The South African government will be selling off some of its shares in telecoms company, Telkom, to help it make up for some of the money it needs to spend over the next year.
This was announced by Minister of Finance, Malusi Gigaba, during his first Medium Term Budget Policy Speech in Parliament today.
Government needs an extra R3.9 billion to sufficiently fund all government related activities and departments.
“Government is disposing of a portion of its Telkom shares to avoid a breach, with an option to buy them back at a later stage,” Gigaba said.
The public purse has recently been strained after government had to make billions in bailouts available for South Africa Airways (SAA) and the Post Office.
SAA set to receive total of R10 billion in bail out money (R5.2 billion already being paid through an appropriation and the remaining R4.8 billion to be paid in March) and the Post Office is getting R3.7 billion.
Gigaba said payments for financial assets are funded by the sale of assets in the same year. The principle was applied to the R23 billion allocation to Eskom in 2015, which was financed by the sale of government’s Vodacom shares.