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Showing posts with label Tibiyo Taka Ngwane. Show all posts
Showing posts with label Tibiyo Taka Ngwane. Show all posts

Monday, 8 August 2022

Swaziland Newsletter No. 738 – 5 August 2022

 

Swaziland Newsletter No. 738 – 5 August 2022

News from and about Swaziland, compiled by Global Aktion, Denmark (www.globalaktion.dk) in collaboration with Swazi Media Commentary (www.swazimedia.blogspot.com), and sent to all with an interest in Swaziland - free of charge.

A battle royal for eSwatini's future

Protests are increasing pressure on King Mswati III, Africa’s last absolute monarch, to relinquish power, says Koffi Sawyer, Chatham House, 3 August 2022

SOURCE

 

Domestic and international calls for a national dialogue in eSwatini are growing as the leadership in Africa’s only absolute monarchy, under King Mswati III, grapples with the sociopolitical crisis that continues to fester following last year’s intense pro-democracy protests.
 
The death of a law student – who many allege was killed by the police – sparked widespread protests last summer and led three members of parliament to petition for a democratically elected prime minister. The message was clear: the demonstrators wanted democratic reforms and an end to the absolute monarchy. 

With no comprehensive strategy to address these longstanding demands for democracy, the government continues to deflect and fall back on a hardline approach of intimidation: stifling voices of dissent, arresting protest leaders and deploying security forces to crack down on demonstrators and perceived troublemakers. 

The protests and the security-centred response have led to violence, death, destruction of property – and even cross-border tensions, with attempts to blockade the South African border due to sympathetic support from some in the neighbouring country. 

All of which makes critical the introduction of democratic reforms in eSwatini (known as Swaziland until 2018). These reforms will, in the short-term, defuse the current sociopolitical tensions and over time build more resilient and accountable institutions. 

Other popular monarchies that have moved to democracies with accountable governance show it is possible. From the mid 20th century in Bhutan, a succession of kings played a proactive role in introducing democratic reforms that led to a constitutional monarchy: executive power was invested in a cabinet of elected officials and the monarch acted as the head of state.

By relinquishing some power, then, King Mswati would enlarge the institutional circle of power, responsibility and accountability. In this way, proactively leading democratic reforms will not only probably preserve the monarchy but will protect its long-term viability and popularity among the population.
 
Last year’s tensions were initially defused by a ministerial delegation from the Southern African Development Community (SADC), urgently dispatched to Mbabane in early July 2021. The political and diplomatic role SADC has taken shows just how important sociopolitical cohesion and stability are for the region. 

Following the visit to eSwatini by SADC delegates, South African President Cyril Ramaphosa arrived in November 2021, and King Mswati agreed to an inclusive national dialogue to address the political upheaval.

A key lingering issue, however, has been the form that the dialogue should take, as pro-democracy groups have rejected the Sibaya – a traditional platform through which citizens’ views are brought before a national gathering at the King’s kraal. This scepticism stems from concerns that the Sibaya has been compromised over the years – exposing it to potential manipulation by the establishment to further entrench the monarchy’s power and authority – and is no longer a legitimate instrument for open dialogue. 

SADC’s continued mediation faces several challenges. There is little evidence of political will on the part of eSwatini’s leadership. No regional precedent or blueprint for a process involving an executive monarchy or other constitutional neotraditional structures exists. Complicating matters further are allegations of foreign meddling and a regime change agenda behind what is now being referred to as eSwatini’s ‘winter revolution’.

Towards a national dialogue

A golden rule for constructive national dialogue is that it is nationally led and owned. However, in eSwatini a few key challenges constrain the process. The country’s political leadership lacks the trust of the people. Independent political institutions are at best weak, at worst not designed to perform their democratic accountability and oversight roles.

The power balance between the king and the pro-democracy groups is asymmetrical. The king lacks strong incentives to loosen his grip on power and authority. And, importantly, a strong, organic grassroots movement for reforms doesn’t appear to extend beyond the country’s main capital cities. 

Although pro-democracy groups represented by civil society and political groups are leading the call for governance reforms, it is important to expand the pool of consultations to involve other key national stakeholders, including traditionalists, women and young people.

Cultural, historical and financial links with the South African economic and governing elite are practical aspects that should be considered. Given the deep ties between the countries, South Africa and its governing ANC should invest in long-term peace and stability in eSwatini. 

The international community can be an important guarantor of a genuine process, support more effective local participation, and bolster national ownership. The approach must be coordinated, integrated, and sensitive enough to mitigate the risks of the process being manipulated for other purposes. 

It is only within a constitutional order that the institution of the monarchy can be safeguarded and sustainably protected. As father of the nation, it is incumbent upon King Mswati to show honest and proactive leadership – and be ready to shed some of his absolute power in the long-term interest of his people and future monarchs. 

