UNEMPLOYMENT CAUSE OF COUNTRY’S PROBLEMS - PRINCE LONKHOKHELA

MBABANE – The Eswatini National Provident Fund (ENPF) is concerned about the high unemployment rate in the country.

With the national unemployment rate standing at 33.3 per cent and youth unemployment as high as 58.2 per cent, ENPF Chief Executive Officer (CEO) Prince Lonkhokhela says this should bother every liSwati, whether employed or unemployed; in power or not; in school or not. “We should all be concerned because this is not for any individual, but all of us. If you look at the history of employment worldwide, there is no specific individual who should create jobs, but this is the responsibility of every development oriented citizen. It is just that, generally, we are people who have been taught to be employees instead of creating employment for ourselves and others,” the prince said during an exclusive interview in his offices.
As a result of the high unemployment, he extended the fund’s invitation to emaSwati with entrepreneurial and other employment-creating bankable proposals to come forward for discussion and possible partnership.

He, however, emphasised that as the fund considers the proposals, over and above the financial returns and the social impact aspects, the proposals should also have taken into consideration ESG and NDGs factors. This is because, as the fund, they were also mindful of the planet and governance issues. He was also quick to mention that: “Where there is no sound governance, we do not even entertain that proposal. We want people who work in the open and where proper corporate governance is at the core of their way of doing business.” He stated that as management of the fund they are answerable to the Board and members of the fund. The Board is in turn answerable to Cabinet, which is why, in part, they ensure that business proposals, ventures, partners observe corporate governance principles. “It is within our strategic plan as a fund to work with emaSwati and we strongly appeal to those with bankable good business proposals to come to us and we are willing to work with them. But we don’t want chancers because we cannot afford to lose even one penny of our members’ money,” the CEO said. The prince said he had realised that people are afraid of venturing into business and generally aligned to being employed, yet real success is constantly measured by the ability to create jobs and provide employment opportunities for others, and not by being employed necessarily. Of course, yet still many complain about lack of funding.

financial difficulties

When the prince took over the position of CEO at the fund, the organisation was worth about E300 million and was experiencing huge financial difficulties. He has over the years been able to steer the fund to greater heights, such that it now ranks among the best managed government entities in the kingdom, with an asset value of E5 billion. The prince views ENPF and their work there as a major success as besides leading the institution into a multi-billion Emalangeni entity, they have also managed to convince the institution’s Board to invest most of its monies locally instead of outside the country, particularly South Africa. As it stands, funds invested locally are currently at 56 per cent, while only 44 per cent is invested offshore. The fund is invested in the following sectors locally: agriculture, hospitality, real estate, retail, forestry, financial sector, etc. He said it was in the 2011/2012 financial year when he advised the Board that all fresh monies should be invested locally. “At that time, local investments were at 30 per cent, and we pushed that drive, such that local investments now far outweigh the investments that we have outside the country. We have been doing well in that regard as a fund; I would like to believe,” he emphasised.

He said they had realised significant returns from the fund’s local investments. This has been the case even during the global financial crisis where the institution’s international investments performed very poorly. “Even this year, the global economy has been negatively affected by the Russian invasion of Ukraine.  It goes without saying that we will not be spared from the effects of this on our international exposure because we are exposed to the JSE (Johannesburg Stock Exchange), which is, in turn, influenced by the international movements. Of course, we are happy that we are at that level as we have brought most of our investments locally to boost our own development,” he said. The CEO said they work and wish to work with other funds on various projects because then they would be sharing the risk that comes with the investment exposure. He further explained that it is the fund’s desire to work with companies that are risk adverse just like itself.

EDUCATION SYSTEM

When asked how the mindset of emaSwati could be changed so that they would adopt an entrepreneurial attitude as opposed to being job seekers, the CEO called for a change in the education system as well as instilling in children at their tender age an entrepreneurial attitude. He encouraged parents to teach their children the skills related to the importance of handling and saving money at an early age. “If you do not save, then chances of succeeding in business or in life are minimal. You have to save for rainy days, however small the savings may be; if you don’t save then you are facing imminent disaster,” he said. He emphasised the importance of transforming the education system such that it produces and develops entrepreneurs because, at present, entrepreneurship is a scary field for most of emaSwati. Having said that, he counselled that it is critical that education is supported as it is viewed as the basis of development for any country.

INCOME STREAMS

The prince recalled what he witnessed in the Republic of China (Taiwan) during a visit there, where he found that people holding even senior positions, who were employed in offices during the day, went to do business after work by conducting trade in what is known as the ‘night market’. He said it was indeed intriguing and impressive to see the same faces he had seen in the offices during daytime manning their stalls in those night markets. The night markets are operated in designated areas between sunset and sunrise and are conducted on sidewalks or even entire streets that carry vehicle and pedestrian traffic by day. “These were senior people in offices, fully and decently employed, but in the evening, they would go to do business at the night markets. I was impressed. Like Warren Buffett said, ‘if your salary is your only source of income, you are one step away from poverty’,” the prince said.

His wish is that emaSwati could copy such entrepreneurial virtues to supplement their income for those who are in formal employment and the self-employed. “The people there are far ahead of us in terms of life and standard of living. These are the mindsets we should be instilling in our children at home and in schools. They should be taught the importance of supplementary income which is over and above normal pay, however small,” he opined.

TRADE OPPORTUNITIES

The prince was at pains with the existing paucity in the country and urged emaSwati to take full advantage of the opportunities that have been opened by Taiwan and other regional markets for Eswatini goods and services to be exported into those countries’ markets at no tariff; tariffs, which on their own can be anti-developmental. “Such opportunities are very rare to come by, let us take advantage of this opportunity and export in masses. This is a great window to develop our economy. We have been given a window which we don’t know when it will close because we can’t say this is forever. He observed that we also do have EU markets, AGOA and SADC, etc, but all offered in different terms and conditions. I believe that we can do a lot more to take advantage of these available markets” he said.

market opportunities

He said ENPF wanted to work with emaSwati to take advantage of these market opportunities through co-funding from the Industrial Development Company of Eswatini (IDCE), which is a development finance institution formed to promote industrial growth in Eswatini. The ENPF is a major shareholder of the IDCE, which holds a 62 per cent stake in the company.
“Many people seem not to know about IDCE, yet it is there for their benefit,” noted the prince. He emphasised that the fund is not inclined to operate or fully own businesses but is interested to empower emaSwati to be majority shareholders of the projects they would come up with for partnering. The prince reiterated that the private sector has the potential to drive the country’s economy and thus employment; all that was needed was commitment and the will to support each other. He said for that to be realised, the private sector should emphasise on the utilisation of local supplies and services instead of going to other countries to seek same that are otherwise available in Eswatini, because that was self-defeating. “Our private sector has all the potential; they just need the will, commitment and cooperation,” he said.

He said he had realised that emaSwati are not adequately informed about the existence of the various  government schemes that provide funding, which includes the Youth Fund, Export Credit Guarantee Scheme, Business Credit Guarantee Scheme etc, but were only familiar with the Regional Development Fund, which they also complained that it was not enough.  “It is critical for the information on these funding schemes to be disseminated to emaSwati. Awareness of these schemes would go a long way in capacitating emaSwati to venture into businesses. We need to communicate and advise each other about these good initiatives. The rate of unemployment would be in part addressed in that way. We may not totally eradicate unemployment, but we can do something to significantly reduce it,” added Prince Lonkhokhela.   

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