Photographer: Dean Hutton/Bloomberg

South Africa's State Broadcaster Seeks Treasury Guarantee

Updated on
  • SABC failed to pay the some production suppliers in March
  • State broadcaster has not had a permanent CEO since 2015

South Africa’s state broadcaster is in talks with the Treasury to secure a guarantee to help it claw its way out of a financial crisis after it failed to pay some of its content suppliers in March and April.

We are “currently in talks with the Treasury and the Department of Communications on how we can possibly secure a guarantee from government,” spokesman Kaizer Kganyago said by phone on Wednesday.

The South African Broadcasting Corp. is one of the key state companies that have been marred with allegations of poor management. The broadcaster’s entire board quit last year after Parliament instituted an inquiry into its conduct following a series of scandals, administration blunders and legal disputes. An internal report shows SABC risks running out of cash.

“The financial difficulties that we have already come out and said we are having are due to the economic crunch that all companies are currently operating in and the fact that advertising revenue has decreased,” Kganyago said.

The state broadcaster hasn’t had a permanent chief executive officer since 2015 and the nation’s graft ombudsman found that the former chief operating officer, Hlaudi Motsoeneng, lied about his qualifications and the High Court barred him from working at the broadcaster. Motsoeneng introduced a controversial policy to ensure 90 percent of music on its 22 radio stations was by local artists.

Payments Delayed

Government guarantees to state companies totals 477.7 billion rand, or 11.5 percent of gross domestic product, according to the February budget review.

SABC’s interim board is seeking at least one billion rand ($75.5 million), according to a report by Johannesburg-based Eyewitness News citing Khanyisile Kweyama, who was appointed chairwoman at the end of March.

“There’s no figure that has been put out by the SABC in terms of how much money we need,” Kganyago said. “The talks are ongoing.”

SABC’s management met with suppliers two weeks ago to explain the broadcaster’s financial difficulties and to inform them some payments might be delayed, Kganyago said.

The broadcaster failed to pay some production companies in March according to a statement issued by the Independent Producers Organization, which represents 100 producers in South Africa. Some producers have also not been paid for April.

“The failure of the SABC to pay not only places the industry in crisis but also puts thousands of livelihoods, bond and loan repayments, school fees and living expenses at risk,” Naomi Mokhele, a spokeswoman for the IPO, said in a statement on March 31.

(Updates with non-payments for April in first paragraph.)
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