its contract has been dismissed, with costs.

In 2023, NSFAS hired four payment partners, namely eZaga, Tenet Technology, Noracco Corporation and Coinvest Africa, to provide digital payments to its over one million beneficiaries in the now-cancelled direct payment system.

It was later revealed that the hiring of the four providers was mired in allegations of corruption, specifically with eZaga and Coinvest revealed by an internal NSFAS report to have been linked to former CEO Andile Nongogo.

Nongogo was soon fired after the report was published, but the four payment providers continued to disburse funds to students across South Africa’s public universities and TVET colleges until March this year. At the time NSFAS said that had no other means to disburse funds.

In May this year, NSFAS under the new administration of Freeman Nomvola, brought on the corruption-busting agency the SIU to finalise the termination of the payment providers. The SIU was allowed by the High Court to join on NSFAS’ side of the court battle.

“The 12 June 2024 court order ruled there was no urgency to the application brought by Ezaga, while the review application to review and set aside Ezaga’s contract is being finalised. The order comes after the Special Investigating Unit (SIU) successfully applied to be joined in the matter as a respondent,” reads a joint statement from SIU and NSFAS.

“The SIU and NSFAS successfully argued that the matter was not urgent and fell to be struck off the roll for lack of urgency.”

eZaga and another payment provider in Noracco are looking to reverse the decision taken by NSFAS following the publishing of the report to fire the four payment partners. According to the Organisation Undoing Tax Abuse, the four companies were contracted in a deal that could net them R5 billion over ten years.

However, the direct payment system was operational for just under one year. Despite this, NSFAS and the SIU are looking for the providers to pay back money they made as part of the tender awarded to them. A tender that the SIU says was “allegedly irregular.”

“The SIU and NSFAS also seek the service providers to be divested of all the profits they accrued due to the impugned tender awarded to them,” the statement adds, meaning that the four providers will have to pay the government the profits they made while working the direct payment system, from banking fees, etc., if ordered to by the High Court.

The pair are also looking to set aside the four contracts and have them declared “invalid and unlawful.”

If granted, the providers may have to pay back several million Rands in total. It seems however, that NSFAS itself will leave the situation with clean hands while the four companies will leave with less money and with their reputations muddied.

NSFAS, especially former employees like Nongogo are just as implicit if the allegations are true.

We reached out to both eZaga Holdings and Tenet Technology, another payment provider, for comment, but did not receive a reply as of time of writing.