PRIVATE SECTOR FEELS THREATENED...

sundayeditor@times.co.sz

MBABANE – The private sector is gravely concerned about the rapid growth of public companies that are building their own offices.

Their strong argument is that the hasty construction of office parks by the public companies is driving private investors out of business.
They pointed to the fact that the more the public companies are allowed to construct their own offices, the more they vacate the already existing offices owned by private investors.

They have observed that office parks owned by the private sector are increasingly being left vacant. Public companies that own their own offices include Swaziland Finance Corporation (FINCORP), Swaziland Motor Vehicle Accident Fund (SMVAF), Eswatini Revenue Authority (SRA), Eswatini Water Services Corporation (ESWSC), Eswatini Post and Telecommunication (EPTC), EswatiniBank,  and Eswatini Electricity Company (EEC) to mention a few.

unhealthy business
environment

Information reaching the Times SUNDAY is that one of the country’s commercial banks and one of the country’s profit making government companies have bought pieces of land in Ezulwini where they also want to build their own offices.
The name of the two entities are known to this publication, but will not be disclosed because those familiar with the issue within the institutions did not want to comment; citing confidentiality.
Business Eswatini’s President Andrew le Roux said: “This is a very unhealthy business environment and something has to be done to stop this.”

Le Roux highlighted that it is wrong for the public companies to compete with private investors in the property (office parks) sector because they are driving them (private investors) out of business.
“These companies are subsidised by the taxes paid by the private sector and they then use the same money to compete with the same private sector. That is totally unfair and not ideal for the country’s economic development,” le Roux said.
The fact that government is posing unfair competition to the private sector was also noted by the US Department of State in its 2015 Investment Climate report.

It observed that government is competing with the private sector through substantial shareholding in private corporations.
The president stressed that this tendency is what makes the country to be run by government instead of the private sector.

COMPETITION UNFAIR

“For them to use our own taxes to compete with us is unfair and where does government expect us to continue getting the money if offices constructed by the private sector are left empty?”
The SRA recently moved to its offices in Ezulwini, leaving half of the PSPF offices in Mbabane empty.
FINCORP as well recently moved out of Dlanubeka Building owned by ENPF to their offices along Gwamile Street.

Notably, besides building their own offices, the public companies provide additional space which they lease to other companies just like the private investors.
To prevent this from happening, le Roux said: “We have to sit down as stakeholders and talk about this because we cannot have an economy run by government if we are serious about turning the economy for the better.”
He added: “We have to understand where they get the mandate to compete with the private sector. It doesn’t make sense.

Le Roux said companies like PSPF and ENPF invested in property because they wanted to maximise the benefits of the pensioners. He said with the mushrooming of the office parks, it would be hard for both companies to give the pensioners better returns.
When presenting the budget speech, Minister of Finance Neal Jijkenberg said meaningful growth would be achieved by enabling the private sector to lead and do what it did best, which includes growing the economy and creating employment. “Government can no longer be the employer of choice in the Kingdom as it is,” he said.

ENPF CEO BEGS TO DIFFER
 Eswatini National Provident Fund (ENPF) CEO Prince Lonkhokhela said it is a good thing to monitor the environment in the sector to see if it was still healthy and ideal for economic development, but in his view, the development of more office parks by other government companies is something that is good for the country.
The CEO said the few investors in property cannot accommodate everyone. 

He said there is still an acute need for office space and residential property.
In my view, this is something good because more investors are participating in economic development through the construction of the offices,” he said. 

The  prince went on to say that despite the rapid growth of properties especially in Mbabane and Manzini, they have not yet started feeling the pinch.
He acknowledged that they have vacant offices which are ranging from 5.0 per cent to 10 per cent at most. 

He said over 90 per cent occupancy is something good for them. 
The CEO further mentioned that it would be bad for the country’s economy if the same investors were in the industry.  The prince said more industry players are needed to enter the space because as a pension fund, they have limits of how far they can go in terms of investing in property.

He said they are allowed to invest up to 15 per cent of their total worth because anything above that becomes riskier.
He reiterated that investors should build more, but should not concentrate on flooding the Mbabane – Manzini corridor with more offices but should look at spreading to the small towns where rates are still affordable. 

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