Lack of political will flops SAA deal, leaving South Africans with the bill

13 March 2024

ActionSA notes Pravin Gordan's announcement that the SAA Deal, which sought to sell off 51% stake in National Airline to Takatso Consortium, has fallen through and South Africans have been kept in the dark as to how this deal collapsed, just as the terms of the deal were shrouded in secrecy.

It has been clear from the first announcement of the sale that there was no real political will to support the necessary sale of a controlling share in SAA to mitigate the losses that have plagued the fiscus for decades. It is evident that the deal has fallen apart over 3 years since its announcement because of the customary internal opposition within the tripartite alliance to the announced measures to privatise the national carrier.

Since 2007 SAA has received more than R50 billion in bailouts at a time in which the competing demands of the national budget could have seen those resources addressing a dysfunctional schooling system, broken infrastructure or a healthcare system in crisis.

As a direct consequence of the collapse of this deal, South Africans face the grim prospect of continuing to carry SAA going forward at a time in which the budget deficit continues to grow as a stagnant economy struggles to keep up with mounting demands from failing departments.

ActionSA is unequivocal in its position that South Africa cannot afford struggling State-Owned Entities that become a drain on the national fiscus. SAA is top of the list of State-Owned Entities that need to be sold as decisively as possible in order to being an end to the financial drain.

An ActionSA in government emerging from the 2024 elections will immediately institute an institutional review of State-Owned Entities to develop a clear plan for which entities should be retained and which should be sold. Central to this review will be the absorption of entities into government departments to ensure a coherence between the departments and the provision of services to the South African people.

Issued by Michael Beaumont, ActionSA, 13 March 2024