South Africa's Zuma Says 'No Crisis' Over Grants Payment System

Cape Town: South African President Jacob Zuma said on Thursday there was no "crisis" as doubts mount over the government's ability to make welfare payments on April 1 to 17 million needy people because of a service-provider dispute.

Dominated by more than 11 million child support grants, the welfare system is a lifeline for South Africa's most vulnerable. Each month long queues form at pay points across the country as people wait for the money that is often the difference between going to bed hungry or not.

Zuma told parliament his government was "doing everything possible" to ensure welfare payments are distributed.

"There is no crisis," Zuma said in response to a question from the opposition in parliament, while defending Social Development Minister Bathabile Dlamini over the saga.

"Why punish somebody before anything happens? That's a funny democracy, a funny legal system that a person before committing a crime, must then be charged and then be punished," Zuma said in response to calls by opposition lawmakers for Dlamini to be fired from cabinet.

South Africa's Constitutional Court on Wednesday blamed Dlamini for the saga, which it described as a crisis.

The court was hearing a case brought by applicants urging it to take oversight of a new contract between the government and a service provider.

The court in 2014 ruled that the tender won by Cash Paymaster Services (CPS), a unit of technology company Net1 unit, was unlawful. The government had until April 1 of this year to take responsibility for social service payments or find a new provider, but failed to do so.

Officials at the South African Social Security Agency (SASSA) have said privately that the agency has opted to negotiate a new deal with Cash Paymaster Services (CPS) despite the court order. There has been no public confirmation.

An inter-ministerial task team, including Treasury, has said any negotiations for a new deal between SASSA and CPS were void, a cabinet minister said at a briefing on Thursday.

CPS has said the new deal must be settled before Thursday to ensure April's welfare payments are made on time.