Original Research

The impact of business support services on the payment of social grants in the Free State province

Setsabi S. Matsoso, Moses M. Gasela

Received: 17 July 2024; Accepted: 14 Oct. 2024; Published: 12 Dec. 2024

Copyright: © 2024. The Author(s). Licensee: AOSIS.
This is an Open Access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

Background: South African Social Security Agency (SASSA) plays a significant role in alleviating socio-economic challenges in the Free State province of South Africa. Yet, little is known as to whether business support services influence the payment of social grants in the Free State province. This study was hence intended to fill this gap.

Aim: This study aimed to examine the impact of business support services on the payment of social grants in the Free State province of South Africa and recommend improvement enhancement mechanisms, which can be used to improve the payment of social grants.

Setting: The setting relates to the state organs at Provincial, Local and National level, in terms of the legal framework, linkages with performance including service delivery and political dynamics.

Methods: A descriptive survey design was adopted. A questionnaire was used to collect quantitative data from a random, systematic sample of 170 employees (100% response rate). Descriptive and inferential data analysis were performed. Pilot testing other measures were undertaken to ensure validity and reliability of the study’s findings.

Results: It was found that there is a positive impact of business support services on the payment of social grants.

Conclusion: Reliable business support services result in the payment of social grants at the right place, at the right time and in a cost effective manner.

Contribution: This empirical investigation contributes to an understanding of the role of business support services within the context of all spheres of government and service delivery.

Keywords: South African Social Security Agency; business support services; social grants payment; Free State; South Africa.

Introduction

Background context and justification of the study

The study empirically investigates the impact of the services, that enable and support the social grants payment at the South African Social Security Agency (SASSA) in the Free State province of South Africa. Twenty-eight million South Africans, which is approximately 46% (28 m/60.6 m) of the national population, of whom 1.1 million reside in the Free State province, receive social grants at an annual cost of R240 billion (South African Social Security Agency’s Annual Performance Plan 2022–2023:6, 51). It appears that there is a consensus among the authors from different schools of thought, such as Patel, Dikoko and Archer (2023), Chagunda (2022) and Maluleke (2021) on the notion that social grants improve socio-economic circumstances of vulnerable persons. Patel et al. (2023:2) assert that one-fifth of the global population in developing countries receive some kind of social grants whether in payments or kind. Providing empirical support to the assertions of the previous authors (Patel et al. 2023:2), Chagunda (2022:14247) concluded that social grants have an optimistic impression on lessening poverty and accrual of other positive as well as negative additional effects to the beneficiaries. Maluleke (2021:13) affirms that poverty, unemployment, food insecurity and economic disparities are part of the main challenges facing South Africa; social grants are part of actions implemented by the South African administration to respond to and alleviate the aforementioned challenges.

The United Nations (UN) developed various Sustainable Development Goals (SDGs) and Millennium Development Goals (MDGs) in relevant socio-economic facets, which are aimed at facilitating human progress and development in the world. According to Scheyvens and Hughes (2019:1), one of its important and challenging SDG goals is SDG 1 (poverty alleviation in the World), which requires the entire member countries of the UN to do whatever is possible and necessary to ‘eradicate poverty in all its forms everywhere’. On a worldwide basis, to reduce extreme poverty and social vulnerabilities in their efforts of operationalisation of SDG 1, different countries implement appropriate social grant systems and measures for all their peoples (Kaltenborn 2017:237). As a member of the UN, South Africa ratified several SDGs, including SDG 1, which is most relevant to the study (Department of Planning, Monitoring & Evaluation 2019:146). Stemming from the aforesaid SDG 1, sections 27 (1) (c) and 28 of the South African Constitution afford everyone the right to social security, including the social grant system (Constitution of the Republic of South Africa Act 108 of 1996 section:8).

South African Social Security Agency is mandated to administrate social security grants in South Africa. It is an entity within the Department of Social Development (DSD) and was established in terms of Act No. 9 of 2004, also known as the SASSA Act. Its objective is to safeguard the efficient, thorough administration and disbursement of social grants, as well as related social assistance. South African Social Security Agency operationalises the social grants programmes by extending the social assistance to qualifying South Africans, who cannot provide for themselves and their dependents (SASSA Act 2004:8).

Given the aforesaid legislative and regulatory obligations of SASSA, as cited in the preceding paragraph, it is therefore evident that on a national basis, it plays a very significant role in implementing the pro-poor government policy, as it pertains to poverty, hunger and unemployment alleviation. This is about one of the seven government priorities (Government priority 4: Social wage) of the sixth term of the government’s sixth administration (Department of Planning, Monitoring and Evaluation 2019:2; South African Presidency 2012:356). Flowing from government policy priorities, the social wage in the South African context for national budget purposes refers to the combined government spending on health, education, housing, social protection, transport, public employment and local amenities (National Treasury 2023a:7). In the 2023 Medium Term Budget Policy Statement (MTBPS), the minister of finance announced that 61% of the aggregated non-interest spending is earmarked to be spent by the South African administration on the social wage during the 2024 Medium Term Expenditure Framework (MTEF) (National Treasury 2023b). Included in the aforementioned announced social wage expenditure is R945.9bn (rounded off to R1 trillion), which is planned to be spent on different types of social grants. The 2024 MTEF refers to the government aggregate expenditure over the three financial reporting periods of the financial years 2024/25–2026/27 (National Treasury 2023a:7).

According to the National Treasury (2023a:7), South Africa’s expenditure on social grants, which is measured as a proportion of the state’s gross domestic product (GDP), is one of the largest when compared to its peer developing countries and the World’s emerging markets. Figure 1 is the schematic presentation of a contrast of the social grant spending by the South African administration to the other key world’s peer emerging markets.

