Times Of Swaziland: MIXED FORTUNES FOR MAJOR PARASTATALS IN 2020

MIXED FORTUNES FOR MAJOR PARASTATALS IN 2020
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BY ASHMOND NZIMA  on 12/01/2021 00:45:00


MBABANE – While there are calls to merge some parastatals, especially those
which are mainly regulatory in nature; the ones which are profit-making have had
mixed fortunes in the past year.
A closer look at some of the major parastatals, especially the profit-making
ones, does not paint a rosy picture.
This is based on their 2019/20 financial results covering the period ending
March 31 last year.
An analyst, on condition of anonymity, said merging of the other State-owned
enterprising performing almost similar duties could help in  saving millions of
Emalangeni that could be diverted into other income-generating projects.
The Central Bank of Eswatini (CBE) made a loss of E177.6 million in the 2019/20
financial year, a complete shift from the E190.1 million profit registered the
previous financial year. The credit impairment losses were said to be the major
contributors to the loss incurred.
Impairments
EswatiniBank recorded a loss of E64.191 million in the financial year under
review and the slump was attributed mainly to COVID-19-related impairments.
According to the bank’s abridged financial statements, the impairments
amounted to E102.373 million and they comprised COVID-19 relief of E30.418
million; gross domestic product (GDP) contraction impact of E55.607 million and
normal loan impairments totalling E16.348 million.
Meanwhile, despite not being granted a tariff increase and the stagnant Eswatini
economy, Eswatini Electricity Company (EEC) net profit for the year under review
was recorded at E438 million compared to E650 million in 2019.
For the Eswatini Water Services Corporations (EWSC) profit for the year amounted
to E26.7 million. The figures were at E25.7 million in the previous year.
When it came to the Eswatini Royal Insurance Corporations (ESRIC) profit for the
year was said to be over E157.52 million.
This publication had reported yesterday that parastatals, which are also known
as State-owned enterprises (SOEs), were believed to be one of the largest drains
to government’s coffers alongside the wage Bill.
In December, government announced that it had undertaken a study to merge and or
abolish some of them.
This decision by government was also articulated in the National Development
Plan (NDP) 2019/20 -2021/22. The NDP was tabled in Parliament by the Minister of
Economic Planning and Development, Dr Thambo Gina, on February 12, 2020.
When tabling the plan, under Strategy four of the NDP, government relayed that
it would review parastatals with a plan to decrease subventions and increase
dividends.
Intervention
The intervention was set to have a comprehensive review of all parastatals and
to investigate the effectiveness and efficiency of State-owned entities in
achieving outcomes.
Consequently, Cabinet, through Circular No. 4 of 2020, called upon the
suspension of establishment of new entities, amendment of legislation,
acquisition and construction of new structures by all Category A public
enterprises.
According to the communication, the implementation of the circular was with
immediate effect. The memorandum is dated December 21, 2020 and was addressed to
all principal secretaries (PSs).
It states that Cabinet, through Cabinet minute CM 9084, approved the use of
Eswatini Economic Policy Analysis and Research Centre (ESEPARC) services to
carry out the study to streamline, strengthen governance and improve performance
of SOEs in Eswatini.