Sawyer is a consultant and researcher on politics and governance in Africa

 

By-election victory for Eswatini pro-democracy activists

AFP, 1 August 2022

SOURCE

 

The wife of a self-exiled pro-democracy lawmaker in Eswatini won Sunday her husband’s seat in a by-election that activists said showed continued support for reforms a year after deadly protests. Nomalungelo Simelane-Zwide was elected as the new member of the lower house for Siphofaneni on Saturday, winning 53 percent of the vote in the small town about 80 kilometres south-east of the capital Mbabane.

Speaking after the results were announced early on Sunday, Simelane-Zwide thanked all Swazi people for “entrusting me with the responsibility to represent them in parliament”. Simelane-Zwide is married to Mduduzi Gawuzela Simelane, a pro-democracy activist who fled to South Africa after police issued a warrant for his arrest following a wave of protests last year.

Eswatini, formerly Swaziland, is the last absolute monarchy in Africa. Rights groups say 46 people were killed last year as police violently quashed demonstrations calling for democratic reforms. Police put the death toll at 37. Simelane is among a group of lawmakers who have advocated for changes to the country’s complex system of non-party elections that critics says ensures King Mswati III faces no meaningful dissent.

 

Sive Siyinqaba: LaZwide's victory is a big lesson to tinkhundla regime

By Eugene Dube, Swati Newsweek 3 August, 2022

SOURCE

 

MBABANE - Sive Siyinqaba Sibahle Sinje National Movement, MP LaZwide’s election victory is a confirmation of a political conscious generation of Eswatini who embraces democracy.

This was revealed in a statement by Sibahle Sinje’s acting chairman Ngomyayona Matoni Gamedze.

“May I, on behalf of Sive Siyinqaba National Movement, take this opportunity to congratulate the Swaziland Liberation Movement for winning the constituency seat in Siphofaneni and choosing to keep it home. The victory by Swalimo’s Comrade Nomalungelo Simelane popularly known as LaZwide is a confirmation that people heeded the calls for change and it is evident that democracy has successfully permeated the notorious system.

“The winds of change blowing across the country are unstoppable,” he added.

 

Gamedze said the claim that her win is about the credibility of Tinkhundla is self-fooling and an attempt of trying to convert a political defeat to a positive now that all efforts of undermining her candidacy failed dismally.

“From the day she was nominated, her nomination was a nightmare for the regime. Fortunately, there was very little the regime could do to her because the world was watching, hence supporting a rival candidate became an option.”

He said this scenario will be replicated in the next general elections. By no small measure this is a victory for political parties’ democracy against the outdated and undesirable Tinkhundla system.

Gameze explained that Swaziland needs to claim its rightful place in the nations of the world, not just as a quantity element but as an effective participant in the global affairs. The country needs to achieve its full potential and stop being a “skunk” of the international community that fails to honour its obligations and opting to shy away from regional summits.

In happier times the relationship between the Sive Siyinqaba and the monarchial systems was cosy before the fall out, under the tenure of late Prime Minister, Barnabas Dlamini.

 

Eswatini royal riches – the business of being king

By Inhlase Centre for Investigative Journalism, The Namibian, 3 August 2022

SOURCE

 

Never in the history of Eswatini has a king been directly involved in business.

King Mswati III, the absolute monarch of Eswatini, has changed that.

His vast business interests first raised eyebrows and set tongues wagging in 2004 when he acquired 10% shares at mobile telecommunications service provider MTN Swaziland.

The availability of the MTN shares in the market had not been advertised.

The Swaziland Post and Telecommunications Corporation, a public enterprise, had handed over its shares at MTN to the king on a silver platter. By giving the king 10%, the SPTC share was reduced to 41%.

By acquiring the shares, it was argued, the king had boldly and loudly announced his first move into business.

In 2009, Forbes Magazine listed King Mswati III as one of the 15 richest royals, worth about US$200 million.

In November 2018, he bought a fleet of about 12 Rolls Royces for himself and the royal family.

The purchase of these luxury vehicles was heavily criticised by among others the United States (US) embassy in Eswatini.

This purchase has intensified the criticism of King Mswati's lavish lifestyle, while 63% of his people live in abject poverty.

Since the open acquisition of shares at MTN, the king and the royal family have not looked back and have continued to expand their business interests.

In some businesses, it has been alleged, he is a sleeping shareholder.

Royal conglomerate

King Mswati's acquisition of businesses has been an addition to the royal 1968 conglomerate, Tibiyo Taka Ngwane, created by his father, King Sobhuza II, by a royal charter.

Tibiyo was established at independence by King Sobhuza, who stated the company was being set up to empower emaSwati, and to assist the government to develop the country.

