South Africa

SABC begged Treasury for R1.5 billion – but was rejected

SABC

The South African Broadcasting Corporation (SABC) asked the National Treasury for R1.5 billion in additional funding, but it was rejected despite the entity’s deteriorating finances. 

This was revealed by the Deputy Minister of Communications, Phil Mapulane, who led the SABC’s appearance before Parliament’s Portfolio Committee on Communications. 

Mapulane said the SABC expected R1.5 billion in funding from the National Treasury in the Medium-Term Budget Policy Statement (MTBPS). 

However, Finance Minister Enoch Godongwana did not announce additional allocations to the ailing state broadcaster. 

“The argument was that because of the macro environment the SABC has painted, operating under the environment of analogue switch off and the need for the SABC to ensure the elections are covered, we submitted a motivation to the Treasury for R1.5 billion,” said Mapulane.

“When the minister was tabling the MTBPS, that allocation was not accepted, so we didn’t get what we requested.”

Mapulane said the department hopes that in the next Budget Speech in February 2024, the National Treasury will respond positively to the SABC’s request for more funding. 

“You will recall we supported the turnaround plan. It was implemented with the hope it would turn around the fortunes of the SABC, but the turnaround plan never turned the finances of the SABC.” 

“We are back to where we were, if not in a worse position than when we started with a bailout,” Mapulane. 

Parliament was told that fundamental interventions must be made at the SABC and that the board was in the process of developing a turnaround plan. 

The SABC has previously warned that it will collapse financially if it does not receive an urgent cash injection from the government and fundamentally change its operating model. 

The SABC is in extreme financial distress and could be forced to apply for business rescue, according to the group’s CFO, Yolande van Biljon.

Van Biljon told Parliament that revenue underperformed by 27% compared to its budget and was 8% lower than the previous financial year.

“The bottom has dropped out of our revenue generation initiatives, and as a consequence, the SABC’s loss increased by R949 million to R1.2 billion,” she said.

One of the main reasons for the SABC’s poor financial performance is that people are not paying for TV licenses.

The state broadcaster’s TV licence revenue declined from R968 million in 2019 to R741 million in 2023.

The SABC billed R4.5 billion in TV licence fees in the last financial year, but, as in previous years, it collected far less.

This translates into a TV licence evasion rate of 84% as debt collection agencies failed to convince people to pay. It is up from 69% four years ago.

Van Biljon said it could be liquidated if the group cannot sort out its financial situation.

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