PARLIAMENT, October 19 (ANA) – Finance Minister Malusi Gigaba will address concerns about the lawfulness of the bailout given to South African Airways at the end of September when he delivers his medium-term budget policy statement next week, Deputy President Cyril Ramaphosa said on Thursday.
Gigaba dipped into the National Revenue Fund to give SAA R3 billion to prevent it defaulting on its loan from Citibank.
Answering questions from the opposition in the National Assembly, Ramaphosa said had the airline defaulted, it would have resulted in more lenders calling in their loans with “catastrophic” results for the country.
He conceded that there were differing legal views on the measure.
Parliament’s standing committee on finance was advised by the legislature’s legal services offices that it may have been unlawful, and said on Wednesday Gigaba should have submitted a special appropriations bill instead of invoking section 16 of the Public Finance Management Act to authorise the allocation.
It sought legal advice after the opposition said that the provision in question only applied to unexpected circumstances, and that it had been foreseeable for some time that SAA would not be in a position to pay Citibank.
– African News Agency (ANA)