However, as Tibiyo grew to become a significant player in business, its initial mandate changed significantly.

This change became more visible during the reign of King Mswati.

Tibiyo has turned into a behemoth that only serves the interests of the royal family.

Political formations in Eswatini are reported to have raised the matter of the royal family's wealth during the Southern African Development Community (SADC) troika's visit to the country on a fact-finding mission in July last year, following violent pro-democracy protests.

This was in the aftermath of the June 29 politically motivated unrest.

Boycotts and sabotage

In Eswatini, there are increasing public calls by pro-democracy campaigners to boycott business entities linked to King Mswati and the royal family, who are estimated to own about 50% of the country's economy.

Some of the businesses connected to the king, the royal family as well as others linked to the tinkhundla system of governance have also been sabotaged.

In March this year, for example, heavy machinery belonging to Inyatsi Construction, a company rumoured to be linked to the king, was burnt by unknown arsonists at Sicunusa where it was preparing to start construction of a road.

Inyatsi has been winning high-profile civil construction projects such as the construction of an international airport at Sikhuphe and the International Convention Centre and Five Star Hotel.

The royal family's control of the economy is done through Tibiyo Taka Ngwane, which holds significant shares in different companies, mainly in the agricultural sector, particularly the sugar and forestry industry.

Coming out

There are other business entities believed to be cash cows of the royal family.

Others have come out in public to declare their shareholding as not connected to royalty to avoid being targeted by a disgruntled population tired of the royal family's greed, such as Southern Star, a haulage company.

Lincoln Motsa, a co-director of Linac Investments running the OK chain of stores in the country, did the same.

The other director, he said, is his wife.

For Motsa, it was too late, because three of his shops had already been torched.

As of the end of its financial year, 30 April, 2018, Tibiyo had assets worth E2,13 billion, according to its annual report.

Tibiyo Taka Ngwane holds 100% shares or less in some of the sugar companies in the country and holds large tracts of land which are home to its commercial forests.

In the sugar industry, Tibiyo is a 50% shareholder at the Royal Eswatini Sugar (RES).

The RES is the largest sugar production company in the country.

Writing in The Bridge, an online publication, Mandla Hlatshwayo, who is chairman of Letfusonkhe living in exile in South Africa, said Tibiyo received E130 million in dividends from RES in 2021.

At the establishment of RES scores of emaSwati had to move to give way to the sugarcane-growing project.

At Ubombo Sugar, the country's second largest sugar production company, Tibiyo is a 40% shareholder.

Tibiyo has a 50% shareholding at Inyoni Yami Swaziland Irrigation Scheme, which is involved in sugar cane farming and livestock.

Shares everywhere

Early in the year, Inhlase reported that another royal company, Silulu Royal Holdings, has been freely acquiring tracts of land and some were set aside for commercial forests for the benefit of the royal family.

Other farms, many of them under Silulu Royal Holdings, are owned by the king and the royal household.

Tibiyo has over the years also invested largely in property, finance services and others.

Tibiyo is a 40% shareholder at Bhunu Mall in Manzini, and owns the Eswatini Observer newspaper.

It holds 30% shares at Eswatini Development Finance Corporation, 25% shares at Simuye Plaza and 100% shares at Tibiyo Properties.

It owns 41,25% at Tibiyo Insurance Brokers.

In mining, the royal company has 25% shares at Maloma Colliery, an anthracite coal mine. The rest of the shares were previously held by Chancellor House, the ANC's investment wing.

The 75% shares initially held by Chancellor House have since changed hands and a local investor has taken over.

In the manufacturing sector, Tibiyo is a 40% shareholder at Swazi Beverages, a company that was burnt during last year's political unrest, and holds 26% shares at Parmalat Swaziland.

The investment company is a 100% shareholder at Tibiyo Leisure and Resorts, a five-star resort at eZulwini.

It also held 39,69 shares at Swazi Spa Holdings, now under liquidation.

It used to own 76% shareholding at the Royal Swazi National Shipping Corporation, which has been dormant for years.

Additional to these are numerous farms held by Tibiyo, and some are held by the king in a trust for the Swazi nation, but they essentially benefit the king and the royal family.

This article is produced by Inhlase Centre for Investigative Journalism from Eswatini. The story is part of 'The Palpable Stirrings of Change in Eswatini' series, with the support of the Canon Collins Educational & Legal Assistance Trust under the Sylvester Stein Fellowship.

 

Union takes Zheng Yong garments to court over dismissal of 20 workers in Eswatini

Industriall, 4 August, 2022

SOURCE

Garment manufacturer Zheng Yong Swaziland has dismissed 20 workers for going on a strike for minimum living wages, and the Amalgamated Trade Unions of Swaziland (ATUSWA) is challenging the dismissals.

