Sovereign Wealth Funds

MBABANE – In 1968, King Sobhuza II created a Royal Charter that governs the Sovereign Wealth Fund (SWF) in Eswatini, Tibiyo Taka Ngwane.

This fund is not subject to government or parliamentary oversight and does not provide information on assets or financial performance to the public.

The US Government states that Tibiyo publishes an annual report with financials, but it is not required by law to do so as it is not registered under the Companies Act of 1912.

The annual reports are not made public or submitted to any other state organ for debate or review. Tibiyo invests entirely in the local economy and local subsidiaries of foreign companies.

It has shares in a number of private companies. Sometimes foreign companies can form partnerships with it, especially if the foreign company wants to raise capital and can manage the project on its own.

CORRUPTION

The US State Department states that the law provides criminal penalties for corruption by officials, but the government does not implement the law effectively. “Officials sometimes engage in corrupt practices with impunity,” reads the report.

The US Government states that corruption continues to be a problem, most often involving personal relationships and bribes being used to secure government contracts on large capital projects.

The Prevention of Corruption Act and the Swaziland Public Procurement Act are the two laws that combat corruption by all persons, including public officials.

The Public Procurement Act prohibits public sector workers and politicians from supplying the government with goods or services; however, this prohibition does not extend to family members of officials.

The Eswatini Public Procurement Agency (ESPPRA) conducted capacity building exercises nationwide with both public and private companies to increase knowledge and encourage adoption of universally practiced purchasing systems.

According to Section 27 of the Public

Procurement Regulations, suppliers are prohibited from offering gifts or hospitality, directly or indirectly, to staff of a procuring entity, members of the Tender Board, and members of the ESPPRA.

While avoiding conflict of interest and establishing codes of conduct are policies that are encouraged, they are not effectively enforced. Some companies use internal controls and audit compliance programmes to try to track and prevent bribery. All of these were said by the US Department of State.

Eswatini is a signatory to the African Union Convention on Preventing and Combating Corruption and Related Offenses and the SADC Protocol against Corruption. Eswatini has signed and ratified the UN Anticorruption Convention, but it is not party to the OECD Anti-Bribery Convention.

The Anti-Corruption Commission (ACC) is legally allowed to investigate corruption and does so.

The ACC does not provide protection to NGOs involved in investigating corruption.

Given the commission’s current capacity, ‘government procurement’ is the most likely area to find corruption in Eswatini.

The global competitiveness report ranks Swaziland 79 of 140 countries on incidence of corruption. Transparency International reports Eswatini as the 14th least corrupt country in Africa.

Though no US firms have cited corruption, the 2015 Africa Competitiveness report found that 12.8 per cent of business owners saw corruption as a hurdle to doing business in Eswatini, impacting profits, contracts, and investment decisions for their companies.

There is a public perception of corruption in the executive and legislative branches of government and a consensus that government does little to combat it.

There have been credible reports that a person’s relationship with government officials influenced the awarding of government contracts; the appointment, employment and promotion of officials; recruitment into the security services; and school admissions.

Authorities rarely took action on reported incidents of nepotism.