FIGURE 1: Social assistance spending.

Figure 1 shows that South Africa’s spending on social grants calculated in terms of its GDP is approximately 3.3%, which is a significant investment. India and China, which are the establishing affiliates of BRICS (Brazil, Russia, India China and South Africa), an economic club of the global major emerging markets in the South, spend approximately 0.1% and 0.2%, respectively, of their GDP on social grants, which is less comparable to South Africa’s spending by 300 basis points. Argentina (another peer emerging market as South Africa), which was set to join the expanded BRICS with effect from 01 January 2024, by the BRICS summit held in South Africa in 2023 by the founding five countries, spends approximately 0.2% on social grants, which is measured as a percentage to its GDP. Finally, Figure 1 shows that Chile, Thailand, Peru and Indonesia, which are non-BRICS and emerging market peers to South Africa, invest approximately 0.9%, 0.4%, 0.1%, and 0.1%, respectively, in the social grants of their vulnerable citizens as a percentage to their GDP. This means that all these non-BRICS and peer emerging market countries (Chile, Thailand, Peru and Indonesia) to South Africa as well as the newest BRICS member (Argentina) spend less in contrast to South Africa by about 300 basis points.

The aforesaid monetary value of the social grants, as reflected in Figure 1, is significant as it demonstrates the South African administration’s commitment to using the state machinery and massive monetary investments (approximately 3.3% of the country’s GDP and 300 basis points more contrasted to the peer emerging markets of the world) towards human progress and development, thereby attempting to alleviate the perennial triple tests of poverty, inequality and unemployment facing the South African society.

Despite the obvious aforesaid good policy interventions on poverty and unemployment alleviation measures taken by the South African administration, which is evidenced by the significant monetary investment of approximately 3.3% of the country’s GDP to social grants, it appears that there are a myriad of problems and significant challenges in the operation of some business support processes, which are designed to enable the social grants payment as follows:

• Corruption in the form of abuse of authority, such as creating fictitious grant beneficiaries by some grant payment officials at SASSA; fraud and other institutionalised endemic corrupt activities as well as misappropriation with the view of obtaining economic benefit from such corrupt activities; material irregularities stemming from alleged fraudulent social grant payments at the application and payment stages resulting in material losses amounting to millions of rand; fraud cases reported through the public service commission and fraud hotline for different grants, such as old age grants (OAG), disability grants, child support, COVID-19 Social Relief Distress (SRD) grants involving SASSA officials, South African Post Office (SAPO) officials, public servants, fraudulent SASSA–SAPO social grant cards, and so forth (Gasela 2021:2–3; Mchunu 2018:6; Munzhedzi 2016:1; SASSA Annual Performance Plan 2022:106–107, 52; Sebake & Sebola 2014:745–746)
• Inefficiencies in the payment of grants are evidenced by long waiting queues for hours and days in certain circumstances during the different stages of the application process, as well as payments at delivery service points (Nhlangulela 2021:54, 57; Steyn 2023:1)
• A lack of access to technology by the potential and actual grant beneficiaries results in their travelling long distances and spending significant transportation costs to access the social grant services (Megannon 2022:20)
• As a result of technological glitches and challenges some of the business support services do not operate correctly as per their design to enable the social grant payments, resulting in social grants not being paid. This affected seven million vulnerable people in a certain incident; litigation over contractual arrangements between SASSA providers of outsourced business support services, which negatively affected the payment of social grants; cyber-attacks on outsourced business support services, such as data management centres, which resulted in interruption of child support grant (CSG) payments; suspension of services, outsourced software management and payment switch challenges, resulting in delayed payments to the beneficiaries; payment system challenges negatively affecting beneficiaries receiving their grant payments in the ATMs and major retailers in South Africa (Steyn 2023:1; South African Post Office, Media statement 2022:1)
• Weak internal controls and ineffective operation of the designed internal controls of the business support services, which are designed to enable and support the payment of the grants (SASSA Annual report 2022/23:152)
• Poor service and unfriendly grant payment officials, who lack batho pele (customer first) ethos at social grant payment points (Megannon 2022:20)
• The scrutiny of the SASSA strategic plans, annual performance plan as well and annual report suggests that SASSA does not have an approved quality and service management in the form of the Service Delivery Model (SDM) and Service Development Improvement Plan (SDIP), which all state organs should have in terms of the Department of Public Service and Administration (DPSA) directives (Department of Public Service & Administration 2011, 2013; SASSA Annual Performance Plan 2022/23; SASSA Strategic Plan 2020–2025).

A scan of recent and reliable sources, as well as research databases, indicates that authors, such as Gronbach, Seekings and Megannon (2022:5), Nhlangulela (2021:58–60), and others conducted investigations on SASSA from a national perspective of social grants payments. None of these studies were undertaken in the Free State context and in the context of the business support service angle. Hence, the knowledge gap and the resultant contributory value of this study.

Research problem and objective

The failure to implement business support services by organisations in the public sector, such as SASSA, which negatively impacts the payment of social grants, could lead to failure to disburse the grants to the beneficiaries. This study was therefore intended to analyse the impact of business support services on the payment of social grants in the Free State province of South Africa and recommend improvement enhancement mechanisms, which can be used to improve the payment of social grants.

This article is organised as follows: After the Introduction, sections ‘Literature review and theoretical framework, ‘Research methods and design ’ and ‘Findings and managerial implications’ are presented. Section ‘Conclusion’ concludes the study.

Literature review and theoretical framework

Definitions of study key concepts

Before an overview of the relevant types of social grants is undertaken, its meaning will be explored through a scan of different definitions and perspectives from recent and reliable sources, leading to an adopted or accepted definition for the study.

