PUTTING CART BEFORE THE HORSE

The decision to improve allowances for board members of State-owned enterprises (SOEs) when we all anticipated cuts and mergers, is disappointing to say the least.
Government had targeted these institutions for mergers to reduce the excessive burden on public funds. There are currently about 50 public enterprises in the country that suck more than E2.4 billion annually from the taxpayers’ pockets with very little return on investment.This is what prompted studies by the Eswatini Economic Policy Analysis and Research Centre (ESEPARC) which made recommendations that were made and approved by the Cabinet of the 11th parliament.Take nothing away from some hard-working and deserving board members in some of these entities, but the ESERPAC report made a finding that Eswatini’s SOEs were more of a burden than a benefit on the economy and the fiscus.

Benefit

Government then sought to reduce them from 49 to about 30. The benefit of this move, according to the minister of Finance, Neal Rijkenberg, back in 2022, would result in savings amounting to E1 billion annually.Therefore, the most logical move would have been to start with the merger process and then review the allowances based on the performance of each entity.The circular increasing the new allowances by as much as 87 per cent, attempts to cushion the obvious public outcry over this move by including conditions for payment of these allowances with regards to attendance and the financial status of that public enterprise.It stipulates that when members participate partially in a board meeting, they will receive proportional sitting fees, with no compensation for attending less than half of the meeting.

It also provides that the minister must be notified if a board member misses two consecutive meetings without providing a satisfactory explanation. There is also a provision for terminating the services of the board member who fails to attend three meetings in succession.The responsibility to ensure compliance with these conditions has been placed with the chief executive officers (CEOs), while external auditors will be requested to audit adherence to such compliance.But how do we expect full compliance when no action has been taken on the non-performing parastatals over decades?How can we expect a CEO, whose board determines contract renewal, to report members who fail to attend meetings? And which board member is going to attend sittings voluntarily for an entity that has no money?

Monitor

What about the cost of external auditors who need to be hired to monitor the implementation of these conditions? This will balloon the costs of running these enterprises, much against the intention to make them more efficient and cost effective. In my opinion, this situation will result in increased service charges for the consumer, enabling the institution to cover board sitting allowances and audit fees. Frankly speaking, this circular should have been the least of government’s priorities. How do you justify it to all the taxpayers and their families who struggle to access medication in the country’s hospitals and clinics? How do you expect pupils to feel when they go to school only to find a lack of basic necessities and food due to government struggling to keep up-to-date with paying Free Primary Education (FPE) funds to schools?

Business people are persistently complaining about extensively delayed payment for services rendered. This is a government that is struggling to remit its obligations to statutory bodies like the provident and pension funds, among other things.Some of these parastatals have had to cut services to government for non-payment and one wonders if these increases are meant to buy favour to avoid such embarrassing occurrences. Municipalities are complaining about government’s failure to pay rates. The list is long, but not as lengthy as the number of parastatals we have, some of which are unknown to the public, to be honest.

Declared

The country’s priorities were clearly pronounced at Sibaya and a Nkwe mandate was declared to deliver on these crises. I don’t recall any mention of sitting allowances.
Corruption has been a thorn in the flesh and the real culprits are yet to see their day in court. Arresting the small fry and having us believe the Anti-Corruption Commission (ACC) is now working does not fool emaSwati anymore. We have yet to be convinced that His Majesty’s declaration is being given due attention and such delays have the effect of appeasing the critics who see Sibaya as nothing more than a talk shop. Applying Nkwe to parastatals should have resulted in the merger of some of these financially burdensome institutions, enabling the taxpayer to save over E1 billion, a crucial amount that could be channelled towards lifesaving priorities.It is safe to say that the dream of merging the SOEs may never see the light of day, as the beneficiaries(board members) have been incentivised to fight tooth and nail to maintain their enhanced perks. Mark my words.

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