Govt Sets Aside E0.5bn For Parastatals Merger And Shutdown

By Phephile Motau

The government has set aside E0.5 billion for the streamlining and merging of State-Owned Enterprises (SOEs) exercise, and a larger amount of it will go towards retrenchment packages. The Eswatini Economic Policy Analysis and Research (ESEPARC) will conduct the streamlining process.

Minister of Finance Neal Rijkenberg said the exercise would come with pain, just like any other good initiative, as some people would lose their jobs. He said the government had always been sensitive and responsible when dealing with retrenchments. It has always compensated affected employees and paid them double. The minister highlighted that government always strives to double the amount paid by the private sector. Rijkenberg said although some people would not be happy with the exercise, the greater good would come out of it.

He explained that the exercise would be conducted systematically and in stages so that it may cause pain at the same time. He said part of the processes would include training those who would be retrenched on how they can use their package to start their businesses. The minister went on to say that the exercise would begin soon, and it’s main objective is that government and taxpayers should get value for their money. He said the principal aim of the exercise is not to make better profits but to get better service delivery and return for the money spent on these parastatals.

The study found that the streamlining of the public enterprises, which involves reducing them from 49 to 30, would significantly the government up to E2 billion, a huge benefit for the economy. Lastly, streamlining could improve the performance of these public enterprises and ensure they would be working better and smarter. According to the budget estimates for the current financial year, the government will spend over E1 billion paying grants and subsidies for only 16 public enterprises, which account for 33 per cent of the 49 SOEs.

One of the ESEPARC recommendations was that government should complete and close out parastatals implementing projects that have run their course.
The organization suggested that these entities be wound down and their activities closed over a specified period of 12 months, adding that this could be done much quicker for the Eswatini National Industrial Development Corporation (ENIDC). It also called for the repurposing of the Sebenta National Institute to establish one non-formal education institution to coordinate skills development centres such as MITC, Mpaka and Nhlangano Vocational Centres. The report also recommended the shutdown of the Eswatini Housing Board or repurposing it for maintenance of government buildings which would fall under the ministry of public works and transport.

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