Financially crippled state broadcasting corporation, SABC has turned to the state government’s treasury for funds to continue operations and pay off some content suppliers it has been owing since March and April.
The SABC, like some other state-owned firms that had gone bankrupt as a result of poor management and lack of viable policy, is in talks with the treasury and the Department of Communications on how to secure a guarantee from the government.
SABC spokesman Kaizer Kganyago who confirmed meeting the treasury, said by phone on Wednesday, that the SABC financial crisis is as a result of the economic backlash most SA companies are currently facing.
“The financial difficulties that we have already come out and said we are having are due to the economic crunch that all companies are currently operating in and the fact that advertising revenue has decreased,” Kganyago said.
Kganyago’s statement about the economic state of the broadcaster comes after Chairperson of the SABC interim board Khanyisile Kweyama revealed the truth about current SABC financial crisis, saying there were doubts about whether salaries would be paid at the end of the month.
Kweyama, who has been managing the broadcaster along with her four fellow interim board members since the end of March, said the financial state of the broadcaster is very bad and needs urgent interventions.
“It’s bad. It’s bad …” She said, adding that the interim board is not even sure if the SABC would be able to meet its March and April payroll.
“The only light at the end of the tunnel is the fact that we were able to pay salaries and some creditors at the end of this month,” she said.
Former SABC COO, Hlaudi Motsoeneng has been accused of causing the SABC financial crisis through his 90% local content policy which he claimed will bring the company to the economic limelight.
The SABC previously confirmed it made a loss of R411 million in the 2015/16 financial year and an additional loss of R200 million to 90% local content policy.
The interim board told the committee that Motsoeneng as the SABC chief operating officer made decisions that directly caused the broadcasting corporation to lose revenue.
Motsoeneng introduced the local content policy which saw 90 percent of music on its 22 radio stations produced by local artists. He was later barred from working at the broadcaster after SA’s graft ombudsman found that he lied about his qualifications.
Meanwhile, reports have it that the SABC is now seeking at least one billion rand ($75.5 million), but the SA government is yet to heed the cry of the board as it is still in talks with the government.
Government guarantees to state companies total R477.7 billion, or 11.5 percent of the gross domestic product, according to the February budget review.
The interim board chair has also met with the suppliers it is owing to explain the SABC financial crisis and its moves to salvage the situation. The board’s chairperson also informed them that some payments might be delayed, Kganyago said.
The broadcaster failed to pay some production companies in March according to a statement issued by the Independent Producers Organisation, which represents 100 producers in South Africa. Some producers have also not been paid for April.
“The failure of the SABC to pay not only places the industry in crisis but also puts thousands of livelihoods, bond and loan repayments, school fees and living expenses at risk,” Naomi Mokhele, a spokeswoman for the IPO, said in a statement on March 31.
Dozens of South Africa’s local musicians have publicly supported Motsoeneng’s 90% local content rule, saying the rule has benefitted them over the past year.
Motsoeneng who recently briefed the media on the state of South Africa also defended his policy saying he can’t understand why there are reports of a decline in audience figures. He also criticized reports that his 90% local content rule has resulted in a drop in audience figures.
“There’s a decline in SABC audience; I want to know how much and who did the research. I’ve checked the reports that say because of local content the public broadcaster did not do well… and those reports indicated a 1% or 2% decline, how can you cry about 2%?” he said