7 November 2017

South Africa: SABC's Financial Woes Continue Into New Financial Year

While the SABC is still in a financial quagmire, a bailout in the form of a government guarantee remains on the horizon.

"The SABC experienced a difficult first quarter [of the 2017/2018 financial year] which was a continuation of events that materialised during the last quarter of the [2016/2017 financial year]," reads the SABC's report to the Portfolio Committee on Communications, delivered on Tuesday by acting SABC CEO Nomsa Philiso.

"The SABC is facing a financial crisis which has seen it unable to meet its contractual commitments.

"Monthly revenues/income was lower than embedded expenditure/costs and some service providers of vital content and services cannot be paid."

At the end of the first quarter, the SABC had outstanding debt of R597m.

"Despite the corporation's cash crises it was able to deliver high-quality public broadcasting and reap a number of awards and accolades," reads the report.

Disappointment at lack of urgency

The SABC recorded a loss of R74.4m in the first three months of the financial year.

The reasons for the loss were listed as a decline in commercial revenue and TV licence collections and depressed economic conditions resulting in advertiser cutbacks.

SABC board chairperson Bongumusa Makhathini said the new board had hit the ground running after its appointment three weeks ago, and its members had been inducted.

He said the board needed to stabilise the SABC financially.

Communications Minister Mmamoloko Kubayi-Ngubane said the SABC's submission asking Treasury for a government guarantee needed to be reworked.

She said it must include an indication of how the money would be used, how the institution would be turned around and the institution's ability to pay back the loans.

DA MP Phumzile van Damme was not impressed with what she perceived to be a lack of urgency by the SABC in the face of the financial crisis.

She said the presentation was very vague, had no sense of alarm and gave the impression that it was business as usual at the SABC.

Source: News24

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