The five-week strike took place from April 5 to May 9 with the main demand being wage increases of at least E15 per hour or E2983 (US$179) per month. However, the employers awarded a paltry 7.25 per cent increase or E12 per hour.

The union says instead of engaging on the workers demand, the employers teamed up with the government and used strike breaking tactics and violence against the workers including teargassing them in their homes and threats of violence. According to the ITUC Global Rights Index for 2022, Eswatini is amongst the “10 worst countries for working people.”

Further, it’s been over three months since the garment manufacturer gave the dues that it is collecting from 1247 workers to the union. By not surrendering the dues as per the labour laws, Zheng Yong, which employs about 4000 workers, is flouting national labour laws, says ATUSWA which is affiliated to IndustriALL Global Union. The union says withholding the dues is a form of union busting as it violates Section 43 of the Industrial Relations Act which states that an employer “shall promptly remit” union dues after collection. ATUSWA argues that the employer’s actions can be construed as punishing workers for going on strike which is against the law.

To resist the push back, ATUSWA is taking Zheng Yong to the Industrial Court to challenge the dismissals and for violating workers freedom of association. Additionally, the union says the employer must respect trade union rights.

Wander Mkhonza, ATUSWA secretary general says: “Zheng Yong and other employers must improve working conditions in the garment and textile sector and not always resort to threats and legal action. Employers must engage with the union when there is a dispute instead of taking drastic action such as dismissing workers for striking for living wages.”

“Adopting an anti-union stance is detrimental to promoting industrial harmony between ATUSWA and Zheng Yong. The employer must pay living wages especially after recent increases in the cost of living. We recommend approaches that promote social dialogue and mediation and arbitration to resolve the dispute,” says Paule France Ndessomin, IndustriALL regional secretary for Sub Saharan Africa.

 

eSwatini unrest: Solidarity forces invade Zakhele police camp, fire hail of bullets.

By Zweli Martin Dlamini, Swaziland News, 3 August 2022

SOURCE

 

MANZINI: Members of the pro-democracy Swaziland International Solidarity Forces (SISF) invaded Zakhele Police Camp on Wednesday evening and fired a hail of bullets.

The escalating political tension in eSwatini comes after Mswati refused to engage in a political dialogue and subsequently unleashed his security forces to kill dozens of civilians.

Reached for comments, the Spokesperson of the Solidarity Forces only confirmed that the forces were already inside eSwatini in preparation for operations.

“We will release a full report later, but the forces are already inside the country for operations,” said the Spokesperson of the Solidarity Forces.

Superintendent Phindile Vilakati had not responded at the time of compiling this report.

Eswatini is in the midst of a political unrest after King Mswati unleashed soldiers and the police to shoot and kill dozens of protesting civilians merely for demanding democratic reforms.

 

Dirco to call in eSwatini High Commission over spokesperson saying South Africa is infected with crime

By Nicole McCain, News 24 (South Africa), 3 August 2022

SOURCE

 

The [South African] Department of International Relations and Cooperation (Dirco) will be calling in representatives from the Eswatini High Commission to explain statements made by a government spokesperson, stating that South Africa has a “cancer of criminality from head to toe”.

Eswatini government spokesperson Alpheous Nxumalo was interviewed on SAfm on Tuesday, amid allegations that the foreign government is linked to the murder of Hillary Gardee, the daughter of former EFF secretary-general Godrich Gardee.

Gardee had claimed in a series of tweets that the Eswatini king was involved in the murder because the EFF had closed border posts in Eswatini in April for six hours during a protest.

Gardee did not provide any evidence for his claims.

In the interview with SAfm presenter Sakina Kamwendo, Nxumalo said it was “unjournalistic and unethical” to insult Eswatini's head of state.

Nxumalo previously told News24 that Gardee’s claims were “wild and empty allegations”.

During the radio interview, Nxumalo said his government did not want to dignify the allegations with a response:

“Our [government] does not have a history of running after people [and] taking people down because they toyi-toyi at the border... I don't know why Gardee is valuing himself so highly.”

Nxumalo described the murder as an “unfortunate development” and said South Africa is “infected with the cancer of criminality from head to toe”.

He added Gardee should be working on bringing legislation to reduce the crime in South Africa, instead of trying to expose conspiracies.

Dirco spokesperson Clayson Monyela told News24 that the department would file a démarche with the kingdom’s high commissioner on Wednesday to seek an explanation.

“We certainly take a dim view of the comments made by Nxumalo. It was an unfortunate statement to make. We will seek to ascertain if this is the view of their government, or of an individual. We want to know what they are going to do about it. It was a wrong characterisation of South Africa. There is no country that is without crime,” he said.

