NSFAS board confirms leave of absence for CEO Andile Nongogo

The board of the National Student Financial Aid Scheme (NSFAS) has confirmed that CEO Andile Nongogo is taking a leave of absence over allegations made against him while he was at the helm of the Services Sector Education and Training Authority (Sseta). 

NSFAS said on Wednesday that over the past few weeks several allegations were levelled against Nongogo.

“The allegations relate to his work with the Sseta and how this may relate to unacceptable conduct in the awarding of bids at NSFAS. While the board recognises that, in the main, the allegations stem from activities in another organisation, it views them in a serious light.” 

The Sunday Times reported at the weekend that a director of Coinvest Africa, Tshegofatso Ntumba, landed a R29m deal with Sseta in 2018 to supply promotional items at grossly inflated prices. 

Nongogo was the CEO of Sseta at the time, while Ntumba was involved as director of the company Star Sign and Print. 

Coinvest Africa is one of four companies awarded contracts by NSFAS to make direct payment of allowances into students’ bank accounts.  

This system has been roundly condemned by students, who recently marched to the Union Buildings in Pretoria to voice their dissatisfaction.

On Wednesday, students from Stellenbosch University and the University of the Western Cape marched to parliament in Cape Town demanding the system be scrapped.

The R29m deal was first exposed by the Organisation Undoing Tax Abuse (Outa) which released an update of its October investigation into NSFAS’s direct payment system recently.  

Among the goods it provided were 20,000 exam pads at a unit cost of R214, which according to Outa retail for about R21. 

In its updated report, Outa made several findings which included that the four companies are not registered financial service providers and are relatively new firms with “very little proof of experience as fintech companies”.  

It also found that after negotiations with the service providers, NSFAS agreed to a monthly fee of R102.35 on students’ bank account, but decreased the monthly fee to R29 and eventually R12. 

While NSFAS refused to divulge how much the contracts awarded to the four service providers are worth, according to calculations by the Sunday Times, each company is expected to make about R330m over five years. 

Meanwhile, according to the NSFAS statement, the scheme said it ran an almost R50bn budget “which services young people from poor and working-class backgrounds”.  

“This is no small task, as it has an impact on skill development and consequently the economic development of our nation. The board believes in executing this responsibility, public trust is of paramount importance.” 

It said that “in the interest of the image of NSFAS, the board has resolved to investigate the allegations with a particular focus on the direct payment project”. 

CFO Masile Ramorwesi will act as CEO until further notice. 

NSFAS said the investigation “is no pronouncement of guilt against the CEO, but an objective effort to determine the veracity of the allegations”. 

TimesLIVE 

• An earlier version of this story said Nongogo had been suspended. This has been amended to reflect he is taking a leave of absence.