According to Vonk and Olivier (2019:10), based on recommendation no. 202 of the International Labour Organization (ILO), a social grant is defined as an instrument for accomplishing the lowest level of protection for vulnerable persons. From the same perspective as the previous contribution (Vonk & Olivier 2019), Shao, Che and Zhou (2022:2) refer to social grants as social assistance, which gives assurance to the minimum standard of living of the poor. Along the same viewpoint as the previous sources (Shao et al. 2022; Vonk & Olivier 2019), albeit from a different perspective somewhat, Chagunda (2022:14241) refers to social grants as the most direct mechanism of governments to lessen poverty and deficiency without getting rid of it.

For this study’s purposes, the accepted definition of the social grant refers to it as the means of benchmarking and sustaining either financially or in kind, a minimum acceptable standard of living for the underprivileged and vulnerable.

Relevant types of social grants

Given that the meaning of the social grant has been examined in the previous paragraph, which leads to an adopted definition in the context of this study, relevant types of social grants will be examined in the next paragraph.

As can be expected, on a worldwide basis, different countries provide unique kinds of social grants in response to their unique socio-economic contexts. The Free State province, which is the element of investigation of the study, is no exception to the aforesaid global phenomenon. Therefore, to appropriately position the study in one of its key constructs (social grant types), the next sub-section commences with a brief overview (on a global basis) of the relevant types of social grants, which will lead to the relevant typology in the South African situation.

Starting with the aforementioned overview of international trends with regard to social grant typology, Raifman, Bor and Venkataramani (2021:15) wrote that in the United States of America (US), the response to joblessness and the impact of coronavirus disease 2019 (COVID-19) pandemic was executed through the unemployment insurance and the Supplementary Nutrition Assistance Program (SNAP), which aligned with the Coronavirus Aid, Relief, and Economic Security (CARES) Act. From another perspective, Kino et al. (2022:873) affirmed that in Japan, residents without the government-determined minimum financial level were provided with public welfare assistance, whose objective was to ensure a minimum level of healthy, social life. On the contrary, in China, Shao et al. (2022:1) claimed that to alleviate health issues, the government provided medical and life assistance to the residents.

From a different perspective, Hlasny (2023:175) argued that, in the Arab region, including Egypt, because of the economic instability and the recent economic contractions, there has been an increase in the public support and social grant coverage for a greater portion of the population. In Eswatini, the public assistance grant includes the OAG. In Zambia, there is a social protection programme, which is known as the Public Welfare Assistance Scheme (PWAS).

With the shift (home) to South Africa, particularly in the Free State Region, which is the focus of this study, the different types of social grants, which are received by the beneficiaries are listed in Table 1.

Table 1 reflects 12 various types of social grants, which are provided by the South African administration to the beneficiaries. For instance, the table starts with the care dependency grant (CDG) and the CSG as items one and two, respectively. The OAG, the war veteran grant and the social relief of distress are listed as items 10, 11 and 12, respectively.

When comparing the typology of the grants delineated in Table 1 with the examples from the international context cited in the preceding paragraphs in this section, it appears that South Africa provides more grants than any of its peers in the developing world. South Africa enshrined the social grants in its constitution as the right to all qualifying residents (Sakala, Mabundza & Noyoo 2022:3–10).

By 2020, South Africa had 18 million social grant beneficiaries (Sakala et al. 2022:3–10). By the same token, Patel et al. (2023:2) wrote that before the advent of the COVID-19 pandemic (between 2018 and 2019), there were 17.8 million recipients of social grants in South Africa. The volumes surged by 47% in 2022. The leading grants are the CSG with 13 million recipients and the OAG with 3.7 million recipients. More than 10 million beneficiaries receive social relief of distress (SASSA Annual Performance Plan 2022–2023:6).

Importance of social grants

An examination of the latest and dependable sources proposes that there is a broad agreement among the management researchers and authors, such as Patel et al. (2023), Fitzpatrick, Harris, Drawve, and Willis (2021) regarding the importance and benefits of social grants in both developed and developing economies. The next sub-sections cover the relevant contributions and perspectives on the critical importance of social grants, which include poverty alleviation, compliance with relevant regulatory and legislative legalities, combatting unemployment effects, and so forth.

Poverty alleviation

Patel et al. (2023), Chagunda (2022) and Maluleke (2021) agree that various countries (international, African as well as closer to home in South Africa) in different contexts instituted poverty alleviation measures in place, such as social grants. Fitzpatrick et al. (2020:2) think that, in the US, the main reason for the need for social assistance is food insecurity, which is defined as the enabled or facilitated access to sufficient food for a healthy and active life by the whole community. In agreement with the previous source (Fitzpatrick et al. (2020), Esobi et al. (2020:9) stressed that during the COVID-19 pandemic, about 8% of the households suffered from the food insecurity, while additional 4% suffered from both food insecurity and hunger in the US. While agreeing with the previous contributions (such as Esobi et al. 2020; Fitzpatrick et al. 2020), from a different angle and in the South African context, Maluleke (2021:27) revealed that families experiencing distress are included in the feeding scheme, offered psychological counselling and given humanitarian grants. Families facing hardship are given humanitarian or financial grants in South Africa (Maluleke 2021).

