STORIES BY MBONGENI NDLELA
E22m set aside for Sibaya National Dialogue
LOBAMBA – The political will and financial commitment towards holding a national dialogue has been clearly displayed by government and the country’s authorities.
While some had expressed concern that the dialogue would not take place, Minister of Finance Neal Rijkenberg has followed up on the Speech from the Throne delivered by His Majesty King Mswati III ON February 4, 2022 by announcing a budget of E22 million towards the exercise.
This announcement was made on Friday, February 17, 2022 by the minister when tabling the 2022/2023 budget speech in the House of Assembly.
Rijkenberg stated that His Majesty had called on all EmaSwati to constructively engage in national dialogue, within the framework provided by the kingdom’s Constitution and Sibaya, which is the ultimate consultative and decision-making forum of all EmaSwati.
“As our society and economic activity resumes post COVID-19, the Nation now has the opportunity for this dialogue to resume. Government have set aside E22 million in this year’s budget for the Sibaya National Dialogue,” the finance minister said in the earlier parts of his speech.
He again addressed the issue of the dialogue towards the conclusion of the speech by reiterating His Majesty’s call on all EmaSwati to engage in the Sibaya to find the best way forward and ensure that the tragedies that were experienced during the past year were never repeated.
“In order to achieve this, we need an all-inclusive process that will allow everyone to be heard. We need to reflect on our words and put aside our weapons. We need to focus on healing rather than hurting, reconciliation rather than conflict and unity in directing our efforts towards common goals of peace and prosperity and a better life for all EmaSwati,” Rijkenberg said.
By the tragedies that were experienced in the past year, the minister was referring to the civil unrest witnessed between June and July 2021 where public and private properties were destroyed and lives were lost when security agencies came in to squash the unprecedented countrywide mayhem.
The minister noted that the past year 2021 was the most difficult for the Eswatini Nation as it had to bear with the tragic loss of life and destruction of property from the unprecedented domestic civil unrest on top of the disproportionate social and economic burden due to the global COVID-19 pandemic.
“We mourn our shared loss at every life lost, at every livelihood impacted and at every business damaged. We as a Nation have been grieving. The health, economic and social status of our Kingdom have been severely impacted causing immense hardship and pain. Yet, despite these seemingly insurmountable challenges, EmaSwati have continued to show their characteristic resilience,” the minister said.
He said the country and Nation were in collective pain and that the civil unrest led to loss of life, damage to property and infrastructure and a loss of confidence and trust in government.
Rijkenberg said the continued and sustained attacks on the country’s institutions, infrastructure and economy will severely undermine collective efforts to rebuild what has been lost.
The minister was referring to ongoing, sporadic attacks on both public and private properties such as schools and police posts which have been the target of arson attacks from unknown people who are behind calls for regime change.
“These efforts to rebuild only add to a long list of challenges that this Government has been working to mitigate,” he said.
The minster reminded that as a Nation founded on peace, stability and the Rule of Law, His Majesty, in partnership with the private sector and development partners, had launched a E500 million Reconstruction Fund to compensate EmaSwati for the damage to property suffered during this civil unrest.
He encourage all qualifying affected people and companies to apply, so that they could restore confidence in the country’s economy and create the jobs that are so desperately needed.
Govt’s E220 million COLA for civil servants
LOBAMBA – Government continues to prioritise the welfare of civil servants despite a ballooning wage bill and lack of financial availability.
Two years ago (2020) government spent around E270 million in awarding a three percent Cost of Living Adjustment (COLA) that contributed to the wage bill rising to E7.3 billion.
With the current administration working on controlling or minimising the wage bill as much as possible, this has, however, not stopped it from ensuring that the civil servants’ salaries do not remain stagnant.
Minister of Finance Neal Rijkenberg, when tabling his budget speech on Friday, said even though a huge amount of effort was going into reducing the exorbitant wage bill, government remained very aware of the fact that civil servants have been getting no or below-inflation cost of living adjustment recently.
“In spite of the one billion emalangeni reduction in our budget, an effort has been made to accommodate Cola at E220 million, salary review exercise at E15 million and E55 million for appeals,” he said.
The minister highlighted how, since coming into office in 2018, measures to contain the wage bill have been hugely effective compared to the five years before (2013 to 2018).
