SAA and Common Sense

The Government has undertaken to provide a guarantee on behalf of South African Airways of five billion Rand in order to allow it to recapitalise.  The Government gave an answer to the obvious question of ‘Why should the Taxpayer continue to fill the bottomless pit caused by incompetent management? 

“This is only a guarantee, it will not come from the taxpayer!”

That is wonderful news!  That reason is the same as that given for the Government’s decision to grant a loan of R2 400 000 to the corrupt and undemocratic Government of Swaziland, shortly before the Swazi King demanded that the Government pay him a ‘loan-raising commission’ of R600 000.  This money does not come from the taxpayer, our highly-competent Minister of Finance declared!  It comes from money that South Africa raises on the capital market!  And, even better, it will be repaid!

This reasoning solves all the problems of the miners, who borrow money from micro-lenders at 30% per month.  It solves all the problems of the countless South African citizens who need a few hundred thousand to establish a factory and lift themselves out of the poverty trap.  All the Government has to do is issue a guarantee on behalf of each of those people, to allow them to borrow on the local or international financial market at five per cent!  Not one cent will be provided by the Taxpayer!  And the money will be repaid!  It is a brilliant plan – about as brilliant as the justification handed to the millions of unthinking citizens who will have to cough up the ultimate cost.  And it will be possible to arrange a loan-raising fee for each of these borrowers, payable to the person who makes the arrangement – almost certainly one of the favoured few BEE zillionaires, as well as to negotiate a purchase commission on the goods to be bought with the money – again one of the favoured few.

All that is now necessary to do is figure how to explain to the world financiers, who rely on the continued solvency of the South African State, how it is that a country can be managed in as amateurish way as it is!  Unfortunately, the Ratings Agencies have already noticed the slide.