In concurrence with the above-stated scholars (such as Esobi et al. 2020; Fitzpatrick et al. 2020; Maluleke 2021), approaching it from a different context, Sakala et al. (2022:3–10) affirmed that in Zambia, social grants were aimed at reducing the extreme poverty. Such social grants relate to non-cash items such as groceries which are provided to the beneficiaries which are living in poverty (Sakala et al. 2022). Along the same thinking as the previous sources (such as Esobi et al. 2020; Fitzpatrick et al. 2020; Maluleke 2021), Patel et al. (2023:2) also wrote that one-fifth of the global population in developing countries receive, in one form or another, some kind of social grants. Closer to home in South Africa, Chagunda (2022:14243) posits that 8 out of 10 families went to bed on empty stomachs and those with access to social grants mainly use them to buy staple food.

It appears that the contributions from all the aforesaid sources cited in this sub-section (2.3.1) suggest that social grants are of critical importance as a poverty alleviation measure.

Compliance with relevant policy and legislative obligations

Vonk and Olivier (2019), as well as the African Union and United Nations Development Programme (UNDP) (2019), agree that some countries embrace the social grants provision in their constitutions. Vonk and Olivier (2019:3) asserted that the constitutions of most European countries provided for social security.

By the year 2000, none of the African countries had a National Social Protection Strategy (NSPS) or National Social Protection Policy (NSPP). However, in 2017, a total of 29 countries had developed such strategies, which are mainly left to the responsibility of the governments. An example in case is Liberia NSPS 2013. However, some are administered through the public–private partnership, such as Rwanda NSPS 2011. Some are implemented through both formal and informal interventions, such as Ethiopia NSPP 2012. Others are operationalised through both informal communal upkeep and additional families, such as Kenya NSPP 2011. The main objectives of social protection in the African context are to reduce the state of distress, to overcome economic and social risks, and to eradicate poverty. However, the majority of African NSPSs and NSPPs do not embrace social protection as a right. Exclusions, among others, are Mozambique, Zimbabwe and Zambia. In the Côte d’Ivoire NSPS 2013, social security is described as safeguarding minimum levels of human dignity. The key target group of social protection ranges from the deprived or extremely underprivileged, as in Madagascar NSPS 2015. This is followed by the vulnerable groups comprising the young, the eldest and the incapacitated as in Central African Republic NSPS 2012. The Lesotho NSPS 2014 mentions the socially excluded group of the society. Exceptionally, Gambia NSPP 2015 emphasises that social protection is open to entirely everyone, with no exceptions (African Union & UNDP 2019:6–7).

Given all contributions in this sub-section, it is evident that the social grants payment in the South African setting complies with the supreme law of the Republic of South Africa, which is the South African constitution as well as the relevant subordinate enabling legislation, such as the SASSA Act (Constitution of the Republic of South Africa Act 108 of 1996 section:8 & SASSA Act 2004:8). Furthermore, the social grants payment follows the 2030 National Development Plan of South Africa, including the 2020–2024 Medium Term Strategic Framework of the sixth term of government of South Africa (Department of Monitoring & Evaluation 2020:2; South African Presidency 2012:356). Finally, the social grants payment in the South African context follows international law, such as the SDG 1, which was adopted by the UN, of which South Africa is a member state (Kaltenborn 2017:237).

Mitigation strategy of the adverse effects of unemployment

Ziliak (2020), Fitzpatrick et al. (2020), Raifman et al. (2021), Esobi et al. (2020) as well as Shao et al. (2022) are in concurrence that unemployment, especially as a result of COVID-19, triggered the development of social grants strategies in different countries. Ziliak (2020:132, 133) wrote that the job loss, which resulted from the COVID-19 pandemic, has an unprecedented impact even surpassing the Great Depression of the 1930s. In concurrence, Fitzpatrick (2020:1) asserted that by March 2020, 700, 000 jobs were reported lost by the United States Bureau of Labour Statistics. From the same school of thought, Raifman et al. (2021:2) affirmed that more than 54 million residents of the US, particularly low-income earners, lost their jobs. They further argue that the majority of social disparities persist and have been aggravated by the COVID-19 pandemic. Shao et al. (2022:1) argued that China has managed to overcome poverty and poor health conditions through the payments of social grants to the relevant segments of the Chinese population.

Closer to home in the South African context, 648 000 or 6.4% of South Africans lost their jobs in sectors that exclude agriculture, as a result of COVID-19 (Statistics South Africa, Quarterly Employment Statistics 2020:5). Furthermore, Free State region was reported as the most severely affected region with a total of 42 000 or 5.7% job losses (Statistics South Africa, Quarterly Labour Force Survey 2021:6).

Food security for the vulnerable members of the society

Nhlangulela (2021), Sakala et al. (2022) and Chagunda (2022) are of the same view that food security is a critically important issue in several countries globally, including South Africa, which is mitigated by the provision of social grants. In a study at Ubuhlebezwe Local Municipality in KwaZulu-Natal, Nhlangulela (2021:41–43) found that the social grant money received from SASSA by the social grant beneficiaries was mainly used in the acquisition of food to provide nutrition for their families. According to Sakala et al. (2022:3–10) in the Zambian context, the social protection programme that was inherited from the colonial era, where it was known as the PWAS, assists in food security thereby reducing extreme poverty in Zambia. The PWAS, in kind transfers, enables the residents living in poverty and focusses on providing food to distressed families (Sakala et al. 2022:3–10). Concurring with the previous author (Sakala et al. 2022), Chagunda (2022:14243) posits that in South Africa, 8 out of 10 families went to bed on empty stomachs and families experiencing distress were included in the feeding scheme, offered psychological counselling and given humanitarian grants. Through the SASSA, beneficiaries were issued vouchers and food parcels. Finally, families facing hardship were given humanitarian or financial grants (Chagunda 2022:14243).

