Treasury said no to SABC’s request for R1.5bn

The Treasury has rejected the cash-strapped SABC’s request for more funding as the corporation continues to bleed millions in revenue.

Deputy minister of communications Phil Mapulane disclosed on Tuesday that the public broadcaster had expected R1.5bn from finance minister Enoch Godongwana’s medium-term budget policy statement (MTBPS) last week. It was not forthcoming.

Mapulane, who led the SABC’s appearance before the portfolio committee on communications, told MPs his department asked the Treasury for R1.5bn for the corporation — funds that would have assisted with the coverage of the 2024 general election. 

“The argument was that because of the macro environment the SABC has painted, operating under the environment of analogue switch off and the need for the SABC to make sure the elections are covered, we submitted a motivation to the Treasury for R1.5bn,” said Mapulane.

“When the minister was tabling the MTBPS that allocation was not accepted so we didn’t get what we requested.”

He said because of the dire economic situation painted by Godongwana, there had been deductions from the baselines of all departments, even to the allocations made in the budget presented in February, “so there’s no new allocation to the SABC”.

“We are engaging with them, hoping in the next budget the National Treasury will respond positively.”

Mapulane said they were concerned about the sustainability of the public broadcaster. Financially, things were worse than the pre-2019 period before the broadcaster received a R3.2bn bailout from the state, he said.

“You will recall we supported the turnaround plan. It was implemented with the hope it would turn around the fortunes of the SABC but the turnaround plan never turned the finances of the SABC. We are back to where we were, if not in a worse position than when we started with a bailout.”

He said fundamental interventions had to be made, and the board was working on a turnaround plan the government could not interfere with.

SABC board chair Khathutshelo Ramukumba previously told the committee they will submit the plan to communications minister Mondli Gungubele by the end of November.

“We will then look at interventions from a structural point of view and revenue. We also hope the SABC bill we tabled will help with the interventions, especially when it comes to funding the public mandate,” said Mapulane.

Of concern for the ministry is the escalating debt of signal distribution costs the SABC owes to Sentech.

Mapulane revealed at the end of September the debt amounted to R745m, a significant figure which, he said, if allowed to continue rising will affect the sustainability of Sentech.

The SABC lodged a dispute with the Competition Commission and Independent Communications Authority of SA (Icasa) in May 2021 about the cost of tariffs charged by Sentech which it said were “unfair and anticompetitive”, and urged both regulators to investigate.

Mapulane said even if were determined the tariffs are high and must be lowered, the SABC would be liable to pay the debt.

“We are looking forward to the two boards resolving this issue in an amicable way. We appeal to the SABC board and management to service the debt and service the cost of the debt,” he said.

Mapulane disclosed the SABC has suffered a net loss of about R464m to date in terms of its second quarter report.

“While the corporate plan is projecting a surplus in terms of revenue, the information at our disposal in terms of the second quarter report indicates there has been a net loss of just below R500m which calls for the targets in the corporate plan to be revised because the available evidence isn’t consistent with the figures presented.”

The SABC was appearing before the committee to present its corporate plan for the 2023/2024 financial year.

The plan was supposed to be presented in May but due to President Cyril Ramaphosa’s delay in appointing a new board, the plan was presented on Tuesday.

The SABC’s corporate plan has been developed in an environment of declining revenue, declining viewership and changes brought largely by streaming platforms which are forcing the corporation to reposition and engage with the changing environment, said Mapulane.

SABC CFO Yolande van Biljon said the corporate plan was designed in the first quarter of the year, and they were using their forecast for 2023 as a baseline.

She said the organisation endeavoured to secure a profit of R56.7m, which was a significant increase from the envisaged loss at the time and the previous financial year, 2022.

“In revenue and expenditure terms, we were targeting R6.5bn worth of revenue, a 38% growth, and we were increasing expenditure by approximately 12%.”

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