SA’s financial fires: Ministers grilled over R5bn UIF deal, Post Office crisis, power price…
Economic cluster ministers faced probing questions on issues ranging from the Treasury’s oversight of municipal budgets to the controversial R5bn UIF deal.
Deputy Minister of Communications and Digital Technologies Philly Mapulane. Photo: Jacques Nelles
Economic cluster ministers were confronted by some tough questions – ranging from Treasury’s oversight on municipal budgets to allegations of bribery in the Unemployment Insurance Fund’s (UIF) R5 billion deal – during a parliamentary Q&A session before the National Assembly on Wednesday afternoon.
The ministers were also grilled on the South African Post Office’s (SAPO) financial situation and the issue of renewable energy.
Post Office’s financial position
Deputy Minister of Communications and Digital Technologies, Philly Mapulane, said the Post Office’s financial situation is at a critical stage. SAPO has been unable to meet its financial obligations, saddled with a total debt of R12 billion owed to creditors.
He said the joint business rescue plan proposes the reduction of the network to about 600 branches for the interim. The reduction is aimed at ensuring that these geographically well-located branches remain open.
Mapulane added that SAPO will negotiate with Post Bank to transfer some of its branches, so it can operate its own independent network in rural and remote areas.
The rescue plan, drawn up by joint business rescue practitioners Anoosh Rooplal and Juanito Damons, also aims to provide a better outcome for creditors than what would have been the case if the Post Office was liquidated.
Mapulane added that the R2.4 billion that was offered to Sapo as a bailout, is being utilised during the business rescue process.
Rooplal, however, said on Tuesday that they need a further R3.8 billion from the government as investment capital to repair and modernise the Post Office to support the turnaround strategy.
UIF R5bn deal
Minister of Employment and Labour, Thulas Nxesi, and three other ministers were recently accused by Thuja Capital’s CEO, Mthunzi Mdwaba, of trying to solicit a 10% bribe from the R5 billion jobs deal between the UIF and Thuja Capital.
Nxesi subsequently said he would file court papers to set the deal aside and denied the allegations, saying he only found out about the deal via the media.
“I reject the allegations with the contempt they deserve,” the minister said on Wednesday afternoon.
When asked about disciplinary action against those in the department implicated, the minister said disciplinary measures would be taken, but the procedural process needed to be adhered to as “cases have been lost for not following procedural process”.
He added that there are dangers when action is hurried.
Nxesi further called on Mdwaba to put the allegations on record in court and be ready to be interrogated.
In relation to former department of labour and employment director-general Thobile Lamati’s resignation, the minister was asked about what disciplinary action is to follow.
According to Nxesi, Lamati resigned after the report into the deal was submitted, and because he resigned, it is now up to the courts to rule on the matter.
Treasury’s oversight on budget misuse
When asked about the Treasury monitoring department and municipality sending, Finance Minister Enoch Godongwana said the Treasury dealt with holistic national costs and has limited powers where underspending or overspending occurs.
The minister said that responsibility lied with the Auditor-General, who revealed on Wednesday that the government wasted R22 billion during President Cyril Ramaphosa’s term.
Godongwana urged Parliament and MPs to hold departments’ officials accountable.
In terms of closing the gap on corruption and the siphoning of state funds, the minister agreed to report to the National Assembly quarterly, when departmental accounting officers will respond to budget-related questions.
Godongwana added that, in relation to corruption, there wasn’t anything stopping members from reporting it to law enforcement.
“Why not report it?” the minister asked.
High electricity price
Minister of Mineral Resources and Energy Gwede Mantashe kicked off by stating that the general conception that renewable energy was cheaper, was an assumption which has not yet been proven.
Mantashe acknowledged the high electricity price and said the structure of electricity is undergoing reform to improve the efficiency of the electricity industry, including the participation of new players.
“There’s an economic assumption that once there is competition, the price will go down. That is an assumption. It’s not a fact at this time,” he said.
The minister added that the state does take responsibility for cushioning the poorer end of society from electricity costs.