BEWARE OF EMPTY INVESTOR PROMISES

While Swaziland and Indian political leaders engage in mutual back-slapping about the amount of investment India is making in the undemocratic kingdom, we ought to remember what happened to a past promise.

In 2015, King Mswati III, who rules Swaziland as sub-Saharan Africa’s last absolute monarch, visited India to drum up investment in his impoverished kingdom.

A year later he was credited with bringing an Indian-based company JSW Energy to Swaziland in an E7 billion (US$500 million) deal to build a thermal power plant. It was intended to generate enough electricity to supply all Swaziland’s needs and have some left over to export. In less than two years the deal was in tatters.

The Swazi Observer, a newspaper in effect owned by the King, reported on 22 October 2016, ‘The fruits of His Majesty King Mswati III’s visit to India just about the same time last year is bearing fruits as JSW Energy Limited, a subsidiary of the JSW group of companies, has brought good news to the country.’

It went on to report the signing of a Memorandum of Understanding (MOU) between JSW and the parastatal Swaziland Electricity Company (SEC). The deal was for JSW to build a thermal power station that would use Swaziland coal.

Swaziland’s Prime Minister Barnabas Dlamini who signed the MOU said, ‘It is an MOU which, when the subsequent agreements are operationalised, will perhaps rank as the catalyst in the future economic development of our country.’

The PM, who was not elected to his office but personally appointed by the King, went on to praise King Mswati for exploring the possibility of investor interest in constructing the power station.

After the flurry of publicity, nothing much happened. Less than two years later in March 2018, it was admitted the project was dead in the water. The Observer on Saturday reported (31 March 2018) that the MOU had ‘elapsed with no progress being made’.

It quoted Winnie Stewart, the Principal Secretary at the Ministry of Natural Resources and Energy, saying the feasibility study on the project that was supposed to be done was not finalised during the life of the MOU. Stewart said government had told SEC to complete the study and then it would put the project out to tender.

During his visit to Swaziland in April 2018, Indian President Shri Ram Nath Kovind confirmed a number of loans running into tens of millions of US dollars his country would make available to Swaziland. He also made a donation of US1 million toward feeding starving children in Swaziland. King Mswati then threw the President a banquet.

Richard Rooney

See also

KING ‘TOOK 100 SERVANTS' ON INDIA TRIP

https://swazimedia.blogspot.co.uk/2015/10/king-booked-200-rooms-on-india-trip.html

 

KING’S PAPER ACCUSES MEDIA OF LIES

https://swazimedia.blogspot.co.uk/2015/11/kings-paper-accuses-media-of-lies.html

UNPAID BILLS: POWER CUT AT MINISTRY

Swaziland’s Ministry of Home Affairs had its electricity cut off on Monday (26 March 2018) because it owes ‘millions of emalangeni’ on its power bill, a newspaper in the kingdom reported.

It is not the first government ministry in the kingdom to be blacked out because of unpaid bills.

The Swazi Observer reported on Tuesday (27 March 2018), ‘Operations at the ministry came to a halt at around 9am.’

It added, ‘People had to use phone lights to navigate through the dark offices and hallways of the ministry and they had to use the stairs as the lifts were not an option under the circumstances.’

The Observer reported, ‘A source asserted that the ministry owes millions to the Swaziland Electricity Company (SEC) and it is for that reason that the latter decided to cut the power yesterday.’

Principal Secretary in the Ministry of Home Affairs Anthony Masilela told the newspaper, ‘If the power blackout is caused by the ministry owing the Swaziland Electricity Company then it lies with the accounts department because I did sign a cheque that was meant to settle any outstanding balance with SEC and I’m yet to check with them on what happened.’

Earlier in March 2018, it was reported law courts, police stations, libraries, media houses, border posts among others in Swaziland were disconnected of electricity because the government had not paid its bills.

It was estimated that it owed the SEC about E15m (US$1.2m). In total the Swazi Government owed its suppliers more than E3bn.

The Times of Swaziland, the only independent daily newspaper in the kingdom ruled by King Mswati III, sub-Saharan Africa’s last absolute monarch, reported at the time  power was restored after a day but the government had not paid its bills but was negotiating payment terms.

Finance Minister Martin Dlamini in his budget speech on 1 March 2018 said, ‘Government arrears as on February 1st, 2018 stood at E3.1bn.’ He added ‘Government, however, acknowledges the accumulation of arrears to suppliers and has prioritised the management of these.’

