GOVT BECOMING SLAVE TO BORROWING

The wealthy rule over the poor, and anyone who borrows is a slave to the lender....” - Proverbs 22:7
The Governor of the Central Bank of Eswatini, Majozi Sithole, hit the nail on the head concerning the root cause of our government’s fiscal problems - as reported in an article in last week’s midweek edition of the Times of Eswatini.

The article stated that, during a presentation of the Integral Annual Report at the Royal Villas Conference Room, Ezulwini, the Governor pointed out that, ‘Government should be cognisant of its wage bill such that they do not have any work tools but just human resources’.

Government’s wage bill, as it is common knowledge, is very huge, running into hundreds of millions of Emalangeni. Impeccable and respected financial entities such as the International Monetary Fund (IMF), have, in the past, incessantly advised government to consider cutting down the wage bill by trimming the number of its civil service if it is to realise an improved fiscal position. This advice has been steadfastly ignored over the years.

FISCAL CRISIS

The governor allegedly urged every involved party to be on top of its game in dealing with the fiscal crisis and play its role. According to the article, he - through engagement with the minister of Economic Planning as well as that of  finance, respectively -  highlighted that, “the problem is not with revenue but lies with expenditure...’.

Therein lies the rub. Past governments who were in office, whichever way you look at it, at times had this propensity to spend money like drunk sailors on a shore vacation. Even though relatively new, the incumbent government seems to be following in the footsteps of its predecessors. Time will tell.
In what I viewed as a very frank interview with the paper, the Central Bank governor raised his concerns over whether government is paying the exact amount equivalent to goods received.

In any environment that lacks stringent checks and balances, the seeds of corruption are bound to be planted, germinate and grow into weeds difficult to uproot. Fully grown, the weeds will continuously taint and choke the morals of mankind, making them susceptible to corrupt acts. The governor rightly pointed out that corruption could be at play when it comes to procurement.

Human ‘mice’ are forever foraging, ready to pounce, help themselves to funds ‘lacaphakile’, and which are tempting to be pilfered. They have become adept and are experts at manipulating and circumventing lax procedures, for illicit gain.
In short, government loses a lot of money, running into millions of Emalangeni, as a result of inflated goods’ prices. We have read of so many accounts of how procurement procedures had been tampered with in the past, with prices of goods bloated up so ridiculously it does not shock us any longer.

Corruption is putrid, and like the vice of gambling, is very addictive and difficult to rehabilitate. For some, it has unabashedly become a way of life;  a part of the DNA of  unscrupulous people entrusted with responsibility, in this country.

A plethora of past and damning audit and accounting reports from the Auditor and Accountant Generals’ offices, respectively, have unearthed many discrepancies in the manner prices of procured goods failed to tally with quality. Rarely do we hear or read of those fingered or implicated, being called to account for their misdemeanours. Who cares, anyway? After all, the embezzled funds belong to the insignificant and despised taxpayer.

 On the human resources side of things, the governor touched on a very salient point - that of a bloated civil service, some of whom go to work solely to engage in their own businesses, not to do what they are paid for. For all intents and purposes, the governor impressed yours truly with his frankness and he deserves a Bell’s, I say!

Sadly, hapless and helpless though we might be, to call to order reckless expenditure, we have persistently over the years, raised our concerns at the seemingly reckless spending patterns our government is so notoriously famous for, as well as over her short-sightedness in prioritising her fiscal responsibilities.... but in vain.

CONCERNED NATION

It is an open secret that a concerned nation - especially comprising mainly of civic organisations - has been (and still is) up in arms, and in a hue and cry, over the construction of the opulent, ICC & FISH project, with its reported, exorbitant and escalating costs. The viability of the project and how it will benefit the ordinary man on the street has been ferociously questioned by many in the country.

Civic groups, who took to the streets a couple of weeks or so ago, have used the contentious project as a rallying issue to demand their long-denied, for the past three years, cost of living adjustment (COLA), accusing government of employing double standards by repeatedly saying she is broke, yet continues to pump funds into (and seeking loans) this extravagant project.

According to an article carried by this publication a fortnight ago, the ICC & FISH building is (or will be) the most pricy building in the entire African continent, beating hands down the current Kigali Convention Centre in Rwanda as the most expensive, which was built at a whopping cost of US$300 million (E4.5 billion).

Government estimates envisage the ICC & FISH project to around E4.8 billion (about US$322 million), that is at the latest Lilangeni/Dollar exchange rate! It is mindboggling how, according to this article, this figure has escalated to four times the initial figure of E1.2 billion (US$80 million) the project was expected to cost when it was approved by government in 2013!

Our ‘esteemed’ Members of Parliament have joined the fray, questioning the alleged, exorbitant costs of bathroom material - at a whopping E78 million, and have instituted a probe to unearth the suspected foul play behind the exorbitant cost - in what they suspect could be a money-making scheme.

SUMMER SUNLIGHT

Will the probe see the scorching, summer sunlight? Your guess is as good as mine!
But I and my irritatingly suspicious nature to some, smell a rat that, like the Asian influx probe of many moons ago, such a probe will gather dust. What happened to the MP Phila Buthelezi-led PAC probe into the Nhlangano-Sicunusa Road project, if I may pry? Shhhh...!
An additional loan is sought by our spendthrift government in order to finish the construction of this contentious project. Government will have her way in the approval of the loan.

Wanna bet?

Chances of the project being a white elephant are a stark reality. So many grand projects in the past have been turned into white elephants. Commentators point out to the adjacent Ezulwini Sun Hotel, which was closed down some years ago, bringing into question the viability of embarking in such projects, especially hospitality ones, due to a dwindling tourism industry.

Incidentally, it has been said that part of the initial funding for the project was a US$80 million dollar (E1.2 billion) loan from Taiwan and various other financiers, but it had long since been exhausted, as it was inadequate to take the project to its completion. More Dollars - meaning more debts - are needed to complete, in the eyes of some of us, these extravagant, vanity projects.

Which brings me to the preamble of my article where I quoted the verse from God’s infallible Word about the folly of being addicted to borrowing.
As much as borrowing from both internal and outside lenders is part and parcel of financial activities of any sovereign state, is it viable to be slaves to borrowing just to embark on vanity projects, which bring little or no returns on investment?

As a developing nation, it a given that we do need funding that can directly improve the quality of life of every citizen, of our infrastructure, building more schools and healthcare facilities, et cetera.  But we need to be careful not to be slaves to borrowing - either for prestige or for vanity purposes.
African governments are famous for blindly falling into debts, where unscrupulous leaders misuse or divert loan funds, for personal gain. As a nation, let us be wary of not falling into the debt trap.

Belt-tightening must be the buzzword. Let us improve our tax collection strategies to boost our revenue.
Finally - and this is crucial - let us borrow ONLY to invest wisely. Let us not reach the stage where we will need bailouts or fall under austerity measures, because we failed to service our loans.

And ohhh!... China is waiting on the sidelines with her strings-attached billions of Dollars in loans for those countries who are slaves to borrowing. Shalom!

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