South African National Airways Cash – Strapped, President Invites Foreign Investors

As a result of dwindling resources, President Cyril Ramaphosa on Monday disclosed that the country’s state-owned airline, South Africa Airways (SAA) is open to outside investment and in talks with a number of potential partners.

Ramaphosa, who stated this during the Africa conference in London said “South Africa Airways is one of those state-owned enterprises that has relied on lots of state bailouts.

“We are on record as saying we are open to the participation of the private sector. As we speak now, we’re talking to a few interested parties when it comes to SAA.”

The country’s economy has come under growing pressure as the government grapples with lacklustre growth, high unemployment and a heavy debt burden, especially from state-owned enterprises such as South African Airways and power firm, Eskom.

Last month, the cash-strapped airline said a government cash injection of 5.5 billion rands ($372 million) had been approved for the 2019/20 financial year, but that it still needed more money.

Ramaphosa also said his government realised it had to pursue prudent fiscal policies in order to grow the economy, create jobs and attract investment.

“At a time when our fiscus (finance) is under great pressure, we are committed to ensuring debt sustainability, improving the composition of spending and reducing risks arising from contingent liabilities, especially of our state-owned enterprises,” he said.

The government is due to publish a number of key papers and decisions over Eskom and who will be the utility’s new chief executive as well as the country’s long-term energy plan, the Integrated Resource Plan.

On whether the government was doing enough to maintain its investment-grade rating with Moody’s, Ramaphosa said he expected “Moody’s and others will be very happy.”

Moody’s is the last of the top three rating firms to still rank Pretoria’s debt at investment grade – Baa3 with a stable outlook – and has not made a widely expected downgrade.

South Africa has been in the news lately for xenophobic attacks on foreigners in the country.

According to reports, the attacks on the foreigners and their business were believed to be carried out because the country’s citizens felt they were denied the country’s jobs.