R30bn more for Nxesi’s dodgy scheme

Employment and Labour Minister Thulas Nxesi is looking for R30-billion more to pump into the controversial labour activation programme (LAP) kitty linking him and 10 other officials to a corruption probe by the Special Investigating Unit (SIU) and Hawks.

According to an internal communication of the department, which Sunday World has seen, the LAP  had been allocated R3-billion budget in the current financial year to fund employability proposals from companies involved in training unemployed people.

The funds are insufficient to cover the costs of the proposed pipeline projects.


By last mont, the programme’s commitments stood at R7,4-billion, including the disputed R5-billion Thuja and UIF contract that has become the subject of legal review.

The internal communication noted that in a meeting held at the Compensation Fund on October 10, Nxesi was “shocked to realise that the value of recommended pipeline projects was around R59,4-billion when LAP is only allocated R2,8-billion, which is inclusive of existing commitments”.

“He then advised the commissioner to consult the then director-general Thobile Lamati and the board and explore the possibility of getting at least R30-billion.

“He indicated clearly that it would be very difficult for him to support any effort asking for more than R30-billion.

“He also advised that we also prioritise companies whose proposals will make a huge impact.”

Officials running the LAP, however, preferred that the prioritisation of  those proposals  only be done after the LAP’s additional budget had been confirmed.


They argued that there was no section in the Public Finance Management Act or National Treasury regulations that allowed officials to commit government funds not officially allocated to their programme.

“UIF finance colleagues have been reminding us about this issue. It became worse recently when the National Treasury said committing a budget not officially allocated to us is financial misconduct, and we can even be fired for that.

“Under normal circumstances, the process owner presents his or her available budget to adjudication committee members in order to ensure that their recommendations do not exceed the available budget. In our case, LAP officials get overpowered by the adjudication committee.”

The uncomfortable officials pleaded with Lamati that to manage the situation, the upcoming adjudication process, then scheduled for October 16–21, be paused until budget issues were resolved.

It was not clear at the time of going to print if  the adjudication was paused.

Nxesi’s proposal for the additional budget came after information was sent to the Hawks and the SIU by the whistle-blower indicating that proposals of several companies funded through the programme were approved without the necessary supporting documents and due process.

This was allegedly done on Nxesi’s instructions, either directly or indirectly, through  Lamati and Unemployment Insurance Fund commissioner Teboho Maruping.

The whistleblower later received death threats.During the media briefing on Thursday, Nxesi said he welcomed the investigation by law enforcement authorities into the LAP to establish the processes followed and the roles of all parties concerned. He said that he had committed to President Cyril Ramaphosa that he intended to create two million job opportunities, and that the plan was on track.

Acting director general Alec Moemi, said defects in the LAP will be identified and addressed because the country needs more work opportunities.

“Unemployment is a crisis, and we need to be deliberate in creating jobs,” he said.

He said this would be done through coordination of efforts with other departments, who will have to bring their resources on board.

He said the department was looking to revamp the whole LAP and be bold enough to go higher and ramp it up to 10 million job opportunities, which would require a budget of up to R30 billion.

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