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ANC intent on driving investment away

The Democratic Alliance (DA) will write to the Minister of Finance to obtain details of the ANC election manifesto statements that the party intends to change the mandate of the South African Reserve Bank (SARB) as well as to prescribe to financial institutions where they must invest the money they hold in trust on behalf of bank depositors, pension and retirement fund contributors, pensioners and insurance policyholders.

The imposition of prescribed assets is exactly what the apartheid regime resorted to in desperation when they could not raise capital in the international markets. Now the ANC is to resort to the same annexation of private funds as international markets hold back on making capital available to South Africa.

Instead of announcing bold new initiatives to stimulate economic growth and job creation, the ANC has decided to simply “expropriate” ordinary South Africans’ savings to try to save bloated and corrupt State-Owned Entities such as SAA and ESKOM.

Clearly President Cyril Ramaphosa has not had the backbone to stand up to the SACP/COSATU and has capitulated to their demands for these changes to the SARB mandate and to imposing a prescribed asset regime.

What these changes will undoubtedly bring about will be to:

  • Make the South African Reserve Bank a battleground as the destructive forces in the ANC and its ally the EFF push the agenda to change the SARB mandate. We urge the SARB Governor to withstand the coming onslaught and to continue to focus on the existing SARB mandate.
  • Result in further downgrades by international ratings agencies no matter how much charm and spin President Cyril Ramaphosa puts on these economically destructive changes.
  • Drive away foreign direct investment,

The losers as a result of these very foolish moves by the ANC is the will be to create more unemployment and misery for the majority of South Africans. There can be little doubt that unemployment numbers in 2019 will sky rocket way beyond the 10 million mark.

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SCOPA must get stuck into the PIC

The allegation that the Minister of Cooperative Government and Traditional Affairs, Dr Zweli Mkhize, received a R4.5 million “kickback” in return for facilitating a R210 million loan from the Public Investment Corporation must be probed by Parliament.

This is just one of several questionable investments made by the Public Investment Corporation, which up until now have included Ayo Technology Solutions Limited, Sagarmatha Technologies Limited, Steinhoff International Holdings N.V. and VBS Mutual Bank.

The fact is that hardly a day goes by without a new scandal surrounding questionable investments emerging at the Public Investment Corporation.

However, the finance committee has proved completely ineffective at probing the questionable investments made by the Public Investment Corporation.

We are prohibited from cross examining senior executives and simply do not receive straight answers to straight questions put to the Public Investment Corporation.

I will, therefore, as a last resort write to the Chairperson of the Standing Committee on Public Accounts, Themba Godi, requesting him to schedule a hearing probing allegations surrounding irregular payments and questionable investments at the Public Investment Corporation.

The hearing should probe the allegation that the Minister of Cooperative Government and Traditional Affairs, Dr Zweli Mkhize, received a R4.5 million “kickback” for facilitating a R210 million loan from the Public Investment Corporation.

However, it should also probe:

  • allegations of irregular payments made by the Chief Executive Officer, Dr Dan Matjila, which now appear not to have been investigated thoroughly, following the leaking of an “internal audit” report; and
  • questionable investments and loans in inter alia Ayo Technology Solutions Limited, Sagarmatha Technologies Limited, Steinhoff International Holdings N.V. and VBS Mutual Bank.
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Labour laws must protect most vulnerable South Africans

The following speech was delivered in Parliament today by DA Shadow Minister of Labour, Michael Bagraim MP, during the debate on a National Minimum Wage.

We are here today to celebrate May Day and labour freedom. It is with a heavy heart that I need to say that the labour freedom was short-lived.

In 1995 under the wisdom and guidance of President Nelson Mandela, we hailed the implementation of our Labour Relations Act in a plethora of forward thinking labour laws.

However, since the implementation of these laws we have gone backwards. In this very Parliament four years ago, The President of the ANC and unfortunately of the country, Jacob Zuma, announced that the government would be creating 5 million jobs.

