Executive Shakeup at NSFAS Sparks Controversy: Nongogo Axed Over FNB Tender Dispute

Executive Shakeup at NSFAS Sparks Controversy: Nongogo Axed Over FNB Tender Dispute. In a recent development that has sent shockwaves through the education funding sector, the National Students Financial Aid Scheme (NSFAS) CEO, Andile Nongogo, has been dismissed, with the controversial termination of a multi-billion rand deal involving retail giant FNB being cited as the primary cause. The NSFAS board, in court papers submitted to the Labour Court in Johannesburg, detailed the breach of fiduciary duties by Nongogo, particularly highlighting the contentious cancellation of the 2020 tender process that favored FNB.

The Unraveling of the FNB Deal

The R2-billion-a-year deal, aimed at direct payment of student allowances, initially opened in July 2020 but faced setbacks when it was deemed non-responsive and subsequently canceled. Upon its re-issuance in November 2020, the bid evaluation committee recommended FNB for the lucrative contract. However, upon assuming his role at NSFAS, Nongogo allegedly asserted that the bid was exclusionary, leading to its cancellation. The NSFAS board contended that Nongogo failed to seek prior approval from the National Treasury for this second cancellation, a procedural lapse that contributed to his dismissal.

Evolution of the Tender

The tender saga took another twist when it was reissued in January 2022 with substantial modifications, including a new requirement for bidders to subcontract 30% to a 51% black-owned company. Notably, traditional banks such as FNB, Nedbank, Absa, and Standard Bank were once again among the 18 bidders. However, only fintech companies, namely Coinvest Africa, Tenet Technology, eZaga Holdings, and Norraco Corporation, were selected to facilitate direct payments to students.

Board’s Perspective and Allegations

NSFAS board chairperson Ernest Khosa asserted in court papers that the changes were necessary to introduce a BEE (Black Economic Empowerment) component and address the reluctance of retail banks to engage black business partners. Khosa argued that the move redirected a substantial annual deal into black hands, eliciting discontent from major banks, who envisioned retaining student beneficiaries as customers by offering them bank accounts.

Controversies Surrounding Nongogo’s Dismissal

Supporters of Nongogo contend that his dismissal is unwarranted, suggesting that he acted in the best interest of NSFAS by bringing attention to the intricacies of the deal. They argue that his decision to cancel the bid in 2021 was an effort to inform the incoming board about the complexities of the agreement. Questions have been raised about the timing of his dismissal in 2023 and why the board continued to trust him after the tender was approved and initiated.

Investigation by Werksmans and Ngcukaitobi

The NSFAS board justified Nongogo’s dismissal by citing the outcomes of an investigation conducted by law firm Werksmans and advocate Tembeka Ngcukaitobi. The details of the investigation, however, remain undisclosed.

Conclusion

The fallout over the FNB tender at NSFAS raises broader questions about transparency, procedural adherence, and the dynamics between financial institutions and public entities. As the controversy continues to unfold, stakeholders eagerly await further insights into the findings of the investigation and the implications for the future leadership of NSFAS.