According to reports reaching us at BMA, South Africa’s Communications Minister, Solly Malatsi, is contemplating the introduction of a levy on both local and international streaming services as a potential solution to address the ongoing financial struggles of the South African Broadcasting Corporation (SABC).
Notably, TV licence holders would be exempt from this levy.
Malatsi’s comments came in response to a Parliamentary inquiry from IFP MP Khethamabala Sithole regarding alternative funding strategies for the public broadcaster. This proposal follows Malatsi’s withdrawal of the contentious SABC Bill before its second reading in Parliament, which sparked internal conflict within President Cyril Ramaphosa’s Government of National Unity (GNU).
The Minister stated that the withdrawn bill failed to tackle the SABC’s immediate funding challenges and granted him excessive authority over the broadcaster’s board of directors. Shortly after this decision, the Presidency established new regulations preventing cabinet ministers from withdrawing bills without approval from Ramaphosa and Deputy President Paul Mashatile, leading to debates about the applicability of this rule to Malatsi’s actions.
The ongoing dispute about the SABC Bill’s withdrawal poses a risk of further delaying the urgent interventions needed to prevent the public broadcaster from collapsing. Since the financial year 2019/20, SABC’s revenue has decreased. Although the broadcaster is making strides to reduce its losses, it still reported a loss of US$10 million last year, an improvement from the US$40 million loss recorded the previous year. However, the broadcaster has accumulated more debt, with total liabilities exceeding US$222 million, a significant increase from US$173 million in 2019/20. Consequently, the SABC slipped into technical insolvency last year, with net equity now at -US$1,9 million.
The SABC’s cash flow situation has also deteriorated, with available cash and equivalents dropping from US$113 million in 2019/20 to US$21 million last year. Despite the situation’s urgency, the SABC Bill did not propose any changes to the funding model. Instead, it allowed the Minister of Finance and Communications and Digital Technologies three years to create a new funding model after the bill’s enactment.
The dire conditions at the SABC are further underscored by the deteriorating state of its Auckland Park office building, where staff face malfunctioning lifts and other infrastructural challenges. A major contributing factor to the SABC’s financial woes is a significant decline in TV licence fee payments, with only 13% of registered holders fulfilling their obligations. This statistic does not account for the households that own televisions without purchasing a licence.
Malatsi’s idea of introducing a levy on streaming services is not entirely novel. The SABC had previously suggested that major pay-TV platforms assist in collecting licence fees. MultiChoice, which operates DStv, rejected this proposition, arguing that expecting a private competitor to handle revenue collection for a government entity was unreasonable.