Under Zuma’s leadership, we have seen a steady loss of 5 million jobs.

Our labour laws have acted as a handbrake to job creation and the labour regulatory authority appears to have done everything in its power to not only cause our workforce to dwindle but to stop businesses from creating more employment positions.

Today we have an astounding 9.2 million people unemployed and we are about to embark upon disastrous legislation which will cause at least a further 715 000 jobs to be lost.

The Treasury tells us that they can forecast these losses so it ill behooves us to say this is an unintended consequence.

Although there are some progressive and forward thinking imminent changes to both the Basic Conditions of Employment Act and the Labour Relations Act, the overall import of the changes will be negative.

It doesn’t help to have some of the best and innovative laws in the world if these laws are not going to have an effect on those at the workplace.

We have over 16 million people employed in South Africa today but only 1200 inspectors from the Department of Labour.

These inspectors are underpaid, overworked and certainly under-resourced.

Invariably small business, with all sorts of pressures, don’t even know what the labour laws are and the majority of our workforce is not unionised.

All the labour federations acknowledge that their numbers are dwindling and the unions confirm that their reach into the small business sector is minimal.

Our labour laws can be compared to a brand new beautiful shining car which has no engine and no driver.

Our government’s answer to its inability to enforce the law is merely to make more law and make the regulations more onerous and complicated.

There is no incentive for anyone to even consider the implementation of the laws that we already have, let alone the new laws and the burdensome regulations we are about to face.

When a staff member is first engaged at the workplace, the very basis of our labour legislation requires that the staff member receives a letter of appointment or a contract of employment.

From that contract the rest of the rights flow in terms of the implementation of the Basic Conditions of Employment Act, the Labour Relations Act and the many other pieces of labour legislation on our statute book today.

When we enquire as to how many workers in South Africa actually do have letters of appointment or contracts of employment we are astonished to see that thousands of our workers don’t even have that simple document from which the enforcement of their rights flow.

Unfortunately, the message that we are receiving from the employers is the same.

Hundreds of companies tell us that they have difficulty trying to register for Workmen’s Compensation and UIF.

Many more tell us when they try to claim from Workmen’s Compensation and UIF they hit a dead end.

The most vulnerable people in our society are those who have been injured at work and who are unable to continue working.

They have insurance for which they handsomely pay every month.

This insurance, workmen’s compensation, supposedly is there to compensate them for these injuries and to pay for their medical expenses.

Only last week, I received a further 27 complaints of claims that have been outstanding for years.

These complaints are a drop in the ocean as I receive regular daily pleas for help from these vulnerable people who are left bereft and non-functioning.

Despite the fact that we have insurance which is heavily resourced and over-funded, they receive nothing.

I have just read an application to The High Court where the applicant is seeking to have a warrant of arrest put out for the Workmen’s Compensation Commissioner.

One can only shudder at this abuse when in fact the PIC is holding billions of rands in reserves to enable the commissioner to pay out our injured workforce.

The real elephant in the room is the ongoing mismanagement of just about every section of our Department of Labour.

We have just had current feedback from the Auditor General who talks about material non-compliance, irregular expenditure, inadequate contract management, wasteful expenditure, lack of skills at various levels, high number of fraud and financial management investigations, duplicate payments made and loans issued to medical service providers in prior years not recovered and many recent suspected fraud incidents.

I can go on, however, there is a culture of poor performance and a weak internal control environment.

It is horrific to read about the lack of urgency and commitment to improve the control environment which may lead to increased instances of fraud and could also result in the possible depletion of funds which would negatively impact service delivery.

All this when the service delivery is at an all-time low. It should be pointed out that there are some existing dedicated hard-working staff who are probably over-worked and who often get discouraged and eventually leave the entity or adapt to the culture of poor performance.

We have entities such as the compensation fund who keep purchasing IT systems but somehow never integrate them properly or learn how to use them.

It should be mentioned that the Commission for Conciliation, Mediation and Arbitration (CCMA) is the one sparkling jewel in the broken crown of the Department of Labour.

