19/07/2017 07:30 SAST | Updated 19/07/2017 07:30 SAST

Fears That Magwaza's Removal Will Scupper Sapo Deal

The removal of the Sassa CEO could be a setback to plans to get the Post Office to assist in the provision of social grants.

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The firing of Sassa CEO Thokozani Magwaza has raised concerns that a deal he signed with the South African Post Office (Sapo) for the insourcing of the provision of social grants could be on the rocks, Business Day reported on Wednesday.

Sapo CEO Mark Barnes confirmed to Business Day and Daily Maverick on Tuesday that Magwaza sent a formal letter to him last week, with an agreement for future collaboration.

Barnes told Business Day that the letter from Magwaza was "essentially an agreement towards a solution. We have not signed a contract as such but it was a firm intention supported by national Treasury."

It is understood that the involvement of Sapo irked those within Sassa who would have preferred for external, private parties to provide social grants. It has also been reported that social development minister, Bathabile Dlamini has stood in the way of the tender to provide grants being awarded to someone new. Magwaza was seen to be driving the process to move the provision of grants away from external provider Cash Paymaster Services (CPS) to Sapo.

There are now fears that his removal, and the possible scuppering of the deal with Sapo, could lay the foundation for a situation where CPS has to be kept on as an emergency measure, again.

Daily Maverick reported that CPS had envisaged a partnership with government for the provision of grants, which Magwaza was against.

Barnes would not be drawn into discussing Magwaza's removal, but he told Daily Maverick:

"It is exciting for us because it is the right thing to do and it saves government money. We would be delighted to be of service to Sassa, we see it as a public service and we would not be doing it to make any profit."

On Tuesday, Dlamini told journalists who asked her about Magwaza's removal to stop "harrassing" her.