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Thursday, 25 November 2010

SWAZI KING SNATCHES $425m PROJECT

How not to run the Swazi economy: part 106.


King Mswati III, Barnabas Dlamini, the illegally-appointed Prime Minister of Swaziland, and Majozi Sithole, his (increasingly) inept Finance Minister have been shouting from the hilltops and travelling the globe (in luxury style) to implore business people to invest in the kingdom.


What they want is for companies to build things in Swaziland and create jobs, thereby contributing to the economy and getting the kingdom out of the financial mess it is presently in.


Not many take up the offer to supply Foreign Direct Investment (FDI) as it is called, and when they do what happens: the Swazi ‘elders’ gang up against them and run them out of town.


That’s what’s happened with the so-called Jozini Big Six Project in Lavumisa, one of the poorest parts of Swaziland. After a year of work, King Mswati has turned round and taken over the project and kept it for himself (sorry, kept it for ‘the Swazi nation’).


The Swazi Observer, the newspaper in effect owned by King Mswati, put is as clear as a bell, The Royal Jozini Big Six property is now the property of His Majesty King Mswati III, the King and Ingwenyama of the Swazi Nation.’


Jozini Big Six is a massive project (so beloved of King Mswati: think Royal Science and Technology Park and Sikhuphe Airport). It was to comprise a marina village, hotel and spa, championship golf course, casino and conference centre, game reserve, craft market, medical centre, airfield and hangars and a staff accommodation village.


No one is sure how much the project was expected to cost, but the figure of E3 billion (425 million US dollars) has been quoted in the Swazi media. It was hoped it would create 3,000 jobs.


It was probably a bit of a fantasy to believe that such a project had any relevance to Swaziland, where seven in ten of the population live in abject poverty, earning less than one US dollar a day. The optimists thought it would attract tourists from outside the country.


There is a lot of mystery about exactly why King Mswati thought he could get away with seizing the project. One of Jozini Leasehold Limited (JLL) directors, Jim Brown, said the closure announcements were ‘patently unlawful, unconstitutional and contrary to the provisions of the lease’. The closure of the project will now be contested in courts, probably in both Swaziland and South Africa.


The arguments about the merits of the closure of the project are rumbling away in Swaziland and probably will never be resolved to everyone’s satisfaction.


But what a clear message this sends to the business world. Don’t invest here. And who now would want to invest in Swaziland? Only last week we were told that an E850 million ‘Royal Science and Technology Park’ was to be built in Swaziland, starting in April 2011. Why would anyone invest in such a project if they knew the king could snatch it away from them at any time?

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