Africa-Press – Eswatini. Finance Minister, Neal Rijkenberg’s assertions that government is successfully navigating cashflow constraints have been substantiated as the nation will receive an infusion of E13.06 billion from SACU.
The funds will be the Southern African Customs Union receipts for the 2024/2025 financial year.
This reflects an increase of 11.15 per cent compared to the current year, where the country received E11.75 billion. It is also a significant increase of over 100 per cent when compared to the previous financial year where the country received E5.8 billion.
The minister said to see the funds again increasing was a relief to them as finance.
“We want to thank Emaswati who faithfully declare goods at the border.
We have the Sekulula system, which makes it easier for one to declare goods at the border and that qualifies us to claim that value-added tax (VAT) back from South Africa, mainly,” Rijkenberg said. He further encouraged everyone to always declare goods at the border even if they purchased a cellphone.
“If the goods are below E5 000, they must state their full name and physical address as it helps the country claim VAT, which is due to it, as the goods’ final destination,” said the minister.
Rijkenberg further explained that of the E13.06 billion, E1.8 billion was surplus revenue collections emanating from the 2022/23 financial year while the E11.26 billion was based on the projected Common Revenue Pool projection for 2024/25, which had grown by 6.6 per cent from the 2023/24 level.
The 2006 SACU Agreement establishes a Common Revenue Pool consisting of all customs, excise and additional duties collected in the Common Customs Area. The minister said it was important to note that the country’s imports from SACU during the year under review increased by 25.24 per cent compared to the previous year.
Government, according to the minister, continued to encourage Emaswati to declare all their goods to customs when they enter at the various ports of entry.
“The money is shared based on what is imported from the SACU countries and the amount of imports increased. It is an indication of the economic growth of the country,” he said.
Rijkenberg further said the kingdom successfully established a SACU Stabilisation Fund in 2022/23 financial Year, which role was to set aside part of the SACU receipts in order to smoothenrevenues for government.
“The fund intends to bring more predictability into the country’s budget,” he said.
This year, the minister said was again a year of surplus and they would allocate a certain amount into the stabilisation fund, which would be finalised in the budgeting process and announced in the budget speech.
Rijkenberg explained that the nation would soon appreciate the relief from the SACU funds.
He said in the previous financial year, the budget was E23.2 billion and this year it was E26.5 billion, which was about a 14 per cent increase.
“I understand that household pressure has been increasing for a few years since COVID-19.
People should soon start feeling the ease of household pressure. It is still going to take a while, but it will start easing as there is now more money in the system and the government budget is increased,” he said.
However, he said it was unfortunate that the country was coming from a highly constrained era, even though SACU receipts increased by around E6 billion.
“We found that the budget only went up by about E3 billion, proving that unfortunately before that, we were heavily dependent on debt and now we are not as heavily dependent on debt,” said the minister.
PSAs’ 4 areas where the money should be spent
Public Sector Associations (PSAs) have highlighted four areas, where the money should be allocated as a priority.
They have urged government to hasten the salary review, which they said was last done in 2016. They also want vacant posts within the civil service to be filled and also the challenges in the health sector expediently addressed.
They further called for more funds to be allocated into the education sector, to address in particular free primary education (FPE), orphaned and vulnerable children (OVC) grant and feeding scheme, among other.
Swaziland Democratic Nurses Union Secretary General, Mayibongwe Masangane, said the government should ensure that healthy working conditions are restored in the health sector.
He said this means government should solve the drugs shortage crisis and hire more healthcare workers. Masangane said their motivation was good salaries and they would ensure that healthcare workers did not think about debts while at work.
Swaziland National Association of Teachers Secretary General, Lot Vilakati, said government should build more schools and ensure that there was enough food for the pupils.
He said government must also convert contract teachers to permanent contracts. He added that the government should also relieve schools by taking support staff and making them government employees.
Minister Rijkenberg said the salary review was budgeted for in the current financial year and went out to tender, but they still do not have a consultant.
“I am hoping that we can land the plane at some point on getting an entity to do the salary review for us.
One will for the right reasons, make sure we budget for the salary review,” he said. The minister said at the same time there was a need to understand that the review was critical, but it was difficult to say how much would be required to implement it.
“As the Planning and Budgeting Committee (PBC), we do take the salary review very seriously,” said Rijkenberg. He said in the comments for this year’s budget, some people were complaining about the previous salary review outstanding issues.
“I am hoping the second one will be able to clear out those issues. There should be terms of reference of the people doing the salary review, including the issues from the past exercise,” said the minister.
Public’s budget input not
window dressing – minister
Finance minister, Neal Rijkenberg, has assured the nation that its input to the national budget on digital platforms was not a window dressing exercise.
He said they had opened the portals for people to make suggestions and some of the criticism was that this is a window dressing exercise as the budget was almost finalised.
“I can declare that it is not, we are having a very good look at what is being submitted and we really appreciate the submissions as there are some really good ones from the public,” said the minister.
Rijkenberg assured that the budget had not been finalised.
impact
He said even though the impact was less this year; they would definitely try to see what they could do to accommodate the inputs.
“Some of the inputs confirm what we have done, which is reassuring for us as the ministry seeing that and the input helps with the final formulation of the budget,” he said.
Invest on strategic
investments – Economist
Economist, Sanele Sibiya has suggested that SACU receipts should be used for catalytic strategic investments.
Sibiya said government should put the money in these investments, which would unlock the potential of the private sector and businesses as a whole.
He said there was a tendency of loose spending when the SACU funds increase, yet it was volatile. The funds, according to Sibiya, should be invested on capital expenditure so that they increased.
“This could include power stations and background infrastructure for government, so that investors can use it and it will make returns for the government,” said Sibiya, adding that government should also pay arrears and unlock other potentials in the economy.
“I do not mean that the important sectors such as health and education should not be catered for, but the money spent should be kept in a certain bracket,” he said.
He also stated that government should not spend on increasing salaries and scholarships too much as it would cause challenges once the receipts decreased
“Emaswati should see that the economy is growing by being able to start their own businesses and getting jobs,” he said.
‘We’re now out of
debt spiral trap’
Finance minister, Neal Rijkenberg, said part of the SACU funds had been utilised to put the country in a debt track as it was entering a debt trap.
“The moment the fiscal deficit is above five per cent, you are in a debt spiral trap and as a country, you do not get out easily.
“As a country, we are now out of the debt spiral trap that we were getting ourselves stuck into, hence we are now positioned well for real economic growth,” he said.
Rijkenberg said economic growth would continue as the country was now on a sustainable foundation and that would also help with investors looking at countries in the region to invest in.
“Most countries are really in debt traps and Eswatini is not, that should put us on a better place for foreign direct investment (FDI) because we are on a point of financial sustainability and again the SACU Stabilisation Fund helps with that too,” said the minister.
Rijkenberg also said the fund would help during the years when SACU receipts decreased as they would be able to withdraw from it.
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