SA to push Angola to pay R850m debt owed to SAA
SAA is owed about a billion rand in revenue earned in other African countries, with Angola the single largest debtor.
CAPE TOWN - South Africa will press the newly-elected Angolan government to pay R850 million it owes struggling South African Airways (SAA), the finance minister said on Tuesday.
The airline runs one of Africa’s biggest fleets but is loss-making. SAA is owed a total of some R1 billion in revenue earned in other African countries, with Angola the single largest debtor, a treasury document showed.
Finance Minister Malusi Gigaba said the Treasury was talking to Angola and other African governments that owe the airline to get the funds repatriated.
“We understand that Angola is facing its own difficulties economically, but so are we and many other countries, so we expect they will continue to honour the agreements ...and pay the money due to us,” Gigaba told Reuters in Cape Town.
In a bid to keep its planes flying, SAA is seeking a R10 billion bailout from the Treasury.
The Finance Ministry and central bank in Luanda did not immediately respond to requests for comment.
Angola held national elections last week won by the ruling MPLA party, according to a provisional tally of results that the two main opposition parties have rejected.
Hit by a collapse in the price of crude oil, Angola - Africa’s second-biggest oil exporter - has been depleting its foreign reserves to fund imports and pay down government debt, and imposed capital restrictions including on amounts travellers can take abroad.
In July, Emirates airline scaled back its five weekly flights to Luanda to three due to difficulties in repatriating revenue and cancelled a management contract with Angolan national carrier Taag.
SAA's spokesman Tlali Tlali said it was not contemplating a similar move.
According to the global airline industry body IATA, Angola was the only one of the top five countries blocking fund repatriation to have seen the amounts it owes increasing - to $477 million from $237 mln in June 2016.
IATA spokeswoman, Katherine Kaczynska said the global organisation was seeking ways to get the outstanding funds released.
LISTEN: SAA to receive R10bn bailout?
TELKOM SHARES SALE AN OPTION
Last week the Finance Ministry said the plan to sell off government’s stake in Telkom to raise an R10 billion bailout for the ailing SAA was just one option being considered.
Democratic Alliance (DA) parliamentarian Alf Lees stunned MPs when he told Deputy President Cyril Ramaphosa on Wednesday that he had a Cabinet document containing Gigaba’s detailed proposal for the move.
Ramaphosa, who was answering MPs’ questions in Parliament, neither confirmed nor denied the plan, saying that government’s strategic assets remained under review.
Eyewitness News had sight of the document which includes a draft bill for the appropriation of the R10 billion.
Lees questioned whether it was a good idea.
“Honourable Deputy President, do you support a sale of a good asset to save a bad asset?”
The Economic Freedom Fighters also challenged the move.
The document values government’s nearly 40% shareholding in Telkom at more than R14 billion and notes it will cost the fiscus R800m in annual dividends.
Lees’ revelation came just hours after Deputy Finance Minister Sfiso Buthelezi told Parliament’s Standing Committee on Public Accounts that SAA would not be allowed to go under and would not be privatised.
Finance ministry spokesman Mayihlome Tshwete confirmed the document was a Cabinet memorandum.
But said it is one option among others that the government was considering assisting the cash-strapped SAA and that nothing had yet been finalised.
Additional reporting by Gaye Davis.
(Edited by Winnie Theletsane)