Treasury increases SABC’s borrowing limit

Tuesday, September 4, 2018

Communications Minister Nomvula Mokonyane says National Treasury has approved an increased borrowing limit for the public broadcaster. 

Mokonyane said this when she briefed the media at the Imbizo Centre in Cape Town on Tuesday. 

The briefing came shortly after she tabled the annual report before the Parliamentary Committee tasked with providing oversight over the Department of Communications. 

“The Auditor-General has highlighted seriously the viability of the SABC as a going concern and to this end, as the shareholder, working together with the board, our engagements with National Treasury have been concluded and as of a day ago, National Treasury has granted consent for the SABC to increase its borrowing limits from the capital markets in line with the Public Finance Management Act and the Broadcasting Act. 

“We do believe that we have the right skills on the board and management to drive the robust turnaround strategy that will lead the broadcaster on a new path towards a public broadcaster that embodies sound, corporate and financial management,” she said. 

Mokonyane said the annual report was presented to Parliament after it was released at the SABC’s annual general meeting last week. 

According to the report, which covers the financial year of 2017/18, the SABC had a net loss of R622 million compared to R977 million in the 2016/17 financial year. 

Mokonyane said there have been concerns raised on the financial viability of the broadcaster within the current regulatory and legal framework, which poses a challenge for the SABC to pursue and deliver on the public mandate, which is largely unfunded and further compromised by the low levels of the income generated from TV licence fees. 

“Equally, there are also historical governance and financial management issues that have previously been identified at the SABC. These were vented in a Parliamentary inquiry into the SABC, the Public Protector’s report and other on-going investigations by the SIU [Special Investigating Unit]. 

“As presented in the annual report, there has been significant progress made in clearing all internal and external audit findings to improve internal controls,” she said. 

Mokonyane said the SABC is one of the key institutional pillars of democracy, delivering essential content to millions of South Africans on multiple platforms. 

“To this end, the SABC contributes to the strengthening of democracy by promoting nation building and cohesion in line with outcome 14 of the National Development Plan and through compelling and accessible local content progress. 

“In delivering its mandate, the SABC’s 18 radio stations and three television channels exceeded their local and general quotas, as set by the Independent Communications Authority of South Africa. 

“The SABC’s mandate to broadcast sport of national interest was also realised, despite the rising costs of sports rights and the absence of a dedicated sports channel,” she said. 

Setting the SABC on a path for recovery 

Mokonyane said, meanwhile, that the current SABC board began a process of setting the SABC on a path to stability and recovery. 

She said this could be seen with the appointments of competent persons in key positions, including the appointment of its Group Chief Executive Officer, Group Chief Operations Officer and the Group Chief Financial Officer, the Head of News and Group Executive for Corporate Affairs and Marketing. 

The appointments, Mokonyane said, are a reflection of a commitment by the board and the shareholder to ensure that they stabilise governance at the broadcaster. 

She said the parties will soon finalise a memorandum of incorporation between the Minister and the board and thereafter, a turnaround strategy for the SABC will be unveiled, which was presented to the Minister shortly before her media briefing. 

“We have, following our interaction between the SABC and government, put together a turnaround task team comprising the Department of Communication, National Treasury and the SABC. 

“National Treasury has assigned a turnaround specialist to look into the strategy that originates from the work done by the collective of the management at the SABC. 

“This strategy seeks to provide a holistic assessment on the broadcaster and identify ways and means to guarantee the future sustainability of the SABC,” she said. 

Mokonyane said, meanwhile, that the SABC was working on settling outstanding payments to independent producers and other creditors. 

“At this stage, the board and management have presented to myself on the current financial challenges and have assured us that employees of the broadcaster will continue to receive their salaries as per the norm and without prejudice. 

“Equally, suppliers owed by the broadcaster have been in engagements with the SABC and there has been progress in effecting payments to creditors. Monies raised through the processes consented to by National Treasury will also be used to pay creditors, including independent producers, SENTECH and the South African Football Association.” –