On Friday, News24 reported that the Gauteng High Court in Pretoria had ordered the Hillary Gardee murder investigation to be handed over to the Hawks and for case to be treated with urgency.

This after the Gardee family said the police were not prioritising the case due to a lack of interest and media attention.

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Thursday, 10 December 2020

Controversial business deal set to benefit Swaziland absolute monarch

King Mswati III, the absolute monarch of Swaziland (eSwatini) is reportedly set to grab more than 90 percent of the shares in some of the kingdom’s prestigious hotels.

He will in effect own the Royal Swazi Spa Resort at Ezulwini by taking it into the Tibiyo Taka Ngwane conglomerate that he controls ‘on behalf of the Swazi nation’.

Existing shareholders are set to lose their shares, the Swati Newsweek, an online news site, reported. It published a statement from Swazi Spa Holdings Limited confirming this. If successful the King would control 90.3 percent of the shares, at present he holds 39.7 percent.

Newsweek quoted an inside saying, ‘Because the company is no longer independent, people who had shares will be removed and another fear is that when Royalty takes over salaries might be reduced. This means that there might be retrenchment.’

The Royal Swazi Spa Resort includes the Lugogo Sun and the Royal Swazi Spa hotels, a convention centre, restaurants bars, and a country club.

The Swazi King’s shareholdings are controversial because although he holds the wealth on behalf of the people of Swaziland in practice he uses much of the money to finance his and his family’s lavish lifestyles.

In November 2019 he purchased between 13 and 15 luxury Rolls-Royce cars at an estimated cost of up to US$4 million. He also has two private airplanes, at least 13 palaces and fleets of top-of-the-range cars. At his 50th birthday in 2018 he wore a watch worth US$1.6 million and a suit beaded with diamonds that weighed 6 kg. Days earlier he had taken delivery of his second private jet. This one, an Airbus A340, cost US$13.2 to purchase but with VIP upgrades was estimated to have cost US$30 million.

Meanwhile, seven in ten of the 1.1 million population live in abject poverty.

The extent of the King’s wealth is a closely-guarded secret. However, in 2009 Forbes magazine estimated that the King himself had a personal net fortune worth US$200 million. Forbes has also said King Mswati was the beneficiary of two funds created by his father Sobhuza II in trust for the Swazi nation. During his reign, he has absolute discretion over use of the income. The trust has been estimated to be worth US$10 billion.  

In August 2014 the Sunday Times newspaper in South Africa reported King Mswati personally received millions of dollars from international companies such as phone giant MTN; sugar conglomerates Illovo and Remgro; Sun International hotels and beverages firm SAB Millerto. He continues to receive money from these sources.

The King receives income each year from Tibiyo Taka Ngwane, which is a an investment fund with extensive shares in a number of businesses, industries, property developments and tourism facilities in Swaziland.

The King is the sole trustee of Tibiyo. Neither the King nor Tibiyo pay tax. The annual accounts for 2018 showed total assets were valued at E2.13 billion (US$140 million).

Money generated by Tibiyo is meant to be used for the benefit of the nation, Tibiyo in fact channels money directly to the Royal Family. A report from the United States State Department in 2016 said, ‘Tibiyo is run as a private equity investment fund for the benefit of the King and the royal family.

It added, ‘This fund is not subject to government or parliamentary oversight.’ 

See also

Lavish lifestyles of Swaziland Royal Family back in spotlight after party video goes viral

https://swazimedia.blogspot.com/2020/12/lavish-lifestyles-of-swaziland-royal.html

Swaziland absolute king calls for stiff public spending cuts but is not making personal sacrifice https://swazimedia.blogspot.com/2019/02/swaziland-absolute-king-calls-for-stiff.html

EU money pays for lavish Swazi King https://swazimedia.blogspot.com/2018/05/eu-money-pays-for-lavish-swazi-king.html

Tuesday, 28 May 2019

Swaziland activist who called for prosecution of King for embezzlement charged under terrorism law

A political opposition activist in Swaziland / eSwatini has been charged under terrorism and sedition laws for calling on absolute monarch King Mswati III to be prosecuted for embezzlement and human rights violations. 

Goodwill Sibiya is a senior member of the People’s United Democratic Movement (PUDEMO) and the Communist Party. Both organisations are banned under the Suppression of Terrorism Act. He is also a founding member of a little-known group called the Economic Freedom Guerrillas.

Sibiya made a legal statement calling for the King to be charged for the ‘embezzlement of states funds’ through his use of money generated by Tibiyo Taka Ngwane, a conglomerate of businesses that is controlled by the King on behalf of the Swazi people; mining royalties and income from MTN the mobile phone company.

