South Africa extends grants payments contract to avert social aid crisis

South Africa’s highest court on Friday averted a major crisis that could have seen 17 million people affected after it extended the social grants payments for one year.

In a long-awaited ruling, the Constitutional Court extended the contract between the state social security agency (Sassa) and the private company Cash Paymaster Services (SPC), which it is subcontracted for the payment of the aid, for one year.

The agreement which was due to expire on 31 March would have left millions without vital social security payments from next month.

South Africa’s government pays 140 billion rand annually(about 9.9 billion euros) of allowances to retirees, the unemployed and the disabled.

“The declaration of invalidity of the contract is suspended for twelve months from 1 April 2017,” said Judge Johan Froneman in reading the Court’s judgment, stating that the payment of social benefits was a “constitutional obligation”.

Social Development Minister Bathabile Dlamini, who is close to South African President Jacob Zuma, has been under fire for several weeks for not having anticipated the end of the contract and found an alternative solution.

On Wednesday, the President of the Constitutional Court, Mogoeng Mogoeng, severely curtailed the minister.

“I sincerely want to understand how one can reach this level (…) of what can be characterized as absolute incompetence,” the magistrate exclaimed at a hearing on Wednesday.

The opposition also slammed Dlamini and the head of state which the leader of the Democratic Alliance (DA) Mmusi Maimane, said was due to “the corruption and incompetence” of Zuma’s government.

But during parliamentary questioning session on Thursday, Zuma was categorical that he was not going to sack Mrs. Dlamini and asserted that there was “no crisis” in her ministry.

The payment of social benefits is viewed as an important factor in the continued strong popularity of the African National Congress (ANC), which has led the country since the fall of apartheid in 1994.