Services across Swaziland have been grinding to a halt because suppliers have not been paid. School have run short of food for children who rely on it to avoid malnutrition; health centres and hospitals have run out of medicines and vaccines.

Meanwhile, the budget included provisions for a E1.5bn convention centre and hotel and E5.5m for a retirement house for the Prime Minister Barnabas Dlamini. 

See also

CHILDREN ‘SHOULD PREPARE FOR STARVATION’

https://swazimedia.blogspot.co.uk/2018/02/children-told-prepare-for-starvation.html

HEALTH CRISIS: BLOOD SUPPLIES DRY UP

https://swazimedia.blogspot.co.uk/2018/01/health-crisis-blood-supplies-dry-up.html
 

MEDICINE SHORTAGE: FIVE DIE

http://swazimedia.blogspot.com/2017/06/medicine-shortage-five-die.html
 

DRUG SHORTAGE CRISIS DEEPENS

http://swazimedia.blogspot.com/2017/05/swazi-drug-shortage-crisis-deepens.html

UNPAID BILLS SO GOVT LIGHTS CUT OFF

Law courts, police stations, libraries, media houses, border posts among others in Swaziland were disconnected of electricity because the government has not paid its bills.

It is estimated that it owes the Swaziland Electricity Company (SEC) about E15m (US$1.2m). In total the Swazi Government owes its suppliers more than E3bn.

The Times of Swaziland, the only independent daily newspaper in the kingdom ruled by King Mswati III, sub-Saharan Africa’s last absolute monarch, reported on Monday (5 March 2018), ‘Information gathered is that the places which were affected by the disconnection included the High Court, most magistrates courts, Swaziland National Libraries, Royal Swaziland Police (RSP), Ministry of Natural Resources, Swaziland Broadcasting and Information Services (SBIS), two border posts and the Swaziland Civil Aviation Authority (SWACAA) among others. On Wednesday, power was disconnected in most of the mentioned places, however, by Thursday afternoon, it had been restored.’

The government has still not paid its bills but is negotiating payment terms, the newspaper reported.

Finance Minister Martin Dlamini in his budget speech on Thursday (1 March 2018), said, ‘Government arrears as on February 1st, 2018 stood at E3.1bn.’ He added ‘Government, however, acknowledges the accumulation of arrears to suppliers and has prioritised the management of these.’

Services across Swaziland have been grinding to a halt because suppliers have not been paid. School have run short of food for children who rely on it to avoid malnutrition; health centres and hospitals have run out of medicines and vaccines.

Meanwhile, the budget includes provisions for a E1.5bn convention centre and hotel and E5.5m for a retirement house for the Prime Minister Barnabas Dlamini. 

See also

CHILDREN ‘SHOULD PREPARE FOR STARVATION’

https://swazimedia.blogspot.co.uk/2018/02/children-told-prepare-for-starvation.html

HEALTH CRISIS: BLOOD SUPPLIES DRY UP

https://swazimedia.blogspot.co.uk/2018/01/health-crisis-blood-supplies-dry-up.html

 

MEDICINE SHORTAGE: FIVE DIE

http://swazimedia.blogspot.com/2017/06/medicine-shortage-five-die.html

 

DRUG SHORTAGE CRISIS DEEPENS

http://swazimedia.blogspot.com/2017/05/swazi-drug-shortage-crisis-deepens.html

HOSTILE REACTION TO VAT INCREASE

The announcement by Swaziland Finance Minister Martin Dlamini that Value Added Tax is to rise by 1 percent to 15 percent to put it in line with neighbour and major trading partner South Africa has been criticised throughout the kingdom.

South Africa made the change last month (February 2018).

Dlamini said in his budget speech on Thursday (1 March 2018) he also wanted to find a legal way of putting VAT on electricity charges. Electricity tariffs are already set to rise by 15 percent on 1 April 2018.

The VAT increase will affect people especially the poorest, commentators in Swaziland said.

When the South African Treasury announced its increase in VAT it also announced measures to mitigate the impact of the VAT increase on poor households with above inflation increases in social grants, partial relief for inflation for the bottom three personal income tax brackets (for people who do not receive social grants), a marginal increase in the tax credits for medical aid contributions and maintaining the 19 zero-rated food items.

Swaziland’s Finance Minister made no concessions. Dlamini also announced additional taxation on alcohol and tobacco products. There are also plans to increase the fuel tax rate by 20 cents from the current E3 and a review of user fees for mobile phones. 