Social benefits

The studies by Hlasny (2023), Patel et al. (2023), and Nhlangulela (2021), as well as Kino et al. (2022), revealed that the social grants positively impact the social aspects of the grant beneficiaries’ lives. Hlasny (2023:175) wrote that the economic instability and the recent economic contractions in the Arab region, including Egypt, have maximised the coverage of social grants to include a greater portion of their populations. Arab countries have also applied more sophisticated targeting methods, such as proxy means tests and the social database of the present, as well as prospective beneficiaries for identifying beneficiaries. This coverage accrued positive social benefits to the beneficiaries (Hlasny 2023).

Sharing the viewpoint with Hlasny (2023), Patel et al. (2023:2) wrote that before the advent of the COVID-19 pandemic (between 2018 and 2019), there were 17.8 million recipients of social grants in South Africa, resulting in the positive impact on the social standing of the beneficiaries. The volumes surged by 47% in 2022. In agreement with this, Nhlangulela (2021:41–43) concluded that women were uplifted by social grants, which helped them upgrade their social status. This in return granted them financial independence, which served as a powerful alternative to the submissive and abusive relationships they endured (Nhlangulela 2021). In alignment with all the aforementioned contributions (Hlasny 2023; Nhlangulela 2021; Patel et al. 2023) from a somewhat different angle, the study carried out in Japan by Kino et al. (2022:873) discovered that the payment of social grants to the beneficiaries improved their health conditions and different aspects of their social life.

Economic benefits

Esobi et al. (2020), as well as Sakala et al. (2022), agree that the social grants programme has a positive economic impact on the beneficiaries’ lives. Esobi et al. (2020:9) wrote that in 2020, CARES in the US, which was approved by law on 27 March 2020, was allocated a total of $15bn, while $8bn was allocated to SNAP to provide economic assistance to the beneficiaries. In concurrence, Sakala et al. (2022:3–10) wrote that in Eswatini, the public grants catered for a total 65 000 beneficiaries at the individual cost of US$78.53 per quarter and in 2016, the social protection allocation attributed to 98% of the total budget. In South Africa, the Finance Minister Godongwana (2023:16) reported in the 2023 budget speech that the DSD was allocated R66bn, including R36bn for COVID-19 social relief extension ending on 31 March 2024.

While in agreement with all the previous authors (Esobi et al. 2020; Sakala et al. 2022), Hlasny (2023:183) further argues that governments should devise strategies to make social grants more sustainable. The strategies should include long-term investment in human capital (particularly training), which would help the households to gradually transition out of poverty (Hlasny 2023).

Challenges around social grants

Notwithstanding the myriad of benefits associated with social grants documented in the preceding section (see ‘Importance of social grants’ section), as to be expected, there are also challenges associated with the payments of social grants. From different schools of thought, it appears that there is consensus from different authors, such as Vonk and Olivier (2019), Shao et al. (2022), Waterhouse and Bennett (2023), African Union and the UNDP (2019), Chagunda (2022), Megannon (2022), Sakala et al. (2022), Zindi and Shava (2022), Megannon (2022), Nhlangulela (2021) as well as Gronbach (2021), regarding the challenges associated with social grants, which include reluctance to acknowledge social grants as a right, domestic violence, technological barriers, long waiting queues, men’s insecurity and domestic violence, limited access to information, dependency on social grants, weak institutions and corruption.

Relevant theory

The underpinning theoretical foundation for the study was the Systems Thinking Theory. According to Ackoff (2015), the core tenet of the Systems Thinking Theory is that the systems and components of the organisation depend on one another to enable it to function efficiently to attain the desired outcomes. Oosthuizen and Manzini (2022), Magudza and Marcus (2019) as well as Cabrera and Cabrera (2019), highlighted the significance of the systems thinking approach in solving complex problems of both private and public sector organisations.

According to Oosthuizen and Manzini (2022:263, 270–271), the systems thinking approach is ideal for interpreting complex, interlinked and socio-technical problems facing organisations. They found that the theory contributes towards organisational learning in understanding the interrelationships among the constituents, whose collective characteristics define the whole system of the organisation. Furthermore, they argued that the exchange of information between internal and external parts of the organisation, as well as the alignment of all the components of the entire system, enable organisations to overcome complexities by combatting the learning obstacle, which is regarded as the driving force for a contemporary digital economy.

Mugadza and Marcus (2019, 7–8) emphasised the complementary and interconnectedness of the core principles of the Systems Thinking Theory. They also reported that the core principles embrace a holistic approach to problem-solving in organisations, incorporating an inclusive stakeholder approach. For Cabrera and Cabrera (2019:26), the systems of organisations are complex, affecting multiple dimensions including politics, economy, society and environment, and are expected to expand with technological, communication and global growth in ensuring the notion of interconnectedness of the whole system.

In this study’s context, the System Thinking Theory will demonstrate the influence of business development services on social grant payments. The provision of social grants involves different processes and functions, which include business support services. These are interrelated and require a holistic approach to problem-solving in organisations, which expects an inclusive stakeholder approach. Relying on the aforementioned principles of the System Thinking Theory, it is evident that a failure in one process or function in the value chain of the provision of social grants to the beneficiaries, whether support or core services, leads to the failure of the whole system.

Impact of business support services on the payment of social grants

The impact of business support services on social grant payment is at the study’s core. It appears that there is an agreement among different management scholars, such as Cronbach, Seekings and Megannon (2022), Fanta et al. (2020) as well as Megannon (2022), on the positive effect of business support services on the social grants payment.

