Staff Reporter
The Democratic Alliance’s shadow Minister of Communications, Phumzile van Damme, accused the Minister of Communications and Digital Technologies (DOCTG) , Stella Ndabeni-Abrahams, of “misleading Parliament” when she allegedly withheld a crucial letter purported to have been sent to her by Finance Minister, Tito Mboweni, on June 25, several days before Ndabeni-Abrahams appeared before the parliamentary Committee that exercises oversight on her department. Ndabeni-Abrahams met the committee on 3 July and made no mention of the letter.
“Misleading Parliament” has in the recent past been used effectively by opposition parties to put pressure on the governing party to remove culprits in the National executive who are found guilty of misleading Parliament.
Is Ndabeni-Abrahams guilty of this new “abomination”? HotNews spoke to various sources within the SABC, Treasury and the DOCDT, some of whom requested not to be named as they are not permitted to make public statements on the matter.
Sources within the SABC have conceded that the current leadership is not familiar with the technical requirements of applying for a government guarantee. A guarantee is an instrument used by State Owned Entities (SOEs) to secure funding from commercial banks outside of the normal budget allocation periods.
“Van Damme, just like the SABC, seems to have confused a government guarantee with a government bailout. The latter is an allocation of funds from the fiscus by Treasury as a cash injection to ease cashflow constraints”, said our source at Treasury.
The source continued: “The two instruments have totally different application processes and technical requirements. What the Minister of Finance has stated is that the SABC application falls short of the technical requirements for a government guarantee because it was packaged as an application for a bailout, something that the Ministry can only process during the specified legal periods”.
Our SABC source said that they did not view the response from Treasury as declining the broadcaster’s application but as part of the continuous engagement to ensure that the application meets the requisite technical requirements.
“There are ongoing engagements between us, our Shareholder and Treasury with numerous pieces of correspondence amongst the various role-players. We believe that it would have been wrong for the Shareholder to isolate and share one piece of correspondence with Parliament as if it was a final determination of the matter. We do believe that ultimately there will be an agreement with Treasury”, said our SABC source.
In official communication the SABC has shot down the suggestion that its turnaround strategy or the application for funding was not up to the required standard.
HotNews sought to establish whether or not the DOCDT had received the letter from Mboweni. The Ministry confirmed that a response to the SABC government guarantee application has been received from National Treasury. “The Minister is still engaging with National Treasury and further communication in this regard will be made upon engagement with all relevant stakeholders”, read a response to the HotNews enquiry.
Whilst all of this is playing itself out behind the scenes, insiders at SABC have spoken of the “dark cloud of Day Zero hovering above Auckland Park”, in reference to the day that there is a broadcast blackout due to the national broadcaster being unable to carry on with its operations. HotNews posed some direct questions to the Ministry in this regard.
HN: The SABC is experiecing a financial quagmire that may affect its broadcast mandate and other operations, including salaries for even this month. Does the Minister, as the shareholder, have a plan for immediate financial injection? DOCTG: Government funding for Departments and SOEs is regulated in terms of the Public Finance Management Act, which specifies the “windows” when such funding may be made available. Outside of these statutory openings, reliance is made on borrowings by SOEs from commercial lenders either as bridging interim funding or as long term funding. As things stand, an attempt is currently being made to support the SABC to raise funding from commercial lenders until such time that government is legally able to inject any funding to the public broadcaster. The Minister has continuously communicated government efforts to support the SABC in order to allay the concerns of all the stakeholders of the SABC, including the employees. SABC management have provided assurance that it is doing all possible not to dishonour its obligations to its employees.
HN: What plans does the Minister have to ensure that the SABC is sustainable and has enough cashflow moving forward? DOCDT: The responsibility to ensure business and financial sustainability of any SOE rests with its Board and Management, with due support from government as a shareholder. Government’s support to the SABC at this stage includes technical advisory services to develop a turnaround strategy as well as supporting efforts to raise interim funding to meet the current and pressing requirements.
HN: What is the viability of a bailout in view of the fiscal constraints that government is generally faced with during this tough economic period which has even recorded negative growth? DOCDT: It is neither advisable nor prudent for government to, without due diligence, provide bailouts to SOEs who must otherwise be trading in a commercially sustainable manner. However, there are cases relating to public mandate responsibility which render themselves as items for consideration for government bailout. This is always undertaken with a high level of circumspection given the constraints on the fiscus to continuously support ailing SOEs, including the SABC. Hence the need for a robust turnaround strategy which government is assisting SABC to develop.
HN: What is the plan to ensure that corporate governance and executive leadership in charge of the SABC is held to account and ensure a sustainable future for the broadcaster? DOCDT: Corporate governance and executive accountability is the cornerstone for responsible service delivery and management of public funds. As a result, formal contracting for performance will take place between the Minister and the Boards of SOEs, including the SABC – and in turn, the Boards will contract with executive management for such performance.
