‘Still no movement in the disposal of govt shares in some companies’
The government’s attempt to sell its shares in four entities, with a target of raising E320 million has been a non-starter, leaving the intended financial gain unattained amid the government’s financial challenges.
This information was shared by the Minister of Finance Neil Rijkenberg in an interview. The minister explained that initially, the government had previously ordered the Eswatini National Industrial Development Company (ENIDC) in 2021 to sell government shareholdings in four entities to raise E320 million, however, there has been no movement since that year.
The ENIDC, a Category A government-owned company, aimed to divest a substantial E313 million shares, representing a 34.95 per cent stake in the Industrial Development Company of Eswatini (IDCE). This strategic move emphasizes ENIDC’s influence as a key player in the region’s economic development, particularly within the framework of IDCE’s role in promoting industrial growth in Eswatini.
Other private companies where government owns shares are Standard Bank Eswatini, Nebank Eswatini and at Eswatini Royal Sugar Corporation (RES Corp) to mention a few.
Other shareholders at IDCE are Eswatini National Provident Fund (61.95 per cent), Standard Bank (1.55 per cent), and Nedbank Eswatini (1.55 per cent).
The IDCE is listed as a public enterprise and has interests in companies such as Swazi Plaza and Corporate Place (100 per cent), Simunye Plaza (50 per cent), Pigg’s Peak Plaza (45 per cent), Wundersight (25 per cent), Swaprop (20 per cent), Aon (15 per cent), and Eswatini Mobile (two per cent).
IDCE fulfils its role by promoting and investing in financially viable projects in all sectors, including manufacturing, property development, transport, agri-business, tourism, services, and small and medium enterprises (SMEs).
Pivotal role
The entity plays a pivotal role in advancing the economic landscape of the Kingdom of Eswatini, fostering growth in industrial, commercial, and agricultural sectors. Its mission involves creating opportunities and supporting the development of both new and established businesses, contributing to the nation’s overall economic prosperity.
The company was formed in 1987 as a joint venture between the Government of the Kingdom of Eswatini and major International Finance Institutions (The DEG of Germany, CDC of the UK, FMO of Netherlands, Proparco of France, and IFC (World Bank).
The minister refrained from divulging the delay’s cause but mentioned the government’s commitment to determining the optimal course for share sale. Transparency may be limited, but efforts are underway to navigate the situation and make informed decisions regarding the shares.
“The government is reconsidering the best way forward regarding shares in category B entities which is where the government does not own 100 per cent of the shares, “ the Minister said.
Minister Rijkenberg stated that the issue would be a focal point during the upcoming cabinet retreat, scheduled to commence after the fields are weeded. Emphasizing its significance, the matter is set for thorough deliberation among government officials during this strategic session.
In 2021 when the minister was asked how the government would determine the companies in which to let go of its shareholding, the minister said: “As we go through the process, we might need to adjust the plan. It will be done in a transparent way.”
Andrew Le Roux, former President of Business Eswatini, lauded the statement, asserting that the government should prioritize fostering a conducive environment for the private sector rather than direct involvement. Acknowledging the importance of supportive policies, Le Roux advocates for a collaborative approach that empowers businesses within Eswatini.
He added that government participation introduces unfair competition, crowds out the private sector, and hampers corporate efficiency due to prolonged decision-making. Emphasizing shareholder concerns, he suggests redirecting funds from government shares towards enhancing infrastructure and social spending for optimal societal impact.