swaziland times

BABANE – Suppliers will receive payments in the coming days, with the government having received around EGP 3.26 billion in the past week.

The country received about €3.26 billion from the Southern African Customs Union (SACU) and €400 million from the Johannesburg Stock Exchange (JSE), the Treasury confirmed. This publication learnt that the JSE funds were deposited into the country’s treasury on Tuesday, while the SACU receipt was received on Thursday. It is noteworthy that the country once again received the highest SACU receipt in the 2024/2025 financial year. Swaziland will receive a total of €13.06 billion in Southern African Customs Union revenues this financial year. SACU revenues in 2024/25 increased by 11.15% compared to 2023/2024 levels. In the 2023/2024 fiscal year, the country’s SACU revenues were €11.75 billion, 102% higher than €5.8 billion in 2022/2023.

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The Southern African Customs Union (SACU) is comprised of Botswana, Lesotho, Namibia, South Africa and Swaziland. All customs duties, excise duties and surcharges (trade taxes) levied in the SACU common customs area are paid into a common revenue pool and shared by the member countries. The member countries’ share in the fund pool is allocated or determined according to the revenue sharing formula of the Southern African Customs Union Agreement. The current revenue sharing formula consists of three parts: customs duty, excise duty and development duty. Customs shares are allocated based on each country’s share of imports within the Southern African Customs Union. On January 12, 2024, Finance Minister Neal Rijkenberg said that of the €13.06 billion, €1.8 billion was surplus revenue for the 2022/2023 financial year, while €11.26 billion was based on the common revenue pool forecast for 2024/2025, which represents a 6.6% increase from 2023/2024 levels.

Increase

He explained that some of the factors that contributed to the increase were that Swaziland’s imports from the Southern African Customs Union increased by 25.24 percent during the reporting year compared to the previous year. The minister said the increase was a good sign for economic and growth. Rijkenberg added that part of the revenue would go directly into the Revenue Stabilization Fund. The fund was set up to reduce the country’s over-reliance on SACU revenue. The funding comes at a critical juncture as the government is in financial trouble and is owed around €1.4 billion to suppliers and service providers.

This has led the government to prioritise its responsibilities, including providing services across sectors. There is evidence that the government has invested significant resources in recent months to revitalise the public health sector. The Treasury reportedly spent more than €270 million on purchasing medical drugs and medical supplies in the past six months.
This has resulted in the government owing up to €1.4 billion to its service providers and suppliers. Although in January 2024, the country had settled about €700 million of the approximately €2.9 billion it received from SACU, the government still has not paid off its arrears. Some of the debts that the government has accumulated in the past few months include rents from citizens for rented homes, which were then distributed to civil servants due to infrastructure shortages. These debts also include service providers such as utility entities like the Swaziland Electricity Company (EEC), the Swaziland Post and Telecommunications Company (EPTC) and the Swaziland Water Services Company (EWSC).

Compiled

The Financial Audit Report on the Consolidated Government Accounts of the Kingdom of Swaziland for the Financial Year Ending March 31, 2023, prepared by Auditor General Timothy Matsebula, shows that several ministries were marked as being in debt to these state-owned enterprises. Other suppliers owed by the government are those that supplied consumables and provided services through micro-projects under the Ministry of Economic Planning and Development. Principals also expressed their challenges when the government expected to receive SACU receipts, mainly due to the lack of revenue due to delays in disbursement of school grants.

The grants go towards the Free Primary Education (FPE) scheme, which provides funding for education in all public primary schools, as well as Orphans and Vulnerable Children (OVC), which pays school fees for students from disadvantaged backgrounds. For each primary pupil in public schools, the government pays at least €672, while €194 million is allocated to the OVC fund to cover the cost of €1,950 per child in high school. There are more than 850 public schools in the country, of which 600 are primary learning centres. It is important to note that the country relies heavily on SACU revenues to finance its budget. Therefore, when the government prepares its annual budget, it forecasts revenues, which include SACU revenues. Additionally, another form of revenue that the government uses to finance the national budget is taxes and other sources of revenue, such as fines.

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As the country is heavily dependent on revenues from the Southern African Customs Union (SACU), a source at the Ministry of Finance explained that these demands relate to all areas of government service delivery, including the payment of social grants (for the elderly, persons with disabilities, families and socially vulnerable groups). The source said the challenge is that the government has not accumulated revenue from other sources, which has created pressure and left the government with insufficient resources to undertake its various social responsibilities. He said as each quarter of SACU revenue sharing draws to a close, government coffers tend to dry up, which affects programmes such as scholarships and ensuring smooth government operations. Sources said all these services require regular disbursement of funds from the government to ensure their smooth operation and when the government gets into trouble, it destabilizes these services.