Gigaba: Treasury still considering SABC's R3bn request

2017-10-05 18:05
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Cape Town - Finance Minister Malusi Gigaba on Thursday said National Treasury is still considering whether or not to grant the SABC a R3bn guarantee, which the state broadcaster needs partly because of declining listenership and viewership. 

In response to a question by DA finance spokesperson David Maynier, Gigaba said the request was made after the broadcaster “made a determination that it would face a liquidity challenge in the current financial year”.

READ: SABC facing fresh cash crisis – report

Gigaba said a number of factors had contributed to the state broadcaster’s declining revenues. 

He noted that, in addition to “unfavorable economic conditions” these included policy decisions about the broadcaster’s content, which he said led to a “decline in the advertising revenues”.

 “Major advertisers withdrew their business due to declining listenership and viewership in some of the broadcaster’s crucial platforms,” he said. 

While he did not name him directly, Gigaba’s statement is an apparent reference to the SABC’s former chief operations officer Hlaudi Motsoeneng decision's to implement a 90% local content policy for radio stations, including TV channels SABC 1 and 2.

The Finance Minister said other drains of the SABC finances included in increased salary bill and pay-outs of dismissed staff.

Declining advertising 

As Fin24 reported last month, the SABC posted a R977m loss after tax for the 2016/17 financial year.

In its annual report tabled in Parliament, the SABC revealed that its total revenue had declined from R8.1bn in 2016 to R7.6bn, representing a 6% year-on-year decrease.

Advertising also dropped 5% to R5.6bn, sponsorship revenue declined by 18% to R384m, and  income from TV license dropped 7% to R915m.

READ: SABC posts R977m loss

In his reply Gigaba did not say when National Treasury would make its decision to grant the guarantee or not. 

DA spokesperson Phumzile van Damme previously called on Minister of Communications Ayanda Dlodlo make the the SABC’s financial requirements public and “consult Parliament on the proposed bailout”.

“It is no secret that the SABC is currently facing immense financial upheaval due to the destructive decision making by its former executives and board,” she said. 

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