MBABANE – Government has been urged to reconsider its continued borrowing from international financial institutions and instead explore the possibility of raising loans from a reported E136 billion held by non-bank financial institutions in the country.
The proposal was made by Hhukwini Member of Parliament (MP) Alec Lushaba, who questioned why government continued to seek external loans when substantial financial resources belonging to emaSwati were held by local pension funds, insurance companies and other non-bank financial institutions.
Lushaba made the suggestion when Minister for Finance Neal Rijkenberg presented three additional loan Bills, through which government intends to borrow more than E3 billion to finance various infrastructure, water and economic development projects.
The MP challenged the minister to engage the Financial Services Regulatory Authority (FSRA) and explore whether some of the money managed by non-bank financial institutions could be made available to government through borrowing arrangements, potentially on more favourable terms than international loans.
Monies
“Minister, the non-bank financial institutions, FSRA says in terms of assets, the monies of emaSwati that are kept amount to around E136 billion. When do we get to use that money?” Lushaba asked.
He questioned whether emaSwati would not prefer government to borrow from institutions holding their money rather than continually seeking financing from external lenders.
Lushaba further suggested that the ministry should engage pension entities with substantial financial resources, citing MOPADO as an example of an institution that could potentially extend loans to government.
He argued that such an arrangement could allow government to access domestic funding, while providing the institutions with an opportunity to invest their funds locally.
Responding to the proposal, Rijkenberg acknowledged that the suggestion was worth considering, but cautioned that the E136 billion could not simply be treated as money readily available for government borrowing.
He explained that a significant portion of the assets held by non-bank financial institutions comprised insurance funds, which presented particular challenges when it came to imposing local investment requirements.
Policyholders
The minister said insurance companies needed to diversify their investments geographically to protect policyholders against situations where a major catastrophe in Eswatini could simultaneously affect the assets held by insurers and their ability to compensate clients.
“A lot of it is insurance. Let’s just say, for instance, the insurance industry specifically wants that money to get out of the country to go somewhere else. Because if you are also investing all the insurance money in the country and the country has a catastrophe, not only can’t you pay the person, but you can’t pay them because the same assets that you have in the country are in distress because of that problem you have in the country,” he explained.
Rijkenberg said government could require financial institutions to invest a certain proportion of their funds locally, but warned that imposing excessive requirements could expose them to unnecessary risks.
He, however, revealed that government was considering a proposal that could see non-bank financial institutions required to invest an additional 20 per cent of their funds in government treasury bills and treasury bonds.
The proposal, which the minister said was still at the discussion stage, would be aimed at strengthening government’s access to domestic financing, while creating an additional layer of protection for investors and pension fund members.
He explained that pension funds were already subject to a local investment requirement of 30 per cent, adding that government was now considering extending a further 20 per cent requirement across non-bank financial institutions for investment in government securities.
Collapse
The minister said the proposed arrangement could also help cushion investors against losses arising from the collapse or financial difficulties of investment entities, referring to the Ecsponent matter as an example of the risks associated with investments.
“If we have an issue similar to that of Ecsponent, at least we have 20 per cent of that money in treasury bills and treasury bonds that you can help to at least wipe some tears with if people take a loss like that,” he said.
Rijkenberg stressed that the proposal was not yet government policy, revealing that he was still working on the idea with his team.
He further acknowledged that this was the first time he was publicly raising the possibility, warning that it could generate concern among stakeholders in the non-bank financial services industry.
“It’s the first time I’m saying this, so you might find it’s going to cause some distress out there. But it’s just thoughts at this stage,” he said.
Meanwhile, the three loan Bills presented by the minister seek to secure financing exceeding E3 billion for different government programmes.
In the first instance, government intends to borrow up to E1.6 billion (R1.6 billion) from Standard Bank of South Africa Limited and other participating lenders to finance a portfolio of infrastructure and social development projects.
Extraordinary
The proposed borrowing is contained in the Standard Bank of South Africa Limited Loan Bill, 2026, published in the Eswatini Government Gazette Extraordinary No. 91 dated October 29, 2026.
The Bill seeks to authorise the minister to raise a loan not exceeding E1.6 billion from Standard Bank of South Africa Limited, which will serve as the sole mandated lead arranger and book runner, as well as other lenders that may be invited to participate in the financing arrangement.
The second Bill proposes borrowing approximately E1.05 billion (US$60 million) from the Arab Bank for Economic Development in Africa (BADEA) to finance Phase 1B of the Mkhondvo-Ngwavuma Water Augmentation Programme.
The proposed loan is contained in the Arab Bank for Economic Development in Africa (Mkhondvo-Ngwavuma Water Augmentation Programme) Loan Bill, 2026, published in Government Gazette Extraordinary No. 90 dated October 29, 2026.
The Bill seeks to authorise the minister to raise a loan not exceeding US$60 million from BADEA to support the implementation of the water augmentation programme.
The third Bill seeks to secure approximately E1.14 billion (US$68.444 million) from the African Development Bank (AfDB) to finance Phase II of the Enhancing Economic Resilience and Competitiveness Programme (EERCP).
The proposed borrowing is contained in the African Development Bank (Enhancing Economic Resilience and Competitiveness Programme (EERCP) Phase II) Loan Bill, 2026, published in Government Gazette Extraordinary No. 89 dated October 29, 2026.
The Bill seeks to authorise the minister to raise a loan not exceeding US$68.444 million from the AfDB to assist in financing the second phase of the programme.
The three Bills add to government’s borrowing plans as Parliament considers further financing arrangements for infrastructure development, water security and economic resilience.
