Lawless Sebenta incurs E5m loss in 5 years
MBABANE – Despite being an official public enterprise that has existed for 64 years, the Sebenta National Institute (SNI) has been operating without a legislation that establishes it.
The lack of legislation has been cited as one of the main reasons the institution, which has incurred losses amounting to around E5 million in the past five years, has struggled to secure funds to assist it in fulfilling its mandate.
This is reflected in the annual performance report of the Ministry of Education and Training, which was tabled and adopted in Parliament recently.
In the report, one of the challenges said to be affecting the operations of the SNI is that the institution has been working on the enactment of a the Bill that will eventually become a legislation to establish it.
It is stated that the process was taking a longer time than it had been anticipated.
This, the report states, has negatively impacted the institution when sourcing for assistance of funds from various strategic alliances.
“It has deprived the institute of an opportunity to access donor funds. However, the institute is working tirelessly in order for the Bill to be enacted by engaging all relevant parties,” reads part of the report.
SERVICES
Under the Government of Eswatini website, the SNI is cited as a non-profit public enterprise that provides a variety of services to enable people to achieve personal goals through adult basic literacy and non-formal education.
It is highlighted on the website that Sebenta believes that a majority of the rural and peri-urban population in Eswatini were underdeveloped, and disempowered in part because of illiteracy, yet there was no way rapid development may be attained with an illiterate population.
The SNI, according to the website, believes that the ability to communicate, read, write and speak with confidence is the key to the upliftment of emaSwati.
It is also mentioned that the SNI strives to deliver a professional basic literacy programme through professionally trained personnel who are dedicated to the course, armed with necessary resources and a broad inclusive curriculum.
It should be noted that in the Auditor General (AG), Timothy Matsebula’s, report for the financial year ended March 31, 2023, the SNI is listed as one of about 11 Category A public enterprises who have continued to perform poorly.
REPORT
In the report, the AG stated that he notified the controlling officer, that being the principal officer in the Ministry of Finance that an an analysis of the financial performance of the public enterprises over a period of five years, financial years 2019 to 2023, revealed that some of them have continually been incurring significant losses.
Matsebula said the expectation was that well managed public enterprises should at least be able to break-even (make adequate income to cater for all operating expenses) and further be able to develop and effectively implement turnaround strategies that would improve their financial performance and financial position.
The AG made reference to Section 4(2)(a) of the Public Enterprise and Monitoring Act of 1989 as amended, which stipulates that the Public Enterprise Unit should, in consultation with the Standing Committee and Governing Body, monitor and review the financial affairs and budgets of each Category A public enterprises on a regular basis with the view of bringing to the attention of the Standing Committee the impending problems of such Category A Public Enterprises.
Matsebula said he warned the controlling officer that monitoring and evaluation of the public enterprises was not effective.
In his analysis, the AG said government may eventually be required to bailout the public enterprises, thereby increasing public spending and plunging the government to excessive deficits.
MANDATES
“The public enterprises may not be able to efficiently and effectively execute their mandates thereby negatively impacting service delivery and consequently the lives of citizens. I advised the controlling officer to, through the Public Enterprise Unit, regularly monitor and evaluate the performance of the public enterprises and ensure that policies and strategies are put in place to improve their financial performance,” the AG said in the report.
He said in response, the controlling officer stated that the PEU Office fully executed its function and reported to SCOPE on a quarterly basis on their performances and challenges these entities were currently facing.
Matsebula said the controlling officer stated that the queried companies were facing serious financial challenges and had noted from the budgets of the subverted entities that most of the costs were tied up in the wage bill as it ranged around 85 per cent of the subventions, leaving a small amount for operational costs and are also accumulating quite a lot of liabilities and tend to use bank overdraft facilities to cater for their critical and operational cost.
He said the controlling officer stated that the PEU executed all its functions as it advised and reported to SCOPE on all the matters pertaining SOEs.
“The response of the controlling officer was noted and appreciated, however, it is unsatisfactory. The assertions are not supported by documentation to prove that the PEU executes its mandate of monitoring, managing and engaging parastatals. There was also no correspondence ever copied to my office to support that the issue of dividend resolutions is discussed with the PEU as stated by the controlling officer,” said Matsebula.
Furthermore, he said the response of the controlling officer did not explain how the other companies were able to faithfully declare and pay dividends despite operating in the same economy.
The response, according to the AG, was also not in the spirit of the dividend policy and government investment objective, yet the ministry was the custodian of the policy, hence he was worried that the taxpayers’ funds injected by government in these parastatals would not yield the desired returns.
ANALYSIS
In the case of the SNI, the AG’s analysis of the losses incurred in the past five years reflected that in the financial year 2023, the amount stood at E432 372 while in 2022 it was E464 321.
In 2021, the losses incurred by the SNI amounted to E990 583, while in 2020 the figure stood at E2 938 770.
In 2019, the losses incurred by the SNI amounted to E866 060.
In total, the losses accrued by the SNI in the five years reviewed by the AG is E5 692 106.
It should be noted that the SNI is among the project parastatals which Eswatini Economic Policy Analysis and Research Centre (ESEPARC) recommended had now completed their journey.
ESEPARC mentioned in its report that free primary education was now ensuring access to basic literacy and that the National Development Plan (NDP) had ensured the achievement of an 87.5 per cent literacy rate in Eswatini.
As a result, ESEPARC recommended that action should be taken to close the entity. In the recommendation, ESEPARC recounted that the SNI was established as a project to improve adult literacy but that it was now deviating from its mandate and tapping into technical and vocational education and training (TVET) skills development.
“Government must complete activities with the current cohort and close the project once the group graduates,” ESEPARC recommended.
It mentioned that after closing the project, government should repurpose the SNI for establishment of one non-formal education institution to coordinate skills development centres such as the MITC, Mpaka and Nhlangano Vocational, among others.