TimesLIVE reports that Finance minister Tito Mboweni has declined to give the cash-strapped SA Broadcasting Corporation (SABC) a much-needed government guarantee in order for the public broadcaster to stay on air.
This was relayed to Communications Minister Stella Ndabeni-Abrahams in a two-page letter dated 25 June 2019. It has taken Mboweni and Ndabeni-Abrahams four months to reject the public broadcaster's loan guarantee application. Last week, Ndabeni-Abrahams told parliament that she was prepared to quit her job rather than give the SABC a loan guarantee while it did not have a solid turnaround strategy. The SABC owes suppliers about R1.9bn, while it struggles to continue paying salaries. Its buildings pose an occupational health and safety risk to employees after years of no maintenance due to a lack of money. SABC spokesperson Vuyo Mthembu could not confirm or deny whether the broadcaster's application had been declined. In his letter, Mboweni noted as follows: “The SABC has been struggling with declining profits as a result of underperforming revenues and a very high cost structure. The SABC’s cost structure is mainly driven by staff costs which constitute on average 40% of total expenditure.” He indicated that a financial analysis, as conducted, indicated that the SABC would invariably find itself in the exact same financial position within the forecast period of the financial model. “This to me indicates that there are fundamental problems with the business model of the entity which, if left unattended, will result in repeated bailouts,” he opined.
- Read the full original of Mpumzi Zuzile’s report on the above story at TimesLIVE
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