UNESWA may cease to exist
MBABANE – Once the pride of the kingdom, the University of Eswatini (UNESWA) may be no more; and soon! This is because the institution is facing financial trouble of an enormous magnitude, such that it can no longer meet its obligations.
There is an expert observation that the current leadership of the university is failing to come up with a rescue plan and the gauntlet has now been thrown at the Ministry of Education and Training to map out a strategy of saving the institution.
The financials of UNESWA make for a messy reading: An accumulated deficit of E1 billion; an operating deficit of E189 million; current liabilities exceed current assets by E947 million; and unremitted taxes to the Eswatini Revenue Service (ERS) amounting to E688 million.
Over the years, the university has been making significant losses, which include the E189 million for the year ended March 31, 2021, and E146.9 million for the year ended March 31, 2020.
These are the findings of Auditor General (AG) Timothy Matsebula, who has since included this information in the Compliance Audit Report of the Government of the Kingdom of Eswatini for the financial year ended March 31, 2021, which was tabled in the House of Assembly on May 6, 2022 by Minister of Finance Neal Rijkenberg.
The Public Accounts Committee (PAC) is presently using this report to get Controlling Officers and other responsible government officials to account on the use of public funds.
It is in this report that the AG has laid bare the seriousness of the situation that UNESWA faces and he has not hidden the fears he has for the institution’s survival.
According to Matsebula, the accumulated deficit, operating deficit, current liabilities exceeding current assets and the unremitted taxes were part of existing ‘material uncertainties which threaten the ability of the university to continue as a sustainable service to deliver tertiary education services to the public, and therefore achieve its mandate’.
The AG said evidence pointed to the fact that the university was spending beyond its income and, therefore, struggling to meet its obligations, hence the institution’s dependence on government to rescue it. “My concern is that if the situation does not change for the better, this important service that the university was created for, will not be sustainable in the foreseeable future,” Matsebula has said.
AG FORESEES LIQUIDITY RATIO
With the university’s current liabilities (amounting to E1 billion) exceeding current assets (E69 million) by around E947 million, the AG said this was an indication of a poor and worse-off liquidity ratio, which made him concerned that the institution may end up not having enough funds to repay required obligations and finance operational costs.
“The above scenario means that the university cannot pay off its liabilities without asking for an additional government subvention. I am hence concerned that, since government’s revenue streams are declining, without increased subvention or other means of generating income within the university, the services provided to the public may not be sustainable in the near future,” the AG said.
He said he was also worried that the university was at risk of losing assets that are held as security for a bank overdraft facility, which has increased E19 359 885 (244 per cent), from E7 938 865 to E27 298 750.
Matsebula has identified an urgent need to identify and implement strategies that will resolve the university’s ‘dire situation’.
He then passed a vote of no confidence in the institution’s top brass: “The current leadership of the university seems to be failing to rescue the essential and country’s pride institution; hence, I advise that the Minister responsible should account for the failures and submit an effective strategy and remedial actions to rescue the university, to the Parliament.”