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SOME MPS RAISE CONCERNS ON E1.5BN STABILISATION FUND

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MBABANE – Having finance reserved in a fund for future incidents that may need funding did not sit well with some Members of Parliament (MPs).

This, after Chairman of the Ministry of Finance Portfolio Committee and Lobamba Lomdzala MP, Marwick Khumalo, moved for the adoption of the report of the Finance Portfolio Committee on the Revenue Stabilisation Fund Regulations, 2023. In his motivation for the adoption of the report, Khumalo shared that; “if there was a windfall or a bumper harvest, it says as a country, we should save for the future because nobody knew what it had in store.’’

announced

He highlighted that government, through the Ministry of Finance, recently announced that Eswatini received over E11 billion from the Southern African Customs Union (SACU) and it was of utmost importance for the country to save for the future from this money. He shared that it was for that reason that the Ministry of Finance saw it fit to come up with the idea to have the fund, which would keep the funding from windfalls, for future use. He also shared that initially, government had planned to keep E2 billion in the fund but the amount was revised to E1.5 billion. However, as much as they did not entirely oppose the formulation of the fund, some MPs questioned the rationale behind having a fund while people in some parts of the country were in dire need of food and feeder roads.

deplorable

They made an example of the road network, especially in the rural areas, which were in a deplorable state. One of the MPs to question the formulation of the fund was Nkilongo MP Timothy Myeni, who shared that a hungry nation was an angry one. “Why not feed the people first then we can talk about having a fund that will keep money for future use. It does not make any sense to me to have money stored in a fund when it should be used to rehabilitate roads that are badly damaged across the country,” he submitted. Lomahasha MP Ndumiso Masimula also shared his discontent on having money stored in a fund when there were a lot of situations in the country that needed urgent funding.

irregularities

“There are no drugs in our hospitals and there are no teachers at schools, all these irregularities need funding. This is a good initiative which I support but the question remains, why would we want to put money in a fund when there are so many critical areas that need urgent funding?” he wondered. The same sentiments were shared by Somntongo MP Dumisani Mbhamali, who also voiced his concerns on having a fund to keep money for future catastrophes when the same funding should be made available for current critical areas that need funding.
Meanwhile, Mkhiweni MP Michael Masuku, was of the view that this was a good initiative that needed the support of the MPs because it was meant to help the country efficiently deal with unforeseen circumstances in future. He also queried if the fund would not clash with the National Disaster Management Agency (NDMA), to which Khumalo responded to the negative.

Khumalo explained to the MPs that there was a formula in place that would ensure that each time the money was withdrawn from the fund, transparency would prevail and it would be accounted for. He made an example that when an individual wanted to make a loan from a financial institution, they were required to have a strong financial muscle to convince the bank that they would be able to repay the loan and the same concept applied with a country when it wanted to make a loan from other international institutions providing same.

surety

He said the fund would act as surety, that indeed the country was capable of repaying whatever loan that may be urgently needed in future to service cases of emergency.  The objective of the fund is to provide fiscal sustainability through addressing the SACU revenue volatility caused by the critical nature of common revenue pool and the inherent forecasting error, reserving funds from the SACU revenue receipts and reserving other revenue streams to address future revenue shortfalls that may be experienced by the government of Eswatini periodically during the budgeting period.

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