The CCMA has managed to a large degree to try and keep labour peace and ensure that disputes are managed both timeously and efficiently.

Unfortunately, we are going to see this jewel have its shine taken off within the next year when the burdensome national minimum wage lands on its lap.

The CCMA performance has been sterling but that are running at full capacity with their budget utilised to the fullest. The CCMA investigated its future workload and has been conservative in stating that its workload will be increased by over 30% with the advent of the new legislation.

There is no budget earmarked for this increase and they are over a year away from being able to train commissioners to handle the tidal wave (no, tsunami) of referred disputes.

NEDLAC, the toy telephone, spent over two years debating the national minimum wage and its modalities.

Many of these issues are going to have an enormous effect on the unemployed in South Africa and the future workforce.

There was no voice of the unemployed and there was certainly no thought with regard to job creation.

This is the true story of rearranging the deck chairs on the Titanic. As talk shops go, NEDLAC is good for those who are entrenched in the workplace and seen as the labour aristocracy.

Even now when a new trade union formation seeks a place at the table, greedy wolves around that table are trying their utmost to deny them a seat.

It is really rich to see that the auditor general has raised a concern about HR management within NEDLAC.

It would be laughable as these are the very people who purport to guide human resources in South Africa.

Over and above this enormous levels of concern have been earmarked within NEDLAC such as appliance management, procurement and contract management, performance management, financial management and oversight and monitoring.

They have been warned they are about to face an audit failure. Collective bargaining in South Africa is about to take another knock with these future amendments where the Minister may extend a collective agreement where either employer parties or the trade union parties are representative.

In other words, big business and big trade unions can extend agreements to destroy small business.

There are some positive amendments which need applause. Firstly, the provision for a secret ballot is intended to ensure that individual union members are able to exercise their right to decide about strike action in a democratic manner.

Furthermore, every strike must have picketing rules and parties may agree on their own rules or the default rules will apply.

At this point I must congratulate Honourable Ian Ollis of the DA who proposed this very amendment in a private Members Bill three years ago to the day.

At that point the motion of a secret ballot was struck down by the ANC as being anti-worker.  Honourable Ollis certainly needs the accolades for this forward thinking.

The intention of the amendment to allow for further extension of a conciliation period is intended to provide for more time where there are reasonable prospects of reaching an agreement.

In essence our law is trying its utmost to find areas of conciliation rather than to resort to strike action.

This is not there to frustrate trade unions and workers but to provide an opportunity for a settlement to be reached. This can be praised as forward thinking.

Anyone materially affected by a strike or a lock out may apply to the Labour Court for an Order to have an advisory arbitration panel appointed.

This is intended to come into effect after a strike has commenced and only in particular circumstances. It does not interfere with the right to strike and nor can it be used to stop strikes.

Again, this decisive piece of legislation will help find solutions to destructive and non-functional strike action. It is intended as constructive and non-binding and will be a means to facilitate a settlement.

These proposed amendments are intended to provide a way in resolving strikes that are intractable, violent or may cause a local or national crisis.  This is in line with the International Labour Organisation.

Unfortunately, the general import of a universal national minimum wage will indeed have costly consequences and will lead to the inflexibility of our labour laws and regulatory bias against employment of low schooled workers.

The reality of our complex regulations will be universal avoidance and unfortunately will also be impossible to implement, monitor and enforce.

Today we face the scourge of unemployment which is increasing monthly and already in the youth category over 50% are unemployed, many of whom are unemployable.

The Democratic Alliance hereby speaks for the unemployed and for those who face imminent retrenchment. The DA will always speak on behalf of the most vulnerable in our society.

 

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Standing Committee on Finance must probe the chaos at the PIC

On 29 April 2018 I, once again, wrote to the Chairperson of the Standing Committee on Finance, Yunus Carrim, requesting him to schedule a hearing on the chaos at the PIC.

This follows revelations, as a result of an investigation into a smear campaign against Dr Dan Matjia, that resulted in the firing, and suspension, of several senior executives at the PIC.

The firing, and suspension, of senior executives comes after a string of allegations about questionable investments made by the PIC.

The fact is that hardly a day goes by without some terrifying new scandal surfacing at the PIC.

We believe the hearings should inter alia cover:

  • the outcome of the investigation of the smear campaign against Dr Dan Matjila and the subsequent firing, and suspension, of senior executives at the PIC; and
  • questionable investments, or potential investments, in Ayo Technology Solution Limited, Erin Energy, Sagarmatha Technologies Limited, Steinhoff International Holdings N.V. and VBS Mutual Bank.

We also believe that the hearing should be scheduled over a full day and that the finance committee should have access to copies of all the relevant minutes of investment committee meetings of the PIC.

We are not going to allow the Standing Committee on Finance to turn a blind eye to the chaos at the PIC.

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PIC willing to gamble pension money on financially crippled Eskom

The decision by the Public Investment Corporation (PIC) to advance a R5 billion bridging facility to Eskom is not only outrageous but a reckless gamble with pension money for government employees.

The PIC already has substantial exposure to Eskom debt and this latest injection will only increase the risk ratio of the Eskom debt it has on its loan books. The Government Employees Pension Fund (GEPF) is currently exposed to Eskom to the tune of approximately R 90 billion in bills and bonds.

Due to this enhanced risk on pension funds, the PIC and Eskom must release the terms of agreement for this loan, the interest that will be paid and when it’s expected to be paid back.

Government cannot raid the PIC to plug the financial holes that failing State Owned Enterprises continue digging for themselves due to corruption and poor corporate governance.

The willingness of the PIC to play fast and loose with pensioner’s money is one of the reasons why the DA has introduced the PIC Bill which will increase protection against poor investment decisions.

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DA submits Private Members Bill to strengthen good governance and transparency at the PIC

A copy of the Public Investment Corporation Amendment Bill, together with the memorandum on the objectives of the Public Investment Corporation Amendment Bill, are enclosed [here].

We have submitted a copy of a Private Members Bill, entitled the Public Investment Corporation Amendment Bill [B-2018], to the Speaker of the National Assembly, Baleka Mbete, for tabling in Parliament.

The Public Investment Corporation Amendment Bill was submitted in terms of Section 73(2) of the Constitution, read together with National Assembly Rule 276(2), following publication in the Government Gazette (No. 41215) on 31 October 2017.

The Public Investment Corporation Amendment Bill aims to promote good governance and transparency at the Public Investment Corporation, which manages funds on behalf of several clients, including the Government Employees Pension Fund.

To strengthen good governance and transparency at the Public Investment Corporation, the Public Investment Corporation Amendment Bill proposes six amendments to the Public Investment Corporation Act (No. 23 of 2004), to ensure, most importantly, that

• the Chairperson of the Public Investment Corporation will be appointed by the Minister on the recommendation of the National Assembly and must have the necessary expertise, qualifications and good character as required by the Financial Advisory and Intermediary Services Act (No. 37 of 2002);
• the Board of the Public Investment Corporation will include a representative of registered trade unions whose members form the majority of the members of the Government Employees Pension Fund; and
• a report reflecting all investments, whether listed or unlisted, be tabled in an annual report and published on the website of the Public Investment Corporation.

The Public Investment Corporation Amendment Bill was published for public comment in the Government Gazette (No. 41215) on 31 October 2017, and will now be processed in terms of National Assembly Rule 276(3) in Parliament.

We look forward to deliberating on submissions from interested parties, including political parties, trade unions and other stakeholders during the legislative process, which we hope will sharpen the Public Investment Corporation Amendment Bill and strengthen good governance and transparency at the Public Investment Corporation.

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BOKAMOSO | In the 21st century, corruption shouldn’t be this easy.

With so many blows raining on the Zupta state capture project, one could be forgiven for expecting it to be on its knees, with the looters beating a hasty retreat. The fightback includes: the incriminating GuptaLeaks; Bell Pottinger’s demise; KPMG, McKinsey and SAP in the firing line; global media coverage; the Supreme Court of Appeal judgement last week that revived Zuma’s 2009 corruption charges; parliamentary inquiries and Gerrie Nel’s private prosecution of Duduzane Zuma – all major blows against the looters.
And yet if anything, the state capture project is picking up pace. Recently, the Zuptas have targeted the PIC, staged an aggressive campaign to get their candidate installed as ANC president, and continued a brisk looting spree at SOEs. The project went into overdrive this week, when President Zuma reshuffled his cabinet to fast track his nuclear deal by deploying a close and compliant crony, David Mahlobo, as Energy Minister. Mahlobo wasted no time in confirming his support for nuclear energy, even as Brian Dames, former CEO and nuclear physicist at Eskom, told Parliament that South Africa doesn’t need and cannot afford nuclear.
The fact is, the Zuptas played a long-term game, lining up their supporters and fortifying their defense years ago. It has held up against every blow. Their strategy for narrow self-enrichment has won out against our Constitution, which was designed to heal the wounds of the past and build an inclusive, prosperous nation. Impressive as it is, the new Constitution just wasn’t designed with such parasitic leadership in mind.
No matter what else separates us as South Africans, we all agree that corruption must have no place in a free and democratic South Africa. It is the greatest enemy in our fight against poverty, unemployment and inequality. So we have to up our game and put in place new systems that combat it. There must be no way for corruption to take hold and flourish in our country.
The DA has some big, bold ideas to win the war against corruption.
For one thing, South Africa needs a new and powerful independent commission dedicated to fighting corruption – a kind of Scorpions on steroids. It must have a high level of independence – it cannot be answerable to the executive. Candidates for leadership must be short-listed by Parliament and then appointed by the Judicial Services Commission, based on competence, experience and ethical conduct.
This corruption-busting unit must be well resourced, and have comprehensive powers to investigate and prosecute. It must have a 24 hour corruption reporting centre where people may anonymously report corrupt activities in either the private or public sector. The DA would enforce a minimum fifteen year sentence for those found guilty of corruption.
Prevention is as important as cure, and a DA government would use genius new Blockchain technology to make the payment of all public money transparent. Blockchain may be the most revolutionary invention of the 21st century. It enables a payment system that is decentralized, totally transparent and virtually incorruptible. It would totally transform public finances management, making every transaction concerning public money publicly available.
The system requires transactions to be verified by more than one person or entity, and only once all verifiers have approved the transaction, the transfer of money occurs. The transaction is combined with other transactions to create a new block of data in a digital ledger that is permanent and unalterable. The technology would be used not just for transactions but for tender processes too – a kind of “internet of public finances management”.
It is time to get really tough on corruption. These, and other such big, bold ideas, would equip South Africa well to fight and win the war. Under a DA government, there will be no place for corrupt politicians, public servants and business people to hide. Building a free, fair and opportunity-driven society begins with defeating corruption. We South Africans have learnt that the hard way. But if we can build systems that make our society robust and resilient as a result, it may yet turn out to have been a valuable lesson.

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Malusi Gigaba appears to have an ulterior motive when it comes to the PIC

The Minister of Finance, Malusi Gigaba, claims to be acting to restore the integrity and ensure public trust in the Public Investment Corporation (PIC).
However, as details of the letter addressed to the Chairperson of the PIC’s Board, Deputy Minister, Sfiso Buthelezi, emerge the strong impression is created that the minister has an ulterior motive, which is ultimately to purge the senior management of the PIC.
The minister seems, most importantly, determined that a forensic investigation, to be conducted by an external audit firm, be launched into the conduct of Dr Dan Matjila, the PIC’s Chief Executive Officer, despite the fact the allegations against him were found to be baseless by the PIC’s Board.
We must act to ensure that the R1.87 trillion, under management by the PIC, is not “captured” by rent seeking factions in the governing party, or by ministers desperate to bailout “zombie” state-owned enterprises, like South African Airways.
I have, therefore, written to the Chairperson of the Standing Committee on Finance, Yunus Carrim, asking him to request the minister:

  • to provide a copy of his letter to the Chairperson of the PIC, Deputy Minister of Finance, Sfiso Buthelezi, dated 09 October 2017, setting out his concerns about the PIC; and
  • to provide a copy of the terms of reference of the forensic audit to be conducted into contracts concluded by the PIC as soon as possible after they have been submitted to him.

It’s imperative that we have sight of the minister’s letter before the PIC appear before the finance committee on Tuesday 17 October 2017 in Parliament.

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Malusi Gigaba’s “spin machine” in a desperate game of catch up at the PIC

The Minister of Finance, Malusi Gigaba, claims to be taking “bold action” to protect the integrity of the Public Investment Corporation (PIC).
However, the truth is the minister’s “spin machine” is playing catch up desperately trying to claim ownership of processes that are already underway at the PIC.
The fact is:
• the first disclosure of beneficiaries and investments, which included details of directors and shareholders, was made last year, and work towards preparing the second disclosure is already underway at the PIC; and
• the chairperson has already agreed, following a request from myself, to consider an investigation into irregularities, including the recent smear campaign, which did so much damage to the PIC.
In the end, the minister’s “spin machine” has packaged processes already underway as “bold action” in an effort to frame the minister as a crusader against “state capture” and a protector of the integrity of the PIC.
It’s just not credible.

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SAA must be Stabilised, Professionalised and Sold Off

The crisis at South African Airways (SAA) is fast reaching boiling point with debt repayments totaling R6.9 billion due this Saturday, 30 September. Despite this urgent situation, National Treasury has yet to reveal where this enormous amount of money will come from.
Our national carrier has become a bottomless pit into which government continues to pour precious public resources that should be spent on lifting 30 million South Africans out of poverty. It is hard to believe that any government hoping to be re-elected would take money from the poor to subsidize travel for the rich.
SAA’s fortunes will not change if we continue done the current tried, tested and failed path. For almost two decades, the airline has relied on government bailouts and guarantees for its survival. The cumulative total of bailouts since 1999 is R14.4 billion, and National Treasury is currently trying to source another R10 billion for the airline in the next 48 hours. Government has already extended R19.1 billion in guarantees – meaning that nearly R35 billion of ordinary South Africans’ hard-earned money has been dedicated to keeping SAA in ‘business’.
In addition to these bailouts and guarantees, and under the control of Board Chairperson Dudu Myeni, SAA has made a cumulative loss of R15.7 billion over the past five years. The DA has been clear and unwavering in our contention that Ms Myeni is both unfit and unsuitable to be at the helm. It is clear for all to see that this government continues to retain and protect Myeni in her position, in spite of this cash hemorrhage, because of her close political affiliations, including President Zuma himself.
The R10 billion that government is saying SAA needs will only pay off the bank loans of R 6.9 billion due by the 30th of September, the Standard Charted bail out of R2.2 billion at the end of June 2017, and R750 million to pay suppliers who were not fully paid in July and August 2017. The R10 billion will not provide working capital to fund the losses that National Treasury and the latest turn-around plan indicate will continue for the next two years. This requires a further R13 billion in cash injections or what National Treasury euphemistically refer to as “re-capitalization”.
The reality is that SAA is insolvent and bankrupt. It must be stabilized, and sold off as soon as practically possible.
Recovery plans have followed turnaround strategies, all yielding further losses. It is clear that national government is hell-bent on hanging onto the beleaguered airline – no matter the cost to the country and its people. SAA is not a strategic state-owned asset and it plays no role in the developmental agenda of government. On the contrary, over the last two decades it has cost our country dearly and delivered no tangible benefits to ordinary South Africans.
Getting to the bottom of the problem
Despite Finance Minister Malusi Gigaba’s best efforts, rumours of an impending raid on the Public Investment Corporation (PIC) refuse to go away. With just 48 hours to go before the R6.9 billion is due, we still do not know how Minister Gigaba intends to fund the bailout, and where additional funds will be found to pay suppliers.
The PIC, which administers the pensions of teachers, nurses, police officers and other public servants, has confirmed that they were approached for a R6 billion bailout for SAA. That our government would even consider risking pension funds of public servants is deplorable.
Significantly, the PIC has serious reservations about SAA’s suitability for a loan. At the media briefing on the 26th of September, PIC CEO, Dan Matjila, revealed that a due diligence investigation had been conducted into SAA. This report found SAA to be below the minimum investment standards required by the PIC. Matjila conceded that the outcome was “not favourable” in terms of “the minimum requirements of our client mandate”.
The contents of this report may be the clearest indication yet of the true state of SAA and the DA believes the report should be released for public scrutiny. We will therefore be submitting an application in terms of the Promotion of Access to information Act (PAIA) to obtain a copy of the SAA due diligence report conducted by the PIC.
Holding Myeni and Gigaba accountable
The Constitution sets out the basic values and principles of public administration in Section 195, which states that:
“Public Administration must be governed by the democratic values and principles enshrined in the Constitution, including … [e]fficient, economic and effective use of resources … The above principles apply to … Public Enterprises.”
The national carrier is deemed a public entity in terms of Schedule 2 of the Public Finance Management Act (No. 1 of 1999) and in terms of the South African Airways Act (No. 5 of 2007). Accordingly, SAA is subject to this section.
Sadly, the management of SAA has become the very antithesis of the requirements set out in the Constitution. It is our belief that Malusi Gigaba and Dudu Myeni, in their respective official capacities, have breached Section 195 of the Constitution by not acting in accordance the principals established therein.
Therefore, the DA will be writing to the Public Protector, Adv. Busisiwe Mkhwebane, requesting an investigation into this matter. Specifically, the Public Protector must investigate the role played by Ms Myeni in the institutional decay and poor governance of SAA, since 2009, and Mr Gigaba in his former and current role as minister of Public Enterprises and Finance, respectively. Myeni and Gigaba’s careers are intimately entwined with SAA’s demise and they must not be allowed to escape accountability.
The way forward for SAA
SAA can be profitable and a company worthy of being called South African. However, immediate and urgent action is required.
The DA’s solution to the SAA crisis would consist of the following interventions:

  • Remove Dudu Myeni from the board entirely and ensure that the board is made up of independent individuals with suitable aviation and business experience;
  • Initiate business rescue proceedings for SAA in terms of Chapter 6 of the Companies Act (No. 71 of 2008). This will temporarily place SAA in the hands of a capable business rescue practitioner charged with returning the entity to a healthy financial position. This will have to include:
    • The removal of political interference both in strategy and in the employment of skilled and experienced management and staff;
    • Aggressively pursuing profitable routes, some of which were foolishly abandoned over recent years;
    • Renegotiating supply contracts, particularly major supplies such as jet fuel on the basis of best price for the required service quality;
    • Adjustments to employee compliment numbers to bring the airline in line with international staffing norms.
  • Release government’s stranglehold over SAA by finding a buyer for SAA immediately. This ought to include an employee share scheme, making a portion of shares available to SAA employees in order to empower them and give them a real stake in the company’s future successes.

These initiatives will not only bring much needed public accountability to the airline’s governance, but will go a long way to making SAA profitable again. We thus call on Minister Gigaba to place SAA under business rescue before the next bailout payment deadline of 30 September.
Conclusion
South Africans cannot continue to fund a defunct and failing national carrier. In truth, the imminent R10 billion bailout will only be a short term solution and will not fix the underlying issues at SAA. It is time for urgent and immediate interventions that seek to stabilize, professionalize and sell off SAA.