Reports that the Minister of Finance, Malusi Gigaba, intends to “dispose of its 39.75% shareholding in Telkom, which is currently valued at approximately R14.4bn” to allow for an R10 billion bailout for SAA are deeply disturbing.
The ANC government has known for more than ten years that SAA is doomed.
Yet, the ANC government has actively chosen, over and over again, to throw R23.3 billion in bailouts and guarantees since 2008 at the problem, instead of cutting the losses.
Now it appears that Cabinet wants to sell its Telkom shares, a successful company so that government can throw another R10 billion at SAA.
We have seen this movie before and we know how it ends – SAA continues to fail and will need more bailouts.
This is money that is desperately needed for education so that our children have a chance at a better future.
It is money that is needed to promote the creation of jobs so that the 9 million South Africans who cannot find a job and are denied dignity, can find employment.
This is money that can be used to make our communities safe for South African women to walk to the shops without fearing for their safety.
The sad fact is that there is no way out of handing over the billions needed to dig SAA out of the very deep hole the government has allowed the airline to fall into.
The effect of the numerous government bail outs and the dire financial situation at SAA is not limited to depleting the public purse but has also been partly responsible for ratings downgrades and negative outlook ratings from international agencies.
It is morally incomprehensible how the situation has been allowed to get to this level.
The only option left, with any hope of plugging financial hole, is for the ANC government to put SAA into business rescue to stabilise the airline before taking it to the market to find private equity investors.