20 March 2017

South Africa: Net1 and BEE Deals - a Gift That Keeps On Giving

Photo: Ihsaan Haffejee/GroundUp
Demonstrators outside the Constitutional Court during hearings on the future of the social grants payment system.
analysis

It is a well-known fact that any government tender awarded in South Africa carries a heavy weighting towards black economic empowerment. The most important criterion taken into account is black ownership. No exceptions... except for Net1, it appears.

At this stage, it will probably not come as a surprise to anyone to know that Net1 had absolutely no black ownership credentials in 2011 when it bid for the Sassa contract, and absolutely none when the contract was awarded.

Apparently, they did claim in the tender that 74.57% of the services performed by Cash Payment Services (CPS) would be outsourced to its BEE partners, with a circular clause which then said that the same BEE partners would outsource those services back to CPS. One of the partners was Born Free Investments 272, headed by Mazwi Yako. This is as clear an example of "fronting" as I have ever come across.

On January 18, 2012, Sassa awarded CPS the contract for the provision of social grant payment services for five years.

On January 26, 2012 Net1 announced a BEE deal. If I were not as cynical as I am, I would probably assume that they felt guilty about the "fronting" situation and...

More on This

Social Grants Crisis - Net1 Deal Sealed With a Kiss

I was really looking forward to debating Serge Belamant, the CEO of NET1, on Radio 702 on Wednesday night.… Read more »

Copyright © 2017 Daily Maverick. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 900 reports a day from more than 150 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.