Development Bank of Southern Africa defends R3.5bn bailout to SAA
Last week, the wholly-owned government entity has pledged the lifeline injection to the struggling national carrier.
JOHANNESBURG – The Development Bank of Southern Africa has come out to defend why it has decided to grant cash-strapped SOE, South African Airways (SAA) R3.5 billion.
Last week, the wholly-owned government entity pledged the lifeline injection to the struggling national carrier.
However, some political parties criticised the move by the bank, arguing that the money given to SAA may be redirected from important development projects meant for millions of South Africans.
Speaking on 702, Zodwa Mbele, the group executive for transacting at the Development Bank of Southern Africa, said if SAA didn’t get the loan, then this would have had a ripple effect on SA’s economy.
“Our mandate is to look into economic development, and this is the view we’ve taken in extending this bridge funding facility to government… It’s not only SAA that would’ve gone down…”
Mbele said SAA was not going to be the ones repaying this loan, but instead government: “We are not lending with the hope of getting repaid by SAA… The repayment will come from government…”
Listen to the full audio below: