SABC in dire straits as debt spirals to R700m

The SABC’s financial position has become so dire that it could soon fail to pay salaries and service providers, parliament heard on Tuesday.

The public broadcaster owes its creditors close to R700m, and according to its own projections it will only have R26m at its disposal by the end of August. This has raised concern about whether the SABC will be able to meet its financial obligations in the near future, including delivering on its mandate to cover events of national interest.

In July, the SABC failed to pay some of its service providers and producers.

The broadcaster is still negotiating with the Treasury in a bid to secure a R3bn government guarantee to keep it afloat.

The SABC spends about R8bn a year on the salaries of more than 3,000 employees. In the most recent SABC annual report tabled in parliament in late 2017, auditor-general Kimi Makwetu warned about the SABC’s going-concern status, noting the broadcaster was commercially insolvent.

On Tuesday, the board and executives appeared before parliament’s communications portfolio committee to brief MPs about the SABC’s financial troubles and turnaround strategy.

Yolande van Biljon, the recently appointed CFO, painted a sorry picture of the organisation’s financial state.

“The SABC’s current financial situation is dismal, with only most critical payments made on a monthly basis. [We are in] danger of not being able to continue to deliver on [our] mandate and legislative charter.”

She detailed how the broadcaster was trying to manage its cash flow challenges.

“Staff and freelancer salaries are paid first, with content providers being second highest priority. Payment arrangements [have been] made with remaining suppliers, service providers and creditors. At end July the situation worsened and content providers did not get paid.”

Van Biljon said the SABC was receiving “an increased number of letters of demand and notices of breach of contract daily”.