E500 million Reconstruction Fund secured from E24 billion National Budget – Neal

Lobamba: The Government of Eswatini has had to make substantial sacrifices to development and welfare projects in its fiscal adjustments towards the establishment of the E500 Million Reconstruction Fund. The fund was established by King Mswati to assist small and medium enterprises as well as other businesses that were adversely affected by the social and political unrest in June.

The actual amount of E568, 556 631.00 for the fund was achieved by making adjustments and reallocations to the E24 Billion budget for the 2021/2022 financial year. The adjustments and re-allocations were made from 29 organs of state such as the 20 Ministries, Elections and Boundaries Commission, and the Anti-Corruption Commission.

Speaking in his preamble during the tabling of the Report of the Finance Sessional Committee on the Supplementary Appropriation (No. 2) Bill No. 09 of 2021, the Minister of Finance, Neal Rijkenberg said “the Supplementary Budget is contained within the E24 billion budget for 2021/2022 through the creation of the required fiscal space.”

In order to attain the appropriated figure of the fund, the government through its legislative processes had to divert or re-direct money that had already been allocated to certain ministries. In so doing, money that had been apportioned towards critical developmental objectives now had to be channeled towards the Reconstruction Fund.  Reallocations from various items including CTA charges, travel expenses, hospitality consumables, and internal transfers were also considered.

Some key ministries such as that of Health and Social Welfare had an amount of E2, 912,345 redirected towards the fund. These are monies that would have gone towards critical health services such as trauma units, pre-natal and antenatal care, pediatrics, dental care, occupational therapy, physiotherapy, and the like.

It must be noted, however, that the supplementary appropriation within the Ministry of Health did cater for the procurement of anti-retroviral drugs to circumvent the declining support from partners (PEPFAR and Global Fund) to the tune of E28, 000,000. A sum of E85, 000,000 was allocated for a shortfall in catering and security services as well as an increase in Fresenius Medical Care.

The Ministry of Public Works and Transport has had to sacrifice funds for the maintenance of roads demolished by heavy rains last December and in January. In so doing, an amount of E21 008, 538 was deducted from Public Works and re-directed towards the Reconstruction Fund.  

An amount of E 3, 649,350 was deducted from the Ministry of Commerce, Industry, and Trade. This amount of money would have gone a long way towards stimulating a sluggish and depressed economy. It would have assisted in alleviating the high levels of unemployment among the youth and indeed all demographic categories.

There are amounts that were also considered under the capital schedule that are cut from one project to other projects which are a contribution to the reconstruction fund. The total amount under the locally financed projects redirected to the reconstruction fund is E219, 250,000 and from donor financial projects is E104, 306. 631. The total capital expenditure re-allocated is E323, 556,631.

For instance, an amount of E37, 647, 369 of donor funds were added to Tinkhundla Administration and Development for the reconstruction of damaged Tinkhundla structures. A total of E 22, 640, 000 was deducted from the Ministry of Education and Training and redirected towards the rehabilitation of damaged infrastructure and equipment in schools.

During the launch of the Reconstruction Fund, King Mswati announced that the contributions towards the fund have amounted to approximately E1 billion. These included contributions from the Republic of Taiwan worth E330 Million as well as from a number of local businesses such as Eswatini Bank, Public Service Pension Fund, Eswatini Royal Insurance Corporation, Eswatini Post and Telecommunications Corporation, Eswatini Sugar Association, and Tibiyo TakaNgwane.

Speaking on national radio, the Minister of Commerce, Industry, and Trade, Manqoba Khumalo said “priority for the funds will be given to buildings, property, and equipment. Traders will know at a later stage how they will go about making claims for the losses. Government can’t guarantee that businesses will get full compensation at this stage, it will depend on the number of requests.”

The Federation of Eswatini Business Community’s(FESBC) Henry “Tums” du Pont says “When His Majesty King Mswati comes through with such initiatives we can only be grateful. We appreciate any assistance that we can get. However, we really need clarity in as far as the regulations and logistics around the rollout of the money is concerned. That is, how the money is accessible and at what state of business, whether the recipient operates in a market or a large multi-million Emalangeni business. This is because in the past we have heard of similar ventures but then they have not filtered to the people on the ground.”

“What does surprises me though is that not so long ago we were being told that there is no money for diesel and for tractors but now suddenly there appears to be money available to be redirected towards the Reconstruction Fund.”

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