He said between 2013 and 2018, the wage bill soared at alarming rates totalling 61 percent before the currently-in-place hiring freeze was implemented.
“The accelerated increase began in 2013/14 when the wage bill increased by 13.5 percent from E4 billion to E4.5 billion. It increased by a further 7.5 percent to E4.8 billion in 2014/15, another 10.7 percent in 2015/16 to reach E5.3 billion and then a further increase by 22.5 percent to E6.5 billion in 2016/17 due to the salary review. In 2017/18 the wage bill grew by 6.3 percent to reach E6.9 billion. Over the five years from 2013 there was a total growth of 61 percent in the wage bill,” Rijkenberg said.
He stated that In 2018/19, which was the current administration’s first year in office, there was a slight reduction in this alarming growth trajectory with a relatively muted increase of 2.5 percent settling at E7.1 billion due to the hiring freeze that was implemented.
He said In 2019/2020 a further dampening of this trend continued with only a 0.5 percent increase in the wage-bill.
The minister said in 2020/21 automatic notching, Covid-19 hiring and the Cost of Living Adjustment led to a further 6.5 percent increase to E7.4 billion.
He said in 2021/22 the wage bill is projected to decrease to E7.3 billion, which will be a reduction of 2.1 percent.
He said this is further projected to decrease in 2022/23 by 1.7 percent.
“All these numbers exclude the pension contributions. The hiring freeze has been successful in muting the growth of the wage bill, increasing by only 3.2 percent over the 5 year outlay from its implementation and resulting in an average growth of 0.64 percent in sharp contrast to the 12 percent average annual growth recorded in the preceding five-year period,” said the finance minister.
Rijkenberg said the head count was increasing by about 2 percent per year during years before the hiring freeze.
The hiring freeze, he said, led to headcount increases of only 0.8 percent during the first year of implementation, but since 2019/20 there have been steady reductions in the headcount numbers.
“2019/20 saw a decrease of 1.1 percent in the headcount followed by a decrease of 0.8 percent in 2020/21 and a further decrease of 1.4 percent in 2021/22. There has been an average decrease of just over 1 percent per year since this policy was implemented,” the minister added.
Government introduces pro-poor taxes
LOBAMBA – It is good news for low income earners and bad news for those who are considered high income earners.
As a means to address income inequality, people earning E4 000 a month or less will not be taxed and those earning less than E250 000 a year (E20 833.33 a month) will not be affected by a proposed three percent increase on pay as you earn (PAYE) tax.
Currently, it is those who earn E3 500 and below who are not taxed.
Announcing this news when tabling the 2022/2023 budget on Friday, Minister of Finance Neal Rijkenberg said lifting the tax brackets so that paying tax will now start from E4 000 a month and implementing a three per cent increase (from 33% to 36%) on those earning more than E250 000 a year was meant to leave “more cash in people’s pockets” for the low income earners.
“Individuals will now only starts paying tax from E4 000 per month instead of E3 500 per month. Unfortunately, we cannot afford to have this reduction other than lifting the upper limits of those earning more. The proposal is to lift the upper tax bracket from 33 percent to 36 percent. This would mean that 80 percent of the tax payers would be better off with more money in their pockets and 20 percent of higher-income earners paid more than E300,000 per year would be worse off. Mr. Speaker, it is understood that this will negatively affect everyone and I appeal to all of us to put the interest of the poor above our own. This measure will be addressing our income inequality,” the minister said.
Further, Rijkenberg said government was proposing amendments to the Value Added Tax (VAT) legislation and would reconsider some non-vatable items “that are not pro-poor”.
Also, the minister said they would propose to have standard rated VAT on electricity but that this would not be applicable to electricity for domestic (household) use.
Good news as corporate tax reduced to 25%
LOBAMBA – Businesses will be pleased with the news that has been brought by Minister of Finance Neal Rijkenberg in as far as corporate tax is concerned.
Corporate tax is a tax imposed on the net income of the company.
The minister informed the House of Assembly when tabling the 2022/2023 budget on Friday that corporate tax was being reduced from 27.5 percent to 25 percent.
“This is in line with the rest of the world reducing tax rates and aims to assist companies to grow quicker and helps to solve our unemployment problem,” he said.
To balance the loss in the reduction in corporate tax, the minister said government will also include a review of the initial allowances, penalties on late submissions on pay as you earn (PAYE), capping of losses carried forward, and the increase of the rate of withholding tax on interest for non-residents from 10 percent to 15 percent.
