South Africa

Bail Out

Beleaguered SABC gets R2bn, more to come

Beleaguered SABC gets R2bn, more to come
Photo: Daily Maverick

After months of pleading with Treasury for a financial lifeline, the SABC will in days receive a R2.1-billion bailout, Communications Minister Stella Ndabeni-Abrahams announced on Friday. It's the first tranche of R3.2-billion for the public broadcaster, which has to prove it can turn its fate around.

Treasury will transfer R2.1-billion to the SABC on Monday after meeting five of eight preconditions set for the public broadcaster’s long-awaited bailout.

The R2.1-billion will be followed by another payment of R1.1-billion once the SABC meets all the requirements set by the Treasury and communications department, Communications and Digital Technologies Minister Stella Ndabeni-Abrahams announced on Friday in Tshwane.

In September, SABC CEO Madoda Mxakwe told the State Capture Commission that the organisation was technically insolvent and desperately needed the R3.2-billion it requested from Treasury after years of maladministration had led to financial chaos.

The SABC recorded a R482-million loss in 2018/19, said the annual report it tabled in Parliament this week. While the loss was lower than the previous year, fruitless and wasteful expenditure increased by 63% at the public broadcaster.

The five preconditions to the bailout the SABC fully met include: determining immediate cash requirements over 12-18 months; identifying revenue enhancement and cost-cutting options; investigating the cause of the financial collapse and the failure of past turnaround plans; providing an update on investigations into implicated employees; and, developing a turnaround plan to prevent further financial failure.

Based on the above-mentioned assessments, the two departments have worked together to facilitate the initial tranche of the R3.2-billion allocation to be transferred to the SABC. As such R2.1-billion will be transferred to the public broadcaster on Monday, 7 October 2019,” said Ndabeni-Abrahams.

The remaining balance of R1.1-billion will be transferred once the public broadcaster fully meets the remaining three outstanding conditions or firmly demonstrates evidence to fully comply.”

The SABC partially met two of the preconditions set to receive its bailout, including developing separate financial reporting for its public and commercial broadcasting services, and identifying non-core assets to sell.

The organisation was also required to develop a plan to collaborate with the private sector, which it failed to meet. Ndabeni-Abrahams said leaders had expressed willingness to complete the plan.

It’s in our interests as the department and the SABC to make sure that we immediately address those shortfalls so that the money can be immediately released,” said the minister.

Going forward and to ensure compliance with the funding conditions, SABC is expected to present its monthly financial status to the department of communications,” she added.

Finance Minister Tito Mboweni suggested in February that the SABC would receive a bailout, but the organisation had to wait months for approval, even after Ndabeni-Abrahams suggested it would be paid in July.

The minister said the finance and communications departments are currently reviewing the SABC’s turnaround strategy, which has been approved by the board. She wouldn’t provide any details of the strategy but said the organisation initially wanted R6.8-billion from government.

Treasury also made demands of the communications department before releasing funds to the SABC, which Ndabeni-Abrahams said had been met. A new board was appointed in April and work has begun on a policy and legislative review.

Work is also under way in appointing a chief reorganisation officer to the public broadcaster, with the department currently providing input on guidelines set by Treasury before it starts the process of filling the new role.

The SABC is expected to suggest either selling or merging some of its platforms but Ndabeni-Abrahams would not be drawn on which assets might be categorised as “non-core”.

They are the ones who will tell us based on the evaluation in terms of the contribution that those entities make under SABC,” she said, adding that the public broadcaster must decide which assets are financially viable and in-line with the SABC’s strategy for the future.

The SABC appointed Ian Plaatjes as chief operations officer (COO) on Wednesday. He will join the institution from the SA Bureau of Standards where he is chief digital officer.

The SABC filed court papers this week in an attempt to recoup almost R1-million from former COO Hlaudi Motsoeneng, blamed for much of the rot in the SABC, and his lawyer Zola Majavu. Motsoeneng is accused of using SABC funds to pay for his personal legal battles. DM


Please peer review 3 community comments before your comment can be posted


This article is free to read.

Sign up for free or sign in to continue reading.

Unlike our competitors, we don’t force you to pay to read the news but we do need your email address to make your experience better.

Nearly there! Create a password to finish signing up with us:

Please enter your password or get a sign in link if you’ve forgotten

Open Sesame! Thanks for signing up.

We would like our readers to start paying for Daily Maverick...

…but we are not going to force you to. Over 10 million users come to us each month for the news. We have not put it behind a paywall because the truth should not be a luxury.

Instead we ask our readers who can afford to contribute, even a small amount each month, to do so.

If you appreciate it and want to see us keep going then please consider contributing whatever you can.

Support Daily Maverick→
Payment options

Daily Maverick Elections Toolbox

Feeling powerless in politics?

Equip yourself with the tools you need for an informed decision this election. Get the Elections Toolbox with shareable party manifesto guide.