JOHANNESBURG – During South Africa's Finance Minister Tito Mboweni's 2019 Budget Speech, he announced that the struggling national broadcaster, the South African Broadcasting Corporation (SABC) needed R6.8bn to survive.
Mboweni said: "The National Treasury has been in talks with the SABC but make no mistake the SABC will most likely be placed in curatorship if they receive a bailout. Gone are the days where money is given out without checks, balances and oversight."
Mboweni said on state-owned enterprises: "We are reviewing our framework for state-owned enterprise support. The government has revised the contingency reserve upwards to R13 billion for 2019/20 to respond to possible requests for financial support. Financial support will be budget neutral as far as possible."
The finance minister said, during this past financial year, total guarantee utilisation increased by R51.1 billion:
- Eskom used an additional R50 billion of its R350 billion guarantee in 2018/19
- Denel was granted a further R1 billion guarantee.
- SAA guaranteed debt increased by R6.2 billion.
- My congratulations to the Land Bank, which repaid debt, reducing government’s guarantee exposure. Other entities reduced their guarantees, unfortunately in some cases as a result of appropriations.
Mboweni added, "We must tighten the guarantee rules. If a state-owned enterprise applies for a government guarantee for operational purposes, it will be required to appoint a CRO in concurrence with the National Treasury and its bondholders.
"The CRO will undertake a full operational and financial review. When banks need state support, we appoint a curator. When provincial and municipal finances are in disarray, government can take over the running of the administration. These rules should also apply to all SOEs."
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