In addition, the minister said government intended to introduce a tax on worldwide income for the residents of the Kingdom of Eswatini.
“It is envisaged that these measures will make the poor better off,” Rijkenberg said.
Government will meanwhile also bring in capital gains tax to guard against businesses that are evading paying tax.
“Government is introducing a capital gains tax for businesses that is aimed at closing loopholes that businesses are using to pay less tax,” the minister said.
Capital Gains Tax is a tax on the profit when you sell (or ‘dispose of’) something (an ‘asset’) that’s increased in value.
It’s the gain you make that’s taxed, not the amount of money you receive
For example, if you bought property for E300 000 and sold it later for E500 000, that means you made a gain of E200 000.
In as far as Small and Medium Enterprises (SMEs) are concerned, Rijkenberg announced that government will be introducing presumptive tax to simplify their administrative processes and remove the requirement of audited financials for payment of tax.
‘Brighter tomorrow’ as govt lists 13 notable successes
LOBAMBA – The current administration has admitted to having inherited a flailing economy coming from a weak fiscal position when it took over in late 2018 but, despite this, it has managed to record significant achievements since then.
When tabling the 2022/2023 budget speech, which has been themed ‘transforming through economic sustainability, Minister of Finance Neal Rijkenberg pointed to the need to celebrate successes, provide a clear and sustainable fiscal path forward and create hope for a collective future as a united Nation.
He was realistic though that while the successes were indicators for a “brighter tomorrow”, the year 2022/23 will, unfortunately, be another tough year for the administration as they would continue on a fiscal consolidation path.
“We have successfully addressed a number of critical issues. Government spending has improved through the restructuring of the CTA, the Phalala Fund has been refocused on growing local domestic capacity to address healthcare so that we can reduce our dependence on this fund, we have also started to issue lump-sum contracts instead of re-measurable contractors on our capital projects. We continue to prioritise the repayment of arrears. We are reducing our dependence on debt and are now approaching a sustainable path. On the recommendation of the International Monetary Fund, we have tightened financial controls to ensure ministries do not overspend on their approved budgets,” the minister said.
He said the work that was being done to transform the governance and financial position was starting to bear fruit and the administration was embarking on a more sustainable path as an economy, as a continuation to build on the progress made over the past 3 years.
“It is hard work and we believe there are no magic solutions. But by addressing leakages and fixing economic policies that have failed over years of misuse and inefficiency, we will see our economy, and the welfare of our nation, thrive,” he said.
Rijkenberg explained that transformation through Economic Sustainability meant making the right long-term policy, and then implementing it consistently over time.
He assured all EmaSwati that there was renewed hope, and then made a re-emphasis on the successes by listing them as follows:
- The country’s GDP growth has shown remarkable resilience with growth of 5.9percent projected for 2021.
- The significant benefits from the successful implementation of the Post-Covid Recovery Plan.
- The country now has a 24-hour access to South Africa – our biggest trading partner.
- Significant increases in our Customs Union receipts over time due to the measures that we have put in place.
- The commissioning of LUSIP Phase II.
- The introduction of the life-line electricity tariff for the most vulnerable.
- The completion of the Manzini to KMIII International Airport highway.
- Improved cash flow leading to reduction of arrears.
- The shutting of CTA trading account.
- Moving from re-measurable contracts to lump-sum contracts which limits cost over runs on capital projects.
- Spending within the budget.
- Healthy reserves and a positive trade balance.
- Mining licences issued.
He said if EmaSwati do not lose faith, Government “is moving towards a more sustainable path”.
The minister concluded by quoting a scripture from the book of Joshua chapter 1 verse 9; “Have I not commanded you? Be strong and of good courage; be not afraid, neither be dismayed, for the Lord your God is with you wherever you go”.
Finance Minister announces 18 000 new jobs
LOBAMBA – The financial year 2022/2023 promises to bring about good news to the many unemployed EmaSwati.
Minister of Finance Neal Rijkenberg has announced thousands of job opportunities that are expected to come with the implementation of a number of new projects around the country.
Among these is the construction of at least four factory shells across the country.
The minister said the factory shells construction shall entail the completion of the Gamula factory shell, Mantambe factory shell, Hlathikhulu factory shell and the Johnson Workwear factory situated in the Jabulani area near Nhlangano.
