In a brief statement issued on Sunday, the Minister of Labor and Employment, Thulas Nxesi announced that he requested the postponement of the Thuja Capital Fund Project after being questioned by recent media reports.
“I have ordered it [the] The Director General (Ditjen) of the Department of Labor and Employment (DEL) and the UIF Commissioner to postpone this project [a] a full report on all matters announced in media reports and related matters,” the minister said in a statement.
This Nxesi shows a Sunday Times article published on 30 December entitled ‘Government spends R5bn on ‘unique, untested chapter’.
Allegations of impropriety
The article reports complaints by what it calls “UIF insiders” about the push by the department’s director general, Thobile Lamati to approve a project that will see billions of workers’ money invested in the Thuja Capital Fund. These so-called insiders only exist on paper.
Sunday Times reports that Thuja Capital Fund has no premises, website or track record and one of its directors, Mthunzi Mdwaba is the chair of Productivity SA – a Department of Labor entity tasked with “saving jobs and increasing productivity.”
The other two people listed as directors of Thuja Capital Fund are Mdwaba’s son, Litha, a rapper, and Alta Roets.
Also read: Thulas Nxesi laments youth unemployment crisis in SA
In its statement, the Ministry of Labor and Employment confirmed that the Thuja Capital Fund Project is a project under the department’s Labor Activation Program (LAP), “managed by the Unemployment Insurance Fund (UIF) together with several partners.
Workforce Activation Program (LAP)
LAP is a program in the Department and is funded by the Unemployment Insurance Fund (UIF).
According to the government, the purpose of the program is to train and improve the skills of unemployed youth and unemployed UIF beneficiaries to gain access to the labor market, and to create their own businesses.
In 2019, the department asked for proposals to train unemployed people and put them to work in the program and Thuja was one of the private companies that responded to the call.
Push for Thuja
Sources cited in the article highlighted how the DG of the department pushed for the project to get the green light on several occasions, starting with an initial push of R2 billion to be paid to Thuja in the first quarter of 2023. He did so by writing “several letters to the department and the UIF ” pushing for the agreement to be completed and the payment made.
The money was supposed to be used to start the company’s operations.
“Another R2 billion will be paid in the second quarter and the remaining R1 billion in the third,” the Sunday Times reported.
All this despite the fact that the Thuja concept has not been properly evaluated by the necessary monitoring mechanisms.
In response to the allegations leveled against him, Lamati said he was motivated, in part, by South Africa’s glaring youth unemployment statistics and the need to address this issue.
He also reportedly told the publication that the UIF “does not have the capacity” to carry out trials on the “unique” proposal.
When contacted to comment on how the company operates, Mdwaba told the publication that he could not explain anything “due to confidentiality.”
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Compiled by Kaunda Selisho