Creating monopolies, charging
exorbitant fees and making money out of desperate people is never shrewd scrupulous
business practice. I sometimes run against the tide or do I resuscitate it? We
have all we want here and do not travel a lot but that should never be a reason
to pinch from our visitors. It is unuBuntu like. Traditions gone to the dogs!
Well, I am not saying investors should not make money but how they make it should
be just and reasonable. Our policies and social services fees should have a
human and social face. With all due respect, we know without doubt that frugal engineering
in ecommerce, particularly egovernment, does not increase costs. If anything,
it reduces the cost to zero.
In South Africa, VFS occupy a
space that had debilitating apache reminiscence for foreign nationals living in
the country. The visa service delivery by the department of home affairs (DHA) was
and is to a great extent pathetic. DHA officers were casual and lethargic in serving
the public, information asymmetry and disinformation was rampant all bent on
confusing the applicants in order to create lucrative breeding ground for
corruption. DHA offices were characterized with unending long queues and
prowling scamsters.
The introduction of an Internet
based self-service visa application platform by VFS mid this year to circumvent
queuing was a welcome development. The platform give applicants, at most, full
control of the initial application process. It is convenient and quite a
civilized service delivery channel for a country so expansive. It aids
planning, time management and reduces unnecessary loss of productive time while
waiting in queues.
Apart from the above positives
and other downstream benefits for increased use of Internet cafés and banking
fees, the VFS business model in South Africa is a total rip-off of poor migrants.
For once the system did not remove the paper based application system. After
applying online one needs to print the completed application form, attach all
required paper based documents, make an appointment for an interview with immigration
officers where upon biometric details are collected, and paper application form
and attached documents are submitted. The system is still entirely paper based
with no internal fallback capabilities if attached supporting documents are
misplaced or lost.
Once the application document is
submitted to DHA, VFS loses control of the time to application outcome. In fact,
it is relegated to a non-interactive document movement tracker a function that was
available on the DHA website albeit with poor back office service. Moreso some
performance targets are not specific, for example, permanent residence permit applications
take anything from an uncapped minimum of eight (8) months. If the first
interview was thorough enough to screen ineligible applications the
adjudication process would be timely. The fact that this is a money spinning
project means thoroughness at the point of application (purchase) will reduce
revenue. This is the reason we see a recycling of rejected applications.
There is no doubt that VFS added
a pinch of value to the visa application process. However, the value they
brought to the table is disproportionate to the whooping melodramatic 89%
increase in the average cost of visa service fees. The rand is not a paper
currency, it is a solid convertible hard
currency. This is authorized inflation and day light profiteering which
unnecessarily increases the cost of doing business in South Africa and making
travel an unreachable luxury. Whatever the investment the company made does not
justify the exorbitant additional fees they charge. To put the rip-off into
perspective, imagine the 250 000 Zimbabweans renewing permits each paying
R870 (R420 for DHA, R380 for VFS and R70 for biometric services). Whilst this maybe
an outlier, the fact is that VFS will effortlessly receive R95million just this
October and November a big feat enough to resuscitate the ailing post office
and save jobs from the looming retrenchments had enough foresight been applied
in the tendering process. A public private partnership (PPP) would have been
the most ideal vehicle to ensure eventual transfer of technology, creation and
saving of jobs. As it is, VFS has created a monopoly that has eliminated all
visa facilitation companies and killed employment. It is uncommon for governments
to resuscitate post offices by assigning them expanded government services like
home affairs and travel functions.
It is incontestable that VFS
offers a turnkey solution replicated with minor changes for all the countries
it serves. It is undeniable that the countries use shared cloud based
databases. The cost savings that result from such a frugal innovation does not
warrant the fees that VFS charges. Pursuant to that, it would be national
interest to know VFS’s cost structure to at least justify its charges and how
it is investing its windfall to prove any benefit to the country.
If egovernment is going to create
reckless monopolies with negative externalities of this magnitude, then we must
go back to the drawing board. The real sustainable value of this service delivery
channel is in reducing both the cost, processing and decision time. Surely to
charge 89% more fees on a basic service which also shifted the cost of data
capturing and printing to applicants while processing and decision time
remained constant is an insult to civilized pricing models. On top of that VFS
may profit from free biometric and personal details captured by the system.
Either DHA or VFS or both should
take a significant cut of their charges to reflect electronic commerce, self-service
savings and long turnaround time. Alternatively, they have to invite other
players to party. In its current form, the service is in direct conflict to the
sustainability revolution underway.
The point is not about who is
served, it is about fair pricing, not a loot.
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