Africa-Press – Eswatini. Minister of Finance Neal Rijkenberg has quelled concerns regarding a cash flow crisis, disclosing that the country received E2.9 billion from the Southern African Customs Union last week, ensuring sufficient liquidity.
The SACU funds were for one quarter.
The minister said he had been inundated with calls from people asking if there was some sort of ‘inyandzaleyo’ (emergency) situation going on.
Rijkenberg said the current cash flow situation was nothing to be too alarmed about, as civil servants would continue to get paid as well as elderly grants disbursed.
“I would not call it a crisis, there are cash flow constraints, but over the years, these have been getting better and better,” Rijkenberg said.
He said one would recall that in July 2023, government managed to catch up with payments to suppliers at 100 per cent.
“We do have a build-up of outstanding payment to suppliers, normally on the SACU cycle. Just before SACU receipts come in, there is about 60 days delayed payments for suppliers, but when the SACU money comes in, payments are made and suppliers are generally settled at that point 100 per cent,” explained the minister.
He said at this point, government was paying suppliers who they owed E700 million, which is the full amount in it’s books at the treasury.
Some of the outstanding payments, according to the minister, would have been submitted last week and only due in 30 days.
“We have even budgeted quite well for free primary education (FPE) and OVC grants. There has also been some catching up on outstanding capital payments, which recently had a few delays,” the minister stated.
“I just want to allay fears, it’s really nothing to be concerned about even though we still are tight on the cash flow, things continue to improve on a continual basis,” Rijkenberg added.
He said they were prioritising payments to the ministry of health suppliers, fuel as well as those of the ministry of education and training.
Further, he explained that there may be payments that might be up to 60 days outstanding, which would be settled this week.
This, the minister said, would bring the country up to date with 30-day payments and hopefully, the Johannesburg Stock Exchange (JSE) listing money would come in February, which should put the country up to date on payments.
However, he stated that unfortunately things were sometimes difficult to predict and noted that in his previous term, he felt that the country was now up to date and could stay up to date, only to find that they slide for 30 days, sometimes up to 60 days.
“Compared to where we come from when we were sometimes up to a year behind on making payments, it’s a whole lot better now,” Rijkenberg said.
He said as finance minister, he would love to be out of arrears and if one tried to accelerate it by going for expensive debt, the country would have expensive debt to deal with.
They decided that the way forward was through the JSE where they were granted permission to raise E4 billion.
“We do not need that amount. The plan is that the money from the JSE will settle arrears once and for all, and then we should have the problem put behind us,” the minister said. He said they did not want to push the JSE listing as they wanted to ensure that the pricing was correct and explained that if they tried and rushed it, they would end up paying too much money for those bills and bonds raised on the stock exchange.
“We have to manage the process nicely, but we feel that at least E0.5 billion will come in February and that will be enough to settle debts and put us in a good position. We would like to be in a surplus position,” he further said.
The minister went on to state that they would like to have a bit more and have money available so they did not end up in a situation of constantly being behind with their bills.
… E2.9bn received
from SACU last week
The Minister of Finance, Neal Rijkenberg, said they received E2.9 billion from SACU last week and it was money for one quarter.
The minister said about E1.4 billion of the money would be used to settle a Central Bank of Eswatini advance.
He said the amount was paid for every three months to the CBE when the SACU receipts come in. Rijkenberg said the other half of the SACU funds were spent on settling all outstanding arrears to suppliers.
Government arrears usually include money in the budget that had not been spent, including money for Micro-projects, the Regional Development Fund (RDF) and subventions.
“We call it arrears because it must still be paid for in the current year,” explained the minister.
He said, however, when he referred to arrears in this instance, he meant money owed to suppliers, which was now at E700 million.
“We always prioritise that because by not prioritising suppliers, it means there are people who supply goods and are not being paid. Paying them is the only way we are going to get our economic growth to be better,” said the minister.
Rijkenberg said by better behaviour in paying suppliers, they were seeing a decent amount of economic growth.
The country moved from two per cent economic growth in 2018 and 20 years before, to three per cent during the COVID-19 pandemic.
Numbers
“As we look at the numbers now, we are projecting 4.5 per cent for this financial year. My personal goal is to get that even much higher,” he said.
He said the fact that the performance was improving because when suppliers are paid on time, they perform better as they could pay their people, pay taxes and a lot of other things, which leads to the economy performing in the right direction.
The minister also said he would make an announcement before the end of the week, which would give an indication on SACU projections for the financial year 2024/2025.
E500m injected into
SACU stabilisation fund
The country has injected an additional E500 million into the South African Customs Union Revenue Stabilisation Fund.
This move is part of the government’s proactive measures to mitigate the potential effects of fluctuating SACU receipts on the country’s finances, resulting in a total of E875 million in the fund.
The SACU Revenue Stabilisation Fund was established to counterbalance the unpredictability of future SACU revenue, aiming to ensure a more consistent and stable financial outlook for Eswatini.
