Johannesburg - The South African National Civic Organisation (Sanco) on Monday said that the R2.3 billion bailout allocated to the South African Airways (SAA) was "a waste of resources thrown down a bottomless pit".
This comes after National Treasury said at the weekend that it had given the embattled national carrier yet another bailout.
“Government has decided to transfer funds from the National Revenue Fund (NRF) to South African Airways to allow the airline to pay back its debt to Standard Chartered Bank, thereby avoiding a default,” Treasury said in a statement.
Treasury said a default by the airline would have triggered a call on the guarantee, leading to an outflow from the NRF and possibly resulting in “elevated perceptions of risk related to the rest of SAA’s guaranteed debt".
Commenting on the bailout, Sanco's national spokesperson, Jabu Mahlangu, said that board members and executives of State Owned Enterprises (SOEs) must collectively and individually be held accountable for bad business decisions that undermine the country’s developmental agenda.
"Stringent conditions must be attached to the bailout. It sets a bad precedent that Treasury will always step in wherever there is incompetence and mismanagement," Mahlangu said.
“Allegations of the state capture suggest that failure of SOE’s and their financial losses costing our economy happen alongside unprecedented looting robbing our communities of much needed resources to address the housing backlog , free education as well as tackle poverty, unemployment and inequality."
SAA recorded losses of R5.6 billion in 2014/15 financial year, R1.5 billion in 2015/16 , R1.9 billion for the 2016/17 year, and is said to be currently losing R370 million a month.
Mahlangu said that the absence of consequences for management at SAA encouraged corruption as well as fruitless and wasteful expenditure across the governance system.
“Early warning systems and oversight by a new board, which is free from capture, will bring accountability and the turnaround for efficiency that our economy requires as part of its recovery,” Mahlangu said.