Dali Mpofu questions if SAA could be saved with R10bn of economic stimulus package

Former national chairperson of the Economic Freedom Fighters (EFF) Dali Mpofu sought an explanation on why South African Airways (SAA) would not receive funding so as to prevent it from possible collapse.

Mpofu’s comment comes after President Cyril Ramaphosa announced South Africa’s biggest spending plan on Tuesday as “a once-off stimulus R500-billion injection into the struggling economy” in response to the Covid-19 pandemic.

“Can anyone explain why we can’t afford R10 billion, a mere 2% of R500 billion, to save SAA and thousands of direct and indirect jobs?” he asked.

The advocate continued to say: “Is it really better for those thousands of people to lose their jobs so that we use the relief package to give them welfare grants and food parcels?”

Ramaphosa’s broad range of interventions to save the country’s economy and help curb the Covid-19 pandemic included a R200-billion loan scheme with major banks; a R50-billion boost for grant recipients; R100 billion for jobs; R70 billion in tax relief; R20 billion for municipalities; 250,000 food parcels and more than R100 million to help protect front-line workers.

Last week, the government decided against giving the ailing SAA R10 billion, or organise money for it from “foreign sources”.

Public Enterprises Minister Pravin Gordhan wrote a letter to the airline’s business rescue practitioners that their apparent request for R10 billion must be denied.

However, the Economic Freedom Fighters (EFF) slammed the “deliberate collapse” of SAA allegedly by Gordhan.

In a statement, the EFF blamed the collapse on Gordhan, who it accused of creating an environment of fiscal uncertainty and “arrogantly” dismissing advisory measures provided by appointed business rescue practitioners.

Meanwhile, on Friday the airline’s unions received a draft settlement agreement offer open to all of their 4,708 employees that would see the termination of their employment contracts by April 30 in exchange for unguaranteed severance packages.

READ NEXT: Unions respond to SAA severance package offer

(Compiled by Molefe Seeletsa. Background reporting by Charles Cilliers, News24 Wire and Moneyweb.)

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