Lobamba – Parliament has laid bare the deepening financial and governance crisis at the Hlathikhulu Town Board after it emerged that the municipality spends almost all of its income on employee salaries, leaving virtually nothing for service delivery.
Appearing before Parliament’s Public Accounts Committee (PAC) on Thursday, officials from the Ministry of Housing and Urban Development and the Hlathikhulu Town Board revealed that the municipality’s annual salary bill of about E2 million consumes 97 percent of its total revenue, leaving only three percent to finance daily operations, infrastructure maintenance and essential public services.
The alarming figures surfaced during hearings into issues raised by the Auditor General involving the Hlathikhulu Town Board, Vuvulane Town Board and Ngwenya Town Council.
The Auditor General’s office painted a bleak picture of Hlathikhulu’s finances, disclosing that the municipality recorded a net operating deficit of E3.7 million, with losses increasing year after year. Operating expenditure has now climbed to E7 million, an increase of E400,000, a trend auditors described as financially unsustainable.
Auditors urged the municipality to tighten expenditure by eliminating non-essential costs and strengthening financial management, warning that the ballooning wage bill had become one of the board’s greatest financial burdens.
Members of the PAC questioned how the situation had deteriorated under the Ministry’s watch, pressing officials to explain the apparent breakdown in oversight that allowed governance and financial management to collapse.
Responding to the committee, Principal Secretary in the Ministry of Housing and Urban Development Dr Simon Zwane admitted that government had failed to exercise adequate oversight over the municipality.
“We did not play a proper oversight role at Hlathikhulu Town Board over the years. What happened, happened right in front of us, which is a very shameful thing, I must admit that. But we are now committed to restoring the dignity of the town,” Zwane told MPs.
He said that after assuming office in 2023, the Ministry assessed local authorities across the country and identified Hlathikhulu as one of the municipalities facing severe governance challenges.
According to Zwane, allegations of illegal land allocations prompted the Ministry to establish an investigation committee before commissioning an internal audit after further financial irregularities were uncovered.
The audit exposed widespread governance failures, leading government to establish a Commission of Inquiry even before the audit process had been completed.
The commission subsequently uncovered what Zwane described as extensive corruption and a near-total collapse of governance structures within the municipality.
He said some of the matters had already been referred to the Police Fraud Department and other law enforcement agencies before the commission completed its work.
The Commission of Inquiry ultimately produced 77 recommendations, which now form the basis of government’s recovery strategy for the municipality.
To drive the implementation process, the Ministry appointed Kenneth S. Fakudze as Acting Chief Executive Officer and Town Clerk for a 12-month period.
Zwane said Fakudze had been tasked with implementing the commission’s recommendations, restoring sound governance and rebuilding public confidence in the municipality.
Speaking emotionally about the town, Zwane said it was disappointing that Hlathikhulu, one of Eswatini’s oldest towns, had experienced little meaningful development despite its historical significance.
He noted that historical records suggest Hlathikhulu had once been considered as a potential capital city of Eswatini but had failed to realise that promise.
“I am now 53 years old, and there are very few structures that have been developed over the years. The only thing that can truly be said to be of value is the hospital,” he said.
Fakudze told the committee that Hlathikhulu dates back to 1924 and has long served as an administrative centre for the Shiselweni Region. Today, the town has a night population of approximately **5,000 residents** and covers about 300 hectares.
He said the municipality had already begun implementing reforms through stricter procurement controls and cost-containment measures aimed at improving financial discipline.
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