Development Bank gives SAA a taxpayer bailout disguised as a loan

29 January 2020

The Democratic Alliance (DA) will write to the Minister of Trade and Industry, Ibrahim Patel, to obtain full details of the reported loan of R3.5 billion that the Development Bank of Southern Africa (DBSA), a state-owned entity (SOE), has allegedly made available to SAA, another SOE. 

Given the fact that the Bank falls under the mandate of Minister Patel, the onus rests on him to come clean on the details of this loan.

This is simply a disguised taxpayer bailout of the bankrupt SAA and it takes money that should be invested by DBSA in real and sustainable development projects that will create jobs for the 10 million unemployed and largely destitute South Africans and throws it into the the bankrupt SAA black hole.

The loan from the DBSA is no better than the aborted attempt in 2015 by the then SAA Board Chaired by Dudu Myeni to get R15 billion from the Free State Development Corporation (FSDC). At the time, the FSDC was chaired by the sister of the then Free State Premier and current ANC Secretary General, Ace Magashule and it was rumored that she would have benefited personally from this funding deal.

This is the “payment by stealth” to SAA that the DA raised as a concern and which has now been confirmed. What has not been confirmed is:

the amount of the loan,

the conditions, if any, attached to the loan,

the interest payable on the loan,

what security SAA provided to the DBSA for the loan, and 

what the SAA repayment obligations for the loan are. 

The DBSA is an entity that has a developmental mandate that must exclude propping up a failed SOE such as SAA.

Issued by Alf Lees,DA Member of the Standing Committee on Public Accounts, 29 January 2020