South African govt awards $28M biometrics contract to ‘faceless’ firm

South Africa’s Government Pensions Management Agency has apparently awarded a biometrics contract to a company that is in the process of deregistration.

According to Sikonathi Mantshantsha, the investigative journalist at News 24 who first reported on the contract scandal, the biometrics deal is worth around 500 million South African Rand (about US$28.3 million) and was awarded to LSC Technologies, a company described as having no directors.

Mantshantsha told Newzroom Afrika that R43 million (about US$2.4 million) has already been paid to the firm, and that an estimated R1.7 billion ($96.5 million) in pensioners’ money has been put at risk through irregular and possibly fraudulent public contracts over the years.

South Africa is not new to biometric contracts controversy. Lat year, an airports biometrics contract awarded to Idemia worth around $20.8 million was cancelled following months of ongoing issues involving the provider, a former local partner and the airport authority. 

Revenue service introduces enhanced biometric authentication

The South African Revenue Service (SARS) has announced the introduction of enhanced facial authentication for two categories of taxpayer transactions.

According to the government agency, this authentication will be required for VAT (Value Added Tax) and PAYE (Pay As You Earn) product registrations on eFiling that may require secure identity verification, as well as for the updating of security contact details for taxpayers who cannot receive a One-Time Pin (OTP).

“These features protect taxpayer identities, reduce fraud, and ensure secure access to SARS digital services,” SARS announced.

It added that for the enhanced system to work, users must hold a camera-enabled device like a smartphone, follow instructions on on-screen facial positioning, and then complete the registration or update security contact details after successful biometric authentication.

In instances where the biometric authentication fails, SARS said it will “automatically create a verification case and may request supporting documents,” and “taxpayers without access to a camera-enabled device can make an appointment at a SARS service centre for assistance.” It also published updated guidelines for users to be consulted.

SASSA beneficiary biometrics mandatory from today

In the meanwhile, the South African Social Security Agency (SASSA) says from today September 1, biometric enrollment for its beneficiaries will be mandatory across all its offices in the country.

In a recent announcement, SASSA said the move is part of efforts to revolutionize the administration by enhancing trust in the system and making it less prone to manipulation and error. The agency explains that its teams have received adequate training to sharpen their readiness for the new dispensation.

The agency introduced biometric authentication last year for some categories of grant beneficiaries in a bid to fight fraud, but the process was met with criticisms as users complained of being locked out of benefits due to verification hassles.

SASSA says they could not fully deploy the system at the start of the 2025/2026 fiscal year as they had envisaged, but “we have ironed out the issues that delayed our plans.”

The biometric system, among other things, will also eliminate instances of duplicate payments, ensure beneficiary authenticity and proof of life, streamlined documentation, audit outcomes and registry integrity.

“SASSA would like to reiterate its commitment and resolve to pay the right social grant to the eligible beneficiaries, and the agency will continue to work with all its stakeholders in strengthening and safeguarding its systems,” SASSA CEO, Themba Matlou, is quoted as saying.

Authorities have warned that any grant application submitted without biometrics will not be entertained.

Article Topics

biometrics  |  digital identity  |  government purchasing  |  government services  |  procurement  |  South Africa