Ramaphosa: there is no plan to sell SAA
President sides with Gordhan and rejects finance minister’s contention that airline should be shut
President Cyril Ramaphosa has sided with public enterprises minister Pravin Gordhan on the future of SAA, rejecting finance minister Tito Mboweni’s contention that it should rather be cut loose.
Just a day after Gordhan signalled that his preference was to nurse the airline back to health, Ramaphosa told parliament on Tuesday that closing it down would destabilise other state-owned entities (SOEs) and the broader economy.
The national carrier has amassed about R18bn of losses since the 2015 financial year and is seeking about R22bn in government bailouts over the next three years.
Answering questions in the National Assembly — in a session that descended into chaos, with EFF and DA MPs almost coming to blows — Ramaphosa said the country would not get value if it tried to sell the debtladen airline, which needed to repay or reschedule about R14bn of debt by March.
Improving financial performance and governance at SOEs has been central to Ramaphosa’s agenda since he replaced Jacob Zuma in February.
Ratings agencies have cited the companies, which carry debts of about R670bn, among the major risks to the sustainability of the nation’s finances.
“You would have to pay someone to take SAA out of your hands,” Ramaphosa said.
‘‘If we say ‘shut it down’ it means that the debt SAA carries becomes payable immediately” and that could have implications for other SOEs and could lead to their collapse, he said.
TAXPAYER MONEY
SAA has recorded losses for about a decade and lost another R5.6bn in the 2017/18 fiscal year, prompting questions as to how long the government should continue throwing taxpayer money at it, given the country’s other development challenges.
Ramaphosa’s comments and those of ANC secretary-general Ace Magashule earlier in the day represented a rebuke to Mboweni, who returned to government in October for the first time since 1998.
A user of social media to air sometimes controversial opinions on policy matters during his time in the political wilderness, the outspoken finance minister may have to curb his instincts and fall in line with government and party discipline.
Ramaphosa said the government had little choice but to try to stabilise the airline, echoing Gordhan’s address to SAA staff the day before. “One of the options is that we get a strategic equity partner. Rather than shut it down, that is one option we are looking at,” Ramaphosa said.
DA MP Alf Lees said it was clear that there were divisions in the ANC government on what to do with SAA. “Clearly the left hand does not seem to be aligned with the right hand.”
Magashule said the airline’s future was being dealt with by ministers and “there is not any intention to close down SAA”.
Addressing an event in New York last week, Mboweni said he believed the loss-making national flag carrier should be closed down as it is “unlikely that you are going to find any private sector equity partner who will come join this asset”.