Home | News | MP: 5 ITEMS NEED TO BE INTERROGATED DURING BUDGET DEBATE

MP: 5 ITEMS NEED TO BE INTERROGATED DURING BUDGET DEBATE

22/02/2022 09:14:00 Stanley Khumalo

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MANZINI – “I’ve set my faith in the debate of the national budget to have five things interrogated which ought not to have been listed,” says a legislator.

Lomahasha Constituency Member of Parliament (MP) Ndumiso Masimula, leading to the presentation of the national budget, had listed five things that he was of the view that the timing did not permit them to be included. Masimula said the five things that the Minister of Finance, Neal Rijkenberg, should not include in the budget allocation were the International Convention Centre (ICC) and the Five Star Hotel (FISH) construction project, new Parliament structure, aviation, national events and two major roads (Mbadlane – Manzini and Lukhula –Big Bend). The legislator said most of the things that he had hoped to have omitted in the upcoming financial year budget allocations were there. He said the investment in the ICC and FISH was there and received an allocation of E550 million.

Consultancy

This, as articulated by our sister publication – Eswatini News – has cost the taxpayer E6.95 billion in a period of a decade. About E450 million was said to be set aside for consultancy fees, interior works, value added tax(VAT) and maintenance works of the landscape. On the other hand, E100 million was set aside from local funds for the completion of building, start cladding, VAT, swimming pool area and maintenance of mechanical works, while there is a greater probability of the taxpayers paying E740 million more in the next two financial years.
Masimula said his hopes were on the budget debate expected tomorrow wherein scrutiny of some of the proposed fiscus distribution would be zoned in. “Despite that the minister (Rijkenberg) explained the reasoning on the allocations, I’m still not convinced,” Masimula said.

Leading to the budget presentation, the MP said the project was set to bring positive spin-offs in the long term, 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 debilitating state of the road network. It is worth noting that our sister publication – Times SUNDAY – reported that the 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 funds were set aside for the ICC and FISH, which was referred to as the Millenium Hotel by then, respectively.
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 consultancy fees, professional fees and works which increased the project to about E1.9 billion
In the 2017/18 financial year, an amount of E721 800 000 was set 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.

Furniture

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. At this instance, the estimated cost of the project was first maintained at E4.8 billion; with the ICC set to cost around E2.5 billion and the FISH at approximately E2.3 billion. 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 supposed that Rijkenberg had said expenditure on the road infrastructure (Mbadlane – Manzini and Lukhula –Big Bend) was sufficient and no more funds would be needed. He purported that this was said during the supplementary budget debate. However, the legislator was quick to point out that he could have misunderstood him. It is worth noting that the Mbadlane – Manzini Public Road has cost the taxpayer about E2 billion and was supposed to be completed in May 2021. In his budget speech, Rijkenberg said: “The completion of the Lukhula–Big Bend road (MR 16) and the progress made on the upgrades of the Manzini-Mbadlane highway (MR 3) will transform the road transport landscape significantly in the Kingdom of Eswatini.”

It is worth noting that last year, Rijkenberg presented the WHO-AG Thomas Joint Venture (Rehabilitation and Upgrading of MR16-Lukhula-Bigbend and MR7-Lonhlupheko-Siteki) Additional Financing Public-Private Partnership Bill No. 11 of 2021to finance the Lukhula –Big Bend Public Road. The loan was valued at E70 117 105.40. On the other hand, University f Eswatini (UNESWA) Lecturer Sanele Sibiya said: “I honestly fail to comprehend why we are investing in RENAC in this economy. Do we have a profitability plan if we cannot even use KMIII to full capacity, this is unnecessary pressure on the fiscus, and we need to hold back on these until we are at a better space economically. The funds could be diverted to energy and youth empowerment or health. Give us a working concept and we will invest in that, not the loss leader we are venturing into.”

He was responding to the inclusion of aviation through the allocation of the Royal Swazi Airline, which was renamed Eswatini Airways. RENAC is the Royal Eswatini National Airways Corporation which shall operate Eswatini Airways. It was allocated E172 560 000 in the upcoming financial year budget. Leading to the budget, 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.

Aviation

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.

Sibiya further said the construction of the new Parliament structure could be suspended as the current Parliament was still fit for human occupation. He said at the moment, the loan would affect the country in the short term as it shall need 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.” 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 have been stalled since 2019.