Home | Feature | GOVT A COST TO ECONOMY

GOVT A COST TO ECONOMY

12/06/2019 08:14:00 Thabiso Dlamini

Font size:

Take a moment to think about who really owns businesses in Eswatini.

Who owns the big sugar companies, who owns the trucking companies, the construction companies, the supermarkets, the grocery shops, the wholesale shops in Matsapha and Manzini, the tourism agencies and tour companies, etc? Eswatini needs a strong private sector to cultivate strong economic development and create opportunities for all of its citizens. At the moment, the country has an upside down economy, where government is the dominating key player in the economy, hence why there is very little to no return on investment on the billions of Emalangeni that are spent out of the G-wallet every year. The country is in dire need of a booming private sector to get rid of high unemployment, the never ending fiscal crunch and the low levels of gross domestic production (GDP), production and economic growth.

The problem with the private sector is that business opportunities seem to circulate around the same people. These people either have strong ties with government/political systems and so they are able to secure lucrative tenders and other business opportunities using other means while the rest of emaSwati watch in awe. Many of the business tycoons climb up the business ladder in Eswatini with serious help from higher powers within government, such that when ordinary emaSwati try to start big businesses, they are sent on a whirlpool of application forms, regulations and protocols until their business ideas disintegrate into a speck of dust.

Millionaires

The truth is that our economic system is set-up in a way that does not allow ordinary emaSwati to become successful millionaires in their own right. How many self-made millionaires do we have in Eswatini? Isn’t it weird that when a person starts playing with millions of Emalangeni in our economy, the Eswatini Revenue Authority (SRA), the Anti-Corruption Commission, and everybody else and their mother start sniffing and raising eyebrows? It is as if no one should or can have serious money in this economy except for a few distinguished people. To get ahead, it is about who you know, who you are connected to, and whose hands you wash in return for favours to materialise your business ideas. In this regard, the private sector is reserved for a few very important people in our economy; you and I should have no business trying to earn an honest buck.

If you haven’t caught on already, this is what we call corruption and unfortunately it is limiting the potential economic growth that could come out of Eswatini. This kind of corruption is insidious; it is deep-rooted at all levels of government such that it has become an acceptable norm embedded in our culture in the way we go about doing our business. The problem starts with government being a key player in the economy and that billions of Emalangeni get to exchange hands between government and the few distinguished people through budgeted government programmes. If you have been following the Public Accounts Committee sittings lately, it is quite clear that most if not all our ministries have lost control of their spending and accountability systems. Our esteemed bureaucrats do not know how much ministries, departments and units are spending and it seems like there is no one person who is responsible for money coming in and money going out of the G-wallet.

To show you just how a serious cost our government has become, the report from the Office of the Auditor General makes some poignant points about the nature of the G-wallet for the year ended March 31, 2018. In the audited financial statements, revenue, assets and liabilities were materially misstated. For instance, revenue collected was misstated by E1.359 billion, debit balances amounting to E13.1 billion were not reconciled to show a true and fair view of liabilities; bank balances were misstated by E1.302 billion; while E116 million was in the overpayment of salaries to ghost employees, salary reimbursement due from civil servants, and unrecovered loans due from public companies. In total as of March 2018, public debt amounted to E12.1 billion.

Overall, the audit of the government financial statements indicates that there are deficiencies in terms of controls over compliance with laws and regulations, and lack of adherence to budgetary requirements and spending authorities. Ministries and departments continue to overspend as well as incur expenditure for activities which do not have budgets without seeking approval from the relevant authorities. Government, instead of becoming an enabler of a conducive business environment, has become a serious cost and debilitating puzzle to the Eswatini economy.