South Africa: SABC Boss tells Parliament it will be bankrupt by 31 March 2019
14 March 2019
SABC boss Madoda Mxakwe tells parliament the crumbling South African public broadcaster will be bankrupt by 31 March 2019 as audience share continues to fall: 'Our cashflow is depleted'.
Madoda Mxakwe, SABC CEO, on Tuesday told parliament that the financially gutted and struggling South African Broadcasting Corporation will be factually insolvent by 31 March 2019 as audience share continues to fall, saying: 'Our cashflow is depleted'.
The South African public broadcaster is on the edge of financial collapse and has already been described by South Africa's Auditor-General (AG) as "commercially insolvent".
The SABC told parliament it's heading for another R568 million loss for the financial year - R281 million more than anticipated - that it can no longer guarantee that it will be able to pay SABC staff salaries at the end of March, and that a "black-on-air" scenario will happen soon without a government bailout.
Last month the minister of finance, Tito Mboweni, revealed after his budget speech in parliament that the SABC needs a whopping R6.8 billion in cash as a government bailout to survive.
On Tuesday Madoda Mxakwe told parliament's portfolio committee on communications that by the end of this month the SABC will no longer be able to pay anybody as its liabilities will exceed its total assets when the broadcaster enters technical insolvency.
A plan to retrench thousands of SABC workers from the overstaffed and bloated public broadcaster where wages form the biggest expense by far was scuppered since 8 May 2019 is election day in South African and political parties don't want to see workers being fired in an election year.
"The severe liquidity challenges we are facing threaten our status as a going concern. Our cashflow is depleted. We cannot honour payments to service providers. We cannot adhere to all our committed contracts," said Madoda Mxakwe.
"We cannot even commission local content production as a result of all of the severe liquidity challenges that we're facing".
"The situation is so bad that several major content providers of key programmes they actually refuse to engage with us. Understandably, because we have not been able to pay them in the past couple of months," said Madoda Mxakwe.
"We can't acquire sports rights. Owing to our liquidity challenges we are not able to do it."
"In terms of the significant suppliers that are due and overdue, you are looking at Sentech, we're looking at SuperSport, Samro, as well as other providers of content that we have not been able to pay."
"The SABC cannot guarantee that it will be able to pay its employees' salaries at the end of March 2019. Should this crisis not be addressed as a matter of urgency, the SABC would be unable to operate and the 'black-on-air' scenario is a real and highly possible threat," said Madoda Mxakwe.
The SABC told parliament that since October 2018 the broadcaster's audience share has been declining, with its revenue that is expected to continue to decline in the 4th quarter of its financial year.
Madoda Mxakwe told parliament that the SABC "is managing a lot of disciplinary cases emanating from the forensic reports that we continue to get. On any given day I get anything from 2 to 3 of these and they depict the kind of malfeasance we still see in the organisation".
Yolande van Biljon, the SABC's chief financial officer (CFO) told parliament that since January 2019 the SABC's actual revenue for the financial year was down 12% below the target at R5.4 billion.
"Our audience share is declining as a result of a combination of factors and we anticipate it to continue."
"Of our television stations, SABC1 remains the top-performing station but we're also too heavily reliant on it. It is outperforming the prior year revenue but it is the targets for this year which are not being met for all three TV channels," said Yolande van Biljon.
"We have incidents almost once a month where either there's a fire or a roof caves in as a result of the severe storms we've been having in Johannesburg. All of it are symptoms of our inability to maintain our infrastructure."
The SABC has repeatedly asked the minister of communications, with Stella Ndabeni-Abrahams currently the 11th minister of communications in 11 years, for a multi-billion rand bailout, similar to the government-guaranteed loan the public broadcaster received in 2011 during its previous financial implosion.
Stella Ndabeni-Abrahams on Tuesday said that the National Treasury had agreed to grant the SABC interim relief in terms of money. The amount of money wasn't disclosed.
Source: TV with Tinus