To: All Media
13th November 2019, Mbabane, Kingdom of Eswatini: The Coordinating Assembly of Non-Governmental Organisations (CANGO) is seriously concerned by the government’s luxurious spending in a crumbling economy and the high level of poverty.
CANGO is an independent Non-Governmental Organisations umbrella organisation who’s over 70 members address development, humanitarian and environmental issues.
Its membership is based on shared principles of democratic governance, transparency and members’ participation and human right-based programming. Its mandate is to coordinate, build capacity of its members, advocate for pro-poor policies and grants management. The Non-Governmental sector remains an extended arm of government in delivering lifesaving services as well as raising concerns of the poor and vulnerable groups.
As a collective of the Non-Governmental Organisations sector, we observed the following:
1. Along-side the whole nation, the NGO sector welcomed the new administration with confidence in resuscitating the ailing economy after the national elections in 2018. This was particularly because we noted that it was guided by the national Vision 2022;
2. We welcomed how the government was alive to the dire economic situation of the country and appreciated how it timeously came up with confidence-restoring strategic framework in the form of the Eswatini Strategic Roadmap 2019-2022 whose five priority areas were: harmonising ease of doing business; fiscal consolidation; Infrastructure, Innovation and Investment; Culture of excellence, and; Social safety nets;
3. His Excellency the Prime Minister Ambrose Mandvulo led Administration introduced the “Interim financial controls to enhance financial prudence and fiscal management so as to contain expenditure which was spiralling out of control”. These austerity measures: to freeze air travelling through flying first class for economy; freezing the procurement of new fleet and or hiring of cars for Cabinet ministers; suspending utility tariffs increment and the suspension of tendering within government while harmonising the procurement system, were to curb government spending;
4. Government also implemented the zero increase for the Cost of Living Adjustment (CoLA) insisting there was no money.
We are alarmed and concerned about the following developments in the country:
a. That the government proposed taxes and tariff hikes to boost the economy has put strain on tax payers as the 85 cent per litre petrol levy; proposed 15% per unit electricity VAT; income tax (PAYE) increase from 33% to 36% for E250 000.00 and above earners and the reduction of corporate tax is too much sacrifice asked from the taxpayer. Yet in contrast reckless spending continues to be the norm.
Though we have not been totally opposed to tax, we stand by our initial position that over taxation is a burden to the working class who supports many dependents with their salary and sympathise with civil servants whose Cost of Living Adjustment remains frozen while commodity prices, taxes and levies skyrocket;
b. The recent acquisition of vehicles has shocked the nation and the development partners. As NGOs depend on grants from external partners this will affect our resource mobilisation;
c. It is becoming clear to us that the government is actually not aligned to its own policy of economic recovery but that of plunging the economy to a grinding halt with serious consequences to the general populace such as deepening poverty, regress on gains made on HIV/AIDS, weakening of service deliver such as social protection, health, education to mention a few.
Our assessment of the current situation is that unless government spending is human developmental-centred and projects accountability, the needless purchasing of luxury cars and spending on external trips, among other mismanagement of taxpayers’ money, is self-defeating and must be addressed immediately;
d. It is contradictory for the government to be calling for tax compliance from taxpayers when the government itself is out on a shopping spree. This is against the Prime Minister’s statement of November 2018 when coming into office, whereby he assured the country of government exercising fiscal prudence.
The government has failed to deliver but operates on secrecy policy and in total disregard of the rights of the tax payer and its responsibility on spending taxes. We find this not only diminish confidence on not only the tax payer but also of investors and donors as well as the international community at large;
e. This situation is further aggravated by corruption and nepotism undermining the principles of good governance and transparency;
f. Government’s spending behaviour may prompt international development partners to withdraw financial assistance whose grants contribute about 3% of towards the country’s budget and are responsible for saving thousands of lives. It is therefore very much concerning to show a contrasting picture to the outside world to appeal for assistance while spending lavishly, in spite of the health crisis and shortage of medicine, delayed tertiary tuition fees sparking class boycotts and protests as well as the continued freezing of CoLa for civil servants.
Therefore, we call for:
a. The Government to facilitate an open budget system where allocations of all institutions are well documented and subjected to scrutiny by Parliament. The culture of secrecy cannot be sustained as it is the taxpayers’ money that is wasted in luxurious commodities. Every institution should use its allocated budget because the current situation where other institution force government to reallocate funds away from life saving measures like essential drugs, social grants is untenable;
b. Parliament oversight strengthening and Portfolio Committees to implement stiff penalties to offenders;
c. Government, like in 2010 financial crisis, to ring-fence health, education and social protection and social services so that these are not subjected to budget cuts and to freeze hiring more non-critical staff.
d. With the high suicide rate there is an urgent need for rehabilitation services to curb many people going through tough times reaching the point of taking decisions to end their own lives.
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