National Treasury has approved an increased borrowing limit for the SABC. Concerns have been raised on the financial viability of the public broadcaster after years of mismanagement.
“The Auditor-General has highlighted seriously the viability of the SABC as a going concern and to this end, as the shareholder, working together with the board, our engagements with National Treasury have been concluded and as of a day ago, National Treasury has granted consent for the SABC to increase its borrowing limits from the capital markets in line with the Public Finance Management Act and the Broadcasting Act,” said communications minister, Nomvula Mokonyane.
She admitted there had been “historical governance and financial management issues that have previously been identified at the SABC. These were vented in a Parliamentary inquiry into the SABC, the Public Protector’s report and other on-going investigations by the SIU [Special Investigating Unit]”.
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Nevertheless, Mokonyane said at a media briefing, “there has been significant progress made in clearing all internal and external audit findings to improve internal controls”.
Mokonyane briefed media shortly after she tabled the SABC’s annual report before the parliamentary committee tasked with providing oversight over the department of communications.
She said the SABC now had the right skills on the board and management to “drive the robust turnaround strategy that will lead the broadcaster on a new path towards a public broadcaster that embodies sound, corporate and financial management”.
The numbers at a glance
The SABC had a net loss of R622 million compared to R977 million in the 2016/17 financial year.
Total revenue was R6.6 billion against a budget of R7.3 billion resulting in an underperformance of R709 million (10%).
Year-on-year performance showed an improvement of R56 million (1%) driven mainly by commercial revenue.
Total expenditure incurred for the 2017/18 financial year amounted to R7.269 billion compared to the budget of R7.279 billion.
The R11 million (1%) underspend is mainly owing to amortisation of content and other expenses.
The turnaround plan
Mokonyane said the current SABC board had begun setting the SABC on a path to stability and recovery with the appointments of competent persons in key positions, including the appointment of its Group Chief Executive Officer, Group Chief Operations Officer and the Group Chief Financial Officer, the Head of News and Group Executive for Corporate Affairs and Marketing.
The board and the shareholder would soon finalise a memorandum of incorporation and unveil a turnaround strategy for the SABC. “We have, following our interaction between the SABC and government, put together a turnaround task team comprising the Department of Communication, National Treasury and the SABC,” she said.
“National Treasury has assigned a turnaround specialist to look into the strategy that originates from the work done by the collective of the management at the SABC. This strategy seeks to provide a holistic assessment on the broadcaster and identify ways and means to guarantee the future sustainability of the SABC.”
Mokonyane said the SABC was working on settling outstanding payments to independent producers and other creditors. She assured employees their salaries would be paid.
“Equally, suppliers owed by the broadcaster have been in engagements with the SABC and there has been progress in effecting payments to creditors. Monies raised through the processes consented to by National Treasury will also be used to pay creditors, including independent producers, SENTECH and the South African Football Association,” she said.
In a statement, the new SABC spokesperson and head of corporate affairs, Neo Momodu, said the the SABC’s 18 radio stations and three television channels exceeded their local content and genre quotas, as set by the Independent Communications Authority of South Africa (ICASA). The SABC’s mandate to broadcast sports of national interest was also realised despite the rising costs of sports rights and the absence of a dedicated sports channel.
The broadcaster had won 24 awards for radio, 22 awards for television, news and current affairs received 36 awards, and two awards were received by SABC Sport.
Momodu said SABC News had reviewed its radio current affairs offerings to align with ICASA requirements. A review of its editorial policies was driven by the SABC’s commitment to offering credible, independent and relevant programming, she said.
In terms of governance, significant progress was made on clearing previous internal and external audit findings. This process continues in the current fiscal and has resulted in the corporate plan 2018/19 reflecting the need to turnaround the organisation.
“We are confident that with the support of the millions of loyal South African audiences, the Shareholder, Parliament and other public and private institutions, we will be able to turnaround the national public broadcaster,” she said.