London — Embattled state-owned SA Airways (SAA) is open to outside investment and in talks with a number of potential partners, President Cyril Ramaphosa said on Monday.
The SA economy has come under ever-growing pressure as the government grapples with lacklustre growth, high unemployment and a heavy debt burden, especially from state-owned enterprises such asSAA and power utility Eskom.
“SAA is one of those state-owned enterprises that has relied on lots of state bailouts,” Ramaphosa told the FT Africa conference in London.
“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.”
In September, the cash-strapped national airline said a government cash injection of R5.5bn had been approved for the 2019/2020 financial year but that it still needed more money.
Ramaphosa also said his government realised it had to pursue prudent fiscal policies to grow the economy, create jobs and attract investment.
“At a time when our fiscus 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.”
The government is due to publish a number of key papers and decisions in the coming days: a special paper laying out how to rescue Eskom and who its new chief executive will be, as well as the country’s long-term energy plan, known as the Integrated Resource Plan (IRP).
Asked if he thought the government was doing enough to maintain its investment-grade rating with Moody’s Investors Service, Ramaphosa said: “Moody’s and others will be very happy.”
Moody’s is the last of the top three ratings firms to still rank SA’s debt at investment grade — Baa3 with a stable outlook — and has not made a widely expected downgrade.
BY: KARIN STROHECKER AND LIBBY GEORGE