Gronbach et al. (2022:54–55) wrote that during the pandemic induced national lockdown, the technological solutions, coupled with existing databases, proved to be a breakthrough in terms of the 14 million successful applications of the COVID-19 SRD grant. In accordance with Gronbach et al. (2022), Fanta et al. (2020:89) argued that the SASSA MasterCard, through which the beneficiaries receive their grants, accords them access to global financial inclusion. In concurrence with previous contributions (Fanta et al. 2020; Gronbach et al. 2022), Megannon (2022:20–22) stated that during the COVID-19 period, social grant applicants were motivated by the ease of information sharing, which led to huge volumes of successful grants applications and payments.

Continuing from the same line of thinking from all the sources covered in this section, but from a somewhat different angle, the Public Sector Accountancy and Audit Academy (PSAAA 2023:9) posits that the potential impact of unreliable digitised solutions results in a myriad of service delivery challenges and non-attainment of service conveyance outcomes at the right place, right time and in a cost effective manner. According to PSAAA (2023), the following are examples of the potential impact of unreliable business support services, such as information technology (IT), on performance outcomes of the state organs:

• Security breaches, which can lead to theft, financial fraud, damage to brand and reputation
• Downtime and outages, which may result in reduced performance and adverse consequences to service delivery beneficiaries, such as reduced customer satisfaction, damaged relationships with key stakeholders and reduced staff or business continuity
• Non-compliance with the law and regulations, which leads to dishonesty in legal duties, dishonesty in client confidentiality, reputational damage and lawsuit.

Despite what appears to be an agreement by scholars cited, thus far on the notion that business support services have a positive influence on the payment of social grants, authors, such as Paterson, Harpham and Kielmann (2012), Gibbs et al. (2018) mention certain downsides to the relationship. Gronbach et al. (2022:54–55) and Megannon (2022:20–22) reported that access to web-based grant applications has always been a critical challenge to rural communities because of a lack of digital literacy, internet connectivity, a lack of identification documents, long and costly distance travelled to post offices for enquiries, no access to web-based devices, such as smartphones and non-existence of mobile money in South Africa, which leads to travelling of the grants beneficiaries to the post offices for cash payments. Paterson et al. (2012:970) and Gibbs et al. (2018:1829) assert that the root cause of problems around access to web-based grant applications are attributable to historical challenges of the rural inhabitants such as lack of digital literacy, internet connectivity.

As mentioned in preceding sections, in the context of the Free State region, there is no empirical investigation, which was conducted to establish the influence of the business development services on the social grants payment. Based on the literature assessment, the following hypotheses were developed:

• H1: Reliable business support services have a positive impact on the social grants payment at the right place, at the right time and in a cost effective manner.
• H2: Unreliable business support services hurt the payment of social grants, which fails to pay them on time, at the right place and in a cost effective manner.

Research methods and design

Research design

Jacobs and Cornelius (2022:110) wrote that the degree of the quality of a research outcome is influenced by the level and completeness of the research design. Stemming from its post-positivist philosophical foundations, the quantitative research design was used. The descriptive survey research design was adopted for this investigation because it led to the attainment of the study objectives. Furthermore, the survey design is also suitable for this study because of its ability to gather high quantities of data from the participants in an economical and fast manner (Saunders et al. 2009 as cited in Gasela 2022:6). The adopted survey design assisted the researcher to investigate the attitudes, opinions and behaviours of the study respondents objectively, in the areas of interest (Gasela 2018:113).

Research methodology

Data collection and analysis

Population and sample: According to Hujo, Behrendt and McKinnon (2017:5), social grant payment officials are process owners within the social grant ecosystem, who have the responsibility to respond to the different needs of social grant applicants and beneficiaries. The target total population of the investigation consists of 301 grant payment officials in 24 SASSA local offices, in the Free State region. The SASSA Free State Information and Communication Technology (ICT) Department report (2023) is a sampling frame as it lists all the 301 grant payment officials in all the 24 SASSA local offices in the Free State province. In line with the contributions of Hujo et al. (2017), the grant payment officials were chosen as the study participants because they are the consumers of business support services, process owners, who are responsible for implementing the business support services and are also responsible for the social grants payment to the social grant beneficiaries. Furthermore, the payment grant officials are in the coalface of service delivery, as they interact directly with the social grant beneficiaries and applicants.

Probability systematic sampling techniques were used in the study. According to Diamantopoulos and Schlegelmilch (2000:15) as well as Leedy and Ormrod (2010:210), systematic sampling techniques refer to a predetermined selection method, whereby sample members are selected at regular intervals. The systematic sampling techniques use a sampling interval or integer, which is computed as a ratio of N/n, where N represents the target total population for the study and n represents the desired sample size (Leedy & Ormrod 2010). The sample size calculator was used to compute a desired probable systematic sample of 170 participants from a target total population of 301 payment grant officials, with a confidence interval of 95% and a margin of error of 5%. According to Diamantopoulos and Schlegelmilch (2000), to maintain the reliability and validity of the study, a good desired probable systematic sample is selected. To compute the sampling interval, for the desired sample of 170, an integer of 1.77 will be used in the aforesaid sampling frame, after a random start. The aforesaid integer of 1.77 is calculated as follows:

Target total population: 301

Desired sample size: 170

Therefore, an integer = 1.77

Data collection: A self-administered questionnaire was emailed to the respondents of the investigation to collect data. The survey questions were drawn up after an all-inclusive literature examination was undertaken and completed. A five point Likert scale was used in the formulated assessment questions.

Data analysis: Statistical Package for Social Scientists (SPSS) Version 27 was used in the data analysis. Descriptive and inferential statistical analysis were performed, using the multiple regression model.

