South Africa risked disaster on welfare grants, court says

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In one of South Africa's biggest crises since the apartheid era, its highest court has accused the government of risking a catastrophe by ignoring court orders to protect millions of impoverished families who depend on monthly grants.

The court ruling is another blow to President Jacob Zuma and one of his closest cabinet allies, at a time when they are manoeuvring to install their favoured candidate as Mr. Zuma's successor.

South Africa's system of social grants has been widely praised for reducing poverty after the end of apartheid in 1994. Nearly half of its 14 million households are receiving at least one payment, mostly child-support or old-age grants.

The government awarded a lucrative contract to a private firm to distribute the grants, but the Constitutional Court – the country's highest court – invalidated it in 2013 and told the government that a state agency should have the contract.

The government ignored the court orders and failed to replace the contract, even as it hurtled toward a deadline of March 31, when the contract would expire, leaving millions of people without any source of income.

Mr. Zuma's social development minister, Bathabile Dlamini, has been accused of benefiting from personal connections to the private firm distributing the grants. She stubbornly refused to take the contract away from the profit-making firm as the deadline approached.

Ms. Dlamini plays a key political role for Mr. Zuma by promoting his campaign to install his ex-wife, former African Union chairperson Nkosazana Dlamini-Zuma, as his successor as leader of the ruling party at a conference in December.

On Friday, just two weeks before the contract was due to expire, the Constitutional Court blasted Ms. Dlamini for jeopardizing the grants that millions of people depend on. The court ordered the contract to be extended for a year, but with much closer supervision and without the increased fees that the private firm had been seeking.

The court also prohibited the private company from using the data of the grant recipients to contact them to offer loans and other money-making schemes. South African media have documented how the company has made profits by lending money and selling services to the impoverished recipients.

Mr. Zuma, facing deep divisions and opposition within his own party and cabinet, has begun blaming what he calls "white monopoly capital" for his country's failings. But the court noted that the government had awarded the grants contract to a private white-owned company and had refused to find an alternative.

The government "admits that it is not able to fulfill its constitutional and statutory obligations to provide for the social assistance of its people," the court said in its ruling. "And, in the deepest and most shaming of ironies, it now seeks to rely on a private corporate entity, with no discernible commitment to transformative empowerment in its own management structures, to get it out of this predicament."

The government broke its promises to the court, and this would lead to "potential catastrophe" when the contract expires at the end of this month, the court said.

Millions of grant recipients have been placed "at grave risk" because of the "recalcitrance" of the minister, her apparent defiance of court orders and the inability of the government's social security agency to "get its own affairs in order," the court added.

All attempts to get an explanation from the minister "drew a blank," it said.

Civil-society groups, who had launched the court case, welcomed the ruling on Friday. It was also welcomed by retired archbishop and Nobel Peace Prize laureate Desmond Tutu, a hero of the anti-apartheid battles. The court ruling "has rescued the country from the worst constitutional crisis it has faced since 1994," Mr. Tutu said.

"The fact that it has come to this underlines the moral bankruptcy of the Zuma regime," he wrote in a commentary on Friday after the court ruling.

"As a long-standing champion of the poor, I do not understand how the President can continue to condone the behaviour of (Ms.) Dlamini, who has shown by her inaction that she has no regard for the poor. Her arrogance in this entire situation is breathtaking."

In a separate ruling on Friday, another South African court invalidated the Zuma government's appointment of a senior police commander, Berning Ntlemeza, who heads an elite investigative unit known as the Hawks.

Mr. Ntlemeza, a close ally of Mr. Zuma, has launched police investigations of senior government officials who have blocked Mr. Zuma's attempts to gain greater control of public finances. But an earlier court ruling had described him as "dishonest, lacking in integrity and dishonourable."