Photo by: Duane Daws
If all else failed, National Treasury might enlist the help of President Jacob Zuma to secure the repatriation of South African Airways funds from fellow African states, Deputy Finance Minister Sifiso Buthelezi told MPs on Wednesday.
Buthelezi told Parliament’s standing committee on finance the efforts to get the funds back could “include going to talk to the president to see if he would make himself available should need” to talk to his counterparts in Angola, Nigeria, Senegal and Zimbabwe arise.
More than R1-billion of SAA’s reserves are stuck in foreign currency in these four countries and it is exacerbating the company’s cash flow problems.
“We would like to use diplomacy. If somebody is not paying your money, he is making you his bank.”
Buthelezi and top SAA management was briefing the committee on SAA’s financial challenges and its turnaround plan, but drew criticism from committee chairman Yunus Carrim for speaking in what he termed “generalisations” and offering little detail.
But SAA board chairpersonn Dudu Myeni countered by trying to answer repeated questions from MPs as to how the board had adapted its approach to ensure that the company, which is losing R250-million a month, returned to financial stability.
“It is quite a big broad statement and it is not one area that you can focus on, we look at the whole business in terms of what can be done,” Myeni said.
Myeni stressed that the cost of doing business as SAA remained too high and that those running the airline had a chance to analyse the reasons for this. This entailed reviewing the turnaround strategy and identifying the “gaps that we think is the reason why the full-blown implementation is not happening”.
“You are right. We can’t rely on guarantees and also we can’t rely on lenders because lenders end up giving you conditions that if you own a household you end up no longer owning that particular house because the lenders instruct you to do certain things because of the conditions you find yourself in.”
But the acting director general of finance Dondo Mogajane said recapitalisation of SAA has clearly been on the cards since then Finance Minister Pravin Gordhan tabled the national budget in February, though a figure has yet to be determined.
He confirmed that the National Treasury would come to Parliament with a sum to be approved, and to be allocated in the adjusted appropriations in the medium-term budget in October. SAA’s long-term strategy is currently being reviewed by Seabury consulting group. This includes the company’s recapitalisation needs.