Lobamba – Senators have questioned whether grants to struggling state-owned enterprises (SOEs) could expose a proposed E200 million fund to misuse and leave less money available for other public entities seeking financial assistance.
The concerns emerged in Senate on Tuesday, October 27, 2026, during debate on the State-Owned Entities Loan and Guarantee Special Fund Regulations, 2026, with legislators favouring repayable loans over grants to protect the fund from being depleted.
Finance Minister Neal Rijkenberg told Senators that Cabinet had initially proposed including grants as part of the financial assistance available to SOEs. However, concerns about possible misuse and the continued demand for financial support prompted a rethink of the approach.
He explained that loans could be offered on concessional terms, allowing entities in financial distress to access assistance while ensuring that the money returned to the fund could be used to support other beneficiaries.
The House of Assembly’s Finance Committee had recommended removing grants from the regulations, citing Government’s limited financial capacity to sustain them.
The committee also raised concerns about the absence of transparent criteria for selecting grant beneficiaries, arguing that this could create room for arbitrary allocations and administrative abuse.
The debate places the management of the proposed E200 million fund under scrutiny, particularly how financial assistance will be allocated, what conditions beneficiaries must meet and how public money will be protected from misuse.
Beyond the question of grants, the regulations seek to expand the existing Public Enterprises Loan Guarantee Fund to allow direct lending to eligible SOEs, provide short-term financial advances and support capacity building within the Public Enterprises Unit.
The proposed framework would allow advances to entities experiencing cash-flow constraints, provided they are repaid within the same financial year.
Rijkenberg explained that an entity awaiting money already allocated in the national budget could receive an advance to meet immediate financial obligations, then repay the amount once the budget funds became available.
He cited micro-projects as an example of entities facing cash-flow difficulties that could benefit from the arrangement.
The regulations also introduce parliamentary oversight over financial assistance to SOEs. Loans, advances and guarantees recommended by the State-Owned Entities Special Fund Committee and authorised by Cabinet would require approval from the Finance Committee, which would report the transactions to the House of Assembly.
The money would be available for approved capital investments, infrastructure development, working capital directly linked to approved projects and Government-approved business restructuring.
However, it could not be used for dividends, penalties, fines or speculative investments. Recurrent expenditure would also be excluded unless expressly approved.
The proposed framework is intended to help financially distressed public enterprises obtain funding while establishing safeguards over the use of public money.
The Senate debate, however, highlighted the importance of ensuring that financial assistance does not undermine the fund’s ability to support other entities in need.
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