GOVERNMENT IN ‘ILLEGAL’ E1BILLION DEAL

MBABANE – Government’s bid to secure a loan of E1 billion from the Swaziland National Provident Fund (SNPF) and Public Service Pension Fund (PSPF), to build institutional houses, is illegal.

The Times SUNDAY can reveal that Section 19 (3) of the Retirement Funds Act of 2005 prohibits entities like SNPF and PSPF from granting loans to employers, sponsors or members of the management board of the fund.
Only members of the pension schemes can get a loan from the institution administering these kinds of funds.

Government, as an employer, cannot even get the loan through its company, the Swaziland National Housing Board (SNHB) because it (SNHB) is not a member of the fund.
At SNPF, government is not an employer but a board member.
Government seeks to get E600 million from PSPF and E400 million from the SNPF.

Parliament has given Martin Dlamini, the Minister of Finance, authorisation to source the funding from the two entities, regardless of the fact that this move is against the law.
Reads Section 19 (3) (a) of the Act: “A retirement fund shall not use any of its moneys nor shall the retirement fund be coerced or induced to; (a) grant a loan to a sponsor, employer or member of the management board of the fund.”

Section (b) reads: “A retirement fund shall not use any of its moneys nor shall the retirement fund be coerced or induced to invest any of its moneys with an institution or organisation with a view to securing a loan at preferential rate of interest or for securing any benefit monetary or otherwise, for the benefit of the employer or any member of the management board or any other person or (c) use any of its assets as a collateral for a loan made by an institution or person to the employer or any member of the management board of the retirement fund.”

However, Cleopas Dlamini, the Chief Executive Officer (CEO) of the PSPF, said his organisation had not yet granted the loan to government.
He said the PSPF was still consulting on the issue.
Dlamini said Parliament authorised the minister to seek the loan, not that it was automatic to get it.

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