Ethical considerations

Piloting testing of the questionnaire was undertaken to ensure the validity and reliability of the study. An approval to undertake the investigation was obtained from the Faculty of Economic and Management Sciences Ethics Committee of University of Free State for ethical clearance (Ref. no.: UFS-HSD2024/0323). The approval letter to carry out the research was obtained from the Regional Executive Manager, who is responsible for SASSA in the Free State province. Respondents signed a written informed consent form for voluntary participation. Other SASSA documents, which were required for this study, such as strategic plans, annual performance plans or business plans, audit reports issued by SASSA external auditors (Auditor General of South Africa), Medium Term Strategic Framework (MTSF), Medium Term Expenditure Framework and so forth, are publicly available and published in the SASSA website, which is linked to the other government sites. No permission was, therefore, required for the aforesaid documents, which are published on public websites.

Findings and managerial implications

This section consists of two parts. Part 1 presents results of descriptive analysis, whereas, Part 2 presents the results of inferential analysis.

Part 1: Descriptive analysis

All 170 questionnaires were completed and returned, which resulted in a 100% response rate.

Key concepts and constructs

In this investigation, the items of the study variables or constructs were measured on a 5-point gauge, where 1 = strongly agree and 5 = strongly disagree. Table 2 presents the frequency distributions, mean scores of the variables that were measured, the independent t-test results, testing the null hypothesis that the mean score is equal to 3. Some of the mean scores were below, and others were equal to 3 or above 3, which implies that either the respondents generally agreed, neutral or disagreed with the statements

t-test

The t distribution was used to equate the mean marks on the Likert scale with the undecided or neutral mark of 3, which was the centre between disagree and agree by executing the one-sample t-test (Equation 1):

where is the mean mark, µ is the presumed mean value (in this case, it equals to 3), S is the standard deviation (SD) of the scores, Xi’s (where i = 1, 2, … 30) and n is the sample size.

As mentioned earlier, this was performed by testing the null supposition that the calculated (or assumed) mean score for a particular question was equal to 3 (i.e. meaning that the respondents were undecided on the statement or question). If the difference between the two values, that is, the calculated mean score and the assumed mean score of 3, was statistically substantial from zero, and offered the mean score calculated from the data was less than 3, then this would provide scientific proof that respondents agreed with the statement. If the difference was not substantial, it would imply that they were undecided or neutral. On the other hand, if the difference was significant and the mean score was more than 3 then it would mean that the respondents disagreed with the statement. The level of significance used was 0.05 (Gasela 2018). As an example, for statement 1 (Reliable business support services have a positive influence on the social grants payment at the right place) of the construct of the effect of Business Development Services on the Payment of Social Grants in the Free State, the computed mean mark for the respondents was 1.538 (SD = 0.606), which was less than 3 (and t = −31.529, p = 0.000 < 0.01). This means that the correspondents rejected the null premise that the mean score was 3. Because the mean mark was less than 3, this tells us that they agreed with the statement. Figure 2 displays the mean marks of the variables or the different statements and Table 2 also displays the mean scores as well as the t test results. The figure displays that all the mean marks were below 3. As already indicated, Table 2 displays that the null premise that the mean mark is equal to 3 was rejected for all of them.

FIGURE 2: The impact of business support services on the payment of social grants.

Reliable business support services result in a positive influence on the social grants payment at the right place, at the right time, and in a cost effective manner. Unreliable business support services expose SASSA to the risks of stealing, monetary fraud, harm to the brand, harm to the reputation, reduced customer satisfaction from grant beneficiaries, reduced customer satisfaction from grant applicants, damaged relationships with key stakeholders, non-compliance with the law as well as the risk of non-compliance with regulations.

Because of the fact that the service providers of the outsourced business support services have little control on their service offerings, SASSA is exposed to the risk of deception in the social grants payment, and the risk of bribery in the social grants payment.

In addition, in order to ensure accountability, there are clear communication channels between the service providers of the outsourced business support services and SASSA grant payment officials. There is also an alignment between outsourced and insourced business support services at SASSA, which results in a positive impact on the social grants payment to the beneficiaries.

An understanding of the examination’s primary findings suggests that the investigation objectives were satisfied. It was found that of all statements that were put to the respondents, it was only statement role34s (The level of service, which is rendered by the outsourced IT business support, is so poor that it has an adverse impact on the payment of social grants at SASSA), which was disagreed; otherwise, the respondents agreed will all the other statements.

The business support services that enable and support the delivery of the core mandate of public sector organisations

For this study, business support services were defined as IT services and technical support including: SASSA Call Centre, Internal Call Centre for vendors, Desktops and laptops supply and support, Network cabling, Printing and scanning, Desktops and laptops supply and support, Printing, scanning and hardware repairs, Access to SASSA Core Applications, Printing and scanning, Data and voice networks. There is potentially a positive impression of business development services on social grant payment of social grants.

The importance of business support services for the payment of social grants

It was found that business support services (e.g. commercial training, network, consultancy and advisory services, assistance in marketing, training and consultancy, business advisory, technological advancement and outsourced administrative services) increase productivity, enhance business development, maximise profit, increase or maximise organisational performance and service delivery, help enterprises to grow and improve sales, and increase the shareholder’s wealth (Hakizimana et al. 2023:19; Kanayo et al. 2023:14; Lwesya et al. 2021; Ndala & Pelser 2019:11; Nyangweso & Wambua 2019; Nyadida 2021). Business support services seem to help organisations accrue some benefits in the service delivery of the core mandate.

The impact of business support services on the payment of social grants

Reliable business support services result in an optimistic impression on the social grants payment at the right place, at the right time, and in a cost-effective manner. Unreliable business support services expose SASSA to the risks of theft, financial fraud, damage to the brand, damage to the reputation, reduced customer satisfaction from grant beneficiaries, reduced customer satisfaction from grant applicants, damaged relationships with key stakeholders, non-compliance with the law as well as the risk of non-compliance with regulations.

