Six public enterprises with high wage bill

... EEC’s administrative expenses, salaries reach E366 million

MBABANE – The Eswatini Revenue Service (ERS) is not the only parastatal paying exorbitantly high staff wages, it has been gathered.

Other State-owned enterprises (SOEs), such as the Eswatini Electricity Company (EEC), actually employs more people, making the payment of staff one of the significant costs accrued.

The EEC annual report shows that administrative expenses, including salaries, stood at E366 million.

The EEC, which takes the lead, employs the most staff, at a total of 867.

EEC employs 766 permanent employees and 101 temporary staff.

The staff complement for permanent staff increased by 4.45 per cent in the previous year.

A total of 585 permanent employees were male, while 181 were female.

Furthermore, the majority of the employees work in the operations division, with a total of 524, while the lowest division is research and development, which has 10 employees.

COMPLEMENT

Compared to the ERS, the EEC staff complement 30 per cent more, with 251 persons.

Despite the EEC having generated E2.45 billion in revenue from selling 1 126.4 gigawatt-hour (GWh), last year, according to the 2023 Integrated Annual Report, costs increased by 10 per cent.

The highest costs were sales costs, which were at E1.9 billion last year, after having increased from E1.8 billion in the previous year.

These costs were attributed to imported electricity, while the Rand/Lilangeni depreciated against the Dollar.

Furthermore, E8 million is attributed to the expense of the net impairment of financial assets, which puts the expenses from the comprehensive income at E374.2 million.

Compared to the costs of the ERS’s E316 million staff costs and the EEC’s E366 million staff costs, the ERS has better salaries, as the latter paid for 251 (30 per cent) more staff than the ERS.

However, EEC further invested E12.2 million in human capital through training.

This translates to the average cost of training each employee at E16 015.

CONSECUTIVE

The EEC Managing Director (MD), Ernest Mkhonta, said in his report, that the past year has seen several shifts that have led to a reduction in demand from high-intensity users, dependency on electricity imports, and a drastic increase in fuel prices, among others, which have led to losses in three consecutive quarters.

This saw EEC’s revenue decrease by 0.4 per cent from the previous year.

ERS, according to the annual report, incurred E316 930 579 costs, as staff salaries reflected an increment from E289 564 272, which was recorded in the previous review.

Both staff salaries and administrative expenses accounted for E461 million in costs from an income of E501 million that ERS received from government.

Revenue from the sales of electricity fell four per cent below the allowable revenue target, set by the Eswatini Energy Regulatory Authority.

However, the company still made E83 million in profits last year.

In fact, in a random sampling of six

SOEs, the ERS came in second place.

Last week, ERS stated in its Integrated Annual Report that it would employ a total of 616 permanent employees by the end of March 2023.

There were 30 workers engaged on contract.

The other four enterprises; besides ERS and EEC are Eswatini Water Services Corporation (EWSC), Sincephetelo Motor Vehicle Accident Fund (SMVAF) , Public Service Pensions Fund (PSPF), and Eswatini Communications Commission (ESCCOM). The sample was measured against the income each company makes.

In third place is the EWSC, which had 583 employees in 2023.

This figure was up from 571 in 2022, with eight employees per 1 000 connections.

ESWC had a total revenue of E513 570 628.

There was other income of E52 288 876.

DEPRECIATION

Employee benefit expense accounted for E158.4 million, depreciation expense at E68 million, and other expenses at E148.2 million.

If anything is to go by, the E158.4 million as expenses for salaries (E366 million for the EEC and E316 million paid by the ERS), the salary is about 57 per cent less than that of the EEC and about 50 per cent less than that of the ERS.

The SMVAF has a total of 121 staff, according to the 2022 annual report, taking fourth place.

There were 76 staff members who were permanent; 22 were on fixed-term contracts; six were temporary; and 17 were at Ekuphileni Clinic.

A majority of the employees (47) are in operations, with the least at the Chief Executive Officer’s (CEO) Office (7).

In terms of gender, 55 per cent were female, while 45 per cent were male employees.

In 2022, the SMVAF had E110.7 million in revenue from the fuel levy and E19.2 million from other operating income.

