South Africa: SAA - Tito Mboweni's R2 Billion Game of Financial Chicken

A South African Airways Airbus landing at Munich Airport (file photo).

The finance minister declared in August 2019 that he wants to debate economic policy. It seems, however, impossible to get an answer on why the single shareholder in the Government Employee Pension Fund, which is the Treasury, doesn't change the GEPF's investment policy to be more supportive of the public sector, as well as more prudent.

Finance Minister Tito Mboweni doesn't seem to know how -- or whether -- to provide the R2bn that Treasury promised in immediate funding for South African Airways. Whatever other problems are facing the public service airline, the problem the Treasury has with this R2bn is contrived. Behind the financial game of chicken is the finance minister's insistence that any rescue operation of SAA must be funded from the national budget.

In the face of that dogma, it doesn't matter that SAA's immediate problem is 95% smaller than Eskom's. This is its relative size if we compare R2-billion to the "net current liabilities" that Eskom accounted for in March 2019. R44-billion had to be found for Eskom in the short term, starting from March 2019, notwithstanding that the public utility at the time was burdened with R445-billion in total debt (R53-billion higher than the year...

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