Finance Minister, Neal Rijkenberg affirmed government’s commitment to strengthening this fund, highlighting its strategic importance in securing the nation’s economic resilience.
“We are dedicated to fortifying the SACU Revenue Stabilisation Fund as a means to safeguard our economy against the fluctuations in SACU receipts,” he stated.
He reiterated government’s intention to bolster the fund, aligning with efforts to reach a target of E1.5 billion for the SACU Revenue Stabilisation Fund.
“It is a crucial step toward greater fiscal stability and enhanced budget planning,” said the minister, shining light on the fact that the injection of an additional E500 million into the SACU Revenue Stabilisation Fund underscores government’s commitment to reducing the country’s vulnerability to fiscal fluctuations stemming from SACU revenue.
Minister Rijkenberg expressed optimism about the impact of this augmentation on the country’s economic stability and emphasised government’s dedication to prudent financial management.
“With this significant injection into the SACU Revenue Stabilisation Fund, the government aims to fortify Eswatini’s fiscal framework, fostering an environment conducive to sustained economic growth and stability,” he said.
… ‘Use digital platforms for budget input’
The Planning and Budgeting Committee will be unable to undertake consultations for the public to make inputs into the national budget.
The PBC, which comprises of four ministries, is responsible for coordinating the preparation of the national budget and is also working on a programme and budget to ensure that the national budget is taken to the people as per Sibaya in the financial year 2025/2026.
The ministries are finance, economic planning and development, public service, and that of tinkhundla administration and development.
Minister of Finance, Neal Rijkenberg said they noted with appreciation the call for the participation of the public in the preparation of the national budget, which was desirable and well received by the PBC.
Rijkenberg said while they appreciate that this was a very important exercise and one close to their hearts, it was unfortunate that they would be unable to undertake the public consultations before the conclusion of the 2024/2025 budget due to a number of factors.
One of the factors was that the year 2023 was an elections year, which shortened the period over which they normally prepared the budget.
The budget calendar had been affected negatively since the budget processes have to be sanctioned by Cabinet and Parliament.
The minister said there was also the need to accommodate other equally important activities such as the induction of the new members of Parliament and Cabinet and some government processes and programmes including the budget, which encroached into the budget calendar.
Another factor was the need to engage more extensively with line ministries in ensuring that their budget proposals were aligned to Sibaya submissions, which further reduced the time available for the preparation and conclusion of the budget.
Rijkenberg said there was also a need to ensure proper planning and adequate resourcing of the relevant PBC ministries as well as the ministry of tinkhundla administration and development, to be able to undertake public consultations.
The minister also noted that during the People’s Parliament, it was noted that the nation want things to be done properly, not in haste.
He said at some point, there was a plan to rush it, but it would have been a cosmetic exercise.
Rijkenberg invited the public to take advantage of digital platforms to share their contributions towards the preparation of the 2024/2025 budget as they await the physical engagements.
The digital platforms are:
Facebook Page: Eswatini Government, Ministry of Finance
Government website: https://www.gov.sz
PBC Email Address: [email protected]
Extra E60m to clear health arrears
The ministry of finance will allocate a supplementary budget of E60 million in addition to the previously budgeted E700 million, to swiftly settle all health arrears and alleviate the critical situation faced by health facilities nationwide.
Minister of Finance, Neal Rijkenberg, emphasised that addressing the persistent drug shortage crisis was an urgent matter, and said the financial injection, therefore, aims to ensure swift resolution of the crisis.
The country has been hit by a drugs shortage crisis since last year, sparking public outcry and prompting government to institute a forensic audit. Patients even took to the streets, demanding essential medications to alleviate their plight at the Mbabane Government Hospital.
Rijkenberg underscored government’s determination to prioritise healthcare and provide immediate relief to hospitals and clinics grappling with the scarcity of essential drugs and medical supplies.
“We are prioritising payments to health ministry suppliers to ensure prompt fulfilment of the critical needs of our healthcare system,” stated the minister during a press conference at his offices yesterday, highlighting the urgency of resolving the on-going drugs shortage.
The minister also highlighted the collaborative effort between the finance ministry and the ministry of health, acknowledging that some delays in payments were attributed to hold-ups within the health ministry. He, however, reassured the public that concerted efforts were underway to promptly resolve these issues.
“The ministry stands resolutely committed to ending the health crisis plaguing our nation, and we are working closely with the ministry of health to streamline processes and ensure timely disbursement of funds owed to suppliers,” he said.
In response, Swazi Pharm, the largest pharmaceutical supplier to government, expressed hope following the minister’s announcement and thanked the new government for its commitment to ending the health crisis.
“We are impressed with the attitude of the new government because it demonstrates a desire to rebuild and maintain the longstanding relationship we have had,” said Swazi Pharm Director, Kareem Ashraff.
Ashraff appreciated government for settling some payments owed to the company, stating that it would help ease the burden of high overdrafts and debts needed to facilitate the services provided to government.
“We will now be able to continue serving the nation because this company does not just operate for profits, but to contribute to the betterment of the nation by ensuring quality healthcare,” he stated.
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