Government money matters

2

85 headline today has a double meaning. While it preempts the fact that we are going to talk about the matter of government funds today, it also says such money issues are important, as in, they matter.

Two weeks ago, Finance Minister Neal Rijkenberg, assured the nation that government was not broke.

He was specifically reacting to the hullabaloo that has accompanied the decision by government to seek a loan of about E5 billion ‘for budget support.’

Rijkenberg said there was no need for panic because the country could afford to service the loan.

The country’s debt burden was apparently still below the 60 per cent debt-to-GDP threshold; GDP being the gross domestic product, which is the total value of all goods produced and services provided within a country in a specified period.

According to the World %ank, the GDP of Eswatini as at the end of 2021 was E62.4 billion. Readers will recall that some commentators doubted government’s ability to repay this amount of money, in light of the fact that it is servicing or has other loans pending. One of these is the controversial E1.6 billion loan for the construction of a new Parliament building.

When he officially opened the current session of Parliament in February, His Majesty the King underpinned the importance of such a structure, saying it would come in handy, because the number of members of the august House was still to increase.

In any event, Swaziland Liberation Movement (SWALIMO) Secretary General, Dr Siphetfo Dlamini lamented the fact that the kingdom was in a financial dilemma because of government’s overspending and failure to prioritise projects by order of importance.

Well, news reports in the last couple of weeks have brought to the fore yet another reason government is having cash flow challenges.

Of course, we can take Minister Rijkenberg at his word when he said government is not broke, but if nothing changes, it will soon go broke.

It is clear that apart from the overspending and poor prioritisation, the handling of public funds within all government structures is too casual.

Nobody seems to care if money is wasted, mismanaged, overspent or simply embezzled. The office of the auditor general seems to be the only one concerned and keeps e[posing the rot. It makes recommendations, but nothing changes. In fact, it keeps getting worse.

I thought it was basic budgetary logic that no matter how much money you make; your financial position will always be determined by your spending habits.

To ensure you remain in a stable financial position, you have to spend less than you make.

However, a series of reports in the last couple of weeks give a very disturbing picture of how public funds are handled in Eswatini’s corridors of power.

I will deliberately begin with what some might regard as an insignificant amount. That is the E1.5 million that government owes public sector association, commonly known as PSAs.

The money in question is paid by civil servants to their unions as subscriptions.

Government, as the employer, deducts it from union members’ salaries and is e[pected to remit it to the four representative organisations.

However, there have been challenges in remitting it on time in the recent past, causing a headache for the respective unions, which obviously need the cash to carry out its various activities.

The failure by government to forward it to the unions on time is giving these organisatons a headache. In fact, they even suspect that government could be doing this deliberately, just to frustrate them.

They also think government could be in a financial quagmire and using their money on other things, in the age-old practice of robbing Peter to pay Paul. Finance Minister Rijkenberg was once again on hand to ask for patience, saying the delays were caused by certain changes in government’s payment method.

As I said, I started with this relatively small amount, because it is such cases that tell us the financial position of an individual or entity. It is when even the smallest debts become difficult to settle.

Moving on, we reported in the Eswatini News last week that more than E180 million worth of funds meant for the response to the COVID-19 was unaccounted for. The coronavirus hit our shores in early 2020 but according to Auditor General (AG) Timothy Matsebula, by the end of March 2021, mismanagement of funds was practically the order of the day.

Money was ‘spent’ on unoccupied hotel rooms that were designated as quarantine spots. At least E450 000 of funds allocated for the funeral of former Minister of Labour and Social Security Makhosi Vilakati cannot be accounted for. What happened to it? The AG had not yet found the answers when he compiled his report, which was presented to Parliament by Rijkenberg a week ago.

Come to think of it, we all witnessed the former minister’s State funeral, and I am sure I am not the only one wondering if it could have cost so much. There was also a diversion of at least E15 million of the funds meant to cushion the impact of layoffs on workers affected by work stoppages at the height of the coronavirus outbreak. The AG uncovered several other aspects of gross mismanagement, suggesting that there was just willy-nilly use (or abuse) of these funds. In the meantime, the Public Service Pensions Fund (PSPF) is also operating on a E10 billion deficit, which may lead to government failing to pay pension benefits to employees.

The main e[cuse is that the Fund was underfunded from inception.

However, investments made and loans given out to various entities should not be overlooked. Are they being paid back?

Speaking of investments, the Eswatini Civil Aviation Authority (ESWACAA), which government seems to treat as the apple of its eye, has incurred over E1.3 billion in total losses over the past three years.

This should raise the red flag for government but you and I know ESWACAA will continue to get subventions, despite the AG’s doubts on the parastatal’s ability to eventually break even. Things need to change.