Salaries and wages were at the cost of E39 184 234 for the group. However, with other benefits, post-retirement benefits contributions, and medical aid contributions, the total costs for salaries and wages went up to E51.5 million.

The PSPF has a staff complement of 59 members.

RECRUITMENTS

There were seven appointments and recruitments that were made during the period under review: Director finance, two benefits administrators, benefits officer (grand gratuities), it support officer, company secretary, director investments, and investments monitoring manager.

Salaries and related costs were E58 503 920 in the year under review.

This figure went up from E50 027 826 of the previous year.

PSPS collected revenues from members of the fund of E315 million.

There was an increment from 2022, whereby this stood at E302 million, with contributions at the normal rate of five per cent of pensionable salary and additional voluntary contributions, while the balance was contributed by employers.

PSPF also invested 44 per cent (E13.7 billion) of its total assets within the Kingdom of Eswatini, 37 per cent (E11.6 billion) in South Africa, and 19 per cent (E5.9 billion) in offshore accounts through external asset managers.

Lastly, ESCOOM has 38 full-time staff and two graduate trainees.

There are 62.5 per cent male and 37.5 per cent female employees, of whom a majority work in support services as well as the strategy and economic regulation departments.

ESCCOM, which is the regulator, made an income of E122.7 million.

This is made up of mainly mobile license fees, spectrum fees, type approval, and general electronic communication licences.

“The main source of revenue is based on the five per cent levied on the net operating income of mobile network operators (MNOs), spectrum fees, as well as the two per cent levied on the net operating income of internet service providers (ISPs),” the annual report states.

UTILISED

ESCCOM utilised E96.6 million for operations, but remained with a surplus of E11.6 million for the year.

ESCCOM has also spent E160 million on the new office building project at Ezulwini.

The total cost is estimated at E221.9 million.

ESCCOM went further to shed light on jobs and income from the information, communication, and technology (ICT) industry.

ESCCOM said employment in the telecommunications industry rebounded in the past year.

There was an increase of three per cent from 2021–2022, whereby 1 238 people were employed to 1 270 in 2022–2023.

However, ESCCOM stated that the

mobile cellular market through phone subscriptions declined by 0.8 per cent, from 1 524 629 in 2021/22 to 1 513 118 in 2022/23.

The commission also said there was negative growth in mobile cellular SIM subscriptions compared to the 19 per cent growth recorded in the previous period, which is attributed to the deactivation of SIM subscriptions.

ESCCOM said mobile broadband subscriptions recorded a slight increase of 0.8 per cent from 1 379 526 subscriptions in 2021/22 to 1 389 894 in 2022/23.

Fixed telephone subscriptions are said to have recovered slightly from a decline in 2020–21.

Fixed telephone subscriptions increased by 2.8 per cent from 38 537 subscriptions in 2020/21 to 39 616 in 2022/23.

The recovery in fixed telephone connectivity was driven by an increase in fixed wireless connections, which increased by 61 per cent in the period under review.

DECLINE

Fixed wired telephone connections, on the other hand, continued to decline in the period by 17 per cent due to copper cable theft.

ESCCOM said the ICT industry contribution to the domestic tax revenue collected by the ERS, which increased from E10 786 960 753 in the financial year 2021/22 to E12 037 537 465 in the financial year 2022/23.

This shows an increase of 12 per cent.

ESCCOM said the telecommunications industry contributed 4.6 per cent to the total domestic tax revenue collected.

This was a 0.8 per cent increase from the 3.8 per cent contribution in financial year 2022–2023.

“The telecommunications industry’s contribution to personal income tax, or pay as you earn (PAYE), increased by 0.3 per cent in FY 2022/23 to 2.5 per cent from 2.2 per cent in FY 2021/22.’’

ESCCOM said value-added tax (VAT) revenue contribution recorded an increase from 5.1 per cent in FY 2021/22 to 5.3 per cent in FY2022/23.

Contributions to company income tax (CIT) and other income tax (OIT) decreased by 0.5 per cent and 2.2 per cent, respectively.