NSFAS to Appeal as Court Rules in Favour of eZaga for Allowance Payments

eZaga Holdings Wins Court Case Against NSFAS as Court rules in favour of eZaga, mandating contract revival.

(The Post News)- The National Student Financial Aid Scheme (NSFAS) is planning to appeal a high court judgment that mandates the revival of a contract with a service provider contracted to provide allowances directly to students.

The court’s decision, made on July 15 by acting judge Sven Olivier at the Western Cape High Court, restrains NSFAS from proceeding with the termination of its contract with eZaga.

NSFAS has been restrained from implementing a direct payment process that allows for the direct deposit of allowances into students’ bank accounts.

Saud Ally, CEO of eZaga Holdings, expressed his pleasure and gratification with the court’s judgement.
“We are happy with the court’s ruling to reappoint eZaga as a trusted payment solutions provider for universities and TVETs.

This ruling is a testament to our unwavering commitment to integrity and excellence. We look forward to continuing our work with educational institutions, providing innovative solutions that enhance financial inclusion and streamline payment processes.”

According to Ishmael Mnisi, spokesperson for the department of higher education, the ruling solely applies to NSFAS’s actions after the Werksmans report, which advised terminating the contract with eZaga due to procurement irregularities.

The report revealed significant concerns, including a conflict of interest involving the fund’s CEO, Andile Nongogo, anomalies in the bid process for direct payment service providers, and the failure to conduct a feasibility study before implementing the direct payment system.

The report recommended contract termination with the companies involved, Nongogo’s dismissal, and ensuring future projects undergo comprehensive feasibility studies.

Moreover, the ruling benefits three other service providers: Coinvest Africa, Norraco Holdings, and Tenet Technology, who, together with eZaga, were awarded the tender to distribute allowances.

The four fintech companies were often held responsible for delayed payment of allowances, and in some cases, students allegedly experienced questionable withdrawals from their accounts.

Some students even took to the streets to vent their frustrations earlier this year.

Mnisi said the court order was granted without considering the validity of the tender award that underpinned the contract.

“The Special Investigating Unit (SIU) and NSFAS’s application to invalidate the contract are currently pending at the Special Tribunal. NSFAS stands firm on implementing the recommendations made in the Werksmans report and will appeal this judgement, in addition to the application at the Special Tribunal,” said Mnisi.

Olivier stated that the ruling will remain effective until either the court or the Special Tribunal renders a final verdict regarding the execution of the service-level agreement between eZaga Holdings and NSFAS.