Ten months after being parachuted in last year to rescue the broken and corruption-riddled national student financial aid scheme (NSFAS), Freeman Nomvalo was beginning to turn it around. But he issued a warning.
“It’s going to take more than two years under administration to fix the rot,” he said. Anything less than this and NSFAS would quickly revert to chaos and corruption.
He was ignored. In February 2025 after less than a year of his intended two-year appointment by then higher education minister Blade Nzimande his term was ended.
Now, by all accounts, not least those of the former chair, Karen Stander, who resigned three weeks ago citing governance collapse, breakdown of leadership, and internal dysfunction, NSFAS is again a mess.
The question is how did it happen so quickly after it was finally, in the words of the Organisation Undoing Tax Abuse (Outa), “moving in the right direction”?
“The problem with all state-owned entities is that where vested interests are allowed to have an upper hand, they tend to control what is happening internally. Decisions taken internally by the organisation on the surface don’t make sense, but to the vested interests, they do because they serve their interests. That is at the core of the trouble these entities are in,” says Nomvalo, former CEO of the South African Institute of Chartered Accountants.
“When you come into an organisation, you pick up the operational and systemic challenges. As you address them, you renegotiate the ways of working with the various stakeholders. When there’s a change of leadership, people who want negative outcomes renegotiate their position. So the change of leadership, if it’s abrupt, tends to have that unintended consequence of an immediate regression. If that is not arrested quickly, it persists. I suspect that’s what happened at NSFAS.”
Before his administration was terminated, Nomvalo warned that if corruption was not rooted out completely, NSFAS would be fighting a losing battle. Is that what we’re seeing now?
“In part, yes. But the bigger point is that there are vested interests. Things don’t change because there’s an operational or strategic need. They change because somebody with sufficient leverage in the whole system pushes for those changes, and then those changes lead to what we’re seeing.”
Nomvalo warned that if his administration was ended before his changes had been embedded, there’d be a reversion.
Anybody who takes the position I did, once you take that person out, it opens the opportunity for regression. We intervened to stop overpayments. When you make that intervention, it means somebody is losing a lot of money. And that person is not celebrating
— Freeman Nomvalo
Why were his warnings ignored?
“It’s difficult for me to answer that, but it is not an accident that SOEs that are similarly dysfunctional are in that condition. It’s because it serves certain interests.”
He says he advised Nzimande about what he was doing, what he needed to do and how long he needed to complete the turnaround. But it was difficult to have that conversation with the minister who came after him in July last year (Nobuhle Nkabane), he says.
“The opportunity for that conversation with Blade’s successor didn’t arise.”
He believes NSFAS is back to where it was when he was parachuted in as the administrator.
“Unfortunately, that is the assessment of the former chair, supported by what one hears and sees.”
What needs to happen to enable NSFAS to deliver on its core mandate?
Consistency of leadership is vital, he says. Frequent interruptions don’t allow people, even if they’re the right people, “sufficient runway” to implement the strategies necessary to turn the organisation around.
“When you are dealing with vested interests, then addressing the operational issues may deliver short-term gains, but you need to put controls in place to deal with longer-term, systemic issues. If you interrupt that process too quickly, you are bound to have a regression.”
Nomvalo was dealing with these systemic issues. He’d gone to court to cancel contracts with irregularly appointed service providers, he was working with the Special Investigating Unit to recover R738m NSFAS had overpaid these providers, and he was acting against complicit NSFAS officials.
But the process of recovery he initiated was interrupted. “When you do what we were doing, you touch a nerve.”
Was he seen as a threat to well-connected vested interests?
“Anybody who takes the position I did, once you take that person out, it opens the opportunity for regression. We intervened to stop overpayments. When you make that intervention, it means somebody is losing a lot of money. And that person is not celebrating.”
He suspects there would have been well-connected people whose interests would have been served by not allowing his administration to run its intended course. The intention was for the minister to evaluate the position after a year, but the gazette was very specific, he says. “It was two years. It left no doubt.”
So given that by most accounts he was turning NSFAS around, and the clear warnings that removing him before his two-year appointment was due to end in 2026 would endanger the processes he’d begun, why was the plug pulled?
“Only the [then] minister [Nkabane] can answer that,” he says.
The government of national unity was constituted on July 3 2024, and the decision to end his administration of NSFAS was gazetted 27 days later. “That begs the question: have you had sufficient time to understand the dynamics to make that call?”
Nkabane, who came in with the GNU, was fired four months ago while mired in allegations of corruption and lying to parliament about cadre deployment.
Her successor, Buti Manamela, said when he took over in July that he would stabilise NSFAS within three months. Instead, the chair has quit, alleging governance collapse, breakdown of leadership, internal dysfunction and external interference.
“It’s disheartening when you see what’s happening, especially given the stakeholders that are the intended beneficiaries of the work of NSFAS,” says Nomvalo. “We were beginning to get a rhythm together that was promising and creating a lot of hope among stakeholders within the higher education sector as well as civil society.”
Would he consider it if asked by the new minister to come back as administrator of NSFAS?
“If I answer that question in any way, the vested interests will start attacking me even before I start. So bear with me if I decline to answer that.”
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