In a list of accusations, Sibiya said the King stripped the powers of two chiefs to the benefit of his brother Prince Maguga. The King forcefully grabbed young girls to be his wives and the King appointed Barnabas Dlamini as Prime Minister in contravention of the constitution, ‘so that he can meet his own greedy interest’.

The statement made at the Nhlangano police station was dated 21 January 2019. According to the Times of Swaziland (27 May 2019) Sibiya attempted to file the document at the High Court on 21 May 2019, but was stopped by staff members who then informed the police.

The Times reported police raided Sibiya’s home with a warrant searching for documents that brought ‘hatred to and incited dissatisfaction against the King’. In its report the Times did not detail Sibiya’s accusations, ‘because of their sensitive nature which borders on treason’.

Sibiya was arrested and appeared at the High Court on Sunday. He was remanded in custody until 1 June 2019.

In Swaziland, King Mswati rules as an absolute monarch, political parties are banned from taking part in elections and he chooses the prime minister and government members. He is immune from any prosecution under s11 of the Swaziland Constitution.

Opposition to the King is crushed by use of the Suppression of Terrorism Act and the Sedition and Subversive Activities Act. Both Acts have been used to stop advocates for democratic reform.

In 2015 Amnesty International renewed its criticism of Swaziland for the ‘continued persecution of peaceful political opponents and critics’ by the King and his authorities. 

The human rights organisation called for the two Acts to be scrapped or drastically rewritten.

It said the Swazi authorities were using the Acts, ‘to intimidate activists, further entrench political exclusion and to restrict the exercise of the rights to freedom of expression, association and peaceful assembly’.

Amnesty said the Sedition and Subversive Activities Act also violated Swaziland’s human rights obligations. 

In September 2016, the Swaziland High Court ruled parts of the two Acts were unconstitutional. The Government appealed the case to the Supreme Court and it has yet to be heard.

See also

Swazi law used against human rights

Monday, 4 March 2019

Swaziland budget repeats failed economic policies of the past

The first budget from the Swaziland / eSwatini Minister of Finance Neal Rijkenberg has been largely welcomed in the media in the kingdom. But memories are short. Commentators have failed to notice the similarities between the 2019 budget plan and the Fiscal Adjustment Roadmap of 2010 (FAR 2010) that failed to save the Swazi economy. 

FAR 2010 was a blueprint for getting the Swazi economy out of what was then described as the worst economic crisis in its history. It was intended to be implemented between 2010 and 2015.

The similarities between FAR 2010 and Budget 2019 are many. They include reforms on tax and increasing the efficiency of tax collection, increasing the so-called Sin taxes (tobacco and alcohol), improving the efficiency of public services, decreasing the public service wage bill, selling government assets, building investor confidence, attracting both private investment and foreign direct investment.

Key to FAR 2010 was the reform of public services, privatising government assets and ensuring ‘that the wage bill remains under control’. FAR 2010 proposed cutting 7,000 public service jobs.

FAR 2010 failed. As an indicator of this in 2010 total external debt was about 13.4 percent of Swaziland’s gross domestic product (GDP). In 2018, Swaziland’s external debt was 23.3 percent of GDP. GDP is the total value of goods produced and services provided in a country during one year. 

In his budget speech delivered on Wednesday (27 February 2019) Finance Minister Rijkenberg said Swaziland, ‘is facing an unprecedented economic crisis’. He added the economic outlook remained ‘subdued’. 

He said, ‘Foreign Direct Investment has been on average negative for a number of years. Arrears have accumulated and we continue to draw down on our reserves. The economy has stagnated and we are failing to attract investment as the gap between the rich and poor continues to grow.’

He said the government wage bill was ‘a key component of our crisis’, stating in the past ten years the wage bill had grown by 125 percent. Decreasing the public sector wage bill had been a key objective of the FAR 2010.

He said the Swaziland economy was in trouble, ‘because our private sector is too small and its growth is too slow. We are in trouble because we have not been balancing our books.’ 

Then he announced a range of polices very close to those of FAR 2010 that failed.

There is no reason to be optimistic about Swaziland’s economic future if the past few years are a guide. FAR 2010 was never likely to succeed and Budget 2019 faces the same fate.

A key reason for failure is the nature of the political system in Swaziland. The kingdom is ruled by King Mswati III as an absolute monarch. Political parties are banned and the King chooses a significant number of the House of Assembly and Senate. He also chooses the Prime Minister and Cabinet ministers.

The King chooses people who will do his will. They owe their positions to him, not to the people who elected them. Put simply, he does not want people in power who will change the economic structure of Swaziland. The King holds all profits from Tibiyo Taka Ngwane, which is an investment fund with extensive shares in a number of businesses, industries, property developments and tourism facilities in Swaziland.