“This huge factory will be finished at the same time as the Sicunusa road along which it is located. These factory shells shall employ over 6 000 people,” Rijkenberg said.
He said Government will also a number of pipeline projects that are private sector-led, which are expected to employ a further 3000 people in the coming financial year.
He said these projects include a renewable energy project through the Eswatini Energy Regulatory Authority (ESERA), mining, manufacturing, retail and agriculture.
“All of these projects originated from the Post Covid-19 Recovery Plan,” the minister said.
Some of the projects listed by the minister include the new mall that is to be constructed in Manzini at the Old Trade Fair Grounds, which is estimated to cost over E2 billion and is expected to start in the coming financial year.
Another commercial development, according to Rijkenberg, is expected to start construction near the new interchange, and is set to be worth over E3 billion.
“We are happy to note strong reinvestment initiatives in a number of large private companies, indicating that the investment sentiment in Eswatini remains strong,” he said.
The minister further said government, through the Ministry of Commerce, Industry and Trade, in pursuit of its policies and programmes in this medium term is committed to creating 9000 new jobs this coming financial year, “whilst continuing to explore all avenues as we continue to grow a competitive and export-driven economy”.
A-level introduced in education reform
LOBAMBA – Government has heard outcries from stakeholders on the need to make changes to the country’s education system to make it competitive and relevant to the current times.
Having phased out the O Level General Certificate of Education and introduced the Eswatini General Certificate of Secondary Education (EGCSE), Government has again reformed the secondary education system.
Finance Minister Neal Rijkenberg said in the 2022 academic, Government is planning to introduce a qualification beyond EGCSE.
The EGCSE will now be completed in four years instead of the current five years and then introduce A (Advanced) Level qualification in the fifth year.
Rijkenberg said this programme is aimed at improving the entry requirement at university level education.
“In other countries like Zimbabwe and Ghana the entry requirement at university is the A-level. However, in our country, it is still the EGCSE. This programme will introduce the 4 years of EGCSE at 28 identified schools in the country commencing in 2022 and rolled-out to other schools in subsequent years. Upon completion of the four years, the first batch of students will then proceed to the A-Level. This programme will provide a range of disciplines beyond science, including business studies and humanities. Government has allocated an additional E30 million towards the e-Learning programme,” the minister said.
He also stated that the audit for right-sizing the teaching service in all public schools regarding school quotas had been done and that 761 teachers were being re-deployed.
“The main objective of the exercise is to ensure that schools are manned by the appropriate staff in terms of numbers and qualifications,” he said.
Finance Minister tables E23.16 billion budget
LOBAMBA – Deservedly, the health and education portfolios have been allocated the larger share of the 2022/2023 national budget that was tabled in parliament on Friday, February 18, 2022.
Minister of Finance Neal Rijkenberg tabled a budget totalling E23.16 billion, which is a reduction of about E1 billion compared to the E24.04 billion for the 2021/2022 financial year.
The minister disclosed that the appropriated recurrent expenditure is expected to be At E16.2 billion, which is at the same level as in the 2021/2022 financial year.
The appropriated capital expenditure has been allocated an amount of E5.36 billion, which is a reduced figure compared to E6.37 billion allocated in the 2021/2022 financial year.
The budget deficit is projected to be at E3.8 billion, which is about E800 million less than the projected E4.6 billion deficit for the 2021/2022 financial year.
For the Ministry of Education and Training, Rijkenberg announced that an amount of E3.53 billion has been allocated to cater for all educational and training programmes.
Once tertiary education scholarships and grants for Orphaned and Vulnerable Children (OVC) are added, this figure increases to E4.05 billion, approximately 16 percent of the total national budget, putting Eswatini in the top 6 percent of education spending in Sub-saharan Africa.
“With this huge investment made by the tax-payers we challenge educators and learners to ensure that Emaswati benefit from this significant investment,” the finance minister said.
For the Ministry of Health, the minister announced an allocation of E2.42 billion as he said the health of the Nation is an important resource that Government will continue to invest in.
He said the E2.42 billion budget allocation translates to about E2,069 spending per capita, putting Eswatini in the top 6 percent of health spending in Sub-Saharan Africa.
