Detractors are celebrating Nzimande says Nsfas troubles tarnish governments reputation

The minister stressed that his decision to dissolve the board and place Nsfas under administration was not taken lightly.

Higher Education, Science and Innovation Minister Blade Nzimande has expressed concern over the negative impact the recent events surrounding the National Student Financial Aid Scheme (Nsfas) have had on both the institution and the government’s reputation.

This week, Nzimande announced his decision to dissolve the Nsfas board with immediate effect.

The minister also placed the institution under administration after accepting the resignation of Nsfas board chairperson Ernest Khosa.

Khosa had been placed on special leave in the wake of corruption allegations against him.

Nsfas board dissolution ‘unfortunate’

Addressing the media on Sunday afternoon, Nzimande confirmed his “unfortunate” decision to dissolve the board and place Nsfas under administration was made official through the government gazette.

“It’s not nice to dissolve boards, I don’t enjoy it,” he told reporters.

The minister stressed that the decision was not taken lightly.

Nzimande highlighted that he had frequently raised his “unhappiness” with the outgoing board about Nsfas’ inability to carry out some of its basic responsibilities.

He explained that the rationale for his decision included the failure to implement the recommendations of an investigative report compiled by Werksmans Attorneys and Advocate Tembeka Ngcukaitobi.

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The investigation followed allegations against former Nsfas CEO Andile Nongogo, who was fired in October 2023, relating to his conflict of interest in the appointment of service providers.

The report found that the four service providers were appointed irregularly and recommended that the direct payment contracts be terminated.

“I must say I raised this in December that steps must be taken to remove these service providers and that hasn’t happened,” the minister said.

Another reason for his decision was Nsfas’ inconsistency in paying students their allowances in time.

“This has resulted in unnecessary stress for students and their parents,” Nzimande continued.

Watch the briefing below:

Nsfas board divided

Furthermore, Nsfas’ failure to submit an proper annual report to Parliament and to address the institution’s capacity deficiencies, such as the non-functional call centre, were other factors considered by the minister.

“In attempt to resolve these problems or to mitigate their negative impact, I engaged with board on several occasions on various solutions including a turnaround strategy, which has not been achieved within agreed timelines.”

READ MORE: ‘We can’t eat promises’: Kickbacks leave many students in lurch

Nzimande also revealed the turmoil between Nsfas board members.

“There were board members who were working very hard, but there were those that seemed to want to go in a different direction then where we should actually go, thus, recently leading to a large extent to a divided board.”

The minister said the affairs of Nsfas has brought “serious reputational damage” to the institution and government as a whole.

“Our detractors have been celebrating these weaknesses.”

New Nsfas administrator

According to Nzimande, the dissolution of the outgoing board will not affect the normal functioning of Nsfas, including the disbursement of funds, since an administrator has been appointed.

Freeman Nomvalo, who is former CEO of the South African Institute of Chartered Accountants (Saica) CEO, will take over the governance, management and administration of Nsfas for two years.

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The minister emphasised that there was no need to panic.

“We will expect the new administrator to finalise all the necessary funding decisions and outstanding payments including those relating to student accommodation.”

He added that Nomvalo will handle the 2025 application cycle for Nsfas funding.

“I mustn’t be misunderstood when I constantly refer to 2025. I already pointed out that things need to be done for 2024, but it’s important that we begin to look at the next academic year right now.”

Nsfas investigations

Meanwhile, Nzimande further confirmed that Nomvalo will oversee the internal investigations at Nsfas.

This includes outgoing board’s investigation into allegations stemming from a report by the Organisation Undoing Tax Abuse (Outa).

Outa released a report supported by voice recordings alleging Nzimande and Khosa received millions of Rands in kickbacks from Nsfas’ service providers.

The minister has denied the allegations.

“I understand that the investigation is close to completion, which means the administrator will have to look at it and act accordingly where necessary,” Nzimande remarked.

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