In a major move, Finance Minister Enoch Godongwana has announced that the National Treasury will take direct control of the Government Pensions Administration Agency (GPAA). This decision comes after a massive scandal involving an irregular procurement deal worth approximately R1.2 billion.
The scandal centers on a “ghost contract” where the GPAA allegedly entered into a 10-year lease for a building that does not exist. Reports indicate the agency has already spent millions, including R62.6 million paid to contractors and R270 million set aside for renovations, despite having no legal access to the property.
The GPAA manages the retirement savings of nearly 1.7 million government employees and pensioners, making the scandal a major concern for their financial security.
Minister Godongwana has appointed a new acting CEO to lead the agency and clean up its procurement and governance practices. This intervention highlights the government’s serious concern over the mismanagement of public funds.
The scandal was first revealed by an investigative news report and has sparked outrage. The public sector union SAFTU has warned that the deal puts the pensions of millions at risk. Political party ActionSA has demanded immediate answers from the finance minister on how this happened and how the money will be recovered.
This is not the first time the GPAA has faced allegations of mismanagement. Earlier this year, a union’s internal audit flagged over R500 million in potential irregularities.
Parliamentary committees have now summoned the GPAA to explain the allegations. The National Treasury’s takeover is seen as a critical step to restore integrity to the agency and protect the pensions of millions of South Africans.