He also takes 25 percent of all mining royalties in Swaziland. Neither Tibiyo nor the King pay tax. The monies are reportedly held by the King ‘in trust for the Swazi nation’ but it is no secret that he uses this money to finance his own lavish lifestyle. He has two private jets, 13 palaces and diamonds and gold. Meanwhile, nearly seven in ten of the 1.3 million population live in abject poverty on incomes less than the equivalent of US$3 per day.

The first thing an independent Finance Minister should do is to take Tibiyo and mining profits away from the King and use them to boost the economy.

A second reason for failure is that the people the King chooses for high office tend not have the experience nor the abilities to deliver complicated policies. After the last election in September 2019 King Mswati appointed Ambrose Dlamini as Prime Minister and Neal Rijkenberg as Finance Minister. Neither men have any experience in politics. They do not know how to successfully draft the necessary legislation to enact Budget 2019 (Rijkenberg has reportedly tabled eight new bills around the Budget 2019) and they do not know how to deliver on policies. 

Again, Rijkenberg said that in the coming year government needed to sell off assets to raise E400 million but he also said he did not know what was to be sold. ‘An exercise’ was underway at the Ministry of Finance to identify these, he said. 

Both FAR 2010 and Budget 2019 were imposed on the people. There was no meaningful discussion with the private sector, foreign investors or public service unions. FAR 2010 fell almost at the first hurdle when the government tried to implement public service wage reductions and job cuts. Even members of parliament would not take pay cuts.

A report on Swaziland from the World Bank published in August 2018 said, ‘The business environment remains unconducive to private sector development due to perceived weak transparency in regulatory systems and lack of clarity on government policies and implementation.’

It added, ‘stronger commitment and leadership is required’ to implement government policies. 

The commitment and leadership is unlikely to be forthcoming.

Richard Rooney

See also

Swaziland Finance Minister threatens public sector job cuts if workers don’t back his budget
Gap between rich and poor in Swaziland continues to grow, Finance Minister reports

Monday, 11 February 2019

Swaziland absolute king calls for stiff public spending cuts but is not making personal sacrifice

King Mswati III, the absolute monarch of Swaziland /eSwatini, has demanded severe public spending cuts across his impoverished kingdom.

But, the King who wore a watch worth US$1.6 million and a suit of diamonds weighing kg 6 at his 50th birthday celebrations last year shows little sign of making any personal sacrifice. Days before the celebration he had taken delivery of his second private jet. This one, an Airbus A340, cost US$13.2 to purchase but with VIP upgrades was estimated to have cost US$30 million.

Meanwhile, seven in 10 of the estimated 1.2 population of Swaziland live in abject poverty on income less than the  equivalent of US$2 per day (about E25).

The King has 13 palaces and fleets of top-of-the-range Mercedes and BMW cars. He and members of his extensive Royal Family (he has had at least 15 wives) live opulent lifestyles and are often seen in public wearing watches and jewels worth hundreds of thousands of dollars.

The King made his call for cuts at the annual opening of the Swazi Parliament on Friday (8 February 2019). He said the kingdom’s spending had ‘surpassed sustainable levels’ and government debts were increasing. The countries financial reserves were falling and there was little economic growth. He warned that taxes collected in Swaziland would not be enough to pay the bills.

King Mswati said there needed to be ‘very stiff measures and concerted effort’ to cut expenditure. He added, ‘hard decisions will have to be taken, sacrifices need to be made and unconventional methods of reducing expenditure need to be pursued’. He did not say what these ‘unconventional methods’ might be.

In his budget speech in March 2018 Finance Minister Martin Dlamini said Government owed E3.1bn (US$230 million) in total to its suppliers for goods and services. 

Swaziland has been in financial meltdown for many years under a succession of governments handpicked by King Mswati. He chooses the Prime Minister and cabinet ministers; political parties are banned in Swaziland and cannot take part in elections. Across Swaziland at present some schools are closed and public hospitals and clinics have run out of food and vital medicines because the government has failed to pay suppliers.

The King’s demand for others to make sacrifices is not new. He has made similar calls at the opening of parliament in recent years. However, he and the Royal Family have failed to make any sacrifices of their own.

The extent of the King’s wealth is a closely-guarded secret. However, in 2009 Forbes magazine estimated that the King himself had a personal net fortune worth US$200 million. Forbes also said King Mswati was the beneficiary of two funds created by his father Sobhuza II in trust for the Swazi nation. During his reign, he has absolute discretion over use of the income. The trust has been estimated to be worth US$10 billion.  

In August 2014 the Sunday Times newspaper in South Africa reported King Mswati personally received millions of dollars from international companies such as phone giant MTN; sugar conglomerates Illovo and Remgro; Sun International hotels and beverages firm SAB Millerto. He continues to receive money from these sources.

