BUSINESS ESWATINI’S GOVT ARREARS FINANCE MODEL

MBABANE – Business Eswatini strongly holds the view that the time has come to start thinking outside the box in terms of coming up with innovative financing models.

Following a presentation by Group Chief Executive Officer (CEO) of Ecsponent Terence Gregory on the state of the investment climate in the kingdom and across the border, the CEO of Business Eswatini, Nathi Dlamini, raised a number of questions which need to be pondered on.

This he did after he had bemoaned the current state of the economy in Eswatini and said the private sector had borne the brunt of the fiscal crisis in the country probably more than others as many businesses were owed huge sums of money by government, which had not been paid. 

 “Our government needs all the help it can get in its endeavour to pay off the debts being owed,” submitted Dlamini.  He also hastened to remind people that they should not forget that it was not this current administration that caused the fiscal mess in which the country finds itself.

Operations

Dlamini said the new team was drawn straight from the private sector to help streamline government operations and get the real business of government back on track; which was the reason why they deserve all the support they need.
He said “If they fail, we all go down with them anyway.”

Dlamini noted that it seemed government needed money desperately but none was willing to give it to her. Dlamini then suggested that fund managers such as Ecsponent should think about introducing innovative funding models which could help alleviate the debt burden from government, while at the same time turbo-charging activity in the private sector.   The CEO then suggested an array of funding models but said he preferred what he called factoring or invoice discounting services for the private sector.

Arrangement

When the CEO was pressed further after the breakfast meeting in terms of what he had meant by what he had said, he explained that he was thinking that fund managers could enter into an arrangement with government whereby fund managers would buy the debt owed by government from the private sector at a discount. This amount stood at around E3 billion during the last update nearly two months ago by Minister of Finance Neal Rijkenberg.  
Dlamini said this meant that fund managers would settle the outstanding debt owed by government to the private sector at a discount, which the CEO said could vary between three and five per cent.

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