CTA FIRE DAMAGE TO COST TAXPAYER OVER E3.8M

MBABANE – The arson attack at the Central Transport Administration (CTA) in Mbabane, which took place on Monday, has come at a cost of over E3.8 million to the taxpayer.

It is believed that the cars and other property that were torched on Monday morning at the CTA premises were valued at over E3.8 million. When the Principal Secretary in the Ministry of Public Works and Transport, Thulani Mkhaliphi, was asked about this figure, he said the value of the destroyed vehicles was around that margin. He said there was a team that was working on gathering the exact figure, which would be shared at a later stage with the public. “The value is around that margin but the exact figure cannot be confirmed at the moment,” said Mkhaliphi in an interview yesterday. Chief Police Information and Communications Officer Superintendent Phindile Vilakati said they did not have the value of the burnt property at CTA as yet.

Comment

When she was asked if they had any leads regarding the arson case, Vilakati preferred not to comment as yet as investigations were still ongoing. A local economist, Sanele Sibiya, said what worried him about such incidents was that the cost of such was enormous for the country which was fast becoming a radicalised nation. He said such behaviour was uncommon in Eswatini but now every other day, there was a structure that had been burnt down. “There is something radical that happens a lot these days and that will have a significant impact on the economy. We are becoming an unstable economy,” he said. Sibiya went on to state that in order for Eswatini to attract any investment, the country would now have to foot a heavy security premium.

“The companies that would have otherwise avoided some of our neighbouring countries, such as South Africa because of protests in that country, may now have no reason to invest in Eswatini due to the arsons,” he said. Sibiya further highlighted that the one thing that Eswatini had going for herself was that it was known as a peaceful and secure country, however, it had since lost that status. “The cost is far bigger than we see before us, which is why it is quite critical for us as a country to get the situation under control. This is also why there is a lot riding on the dialogue,” he added.

The economist further highlighted that if the dialogue did not go well, the country would be at risk of remaining a radical country that was not moving beyond the minor things needed to start working towards retaining the status of a kingdom that it was known to be before. He said in terms of getting the funds to rehabilitate and replace the property that was damaged during the arson attacks, these would have to be collected from taxes such as pay-as-you-earn (PAYE), licence disks, as well as other ways in which government gets funds from its citizens.  

“Unfortunately, government is not insured, so it will most likely be the taxpayer who pays the cost,” Sibiya said. He added that when it came to private properties, people needed to have some sort of insurance against such risks, including arson attacks. “When you analyse it further, such an addition to insurance also increases the cost of doing business. If an environment is not conducive for doing business, you find yourself needing insurance that you did not need previously,” added Sibiya.

Situation

He said the situation was taking the economy 10 steps backwards in terms of growth and the development that the country had achieved. Thembinkosi Dube, who is also an economist, also shared similar sentiments as Sibiya. He said governments normally had an account which worked as an insurer to support the country in such situations. “Large organisations normally have a Public Finance Management (PFM) Act which regulates the management of finances in national and provincial government. The Act aims to secure transparency, accountability and sound financial management in government and public institutions,” said Dube.

He said this was to ensure that the organisation set aside a certain amount of funds for unplanned situations. “The only question would be if the Eswatini Government was saving those funds. Governments are too big for insurance and it would cost them too much to have such,” said Dube. The economist highlighted that several organisations such as those in the railway industry also at times used the PFM Act as in some situations ‘you found that the product was too risky to insure and some insurers did not have that interest to take up such a risk’. “This is when a provisional account is set up where money is put aside every year to back the organisation. It is not so different from self insurance,” he added.

He said what would be unfortunate was if government was no longer saving that money or it had not been implemented and ended up as a plan on paper.
“If government has been effectively using the PFM Act approach, especially for the CTA, then it is time to take the money and use it for the current situation,” he said. According to Dube, it was impossible to separate the economy from politics. He said arson attacks were a terrible thing that simply delayed any country’s progress. “There were cars at CTA but now they have been burnt to ashes, which means that they now need to be replaced with money that could be doing something else,” he added.

Problem

He said what would help the country now would be to identify where the problem was. He said people normally did such things like arson attacks because there was something that was agitating them. “Nobody will insure government because it is a huge risk. We need to get down to what the real problem is,” he said. Dube added that the situation in the country was widespread and it was unlike dealing with just one political party. “Everyone is reacting in their community and in their own way. It is, therefore, difficult for the authorities to know who to accuse,” he added. “You cannot solve a runny tummy by stitching the backside. We need to find the root cause of the runny tummy and deal with it,” he said. He further highlighted that because Eswatini was an import dependant country, inflation had not yet hit the country hard.

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