says ontingency Fund timing wrong

MBABANE – Economist Thembinkosi Dube says government should have prioritised the payment of suppliers over the formation of a Contingency Fund.

Dube noted that the Finance Minister, Neal Rijkenberg, announced that government still owed E750 million to suppliers. He said while the fund was a much-needed provision for rainy days, its timing was wrong. The economist recalled that the minister said suppliers would be paid through the E650 million loan from the Johannesburg Stock Exchange (JSE).

He said that the loan was way below the money government owed to suppliers. “You cannot say you are saving money while you still owe people. This creates an impression that government didn’t want to pay suppliers or prioritised other commitments,” he said.

Dube said government needed to rethink its decision so that suppliers do not feel unconsidered. “If it weren’t for the hips of millions government owed to suppliers, the fund would have been a good move,” he added. He said, however, E200 million was not enough given the fact that the supplementary budget ranges between E1 billion and E3 billion.

Dube added that the country once had a fund similar to the Contingency Fund. “Such funds are not new; a country shouldn’t eat everything. In the early 2000s, there was a fund that was referred to as the Capital Investment Fund (CIF), where the money was invested and reserved for tough periods. I view this as a revival of CIF,” he said. Dube went on to state that it was a bad practice for a country to use all of its money and not save some. He said government needed to prioritise saving but not at the expense of others, in this case, the suppliers.