One South African institution the Finance Minister wants to close tomorrow
Finance Minister Enoch Godongwana says he would close the National Student Financial Aid Scheme (NSFAS) if it were up to him.
The NSFAS was established in 1996 as a South African government student financial aid scheme which provides support to undergraduate students.
The financial aid is designed to help students cover the costs of their tertiary education after completing high school.
It is funded by the Department of Higher Education and Training and manages bursaries such as the Funza Lushaka Teacher Bursary.
Problems, including mismanagement, corruption, and other governance issues have plagued the institution.
Last year, the Auditor-General of South Africa (AGSA) revealed that NSFAS has incurred nearly R60 billion in irregular expenditure.
“NSFAS has long been plagued by mismanagement, leaving students vulnerable and underserved,” said Matlhodi Maseko, DA Spokesperson on Higher Education.
Many students wait for months to receive allowances or bursary funds, putting them in precarious financial positions.
The Organisation Undoing Tax Abuse (OUTA) stated that the failure to manage their funds responsibly undermines the unemployed youth and South Africa as a whole.
It highlighted tender irregularities, including contracts awarded to service providers without banking licences, overly inflated bids, and weak supply-chain compliance.
In April 2023, the Special Investigating Unit (SIU) found that more than R5 Billion NSFAS money was possibly allocated to students who did not qualify.
The SIU’s investigations revealed that more than 40,000 students in 76 institutions of higher education have possibly been funded incorrectly.
The institution has further faced numerous leadership challenges, including board dissolutions, resignations, and investigations into senior personnel.
South Africa’s Finance Minister wants to close NSFAS
Finance Minister Enoch Godongwana said he would close the National Student Financial Aid Scheme if he could.
However, he said there were many vested interests which protect the institution despite its problems and inability to do its job.
“If I had the option to close the National Student Financial Aid Scheme, I would do it with my eyes closed. It will be gone tomorrow,” he said.
He highlighted that NSFAS’s task is to take money from the Department of Higher Education and transfer it to universities.
“You don’t need that conduit. You can transfer money directly to the universities, and they can do the needed tasks,” he said.
“However, we created the strange thing called NSFAS, where the CEO earns more money than the President of South Africa.”
It gets worse. The institution is so dysfunctional that it has decided to outsource the work it is supposed to do.
“They have employed four service providers to do what they were created to do,” Godongwana said.
The Finance Minister stated that students and other stakeholders have been co-opted into defending the National Student Financial Aid Scheme.
Although it serves no purpose and is dysfunctional, the numerous vested interests involved make it impossible to close.
“If we try to close the National Student Financial Aid Scheme tomorrow, you will see protests at universities,” he said.
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