Gigaba raids public purse for SAA
The DA is disappointed, but not surprised, that the Finance Minister, Malusi Gigaba, and the entire Executive resorted to once again raiding the National Revenue Fund of at least R3 billion to settle part of South African Airway's (SAA) debt.
This brings the SAA bailout for the year to R5.2 billion.
Whilst the latest lifeboat will keep the wolves at bay, it will not deal decisively with the funding crisis at SAA, as the airline is currently incurring R350 million in losses every month.
Today’s post Cabinet statement was dead silent on the airline and mentioned no solutions to the crisis.
With this surprise announcement by Gigaba, he must urgently come clean on how Cabinet proposes to deal decisively with SAA’s funding crisis and what eleventh hour agreements were reached with the banks to roll over their loans to the airline including:
- The total amount transferred to the airline in terms of Section 16 of the PFMA;
- The amounts loaned by each bank;
- When each loan matures;
- Each loan’s interest rate and the interest rates before tomorrow;
- Whether the banks assessed a higher risk of the extended or new loans; and
- What additional conditions were imposed by each bank.
Given the continued uncertainty over the airline’s ability to repay the loans, the banks would have required onerous conditions to be met by the airline and the ANC government.
Malusi Gigaba must take full responsibility for getting himself and South Africa into this mess by failing to be transparent and decisive over the issues plaguing the airline. This is further evidence of what the DA said only yesterday, when we wrote to the office of the Public Protector to request an investigation into Gigaba and Dudu Myeni's breach of section 195 of the Constitution.
Further ratings downgrades and an increased borrowing cost for SAA, the ANC government and State-Owned Entities are inevitable.
This massive and wasteful bailout will take even more money away from rescuing the economy for the 9.3 million unemployed South Africans.
Statement issued by Alf Lees MP, DA Shadow Deputy Minister of Finance, 29 September 2017
