JOHANNESBURG – South Africa’s government has named Johannes Bhekumuzi Magwaza as chairman of loss-making state-owned airline South African Airways (SAA), replacing Dudu Myeni, who was an ally of President Jacob Zuma, the finance minister said on Thursday.
In all six board members were replaced, Finance Minister Malusi Gigaba said in a statement without giving reasons for the clear-out, but adding that the new board brings “in-depth knowledge of business in both the private and public sectors”.
Myeni had been reappointed in September 2016 for a year, alongside 11 other board members.
The national carrier received state funds to repay loans in September and has been given until the end of October to settle 5 billion rand ($374 million) of maturing debt to domestic lenders.
Credit ratings agencies have said SAA should be reformed and cite the cost of propping it up as a threat to South Africa’s credit rating. S&P Global Ratings and Fitch have downgraded South Africa’s credit to “junk” status.
Magwaza, also known as “JB,” will be joined by Nolitha Fakude as deputy chairperson, Ahmed Bassa, Tinyiko Mhlari, Martin Kingston and Geoff Rothschild.
Magwaza’s appointment comes a day after the Public Investment Corporation (PIC), one of the continent’s largest asset managers, said it has not ruled out investing in SAA.
The PIC manages South African government employee retirement funds and has been in the spotlight recently after media reports that the finance ministry requested money from the pension fund to bail out struggling state firms.
Gigaba said in September South Africa was not planning to raid the government pension fund to bail out struggling state firms. [nJ8N1LC01M
The opposition Democratic Alliance’s shadow deputy minister of finance, Alf Lees, welcomed the decision.
“Make no mistake, this reported restructuring of the SAA board and the removal of Myeni is far too little, too late to save the airline. There is no saving SAA,” Lees said in a statement.