Trade Union Congress of Swaziland (TUCOSWA) Deputy Secretary General Muzi Mhlanga said, ‘The cost of living as we speak is too high for the working class and such hikes are hard hitting and we are not happy with what was announced by the minister.’

Federation of Swaziland Business Community (FESBC) Chief Executive Officer Dudu Nhlengethwa was against the increase and said businesses had not been consulted.

The Times Sunday newspaper in Swaziland reported (4 March 2018) that the Swaziland Electricity Company (SEC) was against imposing VAT on its charges. The newspaper quoted SEC Marketing and Corporate Communications Manager Sifiso Dhlamini saying, ‘Disposable income for the customer has not increased but is still the same, so there will be an erosion of their purchasing power if VAT will be added on electricity.’

Interviewed by the Swazi Observer newspaper Swaziland Revenue Authority (SRA) Commissioner General,  Dumsani Masilela said the increase was rare and inevitable. The Observer reported, ‘He said it was inevitable because Swaziland had in the past traditionally been aligned with South Africa where VAT is concerned due to structural issues which make it hard for Swaziland to act unilaterally.’ He added that the SRA had made extensive consultations on the VAT issue. 

The Editor of the Observer on Saturday Alec Lushaba, writing in his own newspaper, said the increase in VAT meant, ‘that certain goods and services which are normally accessible to ordinary members of the society, in particular the poor, will no longer be available’. He added that social grants (pensions) for people aged 60 or over had not been increased in the budget.

Swazi Observer Group Managing Editor Mbongeni Mbingo, writing in the Sunday Observer, (4 March 2018) said the increase in VAT did not consider, ‘what the implication and impact really is going to be for an economy that already is on its knees and obviously, with so much unemployment’.

He added, ‘But, this electricity hike and the decision to impose VAT on it shows Cabinet’s fragrant disregard for the situation on the ground.’

Sifiso Sibandze, writing in the Times Sunday, (4 March 2018) said, ‘The long and short of it is, the budget was meant to further disadvantage the already disadvantaged – the poor. It is a budget that will make the poor poorer. Through the budget, government was legitimising his intention of pick-pocketing the poor.’

See also

BUILDING HOTEL A BUDGET PRIORITY

https://swazimedia.blogspot.co.uk/2018/03/building-hotel-budget-priority.html

CABINET DEFIES KING OVER BUDGET

https://swazimedia.blogspot.co.uk/2018/03/cabinet-defies-king-over-budget.html

 

SWAZI BUDGET GIVES PM NEW HOUSE

http://swazimedia.blogspot.co.uk/2018/03/swazi-budget-gives-pm-new-house.html

ELECTRICITY WORKERS WIN PAY STRIKE

Electricity workers in Swaziland won their dispute over unpaid pay bonuses after striking for fewer than two days.

 

Swaziland Electricity Company (SEC) workers are expected to be paid within days. The bonuses had been owed from the past two financial years.

The strike by members of the Swaziland Electricity Supply Maintenance and Allied Workers Union (SESMAWU) started on Monday (8 November 2017). There were widespread electricity blackouts across the kingdom.

Workers defied an Industrial Court order not to strike. The court ruled strike action illegal because SEC employees were deemed to be essential workers.

The strike went ahead despite leaders of SESMAWU asking them to call it off or be in contempt of the court.

See also

ELECTRICITY WORKERS DEFY COURT, STRIKE

http://swazimedia.blogspot.co.uk/2017/11/electricity-workers-defy-court-strike.html

SWAZILAND IN TOP TEN WORST FOR WORKERS

http://swazimedia.blogspot.co.uk/2015/06/kingdom-in-top-ten-worst-for-workers.html

ELECTRICITY WORKERS DEFY COURT, STRIKE

Electricity workers in Swaziland defied a court order on Monday (5 November 2017) and went on strike in a dispute over pay bonuses.

Many parts of the kingdom were reportedly left without power.

Swaziland Electricity Company (SEC) workers in the Swaziland Electricity Supply Maintenance and Allied Workers Union (SESMAWU) are complaining that bonuses owed over the past two years are unpaid.

The Industrial Court banned the strike saying that SEC employees provided an essential service.

The strike took place without the backing of the SESMAWU leadership. It started at 9 am and reportedly ended at about 3pm.

The SEC is a parastatal that is controlled by the government of King Mswati III who rules Swaziland as sub-Saharan Africa’s last absolute monarch.

