ECONOMIST LISTS PARASTATALS GOVT COULD MERGE

MANZINI – Government should merge parastatals that are subvented, which also share similar portfolios, to cut costs.

Parastatals, which are also known as State-owned enterprises (SOEs), have been reportedly one of the largest drains to government’s coffers, secondary to the wage bill. In dealing with that, 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.

Review

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.

Insight

Following this move, economists have said government’s move was in the right direction. They further shared their insight on what they supposed would work for government after the completion of the study by ESEPARC. One of the economists said it would be prudent for government to consider putting together parastatals that were duplicating the same line of work even if it was across ministries. He said SOEs that were regulators like the Construction Industry Council (CIC), Eswatini Environment Authority (EEA), Eswatini Competitions Commission (ECC), Eswatini Communications Commission (ESCCOM) and Eswatini Energy Regulatory Authority (ESERA) could be merged into one.

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