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FACT: CAPITAL PROJECTS A DRAIN TO ECONOMY

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Sir,

There is a lot of taxpayers’ money that gets looted through public procurement in Eswatini. A lion’s share of that money is in government tenders, particularly capital projects, which have led to the construction of white elephants across the country.  A capital project is a long-term project to build, improve, maintain, or develop a capital asset. Capital projects involve a significant and consistent flow of investment and for these reasons it is imperative that government performs a comprehensive benefit-cost analysis for each project so that the social and economic benefits against the cost of financing the project are well justified before spending taxpayers’ money on it.

Money

The big money that gets allocated to capital projects is meant to provide world class infrastructure and amenities through the countruction of roads, bridges, hospitals, schools, airports, etc. Indeed, without these key capital assets, the economy cannot function properly. Unfortunately, infrastructure provision in Eswatini has been turned into a huge money pit for feeding a few distinguished individuals. Even the children of some of the country’s most esteemed politicians cracked the code and started their own construction companies just so they could cash-in on some of the billions of Emalangeni circulating through capital projects. These children are now millionaires who do not even have to lift a finger to do an honest day’s work all thanks to the construction of roads among other capital projects available to be abused in Eswatini.

Factor

In every other country, public infrastructure investment is understood to be a critical factor in the health and wealth of an economy that enables private businesses and individuals to produce goods and services more efficiently. Most importantly, increased infrastructure spending by government is generally expected to result in higher economic output in the short-term, by stimulating demand and in the long-term by increasing overall productivity. Repeatedly, the country has gone through fiscal crisis, yet public infrastructure investment is one of the most advertised tools of anti-recessionary fiscal policy. What usually happens is that when the economy struggles, politicians and public economists call for greater infrastructure spending as a way of stimulating the economy. This means to some level, a lot of the money from government coffers that has been spent on public infrastructure should have at this point brought us some serious growth and provided a lot of business stimulus to the country’s small medium and entreprises.  

Construction of any public infrastructure in Eswatini is an overpriced business that ends up draining the economy. Government is always happy to pay inflated prices, 10 times the actual price for a project that won’t even be completed by the initial contractor. Before even such cases get to the audits of the Public Accounts Committee, how is it that government is able to authorise payments for millions of Emalangeni on obviously shabby construction work? The problem is that someone at every link of the chain has a cut and so these personal interests are much more important and will be protected and swept under the carpet by all means. Fact: Capital projects do the opposite of stimulating and developing the economy in Eswatini, they drain government coffers and lead to a fiscal crisis.

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