South Africa’s postal service will partly take over distributing the social grants that are the main source of income for around 17 million people, the parliamentary communications service said on Wednesday.
South Africa remains scarred by glaring income disparities and a jobless rate of over 27 percent. The social grants keep millions from going hungry.
Cash Paymaster Services, a unit of technology company Net1 unit, had distributed the payments, but a new provider had to be found after South Africa’s highest court ruled five years ago that the tender process to acquire the service was unlawful.
The court in March extended Cash Paymaster’s contract by a year, averting a crisis that had almost seen payments cut off. That gave South Africa’s Social Security Agency (SASSA) until the end of March next year to find another provider. The South African Post Office (SAPO) will now fill part of that role.
The communications service said in a statement that a decision had been taken “to fast-track the introduction of an integrated payment system, which will be provided by government through a partnership between SASSA and SAPO.”
The issue had South Africans on edge earlier this year as a deadline loomed in March for SASSA to find a replacement for Cash Paymaster Services, a deadline it missed. The government’s planned expenditure on social grants in the 2017/18 financial year amounts to more than 150 billion rand ($10.5 billion), a key expenditure item in a low-growth environment.