SAA in dire straits but there is hope

Posted on 4 November 2019

Addressing parliament on 31 October, Minister of Finance, Tito Mboweni said, ‘I was told a story by the CEO of SAA [Zuks Ramasia] which boggles the mind. She says a whole spare engine disappeared from SAA Technical. This big thing, how did it leave the airport? It boggles the mind … This is stuff of the movies, man.’

‘An aircraft part “was lost for ideological reasons”. The ideology of what? The ideology of theft under the guise of Marxism,’ said Mboweni before MPs called him to order.

Mboweni also gave his his medium-term budget address to parliament saying that ‘SAA is unlikely to ever generate enough cash flow to sustain operations in its current configuration. Which then begs the question, how long are we going to be on this current flight path.’

The Minister said that State-Owned Enterprises (SOEs) ‘pose very serious risks to the fiscal framework’.

According to Mboweni, government funding of SAA helps to ‘subsidise the middle class and wealthy to fly around the country and other parts of the world’ while neglecting most South Africans who travel using other means of transport.

The minister said that the main reason behind increasing government debt is simple. ‘We spend more than we earn. We must wean state companies off the national budget. They must learn to stand on their own feet.’

After quoting Zechariah 8 verse 12 from the Bible and Ghana’s Kwame Nkrumah, he also said, ‘Restoring our finances and fixing our state-owned enterprises will take great courage.

But it can be done.’

According to the Tourism Update, the Minister ‘concluded by saying he was optimistic that conversations between SAA and potential equity partners would liberate the fiscus.’

Image: supplied






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