A lack of control on service offerings exposes SASSA to the risk of fraud in the social grants payment, and the risk of corruption in the payment of social grants. There are clear communication channels between the service providers of the outsourced business support services and SASSA grant payment officials and there is also an alignment between outsourced and insourced business support services at SASSA, which results in a positive impact on the social grants payment to the beneficiaries.

Part 2: Inferential analysis

For the inferential statistical analysis, regression analysis was performed as follows.

Multiple regression analysis

Regression analysis helps us to understand how a value of the dependent variable varies when any one of the autonomous variables is altered, while the other independent variables are kept constant. Regression analysis is widely used for modelling the data generating process, prediction or forecast and to understand which among the autonomous variables are linked to the non-autonomous variable, and to explore the forms of these links (Kachunda 2023).

In the multiple regression model, there are p autonomous variables (Equation 2):

where x_ij is the i^th inspection on the j^th autonomous variable.

When a regression model has been fitted, it may be imperative to confirm the goodness of fit of the model by calculating the R-square and the statistical importance of the probable parameters. Statistical importance can be checked by an F-test of the overall fit using the analysis of variance (ANOVA) table, followed by t-tests of individual parameters (Kachunda 2023).

For inferential analysis, regression analysis was used. The simple linear regression model can be written as (Equation 3):

where x is a non-arbitrary variable and e is an arbitrary error distributed with mean zero and variance σ². In this case, Y represents the dependent variable, which is the Impact of Business Development Services on the Social Grants Payment in the Free State and x represents the moderating variables namely, the Role of the Fourth Industrial Revolution (4IR), the Role of Service Management, the Role of Leadership, and the Role of Service Quality.

In this investigation, a regression model was used to recognise the bearing of regulating variables such as the leadership, the 4IR, service management and service quality on the relationship between business support services and the payment of social grants in the Free State. The outcomes are displayed in Table 3: The Adjusted R-square was 0.184, which implies that the model clarifies 18.4% of the disparity of the dependent variable. It is shown that 4IR (coefficient of variation [Coeff.] = 0.333, probability [Prob.] = 0.000 < 0.01) and Leadership Coeff. = −0.273, Prob. = 0.001 < 0.01) are significant. These moderating variables are impacting the relationship between business support services and the social grants payment in the Free State; such that they positively influence this relation. This implies that Leadership and the 4IR are playing a critically crucial role in the relationship between business development services and the social grants payment.

Recommendations

Because of its nature, certain processes of the payments of social grants value chain are susceptible to the inherent risk of fraud and corruption. Management as the first level of defence in any organisation should therefore design various internal control measures around the business support services to ensure that the payment of social grants is at the right place, right time, in a cost-effective manner, and to mitigate the fraud and corruption risks. The process owners in the payments of social grants value chain, as a key subset of the first level of defence, should implement aforesaid internal control measures.

The second line defence such as risk management, quality assurance and so forth should assist management in the mitigation strategies of the identified inherent strategic and operational risks associated with business support services for the payment of social grants. Finally, the third line of defence such as internal audit activity should assist management through their assurance and consulting roles in meeting their objective of ensuring that the payment of social grants is at the right place, right time and in a cost-effective manner.

Management and process owners should implement improvement recommendations stemming from the assurance and engagement roles from the third level of defence. Governance structures such as the Audit Committees, Risk Management Committees should provide oversight roles in the design and implementation of risk management and internal controls associated with business support services for the payment of social grants.

Further research

The quantitative methodology that was used in this study lacks detailed information and based on the value of answers to the survey, the outcomes may not be illustrative of the populace’s view.

To offset the confines, further studies may integrate a qualitative method where interviews with the officials of SASSA may be conducted to solicit more in-depth insights. The constraint of surveys is that they do not allow the investigator to ask further inquisitive questions (Saunders, Lewis & Thornhill 2016).

Conclusion

Business support services are defined as internal or outsourced contracted services that reinforce the organisational core services for value core creation cost-effectively, at the right time and right place. These include IT services and technical support. Business support services positively impact business performance and service delivery in organisations; they help organisations accrue some benefits in the service delivery of the core mandate.

Acknowledgements

The co-author S.S.M. would like to extend his gratitude to his supervisor and promoter at the University of the Free State, Dr Moses Gasela, for his unwavering leadership, coaching, support and inspiration throughout the research journey of the Master’s degree programme. Furthermore the co-author acknowledges the following persons: Matlhalefo (his wife) an inspiration throughout his tough academic journey; Letlatsa and Tlhalefo (his sons) for contributing to his happiness during the journey; the Senior Officer: University of the Free State Business School, Elvira Oberholzer, for her usual support and prompt response to his queries. This article is partially based on the author’s thesis entitled ‘The Impact of business support services on the payment of social grants in the Free State towards the degree of Master of Business Administration in the Department of Business School, Faculty of Economic and Management Sciences, University of the Free State, South Africa on 26 October 2024, with supervisor Dr. Moses Gasela.

The authors declare that they have no financial or personal relationships that may have inappropriately influenced them in writing this article.

S.S.M. and M.M.G. both contributed to conceptualisation, methodology, formal analysis, investigation, writing the original draft, visualisation, project administrations, software, validation, data curation, resources, writing, review and editing. M.M.G. also contributed to supervision.

This research received no specific grant from any funding agency in the public, commercial or not-for-profit sectors.

Data sharing is not applicable to this work as no new data were created or analysed for the research.

The views and opinions expressed in this article are those of the authors and are the product of professional research. The article does not necessarily reflect the official policy or position of any affiliated institution, funder, agency or that of the publisher. The authors are responsible for this article’s results, findings and content.

References