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NO BUDGET FOR THESE FIVE THINGS - COMMENTATORS

16/02/2022 08:42:00 Stanley Khumalo

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MANZINI – There should be no budget allocation for these five things in the upcoming national budget, according to some commentators.

The five things that the Minister of Finance, Neal Rijkenberg, should not allocate a budget for are the International Convention Centre and the Five Star Hotel (ICC and FISH) construction project, new Parliament structure, aviation, national events and two major roads (Mbadlane – Manzini and Lukhula –Big Bend). Lomahasha Constituency Member of Parliament (MP) Ndumiso Masimula said if it were according to him, the investment in the ICC and FISH would be suspended or limited. This, he said, was because the project would not bring positive returns for now yet there were pressing issues that needed the country to utilise every penny to address them. He said the ICC and FISH was a costly capital project that could have its budget allocation contracted in order to address the health sector and also the dilapidated state of the road network.

It is worth noting that our sister publication – Times SUNDAY – reported that the budget amount of the ICC had been on an upward trajectory since 2012 when it commenced. In 2012, government estimated that it would cost around E370 million; with the ICC estimated at E290 million and the FISH projected to be completed with an expenditure of about E80 million.
In the 2012/13 financial year, E65 million and E80 million in local currency were set for the ICC and FISH. In the subsequent years, the margins of the expenditure escalated such that during the 2015/16 financial year, the cost was estimated at E1.255 billion. About E412 million was budgeted for this capital project. In the subsequent financial year, 2016/17, E479 million paid for consultancy fees, professional fees and works which increased the project to about E1.9 billion.

Increased

In the 2017/18 financial year, an amount of E721 800 000 was said to have paid consultancy fees, works and purchasing of land for the ICC and FISH. This expenditure increased the cost to an estimated value of E2 489 590 000. In the 2018/19 financial year, E522 million was said to have been released to pay for the ICC’s civil works, consultancy fees, furniture and fittings; and E989 million was allocated to the FISH. This hiked the estimated cost of the project to E4.8 billion. In the subsequent financial year, a total of E1 235 880 000 was released for construction, consultancy fees and payment of Value Added Tax (VAT) for the ICC. Meanwhile, the Book of Government Budget Estimates for the years from April 1, 2021, to March 31, 2024, shows that the ICC and FISH is now projected to cost the country an estimated E6.4 billion. On the other hand, the legislator said expenditures such as the road infrastructure (Mbadlane – Manzini and Lukhula –Big Bend) should not be allocated any funds as they were said to be complete.

It is worth noting that the Mbadlane – Manzini Public Road cost the taxpayer about E2 billion and was supposed to be completed in May 2021. Last year, Rijkenberg presented the WHO-AG Thomas Joint Venture (Rehabilitation and Upgrading of MR16-Lukhula-Big bend and MR7-Lonhlupheko-Siteki) Additional Financing Public-Private Partnership Bill No. 11 of 2021 to finance the Lukhula –Big Bend Public Road. The loan was valued at E70 117 105.40. Supporting the MP was University of Eswatini (UNESWA) Lecturer Sanele Sibiya. He said the country could not afford to fund an airline as it was costly and the targeted traffic had not been vibrant since the operations of the King Mswati III International Airport.

Reputable

“None of the reputable airlines have used our airport since its construction and what will mostly happen is that RENAC shall incur costs on personnel and servicing the aircraft,” Sibiya said. RENAC is the Royal Eswatini National Airways Corporation, which shall operate Eswatini Airways. His opinion was that the money set to fund the operations of the recently procured two jets should be invested in pressing sectors such as the allocation of scholarships. The economics scholar said RENAC had been getting a better share of the national budget allocations for over a lengthy period. This money, he said, could have been used to fund sectors that would boost the economy immediately. He said the country could be taking a leaf from South Africa by observing that its airline – South African Airways (SAA) – had been operating at a loss for a lengthy period. The move by government, he said, was the reason most parastals were operating at a loss and heavily relying on subventions.

On the other hand, RENAC has been getting a large chunk of the aviation budget. In the past five years, about E621.52 million has been set aside for RENAC as in 2017, it had been estimated that the Category A parastatal would be awarded a subvention of E16.4 million; however, it was eventually given E76.4 million. In 2018, the actual subvention was E355.7 million while in 2019, the subvention to the State-owned enterprise was E322.56 million, while for last year, there was no allocation listed in the Kingdom of Eswatini Book of Estimates. On the other hand, the estimate for the 21/22 financial year is E222.56 million.

Contracted

Sibiya further said the budget should be contracted for national events that were under the Ministry of Home Affairs in order to ensure that even when they were hosted, they were within a controlled budget. He said there could be a need to look into events that were playing a unifying role and ensure that their budget was contained; however, the economists said if these events were now falling short of their role, some could be celebrated during jubilees. “The question for this route that we need to answer is, are we willing to sacrifice culture for economic efficiency?” he asked. Sibiya further said the construction of the new Parliament structure could be suspended as the current Parliament building was still fit for human occupation. He said at the moment, the loan would affect the country in the short-term as it shall needed to be serviced yet there would be no returns on the project.

“We don’t need it now. The loan conditions are even ripping the country off as most of the resources and contractors shall be from India. The terms benefit India, which means the money will not circulate locally,” he said. Sibiya said the E1 billion loan would go a long way in improving the service delivery in the country as it could be used to set off arrears which had been stalled since 2019.