“Mr. Speaker, significant investment has been made by Government and development partners in the health sector during the COVID-19 response. Major investments include: The building of a ward for COVID-19 at Lubombo Referral Hospital; Repurposing of the National TB Hospital in Manzini; Construction of oxygen plants at the Luke Commission and Lubombo Hospital; Installation of bulk oxygen tanks at the Luke Commission and Raleigh Fitkin Memorial Hospital,” the finance minister said.
Furthermore, Rijkenberg said, regional hospitals had improved their capacity to manage severely ill patients and that this capacity will assist the country to manage other critically ill patients even post-COVID-19.
“The country has developed a surveillance system for COVID-19 and other illnesses in order to monitor and respond quickly should another outbreak occur in the future,” he said.
The Ministry of Agriculture, meanwhile, has been allocated E1.36 billion to improve food security and minimise external risks.
An amount of E40.1 million has been set aside for the Input Subsidy Programme which has been running for the past five years and resulted in significant increases in the local production of maize.
”The input subsidy programme has gained momentum and demand has been growing on an annual basis. Government aspires to increase the number of beneficiaries from 10,000 to 15,000 over the medium term,” the minister said.
Government has also budgeted E507 million for the Lower Usuthu Irrigation Programme (LUSIP) and E26 million for Mkhondvo/Ngwavuma for resettlement of affected families and environmental mitigation.
The Mkhondvo/Ngwavuma water augmentation project an exciting project that is currently underway, due for completion in 2027and relates to the building of large dams, canals, and a hydroscheme.
It is envisaged to initially irrigate 10 000 hectares but ultimately irrigating around 30 000 hectares of land mainly in the Shiselweni region; and is expected to create an additional 10 000 jobs at full implementation.
When it comes to information, Communication and Technology, Government has provided E360.7 million to the Ministry of ICT to improve the performance of this fast-developing sector.
Government has also allocated E529 million to the Ministry of Natural Resources to carry out its programmes.
Government will also continue to give support to the Regional Development Fund as the main funding mechanism for the implementation of rural development projects.
In the 2022/2023 financial year, an amount of E177 million has been allocated to the RDF to facilitate continuation of these projects.
Also, a budget of E385 million has been allocated to the Ministry of Tinkhundla to fulfil its obligations.
A number of Tinkhundla Centres were damaged during the civil unrest experienced in 2021 and a rapid assessment on the cost and extent of the damage has been commissioned.
Corruption also continues to be a sore in Eswatini and a budget of E24 million has been allocated to combat corruption in the 2022/23 financial year.
E361m for tertiary scholarships
LOBAMBA – Government will not tolerate misbehaviour from tertiary students whose education is paid for by the State.
Minister of Finance Neal Rijkenberg reminded the scholarship recipients that it is a privilege, not a right to receive these scholarship loans.
”The money that funds the scholarships is from hard-earned income from taxpayers and is meant for the sole purpose of getting an education. Government will not hesitate to cancel the scholarships of students that abuse this privilege and engage in violence and other unlawful behaviour,” he said.
It has become the norm now that students, once they get to university, are influenced not to make their studies a priority but to participate in political activities that are meant to destabilise government operations
The minister said an amount of E439 million has been set aside for the Ministry of Labour and Social Security of which E361 million is for scholarships for tertiary education.
Rijkenberg said there were currently 14 000 students being supported through the study loan scheme to study at tertiary institutions locally and abroad, with an annual expenditure above E300 million.
He said recovery of loans from past beneficiaries amounts to E60 Million on average per annum, which was far below expectations.
“Due to the glaring under-recovery of disbursed scholarships, Government is pursuing the establishment of a scholarship revolving fund to be managed by a bank. In 2022 the regulations for this fund will be finalised and should then mean that the fund grows on an annual basis allowing more students to benefit from the fund,” he said.
On the other hand, the minister said with the support of the International Labour Organisation (ILO), Government had prioritised the establishment of an Unemployment Benefit Fund in Eswatini, towards comprehensive social protection for all.
He said this intervention will seek to establish a gender-inclusive unemployment protection system as part of a comprehensive national social security and social protection policy.
Also, the minister said Government had initiated a National Action Plan project which aims to strengthen the Labour Market Information and Skills Anticipation System (LMIS) in Eswatini.
“The Plan seeks to position this system as a one-stop-shop for labour market information and job-matching in Eswatini,” he said.