The Swazi Government has halted all bonus payments in about 50 public enterprises, including the University of Swaziland (UNISWA), Swaziland Railway, Public Service Pension Fund (PSPF), Swaziland Electricity Company (SEC) and Swaziland Water Services Corporation (SWSC). 

See also

SWAZILAND IN TOP TEN WORST FOR WORKERS

http://swazimedia.blogspot.co.uk/2015/06/kingdom-in-top-ten-worst-for-workers.html

SWAZILAND: DEATH BY 1,000 CUTS

Swaziland is dying and it’s a death by a thousand cuts.

Last week, the International Monetary Fund (IMF) reported that the Swaziland Government was unable to meet its bills and the only thing it could still pay was the wages of public servants. The Government whistled in the dark and said it would get some cash by selling bonds on the financial markets.

It tried, but the Central Bank of Swaziland only sold one-fifth of the bonds it needed to. This means that there must be serious doubts that the government can meet it wages bill for much longer.

That is a catastrophe, but for many people it is a crisis that they don’t really understand (and don’t expect the Swazi media to explain it to them).

But the ordinary people in the kingdom, ruled by King Mswati III, sub-Saharan Africa’s last absolute monarch, are suffering the effects of the cuts as one-by-one they hit their ordinary lives.

Even before the latest catastrophe on the money markets, some government ministries were forced to slash their budgets for 2011/2012 by at least 24 percent. Tourism and Environmental Affairs, is reported to have cut its budget by at least E14 million (about US$2 million) from E78 million in the previous financial year.

The economic meltdown has meant that government departments have had to add an extra 10 percent to the cuts demanded in 2010. But, not all ministries are hit; Health and Education are considered essential and the intention is not to cut their budgets.

There is a growing list of consequences of the cuts that are now hitting the poorest in the land, where seven in ten of King Mswati’s one million subjects earn less than one US dollar a day.

News about the cuts is being made public one drip at a time. Here is a ‘round-up’ of those that I know of (so far).

Even though the Swazi Government pledged not to make cuts in the education and health services in the kingdom, cuts to other government services, such as maintenance to roads and vehicles, is impacting on people’s lives. Many sick people cannot make it to hospital for treatment because there is no longer transport available.

Swazi companies have had to retrench workers because the government can no longer afford to buy goods and services. Some will probably have to close down altogether. Johannes Manikela, Federation of the Swaziland Business Community (FSBC) Mbabane branch Chairman, said there were no salaries to pay their employees. ‘Since October last year [2010], the companies have not been receiving anything in terms of cash because government, whom we do business with, stopped tenders. While government is in a move to retrench her staff, the situation has automatically retrenched our staff,’ he said.

The government has no money to buy blades for graders, which may result in some damaged roads not being attended to for quite some time. Ntuthuko Dlamini, Minister of Public Works and Transport, said because of the financial crisis the ministry could not buy the parts.

The Swaziland Electricity Company (SEC) has halted all rural electrification projects, until the Ministry of Tinkhundla Administration and Development pays its outstanding bill of about E30 million. It is also reported that the Ministry of Tinkhundla Administration and Development owes a total of E59 million for its use of electricity. Prince Gcokoma, the Minister, confirmed this to the Weekend Observer.The bill covers the use of electricity over the whole of Swaziland.

The Central Transport Administration (the government’s central garage) owes E79 million to suppliers. The government also owes E40 million to companies that hire it cars and other vehicles. All contracts have now been cancelled.

The Swaziland Government website was closed down because it hadn’t paid a bill of E100,000. The site is up again, but it is not clear if the bill has been paid.

The Ministry of Public Service couldn’t pay the rent for flats it has to house civil servants.

Government fuel depots ran dry because of unpaid bills and subsistence farmers are unable to plough because they rely on government tractors which are now standing idle for ploughing.

Swaziland’s Tourism Authority is to scale down its activities because of the current economic crisis, Eric Maseko, its Chief Executive Officer said.

SWAZI POWER ‘FRAUD’ RETURNS

Just when I thought we’d heard the last of King Mswati III’s plan to have two thermal power plants to generate electricity built in Swaziland, the project rears its ugly head again.

Last year (2009), I wrote at length about how King Mswati, sub-Saharan Africa’s last absolute monarch, had bypassed his government and secretly negotiated for two power plants worth 5 billion US dollars (E36.5 billion at current exchange rates) to be built in his kingdom.

