South Africa has once again taken another hit, as the current Chief Executive Officer of the South African Airways (SAA), Mr Vuyani Jarana, has tended his resignation letter barely two years after assuming office.
This move marks the second major resignations among the state-owned companies after the Eskom CEO, Mr Phakamani Hadebe who exited saying the job was taking a toll on his health. The South African businessman said his plot to revamp the airline, which has consistently made an 8year loss, is not properly fueled, as financial backing from the state government has not towed the projected line coupled with the prevalence of bureaucracy.
“The strategy is being systemically undermined, and as the Group Chief Executive Officer, I can no longer be able to assure the board and the public that [our strategy] is achievable.”
His resignation letter also stated that;
“Lines of accountability are becoming increasingly blurred about what operational decisions are in my domain, which are in the board’s domain and which are in the minister’s domain. Trust levels are very low, impacting ways of working.”
Mr Jarana, in his resignation further explained that he included a clause in his appointment letter to ensure the smooth flow of funding from the government. He stated that;
“I requested that the following clauses be incorporated into my contract of employment: that SAA remains with National Treasury; regardless of who the ministers of DPE [public enterprises] and NT [National Treasury] were.”This was to ensure that there’s consistency and I don’t have to go through two state departments to obtain approval. I have since gone through four ministers since joining SAA,”.
Also, he expressed that the staff have been denied their pay three different times. The Finance minister, Mr Tito Mboweni, who had expressed pessimism in the revamp project of the SAA said;
“It would be inappropriate for me to comment. The line ministry is public enterprises.”
Though Mr Jarana admitted to a one-time SAA funding, he however in his resignation letter made known that the major part of the money was used to keep debtors at bay. 21.7billion rands ($1.5billon) was mapped out to cater for the salvaging needs of the carrier; out of which 9.2 billion rands was set aside for the backlog of debt and 12.5billion was directed to working capital requirements up till 2021.
“Whereas the government injected R5bn of funding in the 2018/2019 financial year, a big chunk of that was used to fund creditors up to the end of March 2018.”
According to his resignation letter, Mr Jarana has agreed to make his final exit in August.