National Lottery: Where has all the money really gone?

Established in March 2000, the National Lottery was founded as a social development initiative to make an impact by contributing to various charities, non-profit organisations, and education and feeding schemes.

Since its inception 20 years ago, the National Lottery has been giving hope to millions of South Africans every week. Regulated by the National Lottery Commission (NLC), the Lottery sells an average of five million tickets per week generating over R5 billion in tickets every year.

If you wanted to know where your hard-earned money was going, the once-transparent National Lotteries Commission (NLC) published the names of the organisations receiving grant money on an annual basis. That was until 2018 until such publishing abruptly stopped with the excuse that it was to “protect its beneficiaries”.

So, where has all the lottery money gone?  

In 2019, freelance journalist Raymond Joseph and news outlet GroundUp began an investigation into the Commission to find out how the money was being distributed and published a series of explosive and damning reports alleging that hundreds of millions of rands’ worth of grant funding had been mismanaged and inappropriately distributed.

The investigation discovered that the National Lotteries Commission has paid out millions of rands in grants to organisations involved in controversial, incomplete lottery-funded projects, many of which are still ‘under construction’ or have ground to a halt due running out of money.

It is not known whether any of these organisations received additional funding post-2018 as the NLC now refuses to publish a list of lottery-funded grantees. They argue that National Lotteries Act legislation prevents them from releasing the list of beneficiaries.

Dodgy projects

Some of the dicey projects investigated by GroundUp include a boxing arena in Storms River being built by Gauteng-based NPO, Nunnovation Africa Foundation. The foundation received a grant of R23,720,000 on 13 July 2017 and the project is “still under construction”.  

Construction companies Dinosys and Zibsifusion were set to replace pit toilets at schools in Limpopo and the Eastern Cape with Enviro Loo toilet systems and were granted R20 million late in 2018. As of April 2020, the Enviro Loo toilet systems have still not yet been delivered.

The Sanctuary Drug Rehabilitation Centre in Kuruman in the Northern Cape received grants totalling R17 million in 2017 and on a visit to the construction site in 2019, GroundUp found a few half-completed buildings and no sign of building activity.

Response from the National Lotteries Commission

The National Lotteries Commission launched an independent investigation into the serious allegations of maladministration, fraud, and corruption within the entity in early February 2020. The commission, however, has refused to reveal the details of what the investigation is probing.

Head of Marketing and Communications, Ndivhuho Mafela states that “the NLC is engaged in processes that are dealing with the matter and we are unable to comment any further than the statement and open letter issued by the board.”

As the layers of the scandal begin to peel off, there is much debate over whether the lottery funds are reaching deserving organisations, and the DA is taking the NLC to court to force a release of a list of its beneficiaries.

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