* One in three South Africans receive welfare benefits
* Court issues scathing ruling against welfare minister
* ANC calls for heads to roll over scandal
* Allan Gray signals Net1 shareholder revolt over debacle
(Recasts with court ruling, quotes, details)
By Tanisha Heiberg
JOHANNESBURG, March 17 South Africa's
Constitutional Court ordered the government on Friday to pay
social grants on April 1 via its current service provider,
seeking to end a fiasco that had threatened the payment of
benefits to 17 million people.
The court also sharply censured Social Development Minister
Bathabile Dlamini, calling her inaction to resolve the crisis
It is latest example of allies of President Jacob Zuma being
called to account for incompetence and underperformance since he
took office in 2009.
Pauline Masiq, a 74-year old mother of six who walks with a
crutch and lives in Johannesburg welcomed the court ruling. She
receives 1,600 rand ($125) a month in social grants.
"I'm very much pleased," she said. "It means a lot to me
because I have to pay for burials, pay food, pay rent and buy
water and electricity... it helps me a lot."
The chaos over the grants stems from the social welfare
department failing to take responsibility for social service
payments or find a new provider after the Constitutional Court
ruled in 2014 that the tender won by Cash Paymaster Services
(CPS), a unit of technology company Net1, was illegal.
Net1 and CPS said on Thursday it was concerned by comments
by government officials that it had taken an arrogant stance
over the crisis, saying it was trying to resolve the crisis.
"In the deepest and most shaming of ironies, government
relies on a private company ... to get it out of this
predicament," Justice Johan Froneman said on behalf of the
"The sole reason for this litigation is ... the minister's
failure to keep its promise to the people of South Africa," he
said. "There must be public accounting for how this was allowed
Dlamini has until March 31 to show why she should not pay
the costs of the case from her own pocket, he said.
The minister was not immediately available to comment.
The minister and the welfare agency in her department, the
South African Social Security Agency (SASSA), had previously
said privately the that SASSA has opted to negotiate a new deal
with CPS but there has been no public confirmation.
The court said it would take oversight over the welfare
payments and ordered the grant-paying company to continue
distributing the grants under the terms of its current contract
for 12 months before a new arrangement could be adopted.
Zuma said in parliament on Thursday there was no "crisis",
and said he would not fire Dlamini, who is also the head of the
Women's League in the ruling African National Congress party.
During the court hearing earlier this week the country's
chief justice placed the blame for the debacle squarely on
Dlamini. The case was brought by applicants urging the court to
take oversight of a new contract.
The creation of a welfare safety net which supports one in
three South Africans has been one of the key achievements of the
ANC, in power since the end of white apartheid rule in 1994.
The grants are a lifeline for the country's most vulnerable
and includes more than 11 million child support grants, many of
whom would go hungry without the monthly payment.
The ANC's tone over the saga was a striking contrast to
Zuma, who had defended the welfare minister. In a statement, the
party called for an investigation and action "against those
responsible for this embarrassing and undesirable situation".
In another example of how public bodies are scrutinising
Zuma's government, the High Court ruled that the appointment of
Berning Ntlemeza as head of an elite police investigation unit
is unlawful and must be revoked.
Since late last year, parliament has shone a spotlight on
Communications Minister Faith Muthambi over the running of the
state broadcaster SABC, which has been mired in editorial and
The welfare scandal threatened to instigate a shareholder
revolt with investment firm Allan Gray saying its 16 percent
stake in Net1 allowed it to call a meeting for the removal of
the board over the service provider's handling of the crisis.
($1 = 12.7622 rand)
(Additional reporting by Ed Stoddard; Writing by James
Macharia; Editing by Alison Williams)