Telecommunication and Postal Services Minister Siyabonga Cwele says government will soon establish a task team to engage Telkom on the sale of a portion of its shares to address a revenue shortfall.
The Minister said this shortly after Finance Minister Malusi Gigaba tabled the Medium Term Budget Policy Statement (MTBPS), in which he announced the intention to sell a portion of the State’s shares to avoid a risk of an expenditure ceiling breach of R3.9 billion.
The expenditure breach risk was brought about by the recapitalisation of SA Airways (SAA) and the South African Post Office (SAPO) amounting to R13.7 billion.
Speaking to SAnews in Cape Town, the Minister said government decided to sell the Telkom shares instead of borrowing to fill the hole in order to maintain fiscal discipline.
“So the strategy is to use whatever money we have to cut down the debt and invest in key strategic assets – our State-owned companies. That is the approach we are taking with the Post Office, so that we continue to respect our expenditure ceiling and fiscal discipline.
“Under difficult times, you look [at] whether you should borrow or dispose of existing assets or a portion [of the assets]. As a country, we have to continue to maintain our fiscal independence and our fiscal discipline. We don’t want to send Minister Gigaba to international institutions for funding… We are basically leveraging on our existing assets. We are not privatising Telkom.
“As government, we are going to set up a task team that will engage with the management of Telkom so that we do this in a structured manner, not in a manner that may affect the share value of the investors of Telkom.”
New fund for start-ups
Meanwhile, Minister Gigaba also announced that government would set up a new fund for small business enterprise development – which will be a collaboration between the Department of Small Business Development and the Department of Science and Technology.
Reacting to the news, Small Business Development Minister Lindiwe Zulu said while it was important to work with the private sector, the new fund was separate from the R1.5 billion CEO’s Initiative that was announced recently.
“We will use our financial institutions such as the Small Enterprise Finance Agency… and the National Empowerment Fund. We will use all the existing infrastructure to make sure the money goes to the people who deserve it the most.
“The Minister said the amount will be announced soon. I am also excited because the European Union has also set up a fund for us to support SMEs… That money will also focus on start-ups and those businesses that can already see where they are going.”
National Minimum Wage Bill to be tabled in Parliament
Meanwhile, Labour Deputy Minister iNkosi Patekile Holomisa says the department will soon table the National Minimum Wage Bill before Parliament for processing.
The bill will give effect to the announcements made on the National Minimum Wage by Deputy President Cyril Ramaphosa earlier this year that were aimed at addressing wage inequality.
“I have just come out of a Cabinet Committee Meeting and it has been agreed that the National Minimum Wage Bill must be tabled in Parliament after being adopted by Cabinet next week.”