South African Broadcasting Corporation (SABC) – once a giant in the global media industry – is reeling from financial doldrums that have made it unable to meet its obligations, including payment of staff salaries, and could collapse in March unless it urgently receives a R3bn (Ksh 22 billion) government guarantee, media reports indicate.
Board chair Bongumusa Makhathini met South African Parliament’s Standing Committee on Public Accounts on Wednesday to brief it on the situation. Board member and veteran journalist and editor Mathatha Tsedu had earlier told the portfolio committee on Finance that the SABC’s ability to pay full salaries would be in doubt as early as February next year.
By “February we might not even be able to pay full salaries. March is our day zero if nothing happens,” Tsedu was quoted as telling the committee.
The public broadcaster owes creditors R1.3bn debt making it unable to meet its monthly obligations.
It emerged that 70% of SABC’s revenue went to wages, whereas this should in fact be 50%. It has unsuccessfully been seeking a guarantee for the last one year since audit outcomes did not make it an attractive prospect for banks.
According to Makhathini, the guarantee would enable the broadcaster to finance the repayment of debt, the procurement of content and maintenance of infrastructure.
The directors said the company had on Tuesday approached the labour arbitration agency to retrench 981 of its 3,370 staffers. Another 1,200 of its 2,400 freelancers are also earmarked for dismissal.
SABC posted losses of R622m in the financial year ending March 2018. It projects that this will deepen to R803m by the end of March next year.
“The threat of commercial insolvency is increasing quite significantly,” CEO Madoda Mxakwe said.
The company’s financial troubles worsened during the tenure of its former chief operating officer, Hlaudi Motsoeneng, an ally of ex-president Jacob Zuma.
The SABC has three free-to-air television channels and 18 stations broadcasting in all of the country’s 11 official language.
The South African National Editors’ Forum (Sanef) has said urgent government intervention is required to address the financial woes at the SABC.
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“We are particularly concerned about cuts to news and current affairs. These issues must be addressed in the retrenchment plans,” Sanef chairperson Mahlatse Mahlase said.
Story credit: Online sources.
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