The King receives income each year from Tibiyo Taka Ngwane, which is a an investment fund with extensive shares in a number of businesses, industries, property developments and tourism facilities in Swaziland.

The King is the sole trustee of Tibiyo. Neither the King nor Tibiyo pay tax.

Money generated by Tibiyo is meant to be used for the benefit of the nation, Tibiyo in fact channels money directly to the Royal Family. A report from the United States State Department in 2016 said, ‘Tibiyo is run as a private equity investment fund for the benefit of the King and the royal family.

It added, ‘This fund is not subject to government or parliamentary oversight.’ 

According to the Tibiyo 2016 annual report it held assets worth E1.8 billion.

Richard Rooney

See also

King breaks promise on restraint
No sacrifice from King Mswati
IMF calls for sacrifice from King
EU money pays for lavish Swazi King
Will Swazi King cut his spending?
Swazi King and queens of bling

Monday, 7 May 2018

SWAZI GOVT ‘RUNS OUT OF CASH’

The Swazi Government has run out of cash and is living hand-to-mouth. It has to wait for the Swaziland Revenue Authority to put tax collections into its account each Monday before it can pay bills.

The revelation was made by the Sunday Observer (6 May 2018), one of the newspapers in Swaziland in effect owned by the kingdom’s absolute monarch King Mswati III.

In March, Martin Dlamini, the Finance Minister announced the Government owed its suppliers E3.1 billion.
 
The newspaper reported that the latest cash crisis to become public knowledge involved mothers who received child maintenance payments through the Deputy Prime Minister’s Office. This involved fathers who are public servants and have court orders against them for maintenance payments that are collected through salaries. The Times of Swaziland, the only independent daily newspaper in the kingdom, had reported that the money had been collected but not passed on to the mothers. Instead, it had been used by the government to pay debts. About E600,000 (US$48,000) is reportedly collected for maintenance payments each month.

The Observer reported that payments were being delayed. It said government was ‘living-hand-to-mouth’ and issuing cheques in ‘dribs and drabs’.

The newspaper reported, ‘According to well-placed Ministry of Finance sources, there is no money in government’s coffers and the situation has bred a system of wait and see before cheques are printed.’

It quoted the source saying, ‘Government has no money so what we do is stall printing and issuing because they will bounce causing embarrassment.’

The newspaper said government depended on the Swaziland Revenue Authority. ‘Every Monday they sweep money from their collections account into government’s consolidated funds.’

Although the newspaper reported government waited for funds from the Swaziland Revenue Authority no mention was made of two other sources of funding. The King holds 25 percent of all mining royalties and controls Tibiyo Taka Ngwane, a conglomerate that includes, Dalcrue Agricultural Holdings, Inyoni Yami Swaziland Insurance, Royal Swaziland Sugar Corporation, Ubombo Sugar Limited, Bhunu Mall, Nedbank Swaziland, Simunye Plaza, The Swazi Observer, Tibiyo Properties, Maloma Colliery, Parmalat Swaziland, Swaziland Beverages and Swazi Spa Holdings. 

The King holds these ‘in trust’ for the Swazi nation but no records are made public of how profits are spent. In 2016 it was reported Tibiyo Taka Ngwane had revenues of E239 million and assets worth E1.8 billion.

Last month Swaziland held so-called 50/50 Celebrations to mark the King’s 50th birthday and the half-century anniversary of the kingdom’s Independence from Britain. The Swazi Government has been coy about the costs of the celebrations.

On 19 April 2018 King Mswati wore a watch worth US$1.6 million and a suit studded with diamonds at a party for 700 guests. Days before he took delivery of his second private jet. This one, an A340-300 Airbus had a purchase price of US$13.2 million, but with VIP upgrades it reportedly cost about US$30 million, paid or out of state funds.

The King also has 13 palaces and fleets of top-of-the-range BMW and Mercedes cars. His wives regularly travel the world on shopping sprees costing millions of dollars. Meanwhile, seven in ten of the 1.1 million population live in abject poverty on incomes less than the equivalent of US$2 per day. 

In September 2017 the International Monetary Fund (IMF) reported that increased government spending in Swaziland resulted in the highest deficit since 2010. It said the outlook for the future of the economy was ‘fragile’ and that the medium term outlook was ‘unsustainable’ without policy changes.

It also said the governance of public entities was poor.

The IMF recommended that the government should contain ‘the bloated government wage bill’, curb non-essential purchases and prioritize capital outlays. 

See also

SWAZI GOVERNMENT ‘IS BROKE’
SWAZI KING’S BUDGET INCREASES US$14 MILLION
THREAT TO LIFE AS GOVERNMENT DOESN’T PAY BILLS
https://swazimedia.blogspot.co.uk/2017/04/threat-to-life-as-govt-doesnt-pay-bills.html