POLITICIANS’ PACKAGES, ELECTIONS THREATEN BUDGET BALANCE

EZULWINI – Expenditure pressures from the National Elections and exit packages for the outgoing politicians could make it difficult to get the budget balance to positive figures in the medium-term.

This warning bell has been sounded by the Central Bank of Eswatini (CBE) in a presentation delivered by General Manager Economic Policy, Research and Statistics Sikhumbuzo Dlamini, during the launch of the First National Bank (FNB) Forex Online Banking at the Royal Villas yesterday. Dlamini said government identified fiscal consolidation as one of its primary objectives in the formulation of the budget for the 2018/19 financial year. However,  he noted that government still found itself confronted with serious cash flow challenges. “This is in part due to the arrears accumulated and the seasonality of non-Southern African Customs Union (SACU) revenue, traditionally the first and second quarter of each fiscal year have lower revenue collections, whereas expenditure trends remain fairly constant,” said Dlamini.

He said despite the significant increase in SACU receipts in 2017/18, the burgeoning wage bill left the fiscal space constrained. He said subsequently, SACU revenue fell by18 per cent from E7.1 billion in 2017/18 to E5.8 billion in 2018/19. “This has further exerted pressure on reserves falling to 2.8 months in June 2018, currently at 2.9 months as at August 24, 2018,” Dlamini explained. The GM said cash flow challenges continued persisting, leading to the accumulation of expenditure arrears which stood at E3.7 billion in mid-July 2018. Government will part with way over E250 million in exit packages for outgoing politicians, legislators and emabandla of the 2013 to 2018 term. Those who are entitled to the money are MPs, commissioners, personal secretaries, ministers and other politicians who are not returning to be part of the 11th Parliament set to be constituted over the next three months.

Prime Minister Sibusiso Dlamini alone, is going home with almost E1 million as his annual basic salary rests at about E926 000. The money, according to Finance Circular No. 2 of 2013, constitutes 12 months’ salary of that particular officer. Meanwhile, the ongoing elections are projected to cost the country over E200 million. Government Spokesperson Percy Simelane is on record having said shelving the prime minister’s benefits might be more expensive for government in the long run.

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