He said the money was in place and everything was ready to go. People in Swaziland were sceptical and some smelt a fraud was about to take place.

Then, quietly, the plan was shelved and we heard no more about what happened to the money.

Reuters news agency put out a report in October 2009 saying that the plan might have been dropped because it was too ambitious and would have produced much more electricity than Swaziland needed.

Now we hear of a revised plan for two smaller power plants worth up to E7 billion (960 million US dollars) to be built by the end of the year.

The Times of Swaziland, the kingdom’s only independent daily newspaper, reports that the Swaziland Public Enterprises Unit (PEU) says that Swaziland Electricity Company (SEC) will oversee the project.

This time however there is no claim that King Mswati (or anyone else for that matter) has secured the funding.

To put the E7 billion into context – it is E1 billion more than the total amount that Swaziland received from the Southern Africa Customs Union (SACU) last year – and the SACU money accounted for two thirds of Swaziland’s annual budget.

The completion date of the end of December 2010 is unrealistic and in the present economic climate I can’t see anyone putting up the money – especially since no one has explained what happened to the 5 billion US dollars King Mswati assured his subjects he had secured for the power plants last year.

$5bn SWAZI FRAUD IN THE MAKING?

Are the Swazi people about to be the victims of a gigantic 5 billion US dollar (E50 billion) fraud?

Suspicions have been aroused following media reports in Swaziland that King Mswati III has been guaranteed this amount of money in donor aid to pay for two coal-powered electricity generating stations to be built in the kingdom. The King’s Office has deliberately not involved the Swazi Government in negotiations for the deal.

According to reports, a company called Franken Mining has been appointed to oversee the project.

The deal is shrouded in secrecy. Myself and others have separately been trying to find out more details and have come up against a brick wall. Top of our list of concerns is that none of us can even find a company with the name Franken Mining. Nor is it clear which international donor agencies have contributed the funding or what process was gone through before awarding the contract to Franken.

We are right to be suspicious since Swaziland has a long track record of corruption and financial incompetence. It is estimated by the Swazi Government itself that E40 million is lost to corruption in Swaziland each and every month. Also, the long running saga of the E28 million that was secretly (and illegally) paid as a deposit by the Swazi Government to buy a private jet costing E720 million for King Mswati indicates that ministers cannot be trusted to spend money wisely.

It was only after the jet deal became public and attracted outrage both inside and outside Swaziland that the purchase was abandoned, but the E28 million deposit was lost.

What we do know about the latest power station project is that it is connected to King Mswati through the Swazi National Council (Liqoqo), the king’s advisory body. Prince Mangaliso, chair of the SNC, confirmed to the Times of Swaziland that funding had been secured on behalf of the King’s Projects. He said the rights to coal reserves in Swaziland had been allocated to Franken Mining.

The Times of Swaziland quoted Prince Mangaliso saying that to avoid delays in seeing the project actually taking off, government has not been involved. He said government would only be brought on board once all important aspects have been covered.

Prince Mangaliso said, ‘Land and minerals are under the control of the king.’ He said, ‘That is the level at which this matter is being handled. Government is not yet involved because we wanted to avoid the delays, bickering and disagreements that characterise many government projects.’

Frans Whelpton, a professor specialising in traditional law at the University of South Africa, is reported to be in charge of the project. Prof Whelpton made news recently for his involvement in securing E100 million of humanitarian aid for Swaziland after he was tasked with trying to get the E28 million jet deposit returned. This he failed to do, but the aircraft manufacturer is said to have made arrangements for E100 million of aid to be donated to Swaziland as a humanitarian gesture.

The sums involved in the power station deal are vast: 5 billion US dollars is roughly the equivalent of Swaziland’s entire gross domestic product. The total amount of imports into Swaziland in 2008 was worth roughly 2 billion US dollars.

The secrecy behind the power station deal is raising concerns among civil society. The Swaziland Coalition of Concerned Civic Organisations (SCCCO) says, ‘In any normal society, the people would not be presented with decisions without some, if not a lot, of consultations.’ It remains a mystery why Franken Mining was chosen for the project and what tendering process was followed before contracts were issued.

SCCCO questions the validity of the project and remains suspicious about who Franken Mining is. It also has concerns about the expertise of the people involved in taking decisions and managing the project.

There are many unanswered questions about this project and there are many unsubstantiated reports going around about some of the key players in it. None of us yet have the full picture about this deal.

If